City of Atlanta and Fulton County Recreation Authority

This Preliminary Official Statement and any information contained herein are subject to completion and amendment. 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 Series 2017 Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. City Attorney. Certain legal matters will be passed upon by Greenberg Traurig, LLP andRiddle&Schwartz,LLC,bothofAtlanta,Georgia,Co City Attorney.Certainlegalmatterswill bepasseduponbyGreenbergTraurig, LLP Counsel. Certainlegalmatterswillbepassed uponfortheIssuerbyHunton&WilliamsLLP,Atlanta,Georgia.Certain legalmatterswillbepasseduponfortheCityby to theCity.TheSeries2017Bondsareexpected tobedeliveredthroughthebook Regions Bank,Atlanta,Georgia,asbondregistrarandpayingagent,tobesubsequentlydisbursedtheBeneficialOwners(asdefinedherein).See"BOOK Payments ofprincipalof,premium,ifany,andintereston,anySeries2017BondwillbemadetoCede&Co.,asnomineeforDTCregisteredownertheBonds,by book‑entry formonlyandpurchaserswillnotreceivephysicaldeliveryofbondcertificatesrepresentingthebeneficialownershipinterestsinSeries2017Bondssopurchased. of Cede&Co.,asnomineeTheDepositoryTrustCompany,NewYork,York("DTC").PurchasesbeneficialownershipinterestsintheSeries2017Bondswillbemade OF THEBONDRESOLUTION"and"APPENDIX D ‑ FORMINTERGOVERNMENTALLEASEAGREEMENT"attachedhereto. otherwise defined herein will have the meanings assigned thereto in the Bond Resolution and the hereinafter defined Intergovernmental Lease Agreement. See "APPENDIX C ‑ FORM purpose offinancingthe2017Project(asdefinedherein).See"PLANOFFINANCE"and"ESTIMATEDSOURCESANDUSESFUNDS"herein.Allcapitalizedtermsusednot by thatcertainsupplementalpricingresolutionexpectedtobeadoptedonoraboutJuly13,2017(together,the"BondResolution").TheSeriesBondsarebeingissuedfor of itsRevenueBonds(ZooAtlantaParkingFacilityProject),Series2017(the"SeriesBonds")pursuanttothatcertainresolutionadoptedonMay advisor totheIssuer.FirstSouthwest,a Division ofHilltopSecuritiesInc.,Dallas,TexasandGrant&AssociatesLLC,Marietta, Georgiaareservingasco legal matterswillbepassedonfortheUnderwriters byHaleyLawFirm,LLC,Atlanta,Georgia.PhoenixCapitalPartners, Philadelphia,Pennsylvania,isservingasfinancial herein. the offer withoutnotice,andsubjectto the approving opinionofHunton & Williams LLP,Atlanta,GeorgiaandThe Charleston Group, Fayetteville, North Carolina, Co investment decision. Potential investorsmustreadtheentireOfficialStatement(includingcoverpage andallappendicesattachedhereto)toobtaininformationessentialthemakingofaninformed LIABLE PERSONALLYONTHESERIES2017BONDSBYREASONOF ISSUANCETHEREOF. OBLIGATION. NEITHERTHEMEMBERSOFGOVERNINGBODY THEISSUERNORANYPERSONEXECUTINGSERIES2017BONDSSHALLBE TO LEVYANDCOLLECTSUCHTAXESFROMYEARINANAMOUNT SUFFICIENTTOFULFILLANDFULLYCOMPLYWITHTHETERMSOFSUCH WHICH THECITYHASUNDERTAKENTOMAKESUCHPAYMENTSFROM TAXESTOBELEVIEDFORTHATPURPOSEISAMANDATORYOBLIGATION AGREEMENT SHALLCONSTITUTEAGENERALOBLIGATIONANDPLEDGE OFTHEFULLFAITHANDCREDITCITY,OBLIGATION OBLIGATION OFTHECITYTOMAKEPAYMENTSITHASCONTRACTED TOMAKEBYTHEPROVISIONSOFINTERGOVERNMENTALLEASE ANY SUCHPROPERTY,PROVIDED,HOWEVER,THATINACCORDANCE WITHTHEPROVISIONSOFCONSTITUTIONANDLAWSSTATE, THE COUNTY,ORCITY,NORSHALLSERIES2017BONDSCONSTITUTE ACHARGE,LIEN,ORENCUMBRANCE,LEGALEQUITABLE,UPON TO LEVYORPLEDGEANYFORMOFTAXATIONWHATEVERFORTHEPAYMENT THEREOF.THEISSUERHASNOTAXINGPOWER. ISSUANCE OFTHESERIES2017BONDSSHALLNOTDIRECTLYORINDIRECTLY ORCONTINGENTLYOBLIGATETHESTATECOUNTYCITY THE SERIES 2017 BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR AS PROVIDED IN THE BOND RESOLUTION AND THE ANY OTHER POLITICAL SUBDIVISION OF THE STATE, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER, BUT INDEBTEDNESS ORGENERALOBLIGATIONOFTHESTATEGEORGIA(THE"STATE"),FULTONCOUNTY,"COUNTY"), CITY,OR AND SOURCESOFPAYMENTFORTHESERIES2017BONDS ‑ AdditionalParityBonds"herein. Intergovernmental LeaseAgreementandrankingparipassuwiththeSeries2017Bondsastosaidmoneyssecuredbysamepledgetheretolienthereon.See "SECURITY ENDED JUNE30,2016"attachedhereto. FINANCIALSTATEMENTSOFTHECITYATLANTAFORFISCALYEAR AND FINANCIALINFORMATIONREGARDINGTHECITY"and"APPENDIX B ‑ AUDITED THE INTERGOVERNMENTALLEASEAGREEMENT"attachedhereto. OF OF THE BOND RESOLUTION" and "APPENDIX D ‑ FORM See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS" herein and "APPENDIX C ‑ FORM been pledgedpursuanttotheprovisionsofBondResolutionforbenefitOwnersSeries2017BondsandanyAdditionalissuedunder Resolution. such rateorrates,withinanylimitsprescribedbylaw,asmightbenecessarytomakethepaymentscalledforIntergovernmentalLeaseAgreement.TheBasicPayments have Payments whendueinanyyear,theCityhasagreedIntergovernmentalLeaseAgreementtolevysuchannualtaxesontaxablepropertylocatedwithinitsjurisdiction, at amounts, includingamountsdepositedtotheSinkingFundbyIssuerfromNetParkingFees.Ineventamountoffundslawfullyavailableisnotsufficient paytheBasic necessary funds available in itsgeneral revenue and budgetappropriationsto fully satisfy the payment of BasicPaymentsfromits general funds and any other lawfully available Intergovernmental LeaseAgreementareseparateobligationsoftheCitytowhichhaspledgeditsfullfaithandcredittaxingpower.Theagreed tomake Fund fromNetParkingFeesderivedtheoperationandmanagementofFacility(asdefinedherein)alsoprovidedthatamountsdueby City underthe not beabatedorreducedforanyreasonwhatsoever;providedthattheCity’sobligationtomakeBasicPaymentswhendueshalloffsetextentofamounts in theSinking provides thattheobligationofCitytomakeBasicPaymentsandperformitsotherobligationsthereundershallbeabsoluteunconditionalsuchpayments shall on theSeries2017BondsandtomakecertainAdditionalPaymentscovervariousfeeschargesrelatingBonds.TheIntergovernmentalLease Agreement the CityhasabsolutelyandunconditionallyagreedtomakeBasicPaymentsIssuerpermitpay,whendue,principalof,premium,ifany, andinterest Provisions" herein. BONDS ‑ General" herein. the rates and will be payable as to principal in the amounts and on the dates set forth on the inside front cover of this Official Statement. See "DESCRIPTION OF THE SERIES 2017 proposed formoftheopinionCo-BondCounselin"APPENDIX E by theStateofGeorgia.AholderSeries2017Bondsmaybesubjecttootherfederaltaxconsequencesasdescribedhereinundercaption"TAXMATTERS."See income tax,suchinterestistakenintoaccountindeterminingadjustedcurrentearningsforpurposesofcomputingand(c)willbeexemptfromtaxation income taximposedonindividualsandcorporations;however,withrespecttocorporations(asdefinedforfederalpurposes)subjectthealternativeminimum notbeincludedingrossincomeforfederaltaxpurposes,(b)willanitemofpreferencepurposesthealternative minimum Bonds (a) will * Preliminary; subjecttochange. July ___,2017 Academy Securities, Inc. Janney Montgomery Scott Dated: DateofIssuanceandDelivery NEW ISSUE ‑ BOOK The Series2017Bondsareinitiallybeingissuedasfullyregisteredbondsindenominationsof$5,000oranyintegralmultiplethereofandwillbethename This OfficialStatementrelatestotheissuanceandsalebyCityofAtlantaFultonCountyRecreationAuthority(the"Issuer")$30,675,000*inaggregateprincipalamount The Series2017Bondsarebeingofferedwhen,as,andifissuedbytheIssuer acceptedbytheUnderwriters,subjecttopriorsaleandwithdrawalormodificationof This coverpagecontainscertainlimitedinformationforquickreferenceonly.Itis not,andisnotintendedtobe,asummaryofthemattersrelatingSeries2017Bonds. NO OWNEROFTHESERIES2017BONDSSHALLHAVERIGHTTOENFORCE THEPAYMENTTHEREOFAGAINSTANYPROPERTYOFSTATE, THE SERIES2017BONDSSHALLNOTCONSTITUTEADEBTNORMORALORGENERALOBLIGATIONOFISSUER, AN The Issuermay,uponthemeetingofcertainconditionsasprovidedin the BondResolution,issueAdditionalParityBondspayablefrommoneysreceivedpursuantto For additionalinformationrelatedtotheCityanditsfinancialconditiongenerally,see"THECITY""FISCALOVERVIEWOFTHEherein,"APPENDIX Pursuant totheIntergovernmentalLeaseAgreementbetweenIssuerandCityofAtlanta(the"City"),datedasJuly 1, 2017(the"IntergovernmentalLeaseAgreement"), The Series2017Bondsaresubjecttooptionalandmandatorysinkingfundredemptionpriormaturity.See"DESCRIPTIONOFTHESERIESBONDS 2018.TheSeries2017 Bondswillbearinterestat ofeachyear,commencingonJune 1, andDecember 1 Interest ontheSeries2017BondsispayablesemiannuallyJune 1 In theopinionofCo-BondCounsel,undercurrentlawandsubjecttoconditionsdescribedhereincaption"TAXMATTERS,"interestonSeries2017 ® - ENTRY ONLY CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

PRELIMINARY OFFICIAL STATEMENT DATED JUNE 28, 2017

(ZOO ATLANTAPARKINGFACILITYPROJECT), ‑ FORM OFOPINIONCO-BONDCOUNSEL"attachedhereto. Ramirez &Co.,Inc. REVENUE BONDS SERIES 2017 $30,675,000* ‑ entry systemofDTConoraboutJuly27, 2017. Due: December1,asshownontheinsidefrontcover RATINGS: See"RATINGS"herein Stern Brothers &Co. ‑ Disclosure Counsel.Certain 22, 2017,assupplemented - ENTRY ONLYSYSTEM" ‑ financial advisors A ‑ STATISTICAL Jefferies ‑ Redemption ‑ Redemption ‑ Bond

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS†

$30,675,000* CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017

Maturity Principal Interest Initial (December 1) Amount Rate Yield Price CUSIP No.† $

$______- ____% Term Bond, Due ______, Yield ____%, Price ______%, Initial CUSIP No. ______†

* Preliminary; subject to change. † Initial CUSIP numbers have been assigned to the Series 2017 Bonds by an organization not affiliated with the Issuer, the City nor the hereinafter defined Financial Advisors and are included for the convenience of the owners of the Series 2017 Bonds only at the time of original issuance of the Series 2017 Bonds. Neither the Issuer, the City nor the Financial Advisors is responsible for the selection, use or accuracy of the CUSIP numbers nor is any representation made as to the accuracy of the CUSIP numbers as to the Series 2017 Bonds indicated above now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of such Series 2017 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such maturity of the Series 2017 Bonds.

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

William K. Whitner, Esq., Chairperson Michelle Falconer Commissioner Marvin Arrington, Jr., Esq., Vice Chairperson James B. Hughes Jr., Esq. Michael L. Green, Secretary/Treasurer Geoffrey Heard Commissioner Bob Ellis Kellye Terrell Candace L. Byrd, Esq., ex-officio member, Assistant Treasurer

CITY OF ATLANTA

Elected Officials

Mayor Kasim Reed

City Council Ceasar C. Mitchell, President Carla Smith, District 1 Felicia A. Moore, District 9 Kwanza Hall, District 2 Clarence Terrell (C.T.) Martin, District 10 Ivory Lee Young, Jr., District 3 Keisha Lance Bottoms, District 11 Cleta Winslow, District 4 Joyce M. Sheperd, District 12 Natalyn Archibong, District 5 Michael Julian Bond, Post 1, At-Large Alex Wan, District 6 Mary Norwood, Post 2, At-Large Howard Shook, District 7 Andre Dickens, Post 3, At-Large Yolanda Adrean, District 8

Appointed Officials J. Anthony "Jim" Beard, Chief Financial Officer Daniel L. Gordon, Chief Operating Officer Jeremy T. Berry, Esq., City Attorney Candace L. Byrd, Esq., Chief of Staff

CONSULTANTS TO THE ISSUER AND THE CITY

Co-Bond Counsel Hunton & Williams LLP The Charleston Group Atlanta, Georgia Fayetteville, North Carolina

Issuer's Counsel Hunton & Williams LLP Atlanta, Georgia

Co-Disclosure Counsel Greenberg Traurig, LLP Riddle & Schwartz, LLC Atlanta, Georgia Atlanta, Georgia

Financial Advisor to the Issuer Phoenix Capital Partners Philadelphia, Pennsylvania

Co-Financial Advisors to the City FirstSouthwest, a Division of Hilltop Securities Inc. Grant & Associates LLC Dallas, Texas Marietta, Georgia [THIS PAGE INTENTIONALLY LEFT BLANK]

This Official Statement does not constitute a contract among the Issuer, the City or the Underwriters and any one or more owners of the Series 2017 Bonds nor does it constitute an offer to sell or the solicitation of an offer to buy the Series 2017 Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer in such jurisdiction. No dealer, salesman or any other person has been authorized by the Issuer, the City or the Underwriters to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering of the Series 2017 Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by the Issuer, the City or any other person. The information and expressions of opinion in this Official Statement are subject to change without notice, and this Official Statement speaks only as of its date. Neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create the implication that there has been no change in the matters described herein since the date hereof. Except as otherwise indicated, the information contained in this Official Statement, including in the appendices attached hereto, has been obtained from representatives of the Issuer, the City, the Underwriters and from public documents, records and other sources considered to be reliable. The Underwriters have provided the following sentence for inclusion in this Official Statement: The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of their responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE ISSUER AND THE CITY FOR PURPOSES OF RULE 15c2-12 ISSUED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE 15c2-12(B)(1).

IN CONNECTION WITH THE OFFERING OF THE SERIES 2017 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE SERIES 2017 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE BOND RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2017 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2017 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2017 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

In making an investment decision, investors must rely on their own examination of the Issuer and the City and the terms of the offering, including the merits and risks involved. The Series 2017 Bonds have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the Issuer has not confirmed the accuracy or determined the adequacy of this Official Statement. Any representation to the contrary may be a criminal offense.

The order and placement of information in this Official Statement, including the appendices attached hereto, are not an indication of relevance, materiality or relative importance, and this Official Statement, including the appendices attached hereto, must be read in its entirety. The captions and headings in this Official Statement are for convenience only and in no way define, limit or describe the scope or intent, or affect the meaning or construction, of any provision or section in this Official Statement.

THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS IN EITHER BOUND OR PRINTED FORMAT ("ORIGINAL BOUND FORMAT") OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: WWW.MUNIOS.COM. THIS OFFICIAL STATEMENT MAY BE RELIED ON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT, OR IF IT IS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITE.

References to website addresses presented herein, including the City's website or any other website containing information about the City, are for informational purposes only and may be in the form of a hyperlink solely for the reader's convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for any purpose including for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission.

TABLE OF CONTENTS

Page

INTRODUCTION ...... 1

General ...... 1 The Issuer ...... 1 The City ...... 2 Authority for Issuance ...... 2 Purpose of the Series 2017 Bonds ...... 2 Description of the Series 2017 Bonds ...... 2 Security and Sources of Payment for the Series 2017 Bonds ...... 3 Continuing Disclosure ...... 4 Other Information ...... 5

THE ISSUER ...... 5

General ...... 5

THE CITY ...... 7

PLAN OF FINANCE ...... 8

ESTIMATED SOURCES AND USES OF FUNDS ...... 8

DESCRIPTION OF THE SERIES 2017 BONDS ...... 9

General ...... 9 Redemption Provisions ...... 9 Notice of Redemption; Conditional Notice of Redemption ...... 10 Registration Provisions; Transfer and Exchange ...... 11

BOOK-ENTRY ONLY SYSTEM ...... 11

PRINCIPAL AND INTEREST REQUIREMENTS ...... 15

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS ...... 15

General ...... 15 Intergovernmental Lease Agreement ...... 16 Additional Parity Bonds ...... 18 Limited Obligations ...... 18

ENFORCEABILITY OF REMEDIES ...... 19

FISCAL OVERVIEW OF THE CITY ...... 20

Management's Discussion and Analysis ...... 20

(i)

Statement of Revenues, Expenditures and Changes in General Fund Balances ...... 22 General Obligation Bonds ...... 24 Additional General Fund Backed Debt and Self-Supporting Debt ...... 25 Property Tax Supported Debt ...... 27 Ratio of General Bonded Debt Outstanding ...... 28 Pension and Other Post-employment Benefits ...... 29

TAX MATTERS ...... 50

Opinion of Co-Bond Counsel ...... 50 Original Issue Discount ...... 51 Original Issue Premium ...... 51 Other Tax Matters ...... 51

LITIGATION ...... 52

The Issuer ...... 52 The City ...... 52

VALIDATION ...... 53

CONTINUING DISCLOSURE ...... 53

LEGAL MATTERS ...... 54

FINANCIAL STATEMENTS ...... 54

FINANCIAL ADVISORS ...... 54

RATINGS ...... 55

UNDERWRITING ...... 55

FORWARD LOOKING STATEMENTS ...... 56

MISCELLANEOUS ...... 56

AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT 58

APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 APPENDIX C - FORM OF THE BOND RESOLUTION APPENDIX D - FORM OF THE INTERGOVERNMENTAL LEASE AGREEMENT APPENDIX E - FORM OF OPINION OF CO-BOND COUNSEL APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT

(ii) OFFICIAL STATEMENT

relating to

$30,675,000* CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017

INTRODUCTION

General

The purpose of this Official Statement, which includes the cover page and the appendices attached hereto, is to provide certain information in connection with the issuance and sale by the City of Atlanta and Fulton County Recreation Authority (the "Issuer") of $30,675,000* in aggregate principal amount of its Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 (the "Series 2017 Bonds").

This introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to the more complete and detailed information contained in the entire Official Statement, including the cover page and the appendices attached hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement and of the documents summarized or described herein, if necessary. The offering of the Series 2017 Bonds to potential investors is made only by means of the entire Official Statement, including the appendices attached hereto. No person is authorized to detach this introduction from this Official Statement or to otherwise use it without the entire Official Statement including the appendices attached hereto.

All capitalized terms used and not otherwise defined herein will have the meanings assigned thereto in the hereinafter defined Bond Resolution and Intergovernmental Lease Agreement. See "APPENDIX C - FORM OF THE BOND RESOLUTION" and "APPENDIX D - FORM OF THE INTERGOVERNMENTAL LEASE AGREEMENT" attached hereto.

The Issuer

The Issuer is a body corporate and politic and a political subdivision of the State of Georgia (the "State") and has been created pursuant to an act of the General Assembly of the State of Georgia approved on March 17, 1960 (Ga. Laws 1960, p. 2810, et seq.), as amended from time to time (the "Act"). See "THE ISSUER" herein.

* Preliminary; subject to change.

The City

The City of Atlanta (the "City") is a municipal corporation of the State created by an Act of the General Assembly of the State in 1843. See "THE CITY" and "FISCAL OVERVIEW OF THE CITY" herein and "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Authority for Issuance

The Series 2017 Bonds are being issued by the Issuer in accordance with and pursuant to: (a) the Constitution of the State of Georgia of 1983 (the "State Constitution"); (b) the Act; (c) the laws of the State, including the Revenue Bond Law (Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, as amended); and (d) that certain resolution adopted on May 22, 2017, as supplemented by that certain supplemental pricing resolution expected to be adopted on or about July 13, 2017 (together, the "Bond Resolution"). In addition, the execution and delivery of the Intergovernmental Lease Agreement and certain other matters relating to the Series 2017 Bonds have been authorized by the City pursuant to Ordinance No. 17-O-1115 adopted by the Atlanta City Council (the "City Council") on March 20, 2017 and approved without signature by operation of law on March 29, 2017.

Purpose of the Series 2017 Bonds

The Series 2017 Bonds are being issued for the purpose of financing the 2017 Project (as defined herein). See "PLAN OF FINANCE" and "ESTIMATED SOURCES AND USES OF FUNDS" herein.

Description of the Series 2017 Bonds

The Series 2017 Bonds are initially being issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof and initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Purchases of beneficial ownership interests in the Series 2017 Bonds will be made in book-entry form only and purchasers will not receive physical delivery of bond certificates representing the beneficial ownership interests in the Series 2017 Bonds so purchased. Payments of principal of, premium, if any, and interest on, any Series 2017 Bond will be made to Cede & Co., as nominee for DTC as registered owner of the Series 2017 Bonds, by Regions Bank, as bond registrar and paying agent, to be subsequently disbursed to the Beneficial Owners (as defined herein). See "BOOK-ENTRY ONLY SYSTEM" herein.

Interest on the Series 2017 Bonds is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2018. The Series 2017 Bonds will bear interest at the rates and will be payable as to principal in the amounts and on the dates set forth on the inside front cover of this Official Statement. See "DESCRIPTION OF THE SERIES 2017 BONDS - General" herein.

The Series 2017 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity. See "DESCRIPTION OF THE SERIES 2017 BONDS - Redemption Provisions" herein.

See "DESCRIPTION OF THE SERIES 2017 BONDS" herein for a more complete description of the Series 2017 Bonds.

Security and Sources of Payment for the Series 2017 Bonds

Pursuant to the Intergovernmental Lease Agreement between the Issuer and the City, dated as of July 1, 2017 (the "Intergovernmental Lease Agreement"), the City has absolutely and unconditionally agreed to make the Basic Payments to the Issuer to permit the Issuer to pay, when due, the principal of, premium, if any, and interest on the Series 2017 Bonds and to make certain Additional Payments to cover various fees and charges relating to the Series 2017 Bonds. The Intergovernmental Lease Agreement provides that the obligation of the City to make the Basic Payments and to perform its other obligations thereunder shall be absolute and unconditional and such payments shall not be abated or reduced for any reason whatsoever; provided that the City's obligation to make Basic Payments when due shall be offset to the extent of amounts in the Sinking Fund from Net Parking Fees derived from the operation and management of the Parking Facility (as defined herein) also provided that the amounts due by the City under the Intergovernmental Lease Agreement are separate obligations of the City to which the City has pledged its full faith and credit and taxing power. The City has agreed to make necessary funds available in its general revenue and budget appropriations to fully satisfy the payment of Basic Payments from its general funds and any other lawfully available amounts, including amounts deposited to the Sinking Fund by the Issuer from Net Parking Fees. In the event the amount of funds lawfully available is not sufficient to pay the Basic Payments when due in any year, the City has agreed in the Intergovernmental Lease Agreement to levy such annual taxes on the taxable property located within its jurisdiction, at such rate or rates, within any limits prescribed by law, as might be necessary to make the payments called for by the Intergovernmental Lease Agreement. The Basic Payments have been pledged pursuant to the provisions of the Bond Resolution for the benefit of the Owners of the Series 2017 Bonds and any Additional Bonds issued under the Bond Resolution. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS" herein and "APPENDIX C - FORM OF THE BOND RESOLUTION" and "APPENDIX D - FORM OF THE INTERGOVERNMENTAL LEASE AGREEMENT" attached hereto.

For additional information related to the City and its financial condition generally, see "THE CITY" and "FISCAL OVERVIEW OF THE CITY" herein, and "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

The Issuer may, upon the meeting of certain conditions as provided in the Bond Resolution, issue Additional Parity Bonds payable from the moneys received pursuant to the Intergovernmental Lease Agreement and ranking pari passu with the Series 2017 Bonds as to said moneys and secured by the same pledge thereto and lien thereon. See

"SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS - Additional Parity Bonds" herein. THE SERIES 2017 BONDS SHALL NOT CONSTITUTE A DEBT NOR A MORAL OR GENERAL OBLIGATION OF THE ISSUER, NOR CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE, FULTON COUNTY, GEORGIA (THE "COUNTY"), THE CITY, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER, BUT THE SERIES 2017 BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR AS PROVIDED IN THE BOND RESOLUTION AND THE ISSUANCE OF THE SERIES 2017 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OR THE COUNTY OR THE CITY TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATEVER FOR THE PAYMENT THEREOF. THE ISSUER HAS NO TAXING POWER.

NO OWNER OF THE SERIES 2017 BONDS SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE STATE, THE COUNTY, OR THE CITY, NOR SHALL THE SERIES 2017 BONDS CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY SUCH PROPERTY, PROVIDED, HOWEVER, THAT IN ACCORDANCE WITH THE PROVISIONS OF THE CONSTITUTION AND LAWS OF THE STATE, THE OBLIGATION OF THE CITY TO MAKE THE PAYMENTS IT HAS CONTRACTED TO MAKE BY THE PROVISIONS OF THE INTERGOVERNMENTAL LEASE AGREEMENT SHALL CONSTITUTE A GENERAL OBLIGATION AND A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY, AND THE OBLIGATION WHICH THE CITY HAS UNDERTAKEN TO MAKE SUCH PAYMENTS FROM TAXES TO BE LEVIED FOR THAT PURPOSE IS A MANDATORY OBLIGATION TO LEVY AND COLLECT SUCH TAXES FROM YEAR TO YEAR IN AN AMOUNT SUFFICIENT TO FULFILL AND FULLY COMPLY WITH THE TERMS OF SUCH OBLIGATION. NEITHER THE MEMBERS OF THE GOVERNING BODY OF THE ISSUER NOR ANY PERSON EXECUTING THE SERIES 2017 BONDS SHALL BE LIABLE PERSONALLY ON THE SERIES 2017 BONDS BY REASON OF THE ISSUANCE THEREOF.

Continuing Disclosure

The Issuer has determined that no financial or operating data concerning the Issuer is material to any decision to purchase, hold, or sell the Series 2017 Bonds, and the Issuer will not provide any such information. The City will undertake all responsibility for providing continuing disclosure with respect to the Series 2017 Bonds and the Issuer will have no liability to the holders of the Series 2017 Bonds or any other person with respect to the obligations undertaken by the City under the hereinafter defined Disclosure Agreement.

In order to assist the Underwriters (as defined herein) in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the "SEC") promulgated pursuant to the Securities Exchange Act of 1934, as in effect on the date hereof (the "Rule"), simultaneously with the issuance of the Series 2017 Bonds, the City, as an "obligated person"

under the Rule, will enter into a Continuing Disclosure Agreement (the "Disclosure Agreement") with Digital Assurance Certification, L.L.C., as initial dissemination agent ("DAC"), for the benefit of the holders of the Series 2017 Bonds, under which the City will undertake to provide continuing disclosure with respect to the Series 2017 Bonds. See "CONTINUING DISCLOSURE" herein and "APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT" attached hereto.

Other Information

This Official Statement speaks only as of its date and the information contained herein is subject to change. This Official Statement and the appendices attached hereto contain brief descriptions of, among other matters, the Issuer, the City, the Series 2017 Bonds, and the security and sources of payment for the Series 2017 Bonds, the Bond Resolution, the Intergovernmental Lease Agreement, and the Disclosure Agreement. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions, statutes, the Bond Resolution, the Intergovernmental Lease Agreement, the Disclosure Agreement and other documents are intended as summaries only and are qualified in their entirety by reference to such documents, and references herein to the Series 2017 Bonds are qualified in their entirety to the form thereof included in the Bond Resolution. Copies of the Bond Resolution, the Intergovernmental Lease Agreement, the Disclosure Agreement and other relevant documents and information are available, upon written request and payment of a charge for copying, mailing and handling, from the City's Chief Financial Officer, Department of Finance, 68 Mitchell Street, S.W., Suite 11100, South Tower, Atlanta, Georgia 30303, telephone (404) 330-6430.

THE ISSUER

General

The Issuer is a public body corporate and politic and a political subdivision of the State, created on March 17, 1960 by the General Assembly of the State pursuant to the Act, with powers, among other things, to acquire, construct, equip, maintain and operate the athletic stadium, coliseum and recreation centers and areas (including but not limited to public zoos and zoological parks), parking facilities or parking areas in connection therewith, and extensions and improvements of such facilities; to acquire the necessary property therefor, both real and personal, and to lease, sell or operate any or all of such facilities; and to provide for the membership and the appointment of members of the Issuer and to authorize the issuance of revenue bonds or obligations of the Issuer. It is a body corporate and politic and a political subdivision of the State. The Issuer may contract and be contracted with, sue and be sued, implead and be impleaded.

The Issuer owns a 20,000 seat multipurpose sports and entertainment complex ("Philips Arena"). The Issuer manages, through various third-party operating agreements, the operation, capital repair and maintenance of certain public facilities including Philips Arena, an accredited zoological park ("Zoo Atlanta") and various parking facilities, including a 2,000 space structured parking facility located at Philips Arena and surface parking adjacent to the former Turner Field. The Issuer is also responsible for, and manages, a junior golf program at John A. White Park

through a partnership with First Tee of Atlanta, a non-profit corporation. The Issuer serves a conduit issuer on behalf of the City and the County and, in such capacity, issues revenue bonds to finance various park facilities, including natatoriums, basketball and tennis courts, baseball facilities and related recreational facilities and equipment.

The Issuer's Board of Directors (the "Board") consists of nine members each serving a four year term. The appointment process is as follows: six members are selected by appointment by the Mayor of Atlanta subject to confirmation by the Atlanta City Council and three members are appointed by the Board of Commissioners of Fulton County. Any member may be appointed to succeed himself or herself, and each member, duly appointed, will hold office until his successor is appointed and duly qualified, except that any person appointed to membership on the Board who is a public official of Atlanta or the County at the time of his or her appointment will serve as a member of the Issuer only so long as he or she remains a public official of Atlanta or the County. Any member appointed to fill an unexpired term will serve only for the remaining term of the unexpired member being replaced. The members of the Board serve without compensation, but they are to be reimbursed for actual expenses incurred in the performance of their duties.

The current members of the Board and their principal occupations are set forth below.

Name Principal Occupation Appointing Body William K. Whitner, Esq., Chairperson Attorney at Paul Hastings LLP City of Atlanta Commissioner Marvin S. Arrington, Jr., Esq., Fulton County Commissioner and Fulton County Vice Chairperson Attorney at Law Michael L. Green, Secretary/Treasurer Real Estate Investment Professional and City of Atlanta Entrepreneur Commissioner Bob Ellis Fulton County Commissioner and Senior Fulton County Vice President at Chubb Limited Michelle Falconer Founder of Real Estate Investments and City of Atlanta Elite Home Management Services James B. Hughes, Jr., Esq. Emory Law School Associate Dean and City of Atlanta Professor Geoffrey Heard Director of Summerhill Neighborhood Fulton County Community Center Kellye Terrell Senior Human Resources Business City of Atlanta Partner at Southwest Airlines Vacant - City of Atlanta

The Bylaws of the Issuer provide for two ex-officio, non-voting members; one appointed by the City and one by the County. Candace L. Byrd, Esq. is an ex-officio, non-voting member of the Board, serves as the Assistant Treasurer of the Board and was appointed by the City. Ms. Byrd also serves as the Chief of Staff for the Mayor of the City. The ex-officio position for the County is vacant.

William K Whitner, Esq., serves as Chairperson of the Issuer. Mr. Whitner is a Senior Litigation Partner with Paul Hastings LLP, an international law firm with offices across the globe. He works out of the Atlanta office, where he is Co-Chair of the Complex Litigation and Trial Practice group as well as Co-Chair of the firm's Diversity Council. His practice focuses on

complex civil corporate matters, with wide-ranging substantive commercial experience that includes contract disputes, business torts, employment discrimination matters, franchise disputes, intellectual property matters and class actions. Mr. Whitner represents global and national companies in federal, state and arbitration tribunals around the country at the trial and appellate levels.

The Issuer's principal place of business is located at 101 Marietta Street NW, Suite 1070, Atlanta, Georgia 30303.

THE CITY

Under the Charter of the City of Atlanta of 1996, as amended (the "Charter"), all legislative powers of the City are vested in the City Council and all executive and administrative powers of the City are vested in the Mayor.

The City Council consists of 15 members who serve four year terms of office. The City is divided into 12 City Council districts. Twelve members of the City Council are elected by district, and three members of the City Council are elected at large. The three at large members of the City Council are required to reside, respectively, in District No. 1, 2, 3 or 4; District No. 5, 6, 7 or 8; and District No. 9, 10, 11 or 12.

The Charter establishes the office of the President of the City Council. The President of the City Council is elected from the City at large for a term of four years. The President of the City Council presides at meetings, but is not a member of the City Council, and votes only in the case of a tie vote of the City Council. Under the Charter, the President of the City Council exercises all powers and discharges all duties of the Mayor in the case of a vacancy in the Office of the Mayor or during the disability of the Mayor. Under the Charter, the Mayor is elected from the City at large for a term of four years. The Charter does not allow any Mayor who has been elected for two consecutive terms to be eligible to be elected for the next succeeding term. The Mayor is the chief executive officer of the City and has the power to direct and supervise the administration of all departments of the City. The Charter grants the Mayor the power to veto any ordinance or resolution adopted by the City Council, which veto may be overridden only upon the vote of two thirds of the total membership of the City Council. The Charter also grants the Mayor the power to veto any item or items of any ordinance or resolution making appropriations, which veto may be overridden only upon the vote of two thirds of the total membership of the City Council. The current fiscal year of the City is the 12-month period beginning July 1 and ending on June 30 (the "Fiscal Year").

For additional information related to the City, see "FISCAL OVERVIEW OF THE CITY" herein and "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

PLAN OF FINANCE

The Series 2017 Bonds are being issued for the purpose of financing: (a) the design, acquisition, construction, installation and equipping of a portion of the hereinafter defined Parking Complex Project consisting of a 3-story structured parking deck totaling approximately 400,000 square feet with approximately 1,000 parking spaces (the "Parking Facility"), (b) deposits to certain fund and accounts related to the Series 2017 Bonds, and (c) paying certain costs of issuance related to the Series 2017 Bonds (collectively, the "2017 Project").

The "Parking Complex Project," commonly referred to as the Grant Park Gateway, will be comprised of a structured parking garage complex at Zoo Atlanta to be located on an eight acre parcel of land at Grant Park on Boulevard, which currently serves as a surface parking lot, consisting of: (a) the Parking Facility; (b) a "green" roof, steel framed and glass dine-in regional-cuisine restaurant featuring casual dining on the first level, totaling approximately 4,000 square feet, and fine dining on the upper level with balconies overlooking green roof elements, totaling approximately 5,000 square feet; and (c) related improvements. The "green" roof will be comprised of terraced lawns, covered plazas, water features and planted vegetation to reduce stormwater run-off, improve air quality and create an outdoor green space for the surrounding neighborhood. The Parking Complex Project will include bicycle spaces, electric vehicle charging stations and an Intelligent Parking System and it is expected that the Parking Complex Project will achieve at minimum a LEED/Parksmart Silver Certification Rating.

Only the Parking Facility will be funded with the proceeds of the Series 2017 Bonds; the other components of the Parking Complex Project will be funded from other sources.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds of the Series 2017 Bonds are expected to be applied as follows:

Sources of Funds:

Par Amount of Series 2017 Bonds ...... $______Net Original Issue Discount/Bond Premium ...... ______Total Sources of Funds ...... $______

Uses of Funds:

Deposit to Project Fund ...... $______Costs of Issuance(1) ...... ______Total Uses of Funds ...... $______

______(1) Includes Underwriters' discount, legal and accounting fees, financial advisors and other consultant fees, initial bond registrar and paying agent fees, rating agency fees, printing costs, validation court costs (if any), and other miscellaneous fees and costs.

DESCRIPTION OF THE SERIES 2017 BONDS

General

The Series 2017 Bonds will be dated the date of issuance and delivery thereof. Interest on the Series 2017 Bonds is payable semiannually on June 1 and December 1 of each year (each such date, an "Interest Payment Date"), commencing June 1, 2018. Each Series 2017 Bond will bear interest from the Interest Payment Date next preceding the date of such Series 2017 Bond to which interest on the Series 2017 Bonds has been paid, unless the date of such Series 2017 Bond is a date to which interest has been paid, in which case from the date of such Series 2017 Bond, or unless no interest has been paid on the Series 2017 Bonds, in which case from the date of original issuance and delivery.. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Series 2017 Bonds, all Series 2017 Bonds authenticated by the Authenticating Agent after the close of business on the record date for any Interest Payment Date and prior to such interest payment date shall be dated the date of authentication but shall bear interest from such interest payment date; provided, however, that if and to the extent that the Issuer shall default in the payment of the interest due on such interest payment date, any such Series 2017 Bond shall bear interest from the June 1 or December 1, as the case may be, next preceding the date of such Series 2017 Bond to which interest on the Bonds has been paid, unless no interest has been paid on the Series 2017 Bonds, in which case the date of original issuance and delivery.

Payment of the principal of and interest on the Series 2017 Bonds will be made by the Paying Agent directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to DTC's Direct Participants and thereafter to the Beneficial Owners. See "BOOK-ENTRY ONLY SYSTEM" herein. Interest on the Series 2017 Bonds is payable by check or draft mailed by first class mail to the respective owners of said Series 2017 Bonds at their addresses as they appear on the bond register kept by the Bond Registrar.

Redemption Provisions

Optional Redemption. The Series 2017 Bonds maturing on or before December 1, ____ are not subject to optional redemption prior to their stated maturity. The Series 2017 Bonds maturing on or after December 1, ____ are subject to optional redemption prior to their stated maturity as determined by the Issuer, at the direction of the City, in whole or in part, on any date on or after December 1, ______at a redemption price equal to the principal amount of the Series 2017 Bonds being redeemed, plus the interest due thereon on the redemption date.

If less than all of the Series 2017 Bonds are called for redemption, the maturities of such Series 2017 Bonds to be redeemed shall be selected at the direction of the City in such manner may be determined to be in the best interest of the Issuer. If less than all the Series 2017 Bonds of a particular maturity are called for redemption, the Series 2017 Bonds to be redeemed shall be selected by the Bond Registrar by lot in such manner as the Bond Registrar in its discretion may determine. In either case, (a) a portion of any Series 2017 Bond to be redeemed shall be in the principal amount of $5,000 or some integral multiple thereof, and (b) in selecting Series 2017 Bonds for redemption, each Series 2017 Bond shall be considered as representing that

number of Series 2017 Bonds that is obtained by dividing the principal amount of such Series 2017 Bond by $5,000.

If less than all of the Series 2017 Bonds within a series or maturity of a series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series or maturity to be redeemed. See "BOOK-ENTRY ONLY SYSTEM" herein.

Mandatory Sinking Fund Redemption. The Series 2017 Bonds maturing on December 1 in the years ____ and _____ are subject to mandatory redemption as determined by the Issuer, at the direction of the City, prior to maturity on December 1 of the years and in the amounts set forth below at a redemption price equal to the principal amount thereof plus the interest due thereon to the mandatory redemption date.

Term Bond Year Principal Year Principal (December 1) Amount (December 1) Amount

______* Final Maturity.

Term Bond Year Principal Year Principal (December 1) Amount (December 1) Amount

______* Final Maturity.

Notice of Redemption; Conditional Notice of Redemption

Notice of any redemption of the Series 2017 Bonds shall be given at least one time not more than 60 and not less than 30 days prior to the date fixed for redemption to the holders of the Series 2017 Bonds being called for redemption by first class mail at the address shown on the register of the Bond Registrar pertaining to the Series 2017 Bonds. The failure of the Bond Registrar to give any such notice or the failure of the holder of any Series 2017 Bond to receive any such notice as so given shall not affect the validity of the proceedings for the redemption of any Series 2017 Bond as to which proper notice of redemption has been given as provided in the Bond Resolution. All future interest on the Series 2017 Bonds or portions thereof so called for redemption shall cease to accrue from and after the date fixed for redemption unless default shall be made in payment of the redemption price with respect to the Series 2017 Bonds or portions thereof so called for redemption.

Notice of redemption pursuant to the Bond Resolution may (a) be conditioned upon the Issuer having on deposit amounts sufficient to pay the redemption price of the Series 2017 Bonds

on or prior to the scheduled redemption date or (b) shall state that the Issuer retains the right to rescind such notice on or prior to the scheduled redemption date, and such notice and optional redemption shall be of no effect if such moneys are not deposited or if the notice is rescinded as described in the Bond Resolution.

Registration Provisions; Transfer and Exchange

The Bond Registrar of the Issuer shall keep a register for registration of transfer of the Series 2017 Bonds. The Bond Registrar has also been designated as Authenticating Agent for purposes of authenticating the Series 2017 Bonds issued under the Bond Resolution or issued in exchange or in replacement for Series 2017 Bonds previously issued. Such registration of transfer shall be accomplished by the procedure and with the effect provided in the following paragraph.

The Series 2017 Bonds may be transferred only on the bond register of the Bond Registrar with respect to the Series 2017 Bonds. No transfer of any Series 2017 Bond shall be effective for any purpose hereunder except upon presentation and surrender of such Series 2017 Bond at the office of the Bond Registrar with a written assignment signed by the registered owner of such Series 2017 Bond in person or by a duly authorized attorney in form and with guaranty of signature satisfactory to the Bond Registrar. The Issuer, its agents, the Paying Agent and the Bond Registrar may deem and treat the registered owner of any Series 2017 Bond as the absolute owner of such Series 2017 Bond for the purpose of receiving payment of the principal thereof and the interest thereon and for all purposes under the Bond Resolution, notwithstanding any notice, actual or constructive, to the contrary.

Upon surrender for registration of transfer or exchange of any Series 2017 Bond at the principal corporate trust office of the Bond Registrar, the Issuer shall execute and the Bond Registrar shall authenticate and deliver to the transferee or transferees a new Series 2017 Bond of a like aggregate principal amount and of like interest rate and maturity. Every Series 2017 Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Bond Registrar duly executed by the Holder thereof or his attorney duly authorized in writing. The execution by the Issuer of any Series 2017 Bond shall constitute full and due authorization of such Series 2017 Bond and the Bond Registrar shall thereby be authorized to authenticate and deliver such Series 2017 Bond. No charge shall be made to any Bondholder for the privilege of registration of transfer or exchange, but any Bondholder requesting any such registration of transfer or exchange shall pay any tax or other governmental charge required to be paid with respect thereto.

BOOK-ENTRY ONLY SYSTEM

The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC and neither the Issuer, the City nor the Underwriters make any representation or warranty or take any responsibility for the accuracy or completeness of such information.

DTC will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2017 Bond certificate will be issued for each maturity of the Series 2017 Bonds as set forth on the inside front cover of this Official Statement, each in the aggregate principal amount of such maturity and will be deposited with DTC.

DTC 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 U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments 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" and, together with the Direct Participants, the "Participants"). The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.

Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2017 Bond ("Beneficial Owner") is in turn to be recorded on the 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 Participants through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2017 Bonds are to be accomplished by entries made on the books of the Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2017 Bonds, except in the event that use of the book-entry system for the Series 2017 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2017 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 the Series 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC's records reflect only the identity of the Direct

Participants to whose accounts such Series 2017 Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2017 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2017 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2017 Bonds may wish to ascertain that the nominee holding the Series 2017 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Series 2017 Bonds within a series or maturity of the Series 2017 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series or maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2017 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 Issuer 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 Series 2017 Bonds are credited on the record date, as identified in a listing attached to the Omnibus Proxy.

Principal, premium, if any, and interest payments on the Series 2017 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 Issuer or the Paying Agent and Bond Registrar on the payment date in accordance with their respective holdings shown on DTC's records. Payments by the 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 Participants and not of DTC, the Paying Agent, Bond Registrar or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest on the Series 2017 Bonds, as applicable, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer , the Paying Agent and/or the Bond Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of the Participants.

DTC may discontinue providing its services as depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the Issuer, or the Paying Agent or the Bond

Registar. Under such circumstances, in the event that a successor depository is not obtained, Series 2017 Bonds certificates are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Series 2017 Bonds certificates will be printed and delivered to the holders of the Series 2017 Bonds.

NEITHER THE ISSUER, THE PAYING AGENT, NOR THE BOND REGISTRAR WILL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO THE DTC PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE SERIES 2017 BONDS WITH RESPECT TO (a) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY SUCH DTC PARTICIPANT; (b) THE PAYMENT BY DTC OR ANY SUCH DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OR PREPAYMENT PRICE OF OR INTEREST ON THE SERIES 2017 BONDS; (c) THE DELIVERY BY DTC OR ANY SUCH DTC PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED TO BE GIVEN TO HOLDERS OF THE SERIES 2017 BONDS UNDER THE TERMS OF THE BOND RESOLUTION; (d) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2017 BONDS; OR (e) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER OF THE SERIES 2017 BONDS.

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PRINCIPAL AND INTEREST REQUIREMENTS

The following table presents the estimated principal and interest payment requirements with respect to the Series 2017 Bonds.

Series 2017 Bonds Fiscal Year Principal Interest Total $ $ $

$ $ $ ______Source: FirstSouthwest, a Division of Hilltop Securities Inc.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS

General

In order to secure the payment of the principal of, and the interest on, all Series 2017 Bonds issued under the Bond Resolution according to their tenor and effect, and the performance and observance of each and every one of the covenants and conditions in the Bond Resolution and in the Series 2017 Bonds, the Issuer has pledged, assigned and set over, all to the extent and upon the conditions set forth in the Bond Resolution, to the Owners and their successors and assigns forever: (a) all right, title and interest of the Issuer in, to and under the Intergovernmental Lease Agreement and all revenues to be received by the Issuer therefrom; (b) all amounts held in the Project Fund, the Sinking Fund and any and all other moneys and securities from time to time held by any bank depository or custodian appointed under the Bond Resolution (except for any amounts on deposit in the Rebate Fund, the Renewal and Extension Fund and the Issuance Cost Fund); and (c) any and all other property of every kind and nature from time to time which theretofore or thereafter is by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security under the Bond Resolution, by the Issuer or by any other person, firm or corporation with the consent of the Issuer.

The Series 2017 Bonds authorized under the Bond Resolution, together with the interest thereon, and all payments required of the Issuer under the Bond Resolution are not and shall never become general or moral obligations of the Issuer but are special, limited obligations payable solely and only from the Basic Payments to be made by the City and collaterally assigned and pledged under the terms of the Intergovernmental Lease Agreement and from such other sources as authorized and provided in the Bond Resolution.

See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2017 BONDS - Intergovernmental Lease Agreement" below.

Intergovernmental Lease Agreement

Effective Date; Duration of Lease Term. The Intergovernmental Lease Agreement shall become effective upon its delivery and the leasehold interest created by the Intergovernmental Lease Agreement shall then begin, and, subject to the other provisions of the Intergovernmental Lease Agreement, shall expire on the date on which payment in full of the Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution has occurred, including that any Basic Payments made have been reimbursed pursuant to the Bond Resolution, but in no event shall the Intergovernmental Lease Agreement expire later than 50 years from its effective date (the date that the Series 2017 Bonds are delivered). Upon such expiration if all other financial obligations of the parties to the Intergovernmental Lease Agreement have been paid, the City shall be relieved of any further payments under the Intergovernmental Lease Agreement and, upon the demand of the City, the Issuer or its successors or assigns shall convey fee simple title to the Leased Property to the City.

Payments. The City shall make the Basic Payments to the Issuer in an amount sufficient to enable the Issuer to pay in full the principal of, redemption premium (if any) and the interest on the Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution. See "PRINCIPAL AND INTEREST REQUIREMENTS" herein for the debt service schedule for the Series 2017 Bonds. In furtherance of this obligation to provide for Basic Payments, the City agreed that, pursuant to the Bond Resolution, on the 25th day of each May and November (or the next Business Day if such day is not a Business Day) during the Lease Term, the City shall pay to the Issuer, by payment directly to the Sinking Fund Custodian, in immediately available funds, a sum equal to the amount payable on the next succeeding June 1 or December 1, respectively, with respect to the principal of, redemption premium (if any) and interest on the then Outstanding Bonds, including without limitation, amounts due with respect to redemption of Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution, less any amount held by the Sinking Fund Custodian in the Sinking Fund on such day. If the amount held by the Sinking Fund Custodian in the Sinking Fund should be sufficient to pay at the times required the principal of, redemption premium (if any) and interest on all Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution then remaining unpaid, the Lessee shall not be obligated to make any further such payments under the provisions of this subsection.

The City shall also pay as Additional Payments under the Intergovernmental Lease Agreement, (a) to the Issuer its reasonable costs and expenses in connection with the management of the Parking Facility, including, but not limited to, the Issuer's Fee, Annual Fee, advisor fees, counsel fees and any unreimbursed costs of issuance of the Series 2017 Bonds and

any Additional Bonds permitted by the Bond Resolution or costs of the Issuer with respect to the financing of the Parking Facility and the related public improvements not paid from the proceeds of the Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution and (b) any other obligations of the Issuer under the Bond Purchase Agreement relating to disclosure with respect to the Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution.

Obligations of City Under the Intergovernmental Lease Agreement Absolute and Unconditional. The obligations of the City to make the full amount of Intergovernmental Payments provided under the Intergovernmental Lease Agreement and to perform and observe the other agreements on their part contained therein shall be absolute and unconditional. As security for the Basic Payments required to be made under Intergovernmental Lease Agreement and the obligations required to be performed by the City under the Intergovernmental Lease Agreement, the City pledges to the Issuer its full faith and credit and taxing power for such payment and performance. The City covenants that, in order to make any payments of Basic Payments when due from its general funds to the extent required under the Intergovernmental Lease Agreement, it will exercise its power of taxation to the extent necessary to pay the amounts required to be paid thereunder and will make available and use for such payments all taxes levied and collected for that purpose together with funds received from any other sources.

The Lessee further covenants and agrees that in order to make funds available for such purpose in each Fiscal Year, it will, in its general revenue, appropriation, and budgetary measures through which its tax funds or revenues and the allocation thereof are controlled or provided for, include sums to satisfy any such payments of Basic Payments that may be required to be made hereunder, whether or not any other sums are included in such measure, until all sufficient payments so required to be made under the Intergovernmental Lease Agreement shall have been made in full. The obligation of the City to make any payments that may be required to be made from its general funds shall constitute a general obligation of the City and a pledge of the full faith and credit of the City to provide the funds required to fulfill any such obligation. In the event for any reason any such provision or appropriation is not made as provided in the Intergovernmental Lease Agreement, then the fiscal officers of the City are authorized and directed to set up as an appropriation on their accounts in the appropriate Fiscal Year the amounts required to pay the obligations that may be due from the general funds of the City. The amount of such appropriation shall be due and payable and shall be expended for the purpose of paying any such obligations, and such appropriation shall have the same legal status as if the City had included the amount of the appropriation in its general revenue, appropriation, and budgetary measures, and the fiscal officers of the City shall make such payments of Basic Payments to the Issuer if for any reason the payment of such obligations shall not otherwise have been made.

The Lessee further covenants and agrees that, during the term of the Intergovernmental Lease Agreement (including any amendments or supplements), it shall, to the extent necessary, levy an annual ad valorem tax on all taxable property located within the territorial limits of the City, as now existent and as the same may hereafter be extended, as may be necessary to produce in each year revenues that will be sufficient to fulfill the City's obligations under the Intergovernmental Lease Agreement, from which revenues the City agrees to appropriate sums sufficient to pay in full when due all of the City's obligations thereunder. The City shall create

and grant a lien in favor of the Issuer on any and all revenues realized by the City from such tax, to make the payments that are required under the Intergovernmental Lease Agreement. Nothing contained in the Intergovernmental Lease Agreement, however, shall be construed as limiting the right of the to make the payments called for by the Intergovernmental Lease Agreement out of any funds lawfully available to it for such purpose, from whatever source derived, including Net Parking Fees.

Notwithstanding the prior paragraph, each of the Issuer and the City reserve, and shall retain, all rights and remedies it may have for breach of any representation, warranty or covenant or defaults in the performance or payment of any obligation owed under the Intergovernmental Lease Agreement provided such rights and remedies are pursued as independent causes of action in separate proceedings.

See "APPENDIX D - FORM OF THE INTERGOVERNMENTAL LEASE AGREEMENT" attached hereto. For additional information related to the City, including certain other indebtedness of the City, which is General Fund backed, self-supporting, and/or property tax supported and its financial condition generally, see "THE CITY" and "FISCAL OVERVIEW OF THE CITY" herein, and "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Additional Parity Bonds

The Bond Resolution permits the Issuer, from time to time, to issue Additional Parity Bonds, at the direction of the City, ranking as to lien on moneys payable by the City to the Issuer under the Intergovernmental Lease Agreement (pari passu with the lien thereon of Series 2017 Bonds) in an unlimited amount, provided that all of the conditions of the Bond Resolution relating are met. See "APPENDIX C - FORM OF THE BOND RESOLUTION" attached hereto.

Limited Obligations

THE SERIES 2017 BONDS SHALL NOT CONSTITUTE A DEBT NOR A MORAL OR GENERAL OBLIGATION OF THE ISSUER, NOR CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE, THE COUNTY, THE CITY, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER, BUT THE SERIES 2017 BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR AS PROVIDED IN THE BOND RESOLUTION AND THE ISSUANCE OF THE SERIES 2017 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OR THE COUNTY OR THE CITY TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATEVER FOR THE PAYMENT THEREOF. THE ISSUER HAS NO TAXING POWER.

NO OWNER OF THE SERIES 2017 BONDS SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT THEREOF AGAINST ANY PROPERTY OF THE STATE,

THE COUNTY, OR THE CITY, NOR SHALL THE SERIES 2017 BONDS CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY SUCH PROPERTY, PROVIDED, HOWEVER, THAT IN ACCORDANCE WITH THE PROVISIONS OF THE CONSTITUTION AND LAWS OF THE STATE, THE OBLIGATION OF THE CITY TO MAKE THE PAYMENTS IT HAS CONTRACTED TO MAKE BY THE PROVISIONS OF THE INTERGOVERNMENTAL LEASE AGREEMENT SHALL CONSTITUTE A GENERAL OBLIGATION AND A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY, AND THE OBLIGATION WHICH THE CITY HAS UNDERTAKEN TO MAKE SUCH PAYMENTS FROM TAXES TO BE LEVIED FOR THAT PURPOSE IS A MANDATORY OBLIGATION TO LEVY AND COLLECT SUCH TAXES FROM YEAR TO YEAR IN AN AMOUNT SUFFICIENT TO FULFILL AND FULLY COMPLY WITH THE TERMS OF SUCH OBLIGATION. NEITHER THE MEMBERS OF THE GOVERNING BODY OF THE ISSUER NOR ANY PERSON EXECUTING THE SERIES 2017 BONDS SHALL BE LIABLE PERSONALLY ON THE SERIES 2017 BONDS BY REASON OF THE ISSUANCE THEREOF.

ENFORCEABILITY OF REMEDIES

The realization of value from the taxing power of the City under the Intergovernmental Lease Agreement upon any default will depend upon the exercise of various remedies specified by the Bond Resolution and the Intergovernmental Lease Agreement. These and other remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights and remedies with respect to the Series 2017 Bonds may be limited by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, reorganization, insolvency, or other laws affecting creditors' rights or remedies heretofore or hereafter enacted. A court may decide not to order the specific performance of the covenants contained in the Bond Resolution or the Intergovernmental Lease Agreement.

Notwithstanding the foregoing, O.C.G.A. § 36-80-5 provides that no authority or municipality created under the State Constitution or the laws of the State will be authorized to file a petition for relief from payment of its debts as they mature or a petition for consolidation of its debts under any federal statute providing for such relief or consolidation or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. O.C.G.A. § 36-80-5 also provides that no chief executive, mayor, city council, or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any authority or municipality created under the State Constitution or laws of the State of any petition for federal relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities.

FISCAL OVERVIEW OF THE CITY

In addition to the information regarding the City set forth in "THE CITY" herein, and "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto, the City has provided the following financial information regarding the City. A complete review of this Official Statement, including each of the appendices attached hereto, is essential to the making of an informed investment decision by any potential purchaser of the Series 2017 Bonds. In the making of an informed investment decision relating to the Series 2017 Bonds, a potential purchaser should not conclude that the presentation of information in the body of this Official Statement, versus the presentation of information in Appendix A or Appendix B attached hereto, denotes that the information related to the City so provided in the body of this Official Statement is of more relevance or importance than the information set forth in Appendix A or Appendix B attached hereto.

Management's Discussion and Analysis

The following management's discussion and analysis presents a narrative overview and analysis of the financial activities of the City's General Fund for the first nine months of Fiscal Year 2017 compared against the first nine months of Fiscal Year 2016 on an unaudited basis. For additional information relating to the management's discussion and analysis of the financial activities of the City's General Fund for the first nine months of Fiscal Year 2017 compared against the first nine months of Fiscal Year 2016, see "FISCAL OVERVIEW OF THE CITY - Statement of Revenues, Expenditures and Changes in General Fund Balances" herein.

Revenues. Budgeted General Fund revenues, excluding fund balance appropriations, were $607.4 million for Fiscal Year 2017 compared to $593.1 million for Fiscal Year 2016. For the first nine months of Fiscal Year 2017, revenues represented 80.2% of the annual budget compared to 77.2% for the first nine months of Fiscal Year 2016. Total revenues for the first nine months of Fiscal Year 2017 were $489.1 million or 6.4% greater than the amount for the first nine months of Fiscal Year 2016. Property taxes collected on a cash basis during the first nine months of Fiscal Year 2017 were $191.9 thousand or 1.4% greater than the property taxes collected on a cash basis during the first nine months of Fiscal Year 2016. Local Option Sales Taxes ("LOST") revenues collected during the first nine months of Fiscal Year 2017 were approximately $78.7 thousand or 1.2% greater than LOST revenues collected during the first nine months of Fiscal Year 2016. Public utility, alcoholic beverage, and other taxes (collectively, "Other Taxes") collected during the first nine months of Fiscal Year 2017 were $87.0 million or 8.6% less than Other Taxes collected during the first nine months of Fiscal Year 2016 due primarily to timing differences of public utility franchise payments and insurance premium taxes. Licenses and permits revenues collected during the first nine months of Fiscal Year 2017 were $89.2 million or 29.1% greater than the licenses and permits revenues collected during the first nine months of Fiscal Year 2016 due primarily to strong business license collections and improved business conditions. Fines and forfeiture revenues collected during the first nine months of Fiscal Year 2017 were $16.9 million or 6.9% lower than fines and forfeiture revenues collected during the first nine months of Fiscal Year 2016 due primarily to lower traffic citations and reduced pre-trial intervention revenues. Building rental income collected during

the first nine months of Fiscal Year 2017 was $9.1 million or 41.5% greater than the building rental income collected during the first nine months of Fiscal Year 2016 due primarily to an increase in the number of county inmates resulting in increased jail rental income paid to the City by the County.

Expenditures. The General Fund expenditures budget adopted for Fiscal Year 2017 was $607.4 million, an increase of $14.3 million or 2.41% greater than the General Fund expenditures budget for Fiscal Year 2016 of $593.1 million. The General Fund expenditures budget for Fiscal Year 2017 includes 2.4% or $14.9 million, which was reserved at the beginning of Fiscal Year 2017 for any contingencies or unanticipated expenditures and is not available for spending at the departmental level (the "Reserves"). During the first nine months of Fiscal Year 2017, $7.8 million of the Reserves were appropriated for use in Fiscal Year 2017. Actual total expenditures through the first nine months of Fiscal Year 2017 were $31.2 million greater than the first nine months of Fiscal Year 2016. The increase in actual total expenditures was primarily due to increases in: Department of Police Services ("Police Department") of $11.4 million; General Government of $5.6 million; Department of Public Works of $9.6 million; Department of Fire of $2.4 million; Department of Parks, Recreation and Cultural Affairs (the "Parks Department") of $2.0 million; Department of Corrections of $1.5 million. The increase in the Police Department expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily due to salary adjustments and increased overtime costs. The increase in the General Government expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily due to salary increases as the result of moving the permits and licenses office into the General Fund. The increase in the Public Works Department expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily due to increased consulting expenditures relating to various projects. The increase in the Department of Fire expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily due to employer contributions to the defined benefit plan. The increase in the Parks Department expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily related to consulting fees. The increase in the Department of Corrections expenditures for the first nine months of Fiscal Year 2017 compared to the first nine months of Fiscal Year 2016 was primarily due to salaries relating to overtime.

For information relating to the management's discussion and analysis of the City's financial activities for Fiscal Year 2016, see "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 - FINANCIAL SECTION - Management's Discussion and Analysis" attached hereto.

For a summary of the City's general fund trends for Fiscal Years 2012 through 2016, see "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY - CITY FINANCIAL INFORMATION - General Fund Trends" attached hereto.

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Statement of Revenues, Expenditures and Changes in General Fund Balances

The following table presents the City's statement of revenues, expenditures and changes in general fund balances for Fiscal Years 2012 through 2016.

City of Atlanta, Georgia Statement of Revenues, Expenditures and Changes in Fund Balances General Fund (Dollars in thousands) Fiscal Years 2012 2013 2014 2015 2016 REVENUES Property taxes $185,513 $180,229 $184,436 $191,015 $193,217 Local and municipal option sales taxes 97,400 99,872 99,708 102,224 103,515 Public utility, alcoholic beverage and other taxes 115,538 96,781 101,417 105,197 108,686 Licenses and permits 59,105 55,641 67,075 69,681 78,447 Charges for current services 4,580 5,293 8,476 10,087 10,230 Fines, forfeitures and penalties 22,050 22,202 24,206 26,670 24,392 Investment income 1,444 (312) 2,546 2,030 2,311 Building rentals and concessions 6,688 6,600 7,036 7,808 7,411 (1) (2) Other 2,415 2,958 3,690 2,354 2,101 Total revenues $494,733 $469,264 $498,590 $517,066 $530,310 EXPENDITURES Current: General government $110,424 $110,733 $119,177 $125,658 $153,949 Police 164,117 159,943 170,058 177,971 187,437 Fire 72,120 72,730 78,989 82,104 78,521 Corrections 27,496 25,311 30,140 33,457 34,756 Public works 26,310 25,515 36,787 33,328 39,939 Parks, recreation and cultural affairs 27,333 32,237 29,050 32,103 35,689 Debt Service: Principal payments 19,028 18,492 15,456 11,094 11,585 Interest payments 12,208 8,957 7,401 4,394 3,931 Other(3) - 9 31 15 15 Total expenditures $459,036 $453,927 $487,089 $500,124 $545,822 Excess (deficiency) of revenues over expenditures 35,697 15,337 11,501 16,942 (15,512) OTHER FINANCING SOURCES (USES) Proceeds from sale of assets $ 14,623 $ 109 $ 2,547 $ 2,119 $ 1,278 Proceeds from capital leases - 363 - 7,779 Transfers in $ 14,256 $ 36,457 $ 36,553 $ 39,134 $ 41,361 Transfers out (32,206) (40,459) (47,143) (49,166) (32,771) Total Other Financing Sources (Uses) (3,327) (3,893) (7,680) (7,913) 17,647 Net change in fund balances $ 32,370 $ 11,444 $ 3,821 $ 9,029 $ 2,135 FUND BALANCE, BEGINNING OF PERIOD 94,350 126,720 138,164 141,985 151,014 FUND BALANCE, END OF PERIOD $126,720 $138,164 $141,985 $151,014 $153,149 ______(1) Includes $299,000, which was presented in the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2012 as "Intergovernmental revenues and contributions." (2) Includes $2,000 presented in the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2014 as "Intergovernmental revenues and contributions." (3) Includes amounts presented in the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2013, June 30, 2014, June 30, 2015, and June 30, 2016 as "Paying agent fees."

Source: City of Atlanta, Department of Finance.

22 The following table presents the City's comparative Statement of Revenues, Expenditures and Changes in General Fund Balances for the first nine months of Fiscal Years 2017 and 2016 and the variances between such periods.

City of Atlanta, Georgia Statement of Revenues, Expenditures and Changes in Fund Balances General Fund (Dollars in thousands) UNAUDITED

First Nine Months of FY2016 2017 2016 Variance REVENUES Property Taxes $ 193,217 $ 191,933 $ 183,312 $ 2,621 Local and municipal option sales taxes 103,515 78,679 77,773 906 Public utility, alcoholic beverage and other taxes 108,686 87,004 94,511 (7,507) Licenses and permits 78,447 89,175 63,193 25,982 Charges for current services 10,230 4,327 7,531 (3,204) Fines, forfeitures and penalties 24,392 16,918 18,088 (1,170) Investment income 2,311 --- 1,357 (1,357) Building rentals and concessions 7,411 9,076 5,308 3,768 Other(1) 2,101 11,965 1,031 10,934 Total revenues $ 530,310 $ 489,077 $ 485,104 $ 30,973

EXPENDITURES Current: General government $ 153,949 $ 136,760 $ 131,186 $ 5,574 Police 187,437 148,074 163,677 11,397 Fire 78,521 60,476 58,108 2,368 Corrections 34,756 25,959 24,441 1,518 Public Works 39,939 33,716 24,151 9,565 Parks, recreation and cultural affairs 35,689 27,671 25,661 2,010 Debt Service: Principal payments 11,585 6,748 11,406 (4,658) Interest payments 3,931 5,834 2,414 3,420 Paying agent fees 15 5 7 (2) Total Expenditures $ 545,822 $ 445,243 $ 414,051 $ 31,192

Excess (deficiency) of revenues over expenditures (15,512) 43,834 44,053 (219)

OTHER FINANCING SOURCES (USES) Proceeds from sale of assets $ 1,278 $ 422 $ 579 $ (157) Proceeds from capital leases 7,779 - 7,779 (7,779)(2) Transfers in 41,361 79,603 27,697 51,906(3) Transfers out (32,771) (23,197) (22,692) (505) Total Other Financing Sources (Uses) $ 17,647 $ 56,828 $ 13,363 $ 43,465 Net change in fund balances $ 2,135 $ 100,662 $ 57,416 $ 43,246

Fund Balance: Beginning of the Period 151,014 153,149 151,014 FUND BALANCE, END OF PERIOD $ 153,149 $ 253,811 $ 208,430 ______(1) Includes amounts from APS. (2) The decrease in capital lease revenue is due to the purchase of $7.8 million of 800Mhz public safety radios and network equipment in Fiscal Year 2016. (3) Fiscal Year 2017 includes Transfers in of $51.9 million due to the consolidation of the Building Permitting Fund balance back to the General Fund.

Source: City of Atlanta Department of Finance.

For more complete information, see "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

General Obligation Bonds

Authorization and Debt Limit. The State Constitution requires approval from a majority of the qualified voters of the City ("Voter Approval") prior to the issuance of general obligation bonds (the "General Obligation Bonds"); provided, however, that the City may issue: (a) not more than $4 million dollars in aggregate principal amount of general obligation bonds for lawful public purposes other than for school purposes in any Fiscal Year (the "Public Purpose General Obligation Bonds"), and (b) not more than $4 million dollars in aggregate principal amount of general obligation bonds for school purposes in any Fiscal Year (the "School Purpose General Obligation Bonds" and, together with the Public Purpose General Obligation Bonds, the "Annual General Obligation Bonds"), without Voter Approval. The General Obligation Bonds and the Public Purpose General Obligation Bonds are supported by the City's bond levy and the School Purpose General Obligation Bonds are supported by the City's school bond levy. For additional information related to the City's bond levy and the City's school bond levy, see "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY - AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT - Ad Valorem Taxation" attached hereto.

Pursuant to the State Constitution, the total General Obligation Bonds and Annual General Obligation Bonds, shall never exceed 12% of the assessed value of all the taxable property in the City (the "Debt Limit"), provided that the Public Purpose General Obligation Bonds shall never exceed 8% of the assessed value of all the taxable property in the City and the School Purpose General Obligation Bonds shall never exceed 4% of the assessed value of all the taxable property in the City. See "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY - CITY DEBT STRUCTURE - Legal Debt Margin" attached hereto. Certain other indebtedness of the City is General Fund backed, self-supporting, and/or property tax supported but does not require Voter Approval and is not applicable to the Debt Limit. See "FISCAL OVERVIEW OF THE CITY - Additional General Fund Backed Debt and - Property Tax Supported Debt" herein.

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Outstanding General Obligation Bonds. The following table presents the City's outstanding General Obligation Bonds and Annual General Obligation Bonds (collectively, the "Outstanding General Obligation Bonds"), which are secured by the full faith and credit of the City as of the date of this Official Statement.

Outstanding Par Amount General Obligation Bonds: Public Improvement General Obligation Bonds, Series 2008 $ 6,080,000 General Obligation Refunding Bonds, Series 2009A 33,530,000 General Obligation Refunding Bonds, Series 2014A 15,365,000 General Obligation Refunding Bonds, Series 2014B 40,025,000 General Obligation Public Improvement Bonds, Series 2015 252,000,000

Annual General Obligation Bonds: Various Purpose General Obligation Bonds, Series 2016 3,285,000 Total $350,285,000 ______Source: City of Atlanta, Department of Finance.

For more complete information, see "FISCAL OVERVIEW OF THE CITY - Ratio of General Bonded Debt Outstanding" herein and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

No Proposed Issuance of General Obligation Bonds and Annual General Obligation Bonds. The City does not currently plan to issue any General Obligation or Annual General Obligation Bonds in Fiscal Year 2018. However, the City may pursue financing or refinancing opportunities that: (a) lower costs of borrowing and/or maximize savings in accordance with long-term planning objectives, and/or (b) provide funding for projects approved by the City Council.

Additional General Fund Backed Debt and Self-Supporting Debt

In addition to the Outstanding General Obligation Bonds, the City has other indebtedness, which may be payable from the City's General Fund, including the hereinafter defined Additional General Fund Backed Debt and Self-Supporting Debt.

Additional General Fund Backed Debt. In addition to the Outstanding General Obligation Bonds, the City has other indebtedness, which is payable from the City's General Fund, including: (a) contractual obligations of the City relating to the Georgia Municipal Association, Inc. Installment Sale Program Certificates of Participation (City Court of Atlanta Project), Refunding Series 2016 (the "Certificates of Participation"), which are payable solely from funds derived from court fines and forfeitures, (b) contractual obligations of the City relating to the Solid Waste Management Authority of the City of Atlanta Refunding Revenue Bonds, Series 2008 (the "SWMA Revenue Refunding Bonds"), (c) contractual obligations of the City relating to the Atlanta Public Safety and Judicial Facilities Authority Revenue Refunding

Bonds (Public Safety Facility Project), Series 2016 (the "2016 APSJFA Revenue Bonds"), (d) contractual obligations of the City relating to certain intergovernmental agreements (the "Intergovernmental Agreements"), (e) a note payable relating to the City's Public Safety Annex (the "Notes Payable"), (f) contractual obligations of the City relating to a portion of the certificates of participation issued in 1998 by the Georgia Municipal Association, Inc. in connection with a lease pool arrangement with the City and 29 other local governments (the "1998 GMA Lease Pool"), (g) contractual obligations of the City relating to the Georgia Municipal Association, Inc. Installment Sale Program Certificates of Participation (City of Atlanta, Georgia Detention Center, Municipal Court and City Hall East Projects), Series 1998 (the "1998 Installment Sale Program" and, together with the 1998 GMA Lease Pool, the "Other Long-Term Debt"), and (h) certain capital leases relating to digital radio upgrades (the "Capital Leases"). The Certificates of Participation, the SWMA Revenue Refunding Bonds, the 2016 APSJFA Revenue Bonds, the Intergovernmental Agreements, the Notes Payable, the Other Long-Term Debt, and the Capital Leases are collectively referred to herein as "Additional General Fund Backed Debt." As of June 20, 2017, the City had Additional General Fund Backed Debt outstanding in the aggregate amount of $392,157,500. For additional information regarding the Additional General Fund Backed Debt, see "FISCAL OVERVIEW OF THE CITY - Ratio of General Bonded Debt Outstanding" herein and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Proposed Issuance of Additional General Fund Backed Debt. The City may incur other indebtedness in Fiscal Year 2018 relating to: (a) contractual obligations in connection with the proposed issuance of certain bonds in the approximate aggregate principal amount of $25,000,000* to fund the City's Homeless Opportunity/Affordable Housing Program; and (b) other financing or refinancing opportunities that: (i) lower costs of borrowing and/or maximize savings in accordance with long term planning objectives, and/or (ii) provide funding for projects approved by the City Council.

Self-Supporting Debt. In addition to the Outstanding General Obligation Bonds and the Additional General Fund Backed Debt, the City has other indebtedness, which is considered to be self-supporting that may be payable from the City's General Fund, including: (a) certain payments due to Atlanta Public Schools, (b) certain loans relating to the Section 108 Guarantee Program, (c) contractual obligations of the City relating to the Downtown Development Authority of the City of Atlanta Revenue Bonds (City Plaza Redevelopment Project), Series 2016, and (d) contractual obligations of the City relating to the Atlanta Urban Redevelopment Agency Revenue Refunding Bonds (Downtown Parking Deck Project), Series 2017 (the "2017 AURA Bonds") (collectively, the "Self-Supporting Debt"). As of June 20, 2017, the City had Self-Supporting Debt outstanding in the aggregate amount of $35,495,000. For additional information regarding the Self-Supporting Debt, see "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Proposed Issuance of Self-Supporting Debt. The City expects that the contractual obligations of the City relating to the Series 2017 Bonds will be considered to be Self-Supporting

* Preliminary; subject to change.

Debt. In addition, the City may also incur other indebtedness in Fiscal Year 2018 relating to: (a) contractual obligations in connection with the proposed issuance of certain bonds by the City of Atlanta and Fulton County Recreation Authority in the approximate aggregate principal amount of $175,800,000* to, among other things, partially fund the renovation of Philips Arena; and (b) other financing or refinancing opportunities that: (i) lower costs of borrowing and/or maximize savings in accordance with long term planning objectives, and/or (ii) provide funding for projects approved by the City Council.

Property Tax Supported Debt

In addition to the Outstanding General Obligation Bonds, certain Additional General Fund Backed Debt, and the Self-Supporting Debt, the City has other indebtedness, which is property tax supported, including the hereinafter defined Limited Obligation Tax Allocation District Bonds.

Limited Obligation Tax Allocation District Bonds. The City has issued several series of tax allocation district bonds to promote economic development in undeveloped or underdeveloped areas in the City (the "Limited Obligation Tax Allocation District Bonds"). The Limited Obligation Tax Allocation District Bonds are not secured by the full faith and credit of the City and are not payable from the City's General Fund, but are secured solely by and payable from pledged revenues, including tax allocation increments (the amount of property taxes generated within the tax allocation district that exceeds the amount collected from the same area prior to development). A substantial portion of the ad valorem property taxes collected from property within the tax allocation districts is pledged as security for the Limited Obligation Tax Allocation District Bonds. The City is precluded from creating additional tax allocation districts to the extent that the total taxable value of its existing tax allocation district exceeds 10% of the total value of taxable property in the City. As of June 20, 2017, approximately 15% of the City's estimated actual value of taxable property was located within a tax allocation district. As of June 20, 2017, the City had Limited Obligation Tax Allocation District Bonds outstanding in the aggregate amount of $499,385,000. For additional information regarding the Limited Obligation Tax Allocation District Bonds, see "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

No Proposed Issuance of Limited Obligation Tax Allocation District Bonds. The City does not currently plan to issue any Limited Obligation Tax Allocation District Bonds in Fiscal Year 2018. However, the City may pursue financing or refinancing opportunities that: (a) lower costs of borrowing and/or maximize savings in accordance with long-term planning objectives, and/or (b) provide funding for projects approved by the City Council.

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* Preliminary; subject to change.

Ratio of General Bonded Debt Outstanding

The following table presents the City's ratio of general bonded debt outstanding, which (a) includes the General Obligation Bonds, Annual General Obligation Bonds, and Additional General Fund Backed Debt, and (b) excludes the Self-Supporting Debt, the Limited Obligation Tax Allocation District Bonds, and contractual obligations of the City relating to certain debt issued by the City of Atlanta and Fulton County Recreation Authority and The Atlanta Development Authority (the "Component Unit Debt"), for Fiscal Years 2012 through 2016. For additional information regarding the Self-Supporting Debt, the Limited Obligation Tax Allocation District Bonds, and the Component Unit Debt, see "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto. City of Atlanta, Georgia Ratio of General Bonded Debt Outstanding (Unaudited) (dollars in thousands, except per capita)

Additional General Fund Backed Debt Net SWMA Percentage of General Bond General Revenue APSJFA Other Actual Fiscal Obligation Sinking Obligation Certificates of Refunding Revenue Intergovernmental Notes Long-term Capital Taxable Value Per Year Debt(1)(2) Fund Debt Participation(1)(3) Bonds(4) Bonds(1)(5) Agreements(6) Payable(7) Debt(8) Leases(9) Total of Property(10) Capita(11) 2012 $230,680 $(59,150) $171,530 - $16,745 $41,230 $13,433 $11,026 $86,537 $69,349 $409,850 1.86% $ 923 2013 215,320(12) (62,496) 152,824 - 15,410 39,265 40,841 9,394 79,070 64,120 400,924 1.88 894 2014 199,215(12) (66,646) 132,569 - 14,005 37,230 133,358 7,683 62,224 57,129 444,198 2.05 974 2015 395,890(12) (33,756) 362,134 - 12,530 35,110 350,468 5,892 57,639 50,620 874,393 3.89 1,918 2016 357,955(12) (15,145) 342,810 $32,160 10,980 32,900 343,455 4,016 53,759 19,261 839,341 3.36 1,809 ______(1) Excludes deferred amount on bond issuance premiums. (2) Includes the General Obligation Bonds ($354,005,000) and the Annual General Obligation Bonds ($3,950,000). As of June 20, 2017, the General Obligation Bonds ($347,000,000) and the Annual General Obligation Bonds ($3,285,000), were outstanding in the aggregate amount of $350,285,000. (3) Includes the Certificates of Participation ($32,160,000), which are payable solely from funds derived from court fines and forfeitures. As of June 20, 2017, the Certificates of Participation were outstanding in the aggregate amount of $29,780,000. (4) Includes the SWMA Revenue Refunding Bonds ($10,980,000). As of June 20, 2017, the SWMA Revenue Refunding Bonds were outstanding in the aggregate amount of $9,360,000. (5) Includes the 2006 APSJFA Revenue Bonds ($32,900,000). On September 15, 2016, the City issued the 2016 APSJFA Revenue Bonds and refunded a portion of the 2006 APSJFA Bonds. On December 1, 2016, the City paid the principal of and accrued interest on all of the outstanding unrefunded 2006 APSJFA Revenue Bonds. As of June 20, 2017, the 2016 APSJFA Revenue Bonds were outstanding in the aggregate amount of $27,150,000. (6) Includes Intergovernmental Agreements in connection with the: (a) City of Atlanta and Fulton County Recreation Authority Revenue Bonds, Zoo Series 2007A (the "2007 Zoo Bonds") ($9,345,000); (b) Urban Residential Finance Authority of the City of Atlanta, Georgia Taxable Revenue Bonds (Housing Opportunity Program), Series 2007A (the "2007 URFA Bonds") ($24,855,000); (c) Atlanta Urban Redevelopment Agency Taxable Recovery Zone Economic Development Bonds, Series 2010 (the "2010 AURA Bonds") ($17,285,000); (d) City of Atlanta and Fulton County Recreation Authority Park Improvement Revenue and Refunding Bonds, Series 2014A (the "2014A Park Bonds") ($59,390,000); (e) City of Atlanta and Fulton County Recreation Authority Park Improvement Revenue and Refunding Bonds, Taxable Series 2014B (the "2014B Park Bonds") ($7,925,000); and (f) The Atlanta Development Authority Revenue Bonds (New Downtown Atlanta Stadium Project), Senior Lien Series 2015A-1, Senior Lien Taxable Series 2015A-2, and Second Lien Series 2015B (collectively, the "2015 Stadium Bonds") ($224,655,000). As of June 20, 2017, the Intergovernmental Agreements in connection with the: (a) 2007 Zoo Bonds ($8,197,500); (b) 2010 AURA Bonds ($16,065,000); (c) 2014A Park Bonds ($57,555,000); (d) 2014B Park Bonds ($6,395,000); and (e) 2015 Stadium Bonds ($224,655,000), were outstanding in the aggregate amount of $312,867,500. In addition, the City entered into an intergovernmental agreement in connection with the issuance on May 3, 2017of $63,685,000 in aggregate principal amount of Urban Residential Finance Authority of the City of Atlanta, Georgia Refunding and Taxable Revenue Bonds (Housing Opportunity Program), Series 2017A (the "2017 URFA Bonds"), which were used to, among other things, refund all of the 2007 URFA Bonds. As of June 20, 2017, the 2017 URFA Bonds were outstanding in the aggregate amount of $63,685,000. (7) Includes the Notes Payable ($4,016,000). As of June 20, 2017, the Notes Payable were outstanding in the aggregate amount of $2,053,095. (8) Includes the 1998 GMA Lease Pool ($32,444,000) and the 1998 Installment Sale Program ($20,385,000). As of June 20, 2017, the Other Long-Term Debt, including the: (a) 1998 GMA Lease Pool ($32,444,000); and (b) 1998 Installment Sale Program ($15,330,000), was outstanding in the aggregate amount of $47,774,000. (9) Includes the Capital Leases ($19,261,000). As of June 20, 2017, the aggregate present value of the future minimum lease payments under the Capital Leases was $23,543,377. (10) See the table entitled "Schedule 6 City of Atlanta, Georgia Assessed Value and Estimated Actual Value of Taxable Property (unaudited) Last Ten Fiscal Periods" in the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016, which is available on EMMA for the total taxable assessed value. (11) Population data not available for 2016, percentage based on 2015 data. See the table entitled "Schedule 18 City of Atlanta, Georgia Demographic and Economic Statistics (unaudited) Last Ten Years" in the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016, which is available on EMMA for the population value. (12) Reflects certain prior period adjustments.

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance. 28

For additional information, see "APPENDIX A - STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY" and "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Pension and Other Post-employment Benefits

Overview of the City's Pension Plans. The City maintains the following separately administered pension plans:

Plan Type Plan Name Agent multiple-employer, defined benefit The General Employees' Pension Plan Single employer, defined benefit Firefighters' Pension Plan Single employer, defined benefit Police Officers' Pension Plan Single employer, defined contribution General Employees' Defined Contribution Plan ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

The City is required to have actuarial estimates produced for its pension and other post-employment benefits ("OPEB") liabilities. Actuarial estimates are "forward looking" information that reflect the judgment of the fiduciaries of the pension plans and are based upon a variety of assumptions, one or more of which may prove to be inaccurate or be changed in the future, and will change with the future experience of the pension plans. Further, this summary of the City's pension and OPEB information is designed to provide an overview of such matters, and is qualified, in its entirety, to the pension plan documents (available as provided below), the pension plan and OPEB valuations and the audited basic financial statements of the City attached to this Official Statement as Appendix B.

A stand-alone audited financial report is issued for the General Employees' Pension Plan, the Firefighters' Pension Plan, and the Police Officers' Pension Plan (collectively, the "Defined Benefit Pension Plans") and can be obtained at the following address: City of Atlanta, 68 Mitchell Street, S.W., Suite 1600, Atlanta, Georgia 30335.

The General Employees' Defined Contribution Plan does not have separately issued financial statements. For a condensed financial statement for the General Employees' Defined Contribution Plan, see "FISCAL OVERVIEW OF THE CITY - Pension and Other Post-employment Benefits - General Employees' Defined Contribution Plan" herein.

The valuation date for the Defined Benefit Pension Plans is July 1, 2014. The measurement date for the Defined Benefit Pension Plans is June 30, 2015. The allocation of the pension liability is based upon Fiscal Year 2015 contributions from the various departments. The City is presenting net pension liability as of June 30, 2015 for its' Fiscal Year 2016 financials.

Membership. The following table presents pension plan membership as of June 30, 2016:

General Employees' - the City Firefighters' Police Officers' Inactive plan members or beneficiaries currently receiving benefits 3,874 1,007 1,510 Inactive plan members entitled to, but not yet receiving benefits 275 15 13 Active plan members 3,452 1,003 1,962 Total membership 7,601 2,025 3,485 ______Source: City of Atlanta, Actuarial Reports for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

The Defined Benefit Pension Plans' Governance

The General Employees' Pension Plan. The General Employees' Pension Plan is an agent multiple-employer defined benefit plan and was established by a 1924 Act of the State of Georgia Legislature to provide retirement benefits for full time permanent employees of the City, excluding sworn personnel of the Police and Fire Rescue Departments, and the employees of the Atlanta Board of Education (the "School System") who are not covered under the Teachers Retirement System of Georgia. Until 1983, the Georgia Legislature established all requirements and policies of the General Employees' Pension Plan. By a constitutional amendment, effective July 1983, control over all aspects of the General Employees' Pension Plan transferred to the City under the principle of Home Rule. The types of benefits offered by the General Employees' Pension Plan are: retirement, disability, and pre-retirement death benefits. Classified employees and certain nonclassified employees pay grade 18 and below not covered by either the Firefighters' Pension Plan or Police Officers' Pension Plan, and employees hired after September 1, 2005 are required to become members of the General Employees' Pension Plan. A detailed description of the General Employees' Pension Plan benefits terms can be found within "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 - Notes to Financial Statements - Section V. A." attached hereto.

The funding methods and determination of benefits payable were established by the legislative acts creating the General Employees' Pension Plan, as amended, and in general, provide that funds are to be accumulated from employee contributions, City and School System contributions, and income from the investment of accumulated funds.

The General Employees' Pension Plan is administered as an agent multiple employer defined benefit pension plan by the Board of Trustees. Membership of the Board of Trustees includes the Mayor or his designee, the City's Chief Financial Officer, a member of the City Council, two active City employee representatives, one retired City representative, one active School System representative, and one retired School System representative. All modifications to the General Employees' Pension Plan must be supported by actuarial analysis and receive the recommendations of the City Attorney, the City's Chief Financial Officer, and the Board of

Trustees. Each pension law modification must be adopted by at least two thirds vote of the City Council and approved by the Mayor.

The Firefighters' Pension Plan and the Police Officers' Pension Plan. The Firefighters' Pension Plan and the Police Officers' Pension Plan are single-employer defined benefit plans and were established by a 1924 Act of the State of Georgia Legislature to provide retirement benefits for full time sworn firefighters and police officers' of the City Fire Rescue Department and the Police Department. Until 1983, the Georgia Legislature established all requirements and policies of the Firefighters' Pension Plan and the Police Officers' Pension Plan. By a constitutional amendment, effective July 1983, control over all aspects of the Firefighters' Pension Plan and the Police Officers' Pension Plan transferred to the City under the principle of Home Rule. The types of benefits offered by the Firefighters' Pension Plan and the Police Officers' Pension Plan are: retirement, disability, and pre-retirement death benefits. Under the principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Board of Trustees has the authority to establish and amend benefit terms and contributions. A detailed description of the Firefighters' Pension Plan and the Police Officers' Pension Plan benefits terms can be found within "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 - Notes to Financial Statements - Section V. A." attached hereto.

The Firefighters' Pension Plan and the Police Officers' Pension Plan are administered as a single employer defined benefit plan by separate Boards of Trustees with each Board of Trustees including an appointee of the Mayor or his designee, the City's Chief Financial Officer, a member of City Council, two active employee representatives and one retired employee representative. All modifications to the Firefighters' Pension Plan and the Police Officers' Pension Plan must be supported by actuarial analysis input and receive the recommendations of the City Attorney, the City's Chief Financial Officer, and the pertinent Board of Trustees. Each pension law modification must be adopted by at least two thirds vote of the City Council and approved by the Mayor.

The Defined Benefit Pension Plans' Contributions

The General Employees' Pension Plan. Under the Georgia Legislature principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Board of Trustees has the authority to administer the General Employees' Pension Plan. The funding methods and determination of benefits payable were established by the Atlanta Code of Ordinances, Part 1, Section 6 legislative acts creating the General Employees' Pension Plan, as amended, and in general, provide that funds are to be accumulated from employee contributions, City contributions, and income from the investment of accumulated funds.

Employees hired on or after September 1, 2011 who are below pay grade 19 or its equivalent are required to participate in a hybrid defined benefit plan with a mandatory defined contribution component. The defined benefit portion of the General Employees' Pension Plan includes a 1% multiplier, which includes a mandatory employee contribution of 3.75% of salary which is matched 100% by the City.

Additionally, these employees may voluntarily contribute up to an additional 4.25% of salary, which is also matched 100% by the City. Employees vest in the amount of the City's contributions at a rate of 20% per year and become fully vested in the City's contribution after five years of participation.

Beginning on November 1, 2011, employees participating in the General Employees' Pension Plan and hired before September 1, 2011, or after January 1, 1984, had an increase of 5% in their mandatory contributions into the General Employees' Pension Plan fund in which they participate. The contribution is such that the new contribution is 12% of salary (without a designated beneficiary) or 13% of salary (with a designated beneficiary).

Beginning in Fiscal Year 2012, there is a cap on the maximum amount of the City's contribution to the General Employees' Pension Plan measured as a percentage of payroll. The City's annual contribution to the General Employees' Pension Plan may not exceed 35% of payroll of the participants in the Defined Benefit Pension Plans. In the event that this 35% cap is reached, the City will fund any overage for the first 12 month period from its reserves. During that period, the City's management must agree on an alternative method to reduce the overage. If no alternative is reached, beginning in the second 12 month period, the City and the participants will equally split the cost of the coverage, subject only to a provision that employee contributions may not increase more than 5%. During Fiscal Year 2015, the City had an actuarial assessment conducted to review the pay cap. The assessment determined the City was at 25.9%, well within the cap. The 35% cap is not projected to occur over the next 30 years based on the Fiscal Year 2016 results projected forward with pension reform. During the Fiscal Year ended June 30, 2016 the City contributions were $54,236,000.

The Firefighters' Pension Plan and the Police Officers' Pension Plan. Under the Georgia Legislature principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Board of Trustees has the authority to administer the Firefighters' Pension Plan and the Police Officers' Pension Plan including establishing and amending contribution requirements. The funding methods and determination of benefits payable were established by the Atlanta Code of Ordinances, Section 6 legislative acts creating the Firefighters' Pension Plan and the Police Officers' Pension Plan, as amended, and in general, provide that funds are to be accumulated from employee contributions, City contributions, and income from the investment of accumulated funds.

Sworn personnel employed by the Fire Rescue Department and Police Department are required to contribute to the Firefighters' Pension Plan and the Police Officers' Pension Plan. Employees must contribute either 8% of base pay, if hired after August 31, 2011, 12% of base pay if hired before September 1, 2011 without an eligible beneficiary, or 13% of base pay if hired before September 1, 2011 with an eligible beneficiary.

On November 1, 2011, the sworn personnel of the Fire Rescue Department and Police Department participating in the Firefighters' Pension Plan and the Police Officers' Pension Plan and hired before September 1, 2011, or after January 1, 1984, had an increase of 5% in their mandatory contributions into the Firefighters' Pension Plan and the Police Officers' Pension Plan. The contribution is such that the new contribution is 12% of salary (without a designated beneficiary) or 13% of salary (with a designated beneficiary). Beginning in Fiscal Year 2012,

there is a cap on the maximum amount of the City's contribution to the defined benefit pension funds measured as a percentage of payroll. The City's annual contribution to the funds may not exceed 35% of payroll of the participants in the General Employees' Pension Plan, the Firefighters' Pension Plan and the Police Officers' Pension Plan. In the event that this 35% cap is reached, the City will fund any overage for the first 12 month period from its reserves. During that period, the City's management must agree on an alternative method to reduce the overage. If no alternative is reached, beginning in the second 12 month period, the City and the participants will equally split the cost of the overage, subject only to a provision that employee contributions may not increase more than five percent. During Fiscal Year 2015 the City had an actuary assessment conducted to review the pay cap. The assessment determined the City was at 25.9 percent, well within the cap.

Employees hired on or after September 1, 2011 who are sworn members of the Fire Rescue Department and Police Department are required to participate in a hybrid defined benefit plan with a mandatory defined contribution component. The defined benefit portion of this plan includes a one percent multiplier. The retirement age increased to age 57 for participants in the Firefighters' Pension Plan and the Police Officers' Pension Plan. Early retirement age is changed from any age (as long as vested) with penalty to age 52 for hires after September 1, 2011. Upon retirement, these participants will receive an annually calculated cost of living increase to their pension benefit that may not exceed one percent and is based upon the Consumer Price Index. Sick and vacation leave are no longer applied to retirement benefits for hires after September 1, 2011. Contributions to the Firefighters' Pension Plan and the Police Officers' Pension Plan during the year ended June 30, 2016 were $16,454,000 and $25,441,000 respectively.

The Defined Benefit Pension Plans' Investments

The investments for the Defined Benefit Pension Plans are made within the Public Retirement Systems Investment Authority Law of the Georgia Code (O.C.G.A. § 47-20-80). Each Board of Trustees has been granted the authority by City ordinance to establish and amend the respective Defined Benefit Pension Plan investment policy. Each Board of Trustees is responsible for making all decisions with regard to the administration of its respective Defined Benefit Pension Plan, including the management of the respective Defined Benefit Pension Plans assets, establishing the investment policy and carrying out the policy on behalf of the respective Defined Benefit Pension Plan.

Each Defined Benefit Pension Plan's investments are managed by various investment managers under contract with the respective Board of Trustees who have discretionary authority over the assets managed by them and within the Defined Benefit Pension Plan's investment guidelines as established by the Board of Trustees. The investments are held in trust by each Defined Benefit Pension Plan's custodian in the Defined Benefit Pension Plan's name. These assets are held exclusively for the purpose of providing benefits to members of the respective Defined Benefit Pension Plan's and their beneficiaries.

State of Georgia Code and City statutes authorize the Defined Benefit Pension Plans to invest in U.S. government obligations, U.S. government agency obligations, State of Georgia obligations, obligations of a corporation of the U.S. government, the Georgia Fund 1 (a government investment pool maintained by the State of Georgia), and alternative investments.

The Defined Benefit Pension Plans invest in repurchase agreements only when they are collateralized by U.S. government or agency obligations. The Defined Benefit Pension Plans are also authorized to invest in collateralized mortgage obligations (CMOs) to maximize yields. These securities are based on cash flows from interest payments on underlying mortgages. CMOs are sensitive to prepayment by mortgagees, which may result from a decline in interest rates. For example, if interest rates decline and mortgagees refinance their mortgages, thereby prepaying the mortgages underlying these securities, the cash flows from interest payments are reduced and the value of these securities declines. Likewise, if mortgagees pay on mortgages longer than anticipated, the cash flows are greater and the return on the initial investment would be higher than anticipated.

In the development of the current asset allocation plan, each of the Board of Trustees reviews the long term performance and risk characteristics of various asset classes, balancing the risks and rewards of market behavior, and reviewing state legislation regarding investments options. There were no changes to the policy in Fiscal Year 2016. The policy may be amended by the Board of Trustees with a majority vote of its members.

The long term expected rate of return on pension plan investments was determined using a building block method 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 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.

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The following tables present a summary of the estimates of real rates of return for each major asset class included in the Defined Benefit Pension Plans' target asset allocation as of June 30, 2016:

General Employees' Pension Plan Long-Term Expected Asset Class Target Allocation Real Rate of Return Domestic equity 50% 6.6% International equity 20 7.1 Fixed income 25 2.2 Alternative investments 5 6.2 100%

Firefighters' and Police Officers' Pension Plans Long-Term Expected Asset Class Target Allocation Real Rate of Return Broad equity market 7% 6.0% Domestic large-cap equity 30 6.9 Domestic mid-cap equity 15 8.9 Domestic small-cap equity 9 5.0 International equity 9 3.3 Fixed income 25 0.8 Alternative investments 5 7.5 100% ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Net Pension Liability. The total pension liability is based on the July 1, 2014 actuarial valuation rolled forward to June 30, 2015 using standard roll-forward techniques (table shows dollars in thousands):

General Employees' - the City Firefighters' Police Officers' Total Total pension liability $1,873,213 $853,690 $1,294,907 $4,021,810 Plan fiduciary net position (1,153,715) (644,649) (983,385) (2,781,749) Net pension liability $ 719,498 $209,041 $ 311,522 $1,240,061 Plan fiduciary net position as a percentage of the total pension liability 61.59% 75.51% 75.94% 69.17% ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

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The following table presents the net pension liability of the Defined Benefit Pension Plans' allocated among the general government, the Department of Aviation, the Department of Watershed Management and Other Non-major Enterprise Funds as June 30, 2016 (table shows dollars in thousands):

General Percent Percent Police Percent Employees' Allocated Firefighters' Allocated Officers' Allocated Total(1) General Government $337,674 46.9% $158,244 75.7% $286,941 92.1% $ 782,859 Department of Airport 82,671 11.5 50,797 24.3 24,581 7.9 158,049 Department of Watershed Management 235,708 32.8 - - - - 235,708 Other Non-Major Enterprise 63,445 8.8 - - - - 63,445 Total $719,498 100.0% $209,041 100.0% $311,522 100.0% $1,240,061 ______(1) Numbers may not add due to rounding.

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Changes in Net Pension Liability. The City is presenting net pension liability for Fiscal Year June 30, 2016 based on the June 30, 2015 measurement date, as follows (tables show dollars in thousands):

General Employees' - the City Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $1,832,883 $1,145,333 $687,550 Changes for the year: Service cost 20,191 - 20,191 Interest expense 133,276 - 133,276 Difference between expected and actual investment earnings (1,399) - (1,399) Contributions - employer - 48,015 (48,015) Contributions - employee - 16,975 (16,975) Net investment income - 56,575 (56,575) Benefit payments and refunds (111,738) (111,738) - Administrative expenses - (1,445) 1,445 Net changes 40,330 8,382 31,948 Balances at June 30, 2015 $1,873,213 $1,153,715 $719,498 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

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Firefighters' Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $846,325 $658,508 187,817 Changes for the year: Service cost 12,612 - 12,612 Interest expense 60,396 - 60,396 Difference between expected and actual investment earnings - 2,833 (2,833) Demographic experience (23,053) (178) (22,875) Assumption changes - - Contributions - employer - 20,866 (20,866) Contributions - employee - 5,637 (5,637) Net investment income - - Benefit payments and refunds (42,590) (42,590) - Administrative expenses - (427) 427 Net changes 7,365 (13,859) 21,224 Balances at June 30, 2015 $853,690 $644,649 209,041 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Police Officers' Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $1,270,494 $987,507 $282,987 Changes for the year: Service cost 22,387 - 22,387 Interest expense 91,326 - 91,326 Difference between expected and actual investment earnings - 9,235 (9,235) Demographic experience (33,047) (497) (32,550) Contributions - employer - 32,693 (32,693) Contributions - employee - 11,224 (11,224) Net investment income - - - Benefit payments and refunds (56,253) (56,253) - Administrative expenses - (524) 524 Net changes 24,413 (4,122) 28,535 Balances at June 30, 2015 $1,294,907 $983,385 $311,522 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

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Discount Rate. The discount rates used to measure the total pension for the Defined Benefit Pension Plans is as indicated below. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the actuarial determined contributions rates from employers and employees. 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 plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The following table presents the discount rates as of June 30, 2015:

General Employees' Plan City School System Firefighters Police Officers 7.50% 7.50% 7.41% 7.41% ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following table presents the net pension liability of the Defined Benefit Pension Plans, calculated using the discount rates for each Defined Benefit Pension Plan as of June 30, 2016, as well as what the Defined Benefit Pension Plans net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher that the current rate (table shows dollars in thousands):

Current 1% Decrease discount rate 1% Increase 6.50% 7.50% 8.50% General Employees - the City $935,841 $719,498 $537,382 General Employees - School System 559,931 500,583 449,684 6.41% 7.41% 8.41% Firefighters' Pension $317,918 $209,041 $119,100 Police Officers' Pension 490,760 311,522 165,534 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of June 30, 2014 rolled forward to the June 30, 2015 measurement date, using the following actuarial assumptions, applied to all periods included in the measurement.

Investment Rate Inflation Salary Increases of Return General Employees' 2.75% 3.5% 7.50% Firefighters' 2.50 4.0 7.41 Police Officers' 2.50 4.0 7.41 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Each of the Defined Benefit Pension Plans last experience study was conducted in 2011. The assumed interest (or discount) rate was decreased from 7.75 percent per annum to 7.41 percent per annum for the Firefighters' Pension Plan and the Police Officers' Pension Plan.

The actuarially determined contribution rates are calculated as of June 30, one year prior to the end of the Fiscal Year in which contributions are reported. The following actuarial methods and assumptions were used to determine the most recent contribution rate are as follows:

General Employees' - The City Firefighters' Police Officers' Valuation date July 1, 2014 July 1, 2014 July 1, 2014 Actuarial cost method Entry age normal Entry age normal Entry age normal Level percentage, Level percentage, Level percentage, Amortization method closed closed closed Remaining amortization period 26 years 27 years 27 years Asset valuation method Market value Market value Market value ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

For the General Employees' Pension Plan, the mortality rates were based on the RP-2000 Combined Healthy Mortality Table set to reasonably reflect future mortality improvement based on a seven and a half year review of mortality experience for the 2003 - 2011 period. The mortality will be assessed again at the time of the next review, and further adjustment or expected improvement in life expectancy will be made if warranted.

The Firefighters' Pension Plan and the Police Officers' Pension Plan mortality rates were based on the sex-distinct rates set forth in the RP-2000 Mortality Table projected to 2015 by Scale AA, as published by the Internal Revenue Code (IRC) Section 430; future generational improvements in mortality have not been reflected.

General Employees' Defined Contribution Plan. The General Employees' Defined Contribution Plan provides funds at retirement for employees of the City and in the event of death, provides funds for their beneficiaries, through an arrangement by which contributions are made to the General Employees' Defined Contribution Plan by employees and the City. The current contribution of the City is 6% of employee payroll. Employees also make a mandatory pretax contribution of 6% plus have the option to contribute amounts up to the amount legally limited for retirement contributions.

All modifications to the General Employees' Defined Contribution Plan, including contribution requirements, must receive the recommendations and advice from the offices of the City's Chief Financial Officer and the City Attorney, respectively. Each pension law modification must be adopted by at least two-thirds vote of the City Council and approved by the Mayor.

As of June 30, 2016, there were 1,603 participants in the General Employees' Defined Contribution Plan. The covered payroll for employees in the General Employees' Defined Contribution Plan was approximately $113,913,000. Employer contributions for the year ended June 30, 2016, were approximately $9,647,000 and employee contributions were approximately $9,727,000, totaling 17.0% of covered payroll. In addition, there were another 2,883 Defined Contribution Plan participants in the hybrid plans.

Condensed financial statement information for the General Employees' Defined Contribution Plan for the year ended June 30, 2016 is shown below (table shows dollars in thousands):

Current assets: Investment Domestic fixed income securities $ 35,965 Domestic equities 23,255 Alternative partnerships 392 Comingled funds 53,125 Other assets 5,893 Total $118,630

Additions: Employer contributions $ 10,044 Employee contributions 10,106 Refunds and other 693 Total additions $ 20,843

Deductions: Benefits payments $ 6,946 Administrative expenses 59 Total deductions $ 7,005

Change in Net Assets held in trust for pension benefits $ 13,838 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

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Annual Pension Cost. The City's annual pension cost and net pension obligation for the Fiscal Year ending June 30, 2017 and each of the six preceding Fiscal Years are as follows (table shows dollars in thousands):

Annual Pension Annual Required Percentage Plan/Period Cost Contribution Contributed General Employees: Year Ended 6/30/11 $46,068 $46,068 100% Year Ended 6/30/12 35,327 35,327 100 Year Ended 6/30/13 38,694 38,694 100 Year Ended 6/30/14 42,145 42,145 100 Year Ended 6/30/15 47,969 47,969 100 Year Ended 6/30/16 54,236 54,236 100 Year Ending 6/30/17(1) - 53,816 -

Firefighters: Year Ended 6/30/11 $24,912 $24,912 100% Year Ended 6/30/12 21,092 21,092 100 Year Ended 6/30/13 17,491 17,491 100 Year Ended 6/30/14 20,656 20,656 100 Year Ended 6/30/15 20,866 20,866 100 Year Ended 6/30/16 16,454 16,454 100 Year Ending 6/30/17(1) - 17,901 -

Police Officers: Year Ended 6/30/11 $39,135 $39,135 100% Year Ended 6/30/12 33,748 33,748 100 Year Ended 6/30/13 26,525 26,525 100 Year Ended 6/30/14 30,197 30,197 100 Year Ended 6/30/15 32,693 32,693 100 Year Ended 6/30/16 25,441 25,441 100 Year Ending 6/30/17(1) - 27,493 - ______(1) Fiscal Year 2017 figures are unaudited.

Source: City of Atlanta, Department of Finance.

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Funded Status and Funding Progress. The following table is a summary by plan of funding status and funding progress (table shows dollars in thousands):

Unaudited Unfunded AAL as a Unfunded Current Year Percentage of Plan/Valuation Actuarial Accrued Percentage Accrued Covered Covered Date Value of Assets Liability (AAL) Funded Liabilities Payroll Payroll General Employees - The City 7/1/2010 $ 866,906 $1,614,267 53.7% $747,361 $142,597 524.1% 7/1/2011 868,799 1,697,083 51.2 828,284 135,636 610.7 7/1/2012 917,486 1,798,404 51.0 880,918 139,107 633.3 7/1/2013 954,965 1,863,532 51.2 908,567 133,069 682.8 7/1/2014 1,016,486 1,831,581 55.5 815,095 142,493 572.02 7/1/2015 1,084,010 1,874,710 57.8 790,700 146,498 539.74 7/1/2016 1,146,863 1,898,995 60.4 752,132 165,320 454.95

Firefighters

1/1/2010 $422,791 $699,175 60.5% $276,386 $43,910 629.4% 1/1/2011 481,640 732,357 65.8 250,717 42,963 583.6 7/1/2011 509,590 730,535 69.8 220,945 39,482 559.6 7/1/2012 505,692 727,803 69.5 222,111 42,797 519.0 6/30/2013 561,450 788,355 71.2 226,905 42,797 530.2 6/30/2014 658,508 846,325 77.8 156,339 47,181 331.4 7/1/2015 644,649 822,923 78.3 178,274 46,918 380.0 7/1/2016 612,637 852,337 71.9 239,700 44,818 534.8

Police Officers

1/1/2010 $591,981 $ 990,600 59.8% $398,619 $78,520 $507.7 1/1/2011 697,668 1,056,240 66.1 358,572 83,551 429.2 7/1/2011 735,470 1,036,001 71.0 300,531 73,688 407.8 7/1/2012 733,546 1,059,362 69.2 325,816 88,297 369.0 7/1/2013 828,815 1,170,414 70.8 341,599 92,245 370.3 7/1/2014 987,507 1,224,046 80.7 236,539 93,836 252.1 7/1/2015 983,385 1,247,458 78.3 264,073 92,965 284.1 7/1/2016 950,415 1,300,184 73.1 349,769 94,653 369.5 ______Source: City of Atlanta, Department of Finance.

See "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 - Notes to Financial Statements - Section V. A." attached hereto.

City of Atlanta Retiree Healthcare Plan. The City of Atlanta Retiree Healthcare Plan (the "Retiree Healthcare Plan") is a single-employer defined benefit healthcare plan which provides OPEB to eligible retirees, dependents and their beneficiaries. The Retiree Healthcare Plan was established by legislative acts and functions in accordance with existing City laws.

OPEB of the City includes health, dental, and vision care and life insurance. Separate financial statements are not prepared for the Retiree Healthcare Plan.

Funding Policy. The City is not required by law or contractual agreement to provide funding for OPEB other than the pay-as-you-go amounts necessary to provide current benefits to retirees, eligible dependents and beneficiaries. For the Fiscal Year ended June 30, 2016, the City made $43.7 million in "pay-as-you-go" payments on behalf of the Retiree Healthcare Plan. Retiree contributions vary based on the plan elected, dependent coverage and Medicare eligibility. Eligible retirees receiving benefits contributed $47.5 million through their required contributions.

Annual OPEB Cost and Net OPEB Obligation. The City's annual OPEB cost (expense) is calculated based on the annual required contribution ("ARC") of the employer; an amount actuarially determined using the "Projected Unit Credit Actuarial Cost Method." The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years.

The following table presents the elements of the City's OPEB cost for the year, the amount actually contributed on behalf of the Retiree Healthcare Plan, and changes in the City's net OPEB obligation to the Retiree Healthcare Plan for the Fiscal Year ended June 30, 2016 (table shows dollars in thousands):

Other General City-Wide DWM DOA Business-Type Government Annual Required Contribution $ 78,424 $ 13,896 $ 10,170 $ 5,110 $ 49,248 Interest on Net OPEB Obligation 16,626 2,946 2,156 1,083 10,441 Adjustment to Annual Required Contribution (18,892) (3,348) (2,450) (1,231) (11,863) Annual OPEB Cost (expense) $ 76,158 $ 13,494 $ 9,876 $ 4,962 $ 47,826 "Pay As You Go" Payments made (43,717) (7,479) (5,610) (2,147) (28,481) Increase in Net OPEB Obligation $ 32,441 $ 6,015 $ 4,266 $ 2,815 $ 19,345 Net OPEB Obligation - Beginning of Year 415,658 100,909 56,199 24,686 233,864 Net OPEB Obligation - End of Year $448,099 $106,924 $60,465 $27,501 $253,209 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

The following table presents the City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the Retiree Healthcare Plan, and the net OPEB obligation for the Fiscal Years ended June 30, 2014 through 2016 (table shows dollars in thousands):

Percentage of Annual Annual OPEB Cost Net OPEB Fiscal Year Ended OPEB Cost Paid Obligation June 30, 2014 $103,766 42.1% $384,826 June 30, 2015 74,141 58.4 415,658 June 30, 2016 76,158 60.4 448,099 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

See "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016" attached hereto.

Funded Status and Funding Progress. As of June 30, 2014, the most recent actuarial valuation date, the Retiree Healthcare Plan was not funded. The unfunded actuarial accrued liability ("UAAL") for benefits was $1.12 billion. The covered payroll was $348 million, and the ratio of the UAAL to the covered payroll was 321.42%. The Retiree Healthcare Plan membership as of July 1, 2014, was 14,804; consisting of 7,656 current retirees, beneficiaries and dependents and 7,148 current active participants. There are no terminated participants entitled but not yet eligible.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. The determined actuarial valuations of OPEB provided under the Retiree Healthcare Plan incorporated the use of various assumptions including demographic and salary increases among others. Amounts determined regarding the funded status of the Retiree Healthcare Plan and the annual required contributions of the City are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, shown as required supplementary information following the notes to the financial statements, presents multi-year trend information on the actuarial value of plan assets relative to the actuarial accrued liability for benefits. Under the provisions of GASB 45, Accounting and Financial reporting by employers for postemployment benefits other than pensions, the City elected to use the June 30, 2014, actuarial report as the basis for determining the current year ARC requirement.

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of the sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the June 30, 2014, actuarial valuation, the Individual Entry Age Normal actuarial cost method was used. It is amortized as a level percent of payroll over a 23 year period and a closed amortization method. The actuarial assumptions included 4.0 percent investment rate of return (net of administrative expenses) and an annual medical cost trend rate of nine percent initially, reduced by decrements to an ultimate trend rate of five percent after eight years. Both rates include a three percent inflation assumption. Currently there are no assets set aside that are legally held exclusively for OPEB.

See "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016 - Notes to Financial Statements - Section V. B." attached hereto.

Schedule of Changes in Net Pension Liability for the General Employees' Pension Plan for the years ended June 30 (Dollars in thousands)

General Employees' Firefighters' Police Officers' 2015 2014 2015 2014 2015 2014 Total pension liability $1,873,213 $1,832,883 $853,690 $846,325 $1,294,907 $1,270,494 Plan fiduciary net position 1,153,715 1,145,333 644,649 658,508 983,385 987,507 Employers net pension liability 719,498 687,550 209,041 187,817 311,522 282,987

Plan fiduciary net position as a percentage of total pension liability 61.59% 62.49% 75.51% 77.81% 75.94% 77.73% Covered-employee payroll $ 145,654 $ 142,494 $ 47,181 $ 44,508 $ 93,836 $ 91,840 Employers net pension liability as a percentage of covered-employee payroll 493.98% 482.51% 443.06% 421.98% 331.99% 308.13% ______Sources: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Note: GASB 68 requires the schedule to report 10 years of information. Additional years will be displayed as the information becomes available.

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Schedule of Changes in Net Pension Liability for the General Employees' Pension Plan for the years ended June 30. (Dollars in thousands)

2015 2014 Total pension liability: Service cost $ 20,191 $ 19,644 Interest 133,276 130,279 Differences between expected and actual experience (1,399) - Benefit payments, including refunds of member contributions (111,738) (108,175) Net change in total pension liability 40,330 41,748 Total pension liability – beginning 1,832,883 1,791,135 Total pension liability – ending 1,873,213 1,832,883 Plan fiduciary net position: Contributions – employer 48,015 42,145 Contributions – member 16,975 17,366 Net investment income 56,575 188,381 Benefit payments, including member refunds (111,738) (108,175) Administrative expenses (1,445) (8,813) Net change in plan fiduciary net position 8,382 130,904 Plan fiduciary net position – beginning 1,145,333 1,014,429 Plan fiduciary net position – ending 1,153,715 1,145,333 Plan net pension liability – ending $ 719,498 $ 687,550 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Note: GASB 68 requires the schedule to report 10 years of information. Additional years will be displayed as the information becomes available.

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Schedule of Changes in Net Pension Liability for the Firefighters' Pension Plan for the years ended June 30 (Dollars in thousands)

2015 2014 Total pension liability: Service cost $ 12,612 $ 13,783 Interest 60,396 59,473 Differences between expected and actual experience - 10,092 Demographic experience (23,053) - Changes of assumptions - 16,251 Benefit payments, including refunds of member contributions (42,590) (41,629) Net change in total pension liability 7,365 57,970 Total pension liability – beginning 846,325 788,355 Total pension liability – ending 853,690 846,325 Plan fiduciary net position: Contributions - employer 20,866 20,656 Contributions - member 5,637 5,670 Net investment income (loss) (45,540) 71,328 Interest 48,195 41,046 Benefit payments, including member refunds (42,590) (41,268) Administrative expenses (427) (374) Net change in plan fiduciary net position (13,859) 97,058 Plan fiduciary net position – beginning 658,508 561,450 Plan fiduciary net position – ending 644,649 658,508 Plan net pension liability – ending $209,041 $187,817 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Note: GASB 68 requires the schedule to report 10 years of information. Additional years will be displayed as the information becomes available.

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Schedule of Changes in Net Pension Liability for the Police Officers' Pension Plan for the years ended June 30 (Dollars in thousands)

2015 2014 Total pension liability: Service cost $ 22,387 $ 23,755 Interest 91,326 89,442 Changes of benefit terms - - Differences between expected and actual experience (33,047) 36,363 Changes of assumptions - 13,373 Benefit payments, including refunds of member contributions (56,253) (51,070) Net change in total pension liability 24,413 111,863 Total pension liability – beginning 1,270,494 1,158,631 Total pension liability – ending 1,294,907 1,270,494 Plan fiduciary net position: Contributions - employer 32,693 30,197 Contributions - member 11,224 11,157 Net investment income 72,706 108,004 Interest (63,968) 60,960 Benefit payments, including member refunds (56,253) (51,299) Administrative expenses (524) (327) Net change in plan fiduciary net position (4,122) 158,692 Plan fiduciary net position – beginning 987,507 828,815 Plan fiduciary net position – ending 983,385 987,507 Plan net pension liability – ending $311,522 $282,987 ______Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

Note: GASB 68 requires the schedule to report 10 years of information. Additional years will be displayed as the information becomes available.

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Schedule of Employer Contributions for the years ended June 30 (Dollars in thousands)

General Employees' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007(1) Actuarially determined contributions $ 54,236 $ 48,015 $ 42,145 $ 38,688 $ 35,237 $ 46,068 $ 51,762 $ 69,991 $ 59,780 $ 51,772 Contributions in relation to the actuarially determined contribution 54,236 48,015 42,145 38,688 35,237 46,068 51,762 69,991 59,780 51,772 Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered-employee payroll $151,625 $145,654 $142,494 $133,069 $139,107 $135,636 $142,597 $150,312 $179,982 $155,185 Contributions as a percentage of covered-employee payroll 35.8% 33.0% 29.6% 29.1% 25.3% 34.0% 36.3% 46.6% 33.2% 33.4%

Firefighters' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarially determined contributions $16,454 $20,866 $20,656 $17,491 $21,092 $24,912 $25,864 $28,752 $26,373 $25,502 Contributions in relation to the actuarially determined contribution 16,454 20,866 20,656 17,491 21,092 24,912 25,864 28,752 26,373 25,502 Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered-employee payroll $46,918 $47,181 $44,508 $42,797 $39,482 $42,963 $43,910 $43,275 $45,561 $45,686 Contributions as a percentage of covered-employee payroll 35.1% 44.2% 46.4% 40.9% 53.4% 58.0% 58.9% 66.4% 57.9% 55.8%

Police Officers' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarially determined contributions $25,441 $32,693 $30,197 $26,525 $33,748 $39,135 $41,713 $44,810 $45,730 $45,365 Contributions in relation to the actuarially determined contribution 25,441 32,693 30,197 26,525 33,748 39,135 41,713 44,810 45,730 45,365 Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered-employee payroll $92,965 $93,836 $91,840 $88,297 $73,688 $83,551 $78,519 $82,030 $84,015 $77,168 Contributions as a percentage of covered-employee payroll 27.4% 34.8% 32.9% 30.0% 45.8% 46.8% 53.1% 54.6% 54.4% 58.8% ______(1) The General Employees' Plan year was changed from January 1 to July 1, 2007. Therefore, the amounts as of June 30, 2007 represent the 18-month period from January 1, 2006 through June 30, 2007.

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Twelve Months Ended June 30, 2016 and City of Atlanta, Department of Finance.

TAX MATTERS

Opinion of Co-Bond Counsel

In the opinion of Co-Bond Counsel, under current law, interest on the Series 2017 Bonds (a) will not be included in gross income for federal income tax purposes, (b) will not be an item of tax preference for purposes of the federal alternative minimum income tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes) subject to the alternative minimum income tax, such interest is taken into account in determining adjusted current earnings for purposes of computing such tax, and (c) will be exempt from income taxation by the State of Georgia. Except as described hereafter in "Original Issue Discount," no other opinion is expressed by Co-Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of interest on the Series 2017 Bonds.

Co-Bond Counsel's opinion will be given in reliance upon certifications by representatives of the Issuer, the City and other parties as to certain facts relevant to both the opinion and requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and is subject to the condition that there is compliance subsequent to the issuance of the Series 2017 Bonds with all requirements of the Code that must be satisfied in order for interest thereon to remain excludable from gross income for federal income tax purposes. The Issuer and the City have covenanted to comply with the current provisions of the Code regarding, among other matters, the use, expenditure and investment of the proceeds of the Series 2017 Bonds and the timely payment to the United States of any arbitrage rebate amounts with respect to the Series 2017 Bonds. Failure by the Issuer and the City to comply with such covenants, among other things, could cause interest on the Series 2017 Bonds to be included in gross income for federal income tax purposes retroactively to their date of issue.

Co-Bond Counsel's opinion represents a legal judgment based in part upon the representations and covenants referenced therein and a review of current law, but is not a guarantee of result or binding on the IRS or the courts. Co-Bond Counsel assumes no duty to update or supplement the opinion to reflect any facts or circumstances that may thereafter come to Co-Bond Counsel's attention or to reflect any changes in law or the interpretation thereof that may thereafter occur or become effective.

Customary practice in the giving of legal opinions includes not detailing in the opinion all the assumptions, exclusions, conditions and limitations which are a part of the conclusions therein. See Statement on the Role of Customary Practice in the Preparation and Understanding of Third-Party Legal Opinions in The Business Lawyer, Volume 63, Page 1277 (2008) and Legal Opinion Principles in The Business Lawyer, Volume 53, Page 831 (1998). Purchasers of Series 2017 Bonds should seek advice or counsel concerning such matters as they deem prudent in connection with their purchase of Series 2017 Bonds, including with respect to the Co-Bond Counsel opinion.

Original Issue Discount

The initial public offering prices of certain of the Series 2017 Bonds may be less than their stated principal amount. In the opinion of Co-Bond Counsel, under current law, the difference between the stated principal amount of such Series 2017 Bonds and the respective initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of such Series 2017 Bonds is sold will constitute original issue discount. The respective offering prices set forth on the inside front cover of this Official Statement are expected to be the initial offering prices to the public at which a substantial amount of each maturity of Series 2017 Bonds are sold.

Under the Code, for purposes of determining the holder's adjusted basis in Series 2017 Bonds with original issue discount, such discount treated as having accrued while the holder holds the Series 2017 Bond will be added to the holder's basis therein. Original issue discount will accrue on a constant yield to maturity method based on regular compounding. The adjusted basis will be used to determine taxable gain or loss upon the sale or other disposition (including redemption or payment at maturity) of such Series 2017 Bond.

Prospective purchasers of Series 2017 Bonds should consult their own tax advisors with respect to the calculation of accrued original issue discount and the state and local tax consequences of owning or disposing of such Series 2017 Bonds.

Original Issue Premium

Series 2017 Bonds purchased, whether upon issuance or otherwise, for an amount (excluding any amount attributable to accrued interest) in excess of their principal amount will be treated for federal income tax purposes as having amortizable bond premium. A holder's basis in such a Series 2017 Bond must be reduced by the amount of premium which accrues while such Series 2017 Bond is held by the holder. No deduction for such amount will be allowed, but it generally will offset interest on the Series 2017 Bonds while so held. Purchasers of such Series 2017 Bonds should consult their own tax advisors as to the calculation, accrual and treatment of amortizable bond premium and the state and local tax consequences of holding such Series 2017 Bonds.

Other Tax Matters

In addition to the matters addressed above, prospective purchasers of Series 2017 Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers, including without limitation financial institutions, property and casualty insurance companies, S corporations, foreign corporations subject to the branch profits tax, recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of Series 2017 Bonds should consult their own tax advisors as to the applicability and impact of such consequences.

Current and future legislative proposals, if enacted into law, may cause interest on the Series 2017 Bonds to be subject, directly or indirectly, to federal income taxation by, for example, changing the current exclusion or deduction rules to limit the aggregate amount of

interest on state and local government bonds that may be treated as tax-exempt by certain individuals.

The IRS has a program to audit state and local government obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2017 Bonds, under current IRS procedures, the IRS will treat the Issuer as the taxpayer and the owners of the Series 2017 Bonds will have only limited rights, if any, to participate.

There are many events which could affect the value and liquidity or marketability of the Series 2017 Bonds after their issuance, including but not limited to public knowledge of an audit of the Series 2017 Bonds by the IRS, a general change in interest rates for comparable securities, a change in federal income tax rates or treatment, legislative or regulatory proposals affecting state and local government securities and changes in judicial interpretation of existing law. In addition, certain tax considerations relevant to owners of Series 2017 Bonds who purchase Series 2017 Bonds after their issuance may be different from those relevant to purchasers upon issuance. Neither the opinion of Co-Bond Counsel nor this Official Statement purport to address the likelihood or effect of any such potential events or such other tax considerations, and purchasers of Series 2017 Bonds should seek advice from their own tax advisors concerning such matters as they deem prudent in connection with their purchase of Series 2017 Bonds.

Prospective purchasers of the Series 2017 Bonds should consult their own tax advisors as to the status of interest on the Series 2017 Bonds under the tax laws of any state other than Georgia.

LITIGATION

The Issuer

There is no litigation now pending or, to the knowledge of the Issuer, threatened against the Issuer which restrains or enjoins the issuance or delivery of the Series 2017 Bonds, the execution, delivery or performance of the Intergovernmental Lease Agreement, or the use of the proceeds of the Series 2017 Bonds or which questions or contests the validity of the Series 2017 Bonds, the Intergovernmental Lease Agreement, the Bond Resolution or the proceedings and authority under which they are to be issued, executed and delivered. Neither the creation, organization, nor existence of the Issuer, nor the title of the present members or other officials of the Issuer to their respective offices, is being currently contested or questioned to the knowledge of the Issuer.

The City

There is no litigation now pending or, to the knowledge of the City, threatened against the City which restrains or enjoins the issuance or delivery of the Series 2017 Bonds, the execution, delivery or performance of the Intergovernmental Lease Agreement, or the use of the proceeds of the Series 2017 Bonds or which questions or contests the validity of the Series 2017 Bonds, the Intergovernmental Lease Agreement, the Bond Resolution or the proceedings and authority under which they are to be issued, executed and delivered. Neither the creation,

organization, nor existence of the City, nor the title of the present members or other officials of the City to their respective offices, is being currently contested or questioned to the knowledge of the City.

The City, like other similar bodies, is subject to a variety of suits and proceedings arising in the ordinary conduct of its affairs. The City, after reviewing the current status of all pending and threatened litigation with the City's Department of Law, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits which have been filed and of any actions or claims pending or, to the knowledge of the City, threatened against the City or its officials in such capacity are adequately covered by insurance or sovereign immunity or will not have a material adverse effect upon the financial position or results of operations of the City.

VALIDATION

The Issuer received an order and final judgment by the Superior Court of Fulton County, Georgia, on June 22, 2017, confirming and validating the Series 2017 Bonds and the security therefor. Under State law, the judgment of validation is final and conclusive with respect to the validity of the Series 2017 Bonds and the security therefor and is not subject to collateral attack from other parties.

CONTINUING DISCLOSURE

In order to assist the Underwriters in complying with the Rule, simultaneously with the issuance of the Series 2017 Bonds, the City will enter into the Disclosure Agreement for the benefit of the holders of the Series 2017 Bonds, substantially in the form attached hereto as "APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT." The City, as an "obligated person" under the Rule, will undertake in the Disclosure Agreement to provide: (a) certain financial information and operating data relating to the Series 2017 Bonds in each year (the "Annual Report"); and (b) notice of the occurrence of certain enumerated events (each a "Listed Event Notice"). The Annual Report and each Listed Event Notice, if applicable, will be filed by DAC, on behalf of the City, on the Electronic Municipal Market Access system, a service of the Municipal Securities Rulemaking Board. The specific nature and timing of filing the Annual Report and each Listed Event Notice, and other details of the City's undertakings are more fully described in "APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT" attached hereto.

The following disclosure is being provided by the City for the sole purpose of assisting the Underwriters in complying with the Rule: The City previously entered into continuing disclosure undertakings, as an "obligated person" under the Rule (the "Undertakings"). In the

previous five year period beginning on March 30, 2012 and ending on March 30, 2017 (the "Compliance Period"), the City has, on several instances during the Compliance Period, failed to comply with certain provisions of the Undertakings, including: (a) failing to timely file certain annual financial information and/or operating data, (b) failing to provide certain required annual financial information and operating data in its annual filings, and (c) failing to file or timely file certain notices.

LEGAL MATTERS

Certain legal matters incident to the authorization, issuance, validity, sale and delivery of the Series 2017 Bonds are subject to the approving opinion of Hunton & Williams LLP, Atlanta, Georgia and The Charleston Group, Fayetteville, North Carolina, Co-Bond Counsel, whose approving opinion in substantially the form attached hereto as "APPENDIX E - FORM OF OPINION OF CO-BOND COUNSEL" will be delivered concurrently with the issuance of the Series 2017 Bonds. The legal opinion of Co-Bond Counsel will speak only as of its date and subsequent distribution of it by recirculation of this Official Statement or otherwise will not create any implication that subsequent to the date of the legal opinion Co-Bond Counsel has affirmed its opinion. The actual legal opinion to be delivered may vary from the text of Appendix E, if necessary, to reflect facts and law on the date of delivery of the Series 2017 Bonds.

Certain legal matters will be passed upon for the Issuer by Hunton & Williams LLP, Atlanta, Georgia. Certain legal matters will be passed upon for the City by the City's Department of Law. Greenberg Traurig, LLP and Riddle & Schwartz, LLC, both of Atlanta, Georgia, are serving as Co-Disclosure Counsel. Certain legal matters will be passed upon for the Underwriters by Haley Law Firm, LLC, Atlanta, Georgia, Underwriters' Counsel.

FINANCIAL STATEMENTS

The basic financial statements of the City as of June 30, 2016 and for the Fiscal Year then ended have been audited by KPMG LLP, independent auditors (the "Auditor"). The report of the Auditor, together with the management's discussion and analysis, basic financial statements, component units' financial statements, notes to the financial statements, required supplementary information, and combining and individual fund statements and schedule for Fiscal Year ended June 30, 2016 are attached hereto as "APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016." KPMG LLP, the City's independent auditor, has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. KPMG LLP also has not been engaged to perform and has not performed any procedures relating to this Official Statement.

FINANCIAL ADVISORS

FirstSouthwest, a Division of Hilltop Securities Inc., Dallas, Texas and Grant & Associates LLC, Marietta, Georgia are serving as co-financial advisors to the City (the "City's

Financial Advisor"). Phoenix Capital Partners, Philadelphia, Pennsylvania, is serving as financial advisor to the Issuer (the "Issuer's Financial Advisor," and together with the City's Financial Advisor, the "Financial Advisors"). The Financial Advisors assisted in matters related to the planning, structuring and issuance of the Series 2017 Bonds and provided other advice. The Financial Advisors did not engage in any underwriting activities with regard to the issuance and sale of the Series 2017 Bonds.

RATINGS

Moody's Investors Service, Inc. and S&P Global Ratings (together, the "Rating Agencies") have assigned underlying ratings of "Aa1" and "AA+," respectively, to the Series 2017 Bonds.

The ratings, including any related outlook with respect to potential changes in such ratings, reflect only the respective views of the Rating Agencies, and an explanation of the significance of such ratings may be obtained from the Rating Agencies furnishing the ratings. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. There is no assurance that such ratings will remain unchanged for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings or other actions by the Rating Agencies or either of them, may have an adverse effect on the liquidity and/or market price of the affected Series 2017 Bonds. Neither the Issuer nor the City has undertaken any responsibility to oppose any such revision, suspension or withdrawal.

UNDERWRITING

Ramirez & Co., Inc. (the "Representative"), on behalf of itself and the other underwriters listed in the cover page of this Official Statement (collectively, the "Underwriters") have agreed jointly and severally, pursuant to a Bond Purchase Agreement between the Representative, the Issuer and the City (the "Bond Purchase Agreement") to purchase the Series 2017 Bonds at a price equal to $______(representing the principal amount of the Series 2017 Bonds of $______, less an underwriting discount of $______, and plus/minus a net original issue discount/bond premium of $______). The Bond Purchase Agreement provides that the obligations of the Underwriters to accept delivery of the Series 2017 Bonds are subject to various conditions of the Bond Purchase Agreement, but the Underwriters will be obligated to purchase all of the Series 2017 Bonds, if any are purchased. The Underwriters reserve the right to join with dealers and other underwriters in offering the Series 2017 Bonds to the public.

The prices and other terms with respect to the offering and sale of the Series 2017 Bonds may be changed from time to time by the Underwriters after such Series 2017 Bonds are released for sale, and the Series 2017 Bonds may be offered and sold at prices other than the initial offering prices, including sales to dealers whom may sell the Series 2017 Bonds into investment accounts.

Certain of the Underwriters have entered into distribution agreements with other broker-dealers (that have not been designated by the City as underwriters with respect to the Series 2017 Bonds) for the distribution of the Series 2017 Bonds at the original issue prices set forth on the inside front cover of this Official Statement. Such agreements generally provide that the Underwriters will share a portion of its underwriting compensation or selling concession with such broker-dealers.

FORWARD LOOKING STATEMENTS

Any statements made in this Official Statement, including in the appendices, involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized.

Use of the words "shall" or "will" in this Official Statement or in summaries of documents to describe future events or continuing obligations is not intended as a representation that such event or obligation will occur but only that the document contemplates or requires such event to occur or obligation to be fulfilled. The statements contained in this Official Statement, including in the appendices, that are not purely historical, are "forward looking statements." Such statements generally are identifiable by the terminology used, such as "plan," "expect," "estimate," "budget" or other similar words. Readers should not place undue reliance on forward looking statements. All forward looking statements included or incorporated by reference in this Official Statement are based on information available on the date hereof and neither the Issuer nor the City assume any obligation to update any such forward looking statements. It is important to note that the actual results could differ materially from those in such forward looking statements.

The forward looking statements herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Issuer and the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward looking statements included in this Official Statement, including in the appendices, will prove to be accurate.

MISCELLANEOUS

The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series

2017 Bonds, the security for and the source for repayment for the Series 2017 Bonds and the rights and obligations of the Bondholders. Copies of such documents may be obtained as specified under "INTRODUCTION - Other Information" herein.

The appendices attached hereto are integral parts of this Official Statement and should be read together with all other parts of this Official Statement.

Any statements made in this Official Statement involving matters of opinion or of estimates or forecasts, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or forecasts will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the Bondholders of the Series 2017 Bonds.

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AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT

The execution and delivery of this Official Statement, and its distribution and use by the Underwriters in connection with the original public offer, sale and distribution of the Series 2017 Bonds by the Underwriters, have been duly authorized and approved by the Issuer and the City.

CITY OF ATLANTA AND FULTON COUNTRY RECREATION AUTHORITY

By: William K. Whitner, Esq., Chairperson

CITY OF ATLANTA

By: Kasim Reed, Mayor

58 APPENDIX A

STATISTICAL AND FINANCIAL INFORMATION REGARDING THE CITY

[THIS PAGE INTENTIONALLY LEFT BLANK] In addition to the information provided in the Official Statement, including each of the appendices attached thereto, with respect to the City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 (the "Series 2017 Bonds"), the City of Atlanta (the "City") has provided the following general information regarding the City, ad valorem taxation, collection and enforcement, financial data, debt structure, and certain economic and demographic trends. A complete review of this Appendix A, together with the body of the Official Statement and all other appendices attached thereto, is essential to the making of an informed investment decision by any purchaser of the Series 2017 Bonds. In the making of an informed investment decision relating to the Series 2017 Bonds, a potential purchaser should not conclude that the presentation of information in this Appendix A, versus presentation of same in the body of the Official Statement, denotes that the information so provided in this Appendix A is of less relevance or importance than the information set forth in the body of the Official Statement.

The City has not authorized anyone to give any information or to make any representations not contained herein or supplemental hereto, and if given or made, such other information or representations must not be relied upon as having been authorized. All of the following information, estimates, and expressions of opinion are subject to change without notice. The delivery by the City of the information contained herein shall not, under any circumstances, create any implication that there has been no material change in the affairs of the City since the date of the Official Statement. All capitalized terms used herein and not otherwise expressly defined herein shall have the respective meanings set forth in the Official Statement.

TABLE OF CONTENTS

PAGE

THE CITY ...... 1 Introduction ...... 1 City Administration and Officials ...... 1 City Services ...... 1 City Facilities ...... 2 AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT ...... 2 Ad Valorem Taxation ...... 3 Assessed Value ...... 6 Annual Tax Levy ...... 8 Collection and Enforcement ...... 9 Recent Updates Concerning the Property Tax Assessment and Collection Process...... 13 Principal Property Tax Payers ...... 14 CITY FINANCIAL INFORMATION ...... 15 Accounting System and Policies ...... 15 Fiduciary Fund Types ...... 17 Budget Commission ...... 17 General Fund Trends...... 17 General Fund Data ...... 20 Pension and OPEB Matters ...... 20 CITY DEBT STRUCTURE ...... 20 Summary of Long-Term Debt ...... 20 Ratio of General Bonded Debt Outstanding ...... 22 Legal Debt Margin ...... 23 Proposed Issuance of General Obligation Bonds, Additional General Fund Backed Debt, Self-Supporting Debt, and Property Tax Supported Debt ...... 24 CITY ECONOMIC AND DEMOGRAPHIC INFORMATION ...... 24 Population Data ...... 25 Employment and Weekly Wage by Sector ...... 26 Principal Employers ...... 27 Employment ...... 28 Per Capita Personal Income ...... 28

THE CITY

Introduction

The City is a municipal corporation created and existing under the laws of the State of Georgia (the "State"). The City is the seat of government of the State and Fulton County. The City currently has a land area of approximately 134 square miles, approximately 94.8% of which is located in Fulton County and 5.2% of which is located in DeKalb County. The City constitutes approximately 23.8% of the land area of Fulton County and 2.6% of the land area of DeKalb County. 1 The City has not accomplished a major annexation since 1952, but is the core of the ninth largest Metropolitan Statistical Area in the country as of July 1, 2016 according to the U.S. Bureau of the Census, including approximately 5.8 million people. 2

This economic and demographic information does not purport to be comprehensive. For further economic and demographic information relating to the City, see "CITY ECONOMIC AND DEMOGRAPHIC INFORMATION" herein. In addition, the City’s Comprehensive Annual Financial Report for the year ended June 30, 2016 can be obtained through EMMA at http://emma.msrb.org or by request to the following address: 68 Mitchell Street, S.W., Suite 11100, South Tower, Atlanta, Georgia 30303, telephone (404) 330-6430.

City Administration and Officials

For information related to the City's administration and officials, see "THE CITY" in the Official Statement.

City Services

The City provides a full range of municipal government services to approximately 463,8783 residents as of July 1, 2015. The City provides police and fire protection, the cost of which is financed by general fund revenues. The City also provides recreational, cultural, traffic control, sanitary code enforcement, pretrial detention, municipal court, planning and zoning, and building and housing code enforcement services and acquires, constructs, and maintains highways, streets, bridges, traffic signals, and other infrastructure, the cost of which is financed by general fund revenues. The City provides residential solid waste removal, the cost of which is financed by fees and charges to the end user. The City also operates the William B. Hartsfield – Maynard H. Jackson Atlanta International Airport ("Hartsfield-Jackson Atlanta International Airport"), the cost of which is financed by landing fees, rental of airport property and concession revenues. In addition, the City is financially accountable as of June 30, 2016 for the City of Atlanta and Fulton County Recreation Authority, the Urban Design Commission (UDC), the Solid Waste Management Authority (SWMA), the Atlanta Public Safety and Judicial Facilities Authority, the Atlanta CoRA Inc., Keep Atlanta Beautiful, Atlanta Housing Opportunity, Inc.

1. Sources: City of Atlanta, Georgia, Comprehensive Annual Financial Report for the Year Ended June 30, 2016; U.S. Census Bureau, U.S. Department of Commerce; Bureau of Labor Statistics. 2. Sources: U.S. Census Bureau Population Division, Annual Estimates of the Population of Metropolitan and Micropolitan Statistical Areas: April 1, 2010 to July 1, 2016. 3. Source: U.S. Census Bureau, Population Division.

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and The Atlanta Development Authority (doing business as Invest Atlanta), all of which are included as part of the City’s Comprehensive Annual Financial Report for the year ended June 30, 2016.

City Facilities

The City operates from its main governmental center, located at 55 Trinity Avenue, SW referred to as City Hall. The Office of the Mayor and City Council are located at City Hall.

The City owns a drinking water supply, treatment, and distribution system, which serves approximately 154,9904 metered connections, including residential, commercial, and industrial customers, as well as the water distribution systems of other governments in the Atlanta area. The population of the water system's service area is estimated to be more than 1,000,000 users, approximately 400,000 of which are located inside of the City's corporate limits. The remaining capacity of the water system is available on a retail and contract basis to surrounding jurisdictions. The City also maintains three treatment plants, one of which is jointly owned with Fulton County, and three initial pumping stations, one of which is jointly owned with Fulton County.

The City owns and operates a wastewater collection and treatment system, including three treatment plants that serve an area of approximately 225 square miles (approximately 54% of which is within the corporate limits of the City), containing an estimated population of 1,500,000. The City treats wastewater for other governments in the Atlanta area under long-term contracts to treat a portion of such governments' wastewater.

As discussed above, the City owns and operates Hartsfield-Jackson Atlanta International Airport, which consistently ranks as one of the busiest airports in the world in total passenger volume according to the Airports Council International. Hartsfield-Jackson Atlanta International Airport is one of the nation's major hub airports and is the primary airport for the southeastern United States. The City exercises exclusive administrative control over the airport through its Department of Aviation.

AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT

Following is a summary of certain ad valorem taxation, collection and enforcement provisions and procedures under the State Constitution, the Official Code of Georgia Annotated ("O.C.G.A." or the "Georgia Code"), the Fulton County Code of Laws (the "Fulton County Code") the Code of DeKalb County, as Revised 1988 (the "DeKalb County Code"), and the Ordinance Code of the City of Atlanta, as such provisions and procedures may be amended from time to time (collectively referred to in this section as the "Georgia Tax Law"). Any references herein to millage rates, exemptions and other matters relating to the assessment and collection of taxes by, or for the benefit of, the Atlanta Board of Education (the "Board of Education") are purely for informational purposes only. This summary of ad valorem tax related provisions and

4. Includes governments and wholesale customers. In Fiscal Year 2016, there were 1,098 customers in this category.

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procedures is qualified in its entirety by the applicable provisions contained under Georgia Tax Law.

Ad valorem property taxes are an important source of revenue, which the City uses to fund its operations and pay certain long-term debt obligations. See "FISCAL OVERVIEW OF THE CITY – Property Tax Supported Debt" in the Official Statement. Ad valorem property taxes are levied annually in mills (one-tenth of one percent) upon each dollar of assessed value.

The City and the Board of Education are required to provide Fulton County and DeKalb County with the millage rate to be levied on all property subject to ad valorem taxation for purposes of the then current calendar year by June 1 of that year. Fulton County and DeKalb County are required to establish its millage rate to be levied on all property subject to ad valorem taxation for purposes of the then current calendar year by May 15 of that year.

Ad Valorem Taxation State and local legislation is enacted from time to time which modifies the ad valorem property tax system, including, without limitation, the type and amount of the homestead exemption, the applicability of other exemptions and the amount of assessments.

Ad valorem property taxes are levied based upon value, against real property located within the City. There are, however, certain classes of property which are exempt from taxation, including public property, property owned by certain religious entities, property owned by certain charities, property of nonprofit hospitals, nonprofit homes for the aged and nonprofit homes for the mentally handicapped, property owned by colleges and certain educational property, public library property, certain farm products, certain air and water pollution control property, and personal effects.

Exemptions for City Taxpayers in Fulton County – For purposes of calculating ad valorem taxes, City taxpayers who own and reside in their home in Fulton County are allowed a homestead exemption from taxation on the first $30,000. At age 62, with household income not exceeding $10,000, City homeowners may receive an additional $10,000 homestead exemption applicable to taxes levied by the Board of Education. At age 65, with household income not exceeding $40,000, the City homeowners may receive a $40,000 homestead exemption from City operating and parks levies, an additional $25,000 homestead exemption from the Board of Education if household income does not exceed $25,000, an additional $4,000 homestead exemption from Fulton County with household income not exceeding $10,000 and an additional $10,000 homestead exemption from Fulton County taxes if the applicant and spouse's adjusted gross income does not exceed the maximum amount which may be received under federal social security. Certain disabled veterans, their unremarried surviving spouses or minor children and unremarried surviving spouses of members of the armed forces killed in action may qualify for a homestead exemption from all ad valorem taxes or the maximum amount of $72,000 from State, Fulton County, City and school tax levies. Unremarried surviving spouses of firefighters or peace officers killed while in the line of duty are granted a full exemption from all ad valorem taxes. Disabled persons and persons over the age of 70, upon meeting certain filing requirements, may qualify for a homestead exemption from Fulton County's ad valorem taxes for the full value of the homestead if such person's adjusted gross income, together with the adjusted gross income

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of the resident's spouse who also resides at the homestead, does not exceed the maximum amount which may be received by an individual and an individual's spouse under the federal social security act. Further, the value of residential property owned by persons age 65 or older with annual household income not exceeding $39,000 for the preceding taxable year is frozen and will remain the property's value as long as the eligible person occupies the residence. In addition, pursuant to legislation enacted in 2004, an additional homestead exemption for Fulton County ad valorem taxes was provided limiting the increase in the assessed value of a taxpayers property to 3% per year or the consumer price index, whichever is lower; provided that this limit shall not apply to increases in assessed value due to improvements to the homestead in a given year. Finally, a tax deferral is also available to citizens 62 years or older meeting certain requirements to the extent deferred taxes, interest and liens do not exceed 85% of the fair market value of the homestead.

Exemptions for City Taxpayers in DeKalb County – For purposes of calculating ad valorem taxes, City taxpayers who own and reside in their home in DeKalb County are allowed a homestead exemption from taxation on the first $12,500 for DeKalb school tax levies, the first $10,000 for DeKalb County taxes excluding bond levies, and the first $30,000 for City tax levies. At age 62 or if permanently disabled, City homeowners may receive a reduction of taxable value of property by $10,000 from taxes levied by DeKalb County, excluding bond levies, with household income not exceeding $16,000 in gross income. At age 65 or if permanently disabled, City homeowners may receive an additional $4,000 homestead exemption from all DeKalb County tax levies with household income not exceeding $10,000 in net income, or an additional $4,000 homestead exemption from DeKalb County tax levies with household income not exceeding $15,000 in net income, or an additional $4,000 homestead exemption from DeKalb County tax levies with household income not exceeding $16,000 in gross income. Disabled veterans, their unremarried surviving spouses and unremarried surviving spouses of members of the armed forces killed in action may qualify for a homestead exemption a maximum amount of $72,965 from school tax levies and a maximum amount of $70,465 from all other tax levies. Certain other disabled veterans at the age of 65, with household income not exceeding $10,000 in net income, their unremarried surviving spouses and unremarried surviving spouses of members of the armed forces killed in action may qualify for a homestead exemption from all school tax levies and a maximum amount of $70,465 from all other tax levies. Unremarried surviving spouses of firefighters or peace officers killed while in the line of duty are granted a full exemption from all ad valorem taxes. At age 70, City homeowners may receive a homestead exemption from all DeKalb County school tax levies with household income not exceeding $84,115 plus income from municipal bonds.

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The following table presents the direct and overlapping property tax rates for certain property located within the City for the last ten fiscal periods.

Direct and Overlapping Property Tax Rates Last Ten Fiscal Periods (per $1,000 of assessed value)

Direct Property Tax Rates Overlapping Property Tax Rates(1) (2) (3) City of Atlanta Board of Education Fulton County DeKalb County General School School General State of General State of Fiscal Operating Bond Parks Operating Bond Total Operating Bond Georgia Total Operating Hospital Bond Library Georgia Total Year Levy(4) Levy(5) Levy(6) Levy(7) Levy(8) Levy Levy(9) Levy(10) Levy(11) Levy Levy(12) Levy(13) Levy(14) Levy(15) Levy(11) Levy 2007 7.53 1.41 0.50 22.65 0.05 32.14 10.28 0.06 0.25 10.59 9.12 0.83 0.56 0.99 0.25 11.75 2008 7.09 1.33 0.50 21.65 0.05 30.62 10.28 - 0.25 10.53 7.54 0.89 0.53 0.96 0.25 10.17 2009 7.12 1.18 0.50 21.64 0.05 30.49 10.28 - 0.25 10.53 7.99 0.84 0.51 0.83 0.25 10.42 2010 10.24 1.20 0.50 21.64 0.05 33.63 10.28 - 0.25 10.53 8.00 0.96 0.57 1.00 0.25 10.78 2011 10.24 1.20 0.50 21.64 0.05 33.63 10.28 - 0.25 10.53 8.00 0.96 0.57 0.88 0.25 10.66 2012 10.24 1.20 0.50 21.64 0.05 33.63 10.28 0.27 0.25 10.80 9.43 0.88 0.87 1.02 0.25 12.45 2013 10.24 1.20 0.50 21.64 0.10 33.68 10.28 0.27 0.20 10.75 10.43 0.94 0.70 1.22 0.20 13.49 2014 10.05 1.20 0.50 21.64 0.10 33.49 10.21 0.27 0.15 10.63 10.71 0.80 - 1.16 0.15 12.82 2015 9.75 1.20 0.50 21.64 0.10 33.19 11.78 0.27 0.10 12.15 8.22 0.80 0.01 1.06 0.10 10.19 2016 8.89 1.48 0.50 21.64 0.10 32.61 10.50 0.25 0.05 10.80 10.39 0.89 0.01 1.11 0.05 12.45 ______(1) Excludes overlapping property taxes, fees and assessments levied by the governing board of each community improvement district ("CID") formed in the City on real property located within each such CID (the "CID Levies"). The CID Levies are imposed solely on non-residential property uses. In Fiscal Year 2016, the levy, in mils, for: (a) the Downtown CID is 5.00; (b) the Midtown CID is 5.00; (c) the Buckhead CID is 3.00; (d) the Airport West CID is 5.00; and (e) the Little Five Points CID is 3.00. (2) Approximately 94.8% of the City is located in Fulton County. (3) Approximately 5.2% of the City is located in DeKalb County. (4) The general levy is set by the City Council and is used to pay general operating expenses. (5) The bond levy is set by the City Council and is used to pay debt service on general obligation bonds issued for lawful public purposes other than for school purposes. (6) The parks levy is set by the City Council and is used to pay expenses related to the City's parks. (7) The school operating levy is set by the Board of Education and is used to pay general operating expenses of the Board of Education. Includes taxes required under the Quality Basic Education Act. (8) The school bond levy is set by the Board of Education and is used to pay debt service on general obligations bonds issued for school purposes. (9) The general operating levy is set by the Fulton County Board of Commissioners and is used to pay general operating expenses of Fulton County. (10) The bond levy is set by the Fulton County Board of Commissioners and is used to pay debt service on Fulton County's bonds. (11) The State levy is set by the State and is used to pay general operating expenses of the State. The State levy will be abolished in 2016. (12) The general operating levy is set by the DeKalb County Board of Commissioners and is used to pay general operating expenses of DeKalb County. (13) The hospital levy is set by the DeKalb County Board of Commissioners and is used to pay the expenditures designated in the contract with the Fulton-DeKalb Hospital Authority and the DeKalb Hospital Authority. (14) The bond levy is set by the DeKalb County Board of Commissioners and is used to pay debt service on DeKalb County's bonds. (15) The library levy is set by the City and is used to pay the cost of furnishing library services to City residents.

Source: City of Atlanta, Georgia, Comprehensive Annual Financial Report for the Year ended June 30, 2016 (Statistical Section).

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Assessed Value

Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated as a percentage of fair market value of the property being assessed, based on zoning, use, covenants or restrictions, bank sales, conservation easements and other existing factors. Georgia Tax Law requires taxable real and tangible property to be assessed with certain exceptions, at 40% of its fair market value and to be taxed based on a levy made by each respective tax jurisdiction (for purposes hereof, only the City and Fulton County) according to 40% of the property's fair market value.

The Fulton County Board of Tax Assessors (the "Board of Assessors") is the entity charged with the responsibility for determining the tax digest (total assessed value net of applicable exemptions) for Fulton County (inclusive of the City, except as described below). The Board of Assessors is a five-member board appointed by the five-district elected members of the Fulton County Board of Commissioners. The primary function of the Board of Assessors is to estimate the fair market value of all real and personal property within Fulton County as of January 1st of each calendar year. This assessment results in the tax digest. The Fulton County Tax Assessor's Office (the "Tax Assessor's Office") is a department of Fulton County that is administered by a Chief Appraiser appointed by the Board of Assessors. The Board of Assessors is required to complete the tax digest by June 1 of each year and provide it to the Fulton County Tax Commissioner for certification and transmittal to the State of Georgia Revenue Commissioner for examination and approval. The State of Georgia Revenue Commissioner has the authority to examine the tax digest for the purpose of determining if the valuations of property are reasonably uniform and equalized between and within counties. Every three years, the Fulton County tax digest is subject to a detailed review by the State of Georgia Revenue Commissioner, and in such years more than half of the residential and commercial properties in the Fulton County must be revalued.

Georgia law requires that owners of real property subject to taxation must file a tax return (a "Tax Return") with the tax receiver or tax commissioner in the county where the property is located. A Tax Return must be filed before April 1 of the year for all real property owned on January 1 of the year. If real property is acquired by transfer and a properly completed real estate transfer tax return is filed and the real estate transfer tax is paid, the property owner will be deemed to have returned the property for taxes. In each succeeding year after the initial return is filed, so long as no improvements were made to the real property, the property owner is not required to file additional returns. Where improvements are made, a new return must be filed.

The Board of Assessors permits commercial property owners to file a temporary assessment or "TPA" stating the fair market value of the property being returned for taxation. It is the policy of the Board of Assessors to review such temporary assessment filings to confirm that the returned value is not less than the value that such property would have been assessed at in the Board of Assessor's valuation process. Valuations that exceed what the Board of Assessors would have determined as the fair market value of the subject property are utilized for purposes of calculating assessed value.

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Taxpayers in the State must be notified in writing of increases and decreases in property valuations and have the right to appeal such revaluations. As such, property valuations are subject to review at various stages by arbitrators, boards of equalization and state courts, with some exceptions and limits, the ability of county boards of assessors, such as the Board of Assessors, to appeal a decision of the applicable county board of equalization or arbitrator or board of arbitrators, as applicable, to the extent the assessment is changed by 20% or less in the proceedings. When property valuations are reduced or unchanged from the value on the initial annual notice of assessment and such valuation is established as the result of either an appeal decision rendered or stipulated by agreement, the valuation so established by appeal decision or agreement may not be increased by the Board of Assessors during the next two successive years, subject to certain exclusions.

In addition, a county's failure to deliver its tax digest to the State, to properly appraise property pursuant to Georgia standards and procedures or to reassess properties can result in delays in the collection of ad valorem taxes on property and/or substantial penalties. To the extent that a county's tax digest is not permitted to be certified by the State of Georgia Revenue Commissioner, a county may, under certain conditions, seek an order from the superior court of such county authorizing immediate and temporary collection of taxes until such time as the matter affecting approval of the tax digest is resolved. In such cases, judges of the superior court have discretion to set the temporary millage rate or valuation based on the previous year's millage rate and valuation.

The following table presents the assessed value and estimated actual value of taxable property located in the City for the last ten fiscal periods.

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Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Periods(1)(2)

Fiscal Residential Commercial Industrial Other Less: Tax-Exempt Total Taxable Total Direct (3) (4) Year Property Property Property Property Property Assessed Value Tax Rate 2007 $ 13,202,618,136 $ 9,744,120,546 $ 776,908,905 $ 1,595,456,173 $ 1,887,341,520 $ 23,431,762,240 31.61 % 2008 13,980,076,949 13,067,992,615 1,031,326,231 1,615,241,347 2,093,949,974 27,600,687,168 30.49 2009 13,872,372,979 11,249,746,299 890,877,231 1,720,999,874 1,910,282,501 25,823,713,882 30.49 2010 12,749,326,810 11,746,535,282 806,421,455 1,542,422,321 2,831,876,995 24,012,828,873 33.63 2011 12,609,751,900 10,924,151,062 775,954,220 1,525,316,851 2,731,195,758 23,103,978,275 33.63 2012 11,506,413,986 11,148,297,009 758,400,890 1,528,992,043 2,880,803,214 22,061,300,714 33.63 2013 10,896,664,314 10,752,062,104 723,400,082 1,658,974,465 2,660,010,749 21,371,090,216 33.68 2014 11,183,385,556 10,556,075,940 687,309,657 1,671,292,251 2,430,432,837 21,667,630,567 33.49 2015 11,687,041,707 11,151,391,836 683,832,400 1,554,353,314 2,599,674,413 22,476,944,844 33.19 2016 12,848,381,757 12,774,083,537 711,630,623 1,503,577,204 2,874,052,314 24,963,620,807 33.49

(1) Assessed value and estimated actual value figures include property within the City’s tax allocation districts. A substantial portion of the ad valorem property taxes collected from property within the tax allocation districts is pledged as security for tax allocation district bonds. The City is precluded from creating additional tax allocation districts to the extent that the total taxable value of its existing tax allocation district exceeds 10% of the total value of taxable property in the City. As of February 1, 2016, approximately 15% of the City's estimated actual value of taxable property was located within a tax allocation district. (2) Assessed values are established by the Fulton County and DeKalb County Boards of Tax Assessors on January 1 of each year at 40% of the market value as required by State law. (3) Other property consists of Historical, Agricultural, Conservation, Utility, Motor Vehicle, Heavy Equipment, Timber, Mobile Homes, etc. (4) Tax exempt property consists of data from non-taxable property such as the Basic Homestead, Elderly, Disabled Veteran, Freeport, etc.

Source: City of Atlanta, Georgia, Comprehensive Annual Financial Report for the Year ended June 30, 2016 (Statistical Section).

Annual Tax Levy

Ad valorem tax rates for debt service on direct general obligation bonds of the City, Fulton County and DeKalb County are not limited. Amounts received for that purpose are accounted for separately from other funds. In addition, the State Constitution allows the board of education of each school system to impose a school tax of not greater than 20 mills per dollar for the operation and maintenance of education, unless such limitation is increased or removed by a majority of the qualified voters in the school district. The Board of Education, however, has both the constitutional and statutory authority to levy more than 20 mills for school tax purposes pursuant to the grandfather clause in the pertinent provisions of the State Constitution applicable to independent school systems that levied at a tax rate greater than the uniform 20-mill rate prior to the enactment of the constitutional limitation.

According to the Fulton County Tax Commissioner's Office, the actual millage rate levied by the City, the Board of Education, and Fulton County and DeKalb County per $1,000 of assessed value in Fiscal Year 2017 as used for purposes of calculating assessments is 43.30 mills, and is comprised of 8.88 mills levied by the City for Operations and 0.50 mills levied for City Parks, 21.715 mills levied by the Board of Education, and 10.45 mills levied by Fulton County, 0.00 mills levied by the State, 1.48 mills levied for the City bond levy (the "City Bond Levy"), 0.025 for the Board of Education bond levy, and 0.25 for the Fulton County bond levy.

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No assurance can be provided that the current ad valorem property tax system or millage rates will remain unchanged during the term of the Series 2017 Bonds. State and local laws governing the assessment, collection and administration of property taxes are subject to change at the discretion of the State, City, the Board of Education, Fulton County, DeKalb County and other taxing jurisdictions. The City, the Board of Education, Fulton County and DeKalb County retain discretion with respect to the determination of the millage rate levy imposed each year, and are subject to State and local law which establishes procedures allowing and, in certain cases requires, such millage rates to be decreased (e.g., equalization of millage rates to adjust for sales tax collections).

Collection and Enforcement

As of July 1, 2016, delinquent taxes bear interest at an annual rate equal to the bank prime loan rate as an annual rate equal to the bank prime loan rate as possited by the Board of Governors of the Federal Reserve System in statistical release H.15 or any publication that may supersede it, plus 3% to accrue monthly. Interest accrued prior to July 1, 2016 will remain at 1% per month. In Fulton County and the City, an additional rate of interest 1% per month will accrue on the amount of such delinquent taxes, fees service charges and assessments exceeding $1000.00, not to exceed 12% per year.

Also as of July 1, 2016, a penalty is charged for late payment of ad valorem taxes, and if such delinquent taxes are not paid within 120 days after the due date, then a first penalty of 5% of the amount the tax due and unpaid is assessed; and if such delinquent taxes are not paid within 120 days of the date of imposition of the first penalty, a second penalty of 5% of any tax amount remaining due is imposed; and if such delinquent taxes are not paid within 120 days of the date of imposition of the second penalty, a third penalty of the 5% of any tax amount remaining due is imposed; and if such delinquent taxes are not paid within 120 days of the date of imposition of the third penalty, a fourth penalty of 5% of any tax amount remaining due is imposed.

The Fulton County Tax Commissioner and DeKalb County Tax Commissioner bill and collect the ad valorem taxes for the Counties.

The Fulton County Tax Commissioner and DeKalb County Tax Commissioner also bill and collect the ad valorem taxes for the City and the Board of Education and remit tax receipts to the City and the Board of Education as received. The City and Board of Education taxes are due 45 days after the billing date. The late interest payment and penalty provisions applicable to the Counties ad valorem taxes also apply to the City and Board of Education ad valorem taxes. Pursuant to an agreement between the City, the Board of Education and the Counties, the City and the Board of Education pay the Fulton County Tax Commissioner and the DeKalb County Tax Commissioner a tax collection fee based upon the costs of operating the Fulton County Tax Commissioner's and DeKalb County Tax Commissioner's offices. Penalties collected in connection with late filings and late payments of taxes are remitted to the respective county. Interest on delinquent ad valorem taxes are required to be shared, pro rata, by each taxing jurisdiction based on each jurisdiction's share of the total tax on which such penalties and interest are computed.

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The State, counties and municipalities are provided with the power to issue a writ of execution ("Executions") for the collection of any tax, fee, license, penalty, interest, or collection costs due from a taxpayer. Immediately after the last day for payment of taxes has elapsed, the tax commissioner is required to give notice in writing to the taxpayer that taxes are delinquent and that an Execution will be issued for unpaid taxes. Tax collectors and tax commissioners are required to issue Executions for nonpayment of taxes at any time after 30 days have elapsed from the giving of notice to the taxpayer of the delinquent taxes and to enter such taxpayer's name on the Execution docket required to be maintained by each tax collector or tax commissioner. In certain circumstances where the property within a county or municipality is insufficient to cover the tax payment delinquency, a county or municipality may levy upon property of a taxpayer that is not within such county or municipality. Executions for taxes and assessments (for permanent improvements of streets, sewers or otherwise) bear interest at a rate of 1% per month. Once the Execution has been issued the tax commissioner may use in rem judicial tax foreclosure ("Judicial Foreclosure") procedures provided for in O.C.G.A. § 48-4-76 through § 48-4-81, the tax sales procedures provided for in O.C.G.A. § 48-4-1 through § 48-4-7 ("Nonjudicial Foreclosure") or the tax commissioner may sell or assign the tax Executions (an "Execution Sale") to a third party (an "Execution Purchaser") as provided in O.C.G.A. § 9-13-36.

If the taxing jurisdiction determines that it will proceed with Judicial Foreclosure, the jurisdiction must wait until the taxes are delinquent for 12 months. After taxes have been delinquent for twelve months, the tax commissioner must file a petition with the superior court of the county in which the property is located. The petition is filed against the property subject to taxation and does not constitute an action for personal liability of the owner(s) of the property. Copies of the petition must be mailed to all interested parties whose identities and addresses are reasonably ascertainable and to the property address to the attention of the occupants of the property. Notice of the hearing must also be published twice in the official organ of the respective county. Not sooner than 30 days after the petition is filed, a judicial hearing on the petition will be held, and if the judge finds that the petition is accurate and no interested parties express an intent to pay the delinquent taxes, the judge will order that the property be sold on the courthouse steps not earlier than 45 days after the order is issued and that the sale will become final and binding 60 days after the date of the sale. The minimum sales price (the "Minimum Sales Price") for which property may be sold under a Judicial Foreclosure is the delinquent taxes plus interest, penalties and costs. The owner of the property has 60 days after the sale of the property to redeem the property or all rights to the property will be lost. Currently, Fulton County and DeKalb County conduct sales of delinquent properties on the first Tuesday of every month. If the property is sold for an amount in excess of the Minimum Sales Price, the excess amount will be deposited into the registry of the superior court and will be distributed by the superior court to the interested parties, including the owner, as their interests appear.

To the extent that bids for the property subject to a levy are not sufficient to cover the taxes and costs, the governing authority of a county is permitted to bid on the property, up to the amount of the taxes and costs; provided, however, that the governing authority of the county is not required to pay the proportionate part of the taxes due the State, any school district, any municipality or other political subdivision until the property is redeemed or resold as provided under Georgia Tax Law.

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If the taxing jurisdiction determines that it will proceed with Nonjudicial Foreclosure, following the issuance of the Execution, the levying officer must give 20 days written notice to the owner, tenant, certain governmental lienholders and holder of the security deed before proceeding to advertise the sale of property. The levy notice is delivered by certified mail and if delivery cannot be affected by certified mail, the levy notice must be delivered to the owner and/or tenant in person. The levy must state the owner's and/or mortgage holder's name, the tax years delinquent, the principal amount of taxes due, the accrued cost due and the description of the property to be sold. The sale must be advertised in the official organ of the county weekly for four consecutive weeks. At least ten days before a tax sale, the owner is sent written notice by certified mail informing of the impending tax sale. Sales of delinquent properties are held on the first Tuesday of every month. Any person having any right, title or interest in or lien upon property sold following Nonjudicial Foreclosure may redeem the property by the payment of the redemption price at any time within 12 months from the date of the sale or any time thereafter until the right to redeem is foreclosed by the purchaser giving notice of foreclosure of the right to redeem.

Georgia law also authorizes taxing jurisdictions to enter into Execution Sales for transfers of individual Executions or for transfers of "lot block Executions." Any person may purchase Executions for delinquent taxes on property owned by others by paying the delinquent taxes, interest, penalties and costs and requesting that the tax commissioner transfer the Execution to them. The transferee shall have the same rights as to enforcing the Execution and priority of payment as might have been exercised or claimed before the transfer; provided that the transferee has the Execution entered on the general Execution docket within 30 days from the transfer.

The notice, publication and waiting periods and other procedures required in order to collect delinquent ad valorem taxes and other taxes under Georgia Tax Law may cause a delay in the timeliness of payments of debt service on the Series 2017 Bonds. To the extent that third parties are unwilling or unable to pay the costs and expenses and other sums required in order to effect transfers of Executions or to purchase property at tax sales, the receipt of ad valorem taxes could be further delayed.

The table below provides historic information for levies and collections.

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City of Atlanta, Georgia Property Tax Levies and Collections Last Ten Fiscal Periods (Dollars in thousands)

Collected Within the Fiscal Year of the Levy Total Collections to Date Collections Net of % of Tax Levied Adjustments Delinquent Fiscal for the Fiscal Percentage in Subsequent Percentage Delinquent Taxes To Tax Year Year Amount(2) of Levy Years(1) Amount(2) of Levy(2) Amount(2), (3) Levy(3) 2007 $ 179,607 $ 164,976 91.85% $ 13,851 $ 178,827 99.57% $ 780 0.4% 2008 182,021 173,030 95.06 8,165 181,195 99.55 826 0.5 2009 198,378 190,475 96.02 6,615 197,090 99.35 1,288 0.7 2010 264,371 257,062 97.24 5,720 262,782 99.40 1,589 0.6 2011 240,586 234,895 97.63 4,111 239,006 99.34 1,580 0.7 2012 222,633 218,472 98.13 2,996 221,467 99.48 1,166 0.5 2013 219,177 214,494 97.86 3,545 218,038 99.48 1,139 0.5 2014 222,103 218,184 98.24 2,757 220,941 99.48 1,162 0.5 2015 227,842 224,808 98.67 1,761 226,570 99.44 1,272 0.6 2016 239,875 237,840 99.15 - 237,840 99.15 2,035 0.9 ______(1) Adjusted to include collection in subsequent years. (2) Does not include tax revenues retained by Fulton County and DeKalb County for administrative expenses. Therefore, the collection rate shown is slightly less than the actual collection rate. (3) Delinquent Amount and % of Delinquent Taxes to Tax Levy figures are as of December 21, 2016.

Source: City of Atlanta, Georgia, Comprehensive Annual Financial Report for the Year ended June 30, 2016 (Statistical Section) and City of Atlanta, Department of Finance.

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Recent Updates Concerning the Property Tax Assessment and Collection Process

O.C.G.A. § 48-5-304(a) requires that appeals must be brought below 5% of the total assessed value in order for the State of Georgia Revenue Commissioner to certify a county's tax digest in any year except in those years when a complete revaluation of property is done, in which years, the value of property under appeal may be 8%. The statutory procedure pursuant to the provisions of O.C.G.A. § 48-5-310 allows for the collection of taxes to proceed under a temporary collection order if an appeal has been filed to prevent the approval of the digest by the State of Georgia Revenue Commissioner, or if the digest has not otherwise been approved by the State of Georgia Revenue Commissioner, or if the digest is otherwise not enforceable or collectable by law, and if the appeals prevent collections from being made or enforced on the digest. The methodology for issuing tax bills under the temporary collection order is decided by a judge of the Superior Court of the respective county. The hearing on the temporary collection order is advertised and persons in opposition to the methodology to be used to issue bills pursuant to the temporary collection order have the right to intervene. Case law has consistently upheld the general principle that as a matter of policy and judicial economy, ad valorem tax disputes should be resolved first at the local level through the appeal procedures created specifically for that purpose.

Action to Correct any Errors Relating to Fulton County's 2017 Tax Digest – On June 21, 2017, the Fulton County Board of Commissioners adopted Resolution #17 0549 ("Fulton County Resolution #17-0549") pursuant to the laws of the State of Georgia, including particularly 1880-1881 Ga. Laws (Act No. 403), page 546, § 2 VI which states that "Commissioners shall have the power to correct any errors in the tax digests of said county, upon such evidence as may be deemed satisfactory by them." Fulton County Resolution #17-0549 authorized and directed the Fulton County Board of Assessors to take steps to correct the 2017 Tax Digest as follows: (a) reinstating all freezes implemented from appeals that were removed for tax year 2017 and having the records reflect the properties' value prior to the unilateral withdrawal of such freeze; and (b) utilizing the 2016 Tax Digest as the basis for the 2017 Tax Digest and related property bills adjusted as follows: (i) for residential properties, the Fulton County Board of Assessors is required to set and enter into the tax database for the 2017 Tax Digest and for tax billing purposes, the values set by the certified 2016 Tax Digest, subject only to the following changes to adjust the values for parcels that: (A) were subject to new construction or improvements coded as growth on the 2017 notice file within the Fulton County tax system using 2016 values for said improvements; (B) had a change in exemption for the property requested by taxpayers prior to the date of Fulton County Resolution #17-0549 or removed by the Fulton County Tax Assessors' Office in error that need to be properly reflected; (C) were subject to litigation that either changed ownership or value of the land or improvements within a tax parcel as a result of the appeal; (D) did not exist in 2016 for tax purposes (in said cases, the value established by the 2017 assessment shall be used for the corrected 2017 Tax Digest) and (ii) for commercial properties, given the fact that the Fulton County Tax Assessors' Office did perform an extensive review of such parcels during tax years 2015 and 2016 for the purpose of preparing the 2017 Tax Digest, the values from the original 2017 Tax Digest shall be utilized for the corrected 2017 Tax Digest and tax billing purposes for such parcels, as the same do not need to be corrected.

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The foregoing action by the Fulton County Board of Commissioners may delay: (a) the date on which the local taxing authorities, including the City, will set its millage rates; (b) the date on which the Fulton County Tax Commissioner will generate 2017 tax bills; and (c) the date on which the City receives such revenue. The City does not anticipate that the proposed corrections to the 2017 Tax Digest will have a material adverse effect on the City's ability to timely pay its debt obligations.

Principal Property Tax Payers

The following table presents the principal property tax payers of the City for the calendar year 2015. A determination of the largest taxpayers within the City can be made only by manually reviewing individual tax records. Therefore, it is possible that owners of several small parcels may have an aggregate assessment in excess of those presented in the following table. Furthermore, the taxpayers shown in the table below may own additional parcels within the City. No independent investigation has been made of, and consequently no representation can be made as to, the financial condition of any of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the City.

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Principal Property Tax Payers(1) Percentage of 2015 Taxable Total City Assessed Taxable Taxpayer Nature of Business Value Assessed Value (2) Development Authority of Government $ 979,728,452 4.12% Fulton County(3) Georgia Power Company Utility Service 296,597,925 1.25 Post Apartment Homes, LP Residential Real Estate 172,256,249 0.72 Bell South/AT&T Communication Service 155,862,813 0.66 Coca-Cola Company Marketing and Manufacturing 146,645,787 0.62 Corporate Property Corporation Commercial Real Estate 136,742,310 0.58 SunTrust Plaza Association Commercial Real Estate 110,808,080 0.47 Hines One Atlantic Center LP Commercial Real Estate 96,895,409 0.41 IEP Peachtree, LLC Unclassified 96,592,350 0.41 GA-MET Unclassified 82,628,961 0.35 Total(4) $ 2,274,758,336 9.57 % ______(1) Unaudited. (2) Based on Net Assessed Value of $23,761,822,876 for the Fulton County tax digest. (3) The Development Authority of Fulton County owns less than one percent (1%) of the property in the City. Such ownership is pursuant to an economic development initiative program that typically expires over a ten year period with respect to each individual property owned. (4) Totals may not add due to rounding.

Source: City of Atlanta, Georgia, Comprehensive Annual Financial Report for the Year ended June 30, 2016 (Statistical Section).

CITY FINANCIAL INFORMATION

Accounting System and Policies

The accounting practices and policies of the City conform to generally accepted accounting principles as applied to governments. The City's accounting system is organized and operated on a fund basis. The City's funds are segregated for the purpose of accounting for the operation of specific activities or attaining certain objectives. The City's primary fund is the General Fund, which contains all City revenues except those that are specifically allocated for other purposes. The City may appropriate money from the General Fund for all ordinary City expenses. The City also maintains several other funds to account for specific activities or to attain certain objectives.

Financial statements of the City are prepared in accordance with Governmental Accounting Standards Statement No. 34, Basic Financial Statements – and Management's Discussion and Analysis – for State and Local Governments ("GASB 34"). Under GASB 34, financial statements focus on major governmental and business-type activities, requiring governments to continue to present fund-based financial statements on a modified accrual basis of accounting. The fund-based financial statements are complemented by a set of government- wide financial statements that present the unit as a single, unified entity. Government-wide financial reporting requires that (a) data reported in governmental funds using the current financial resources measurement focus and modified accrual basis of accounting be converted to the economic resources measurement focus and accrual basis of accounting; and (b) the redundancy resulting from interfund activity within the primary government be eliminated from

A-15 the government-wide presentations by means of consolidation. Two financial statements are required for the government-wide reporting: the Statement of Net Position and the Statement of Activities. The Statement of Net Position presents the information on all of the nonfiduciary activities of the City and its component units. Component units are legally separate units for which the City is responsible. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenue.

The government-wide audited financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the Fiscal Year or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the Fiscal Year. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest are all considered to be susceptible to accrual and so have been recognized as revenues of that Fiscal Year. All other revenue items are considered to be measurable and available only when cash is received by the City.

During 2004, the City Council approved changing the City's Fiscal Year to the 12-month period beginning July 1 and ending on June 30 (the "Fiscal Year"), effective January 1, 2006, and implemented GASB 44, Economic Condition Reporting: The Statistical Section. The City reports the following major governmental funds:

General Fund – The General Fund is the City's primary operating fund. It accounts for all financial transactions of the City, except those required to be accounted for in another fund.

Municipal Option Sales Tax (MOST) – This fund is used to account for a special 1% sales tax collected by the City for use by the Department of Watershed Management. The fund is accounted for as a special revenue fund and carries no fund balance as all revenue collections are subsequently transferred to the Department of Watershed Management. The amount of revenue collected for the MOST qualifies the fund to be reported as a major governmental fund.

Capital Projects Fund – This fund is used to account for the acquisition, construction or improvement of capital assets. Although reported as a single fund in aggregate, it is comprised of multiple, separately tracked funds and projects funded with the proceeds of long-term debt.

The City reports the following major proprietary funds:

Water and Wastewater System Fund – This fund accounts for activities associated with the provision of water, wastewater and water pollution control services to individuals, organizations and other governmental units within and around the City of Atlanta.

Department of Aviation Fund – This fund accounts for the activities of the Hartsfield- Jackson Atlanta International Airport.

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In addition, the City has an Internal Service Fund, accounted for as a proprietary fund. The activities of the Bureau of Motor Transport Services are accounted for in the Internal Service Fund, as well as group insurance transactions related to the provision of life, accident, and medical insurance benefits through outside insurance companies for permanent employees and retirees of the City.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance.

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

Fiduciary Fund Types

Trust Funds – These funds account for activities in which the City acts as trustee for an individual or organization. Additionally, these funds account for Pension Trust Funds which accumulate resources for pension benefit payments to qualified general employees, police and firefighters for the City.

Agency Funds – These funds account for deposits held in custody for various deposits for which the City is the agent or custodian.

Budget Commission

Budgeting procedures are set forth in the Charter of the City of Atlanta of 1996, as amended (the "Charter"), which embraces major provisions of a Budget Law enacted by the Georgia General Assembly in 1937. The Budget Commission is composed of the Mayor, Chief Financial Officer, Chairman of the Finance Committee of the Council, and two other members of the Council. The Budget Commission may not anticipate for any year a sum in excess of 99% of the normal revenues of the City actually collected during the previous year plus any cash surplus carried forward from the previous year. The Charter provides that the Budget Commission shall allocate sums sufficient to pay debt service on bonded indebtedness, including sinking fund requirements. Each member of the Budget Commission is personally liable for any over anticipation of revenues. Under State law, the City must have a balanced budget, which the City Council is responsible for adopting. The City has never defaulted on the payment of principal or interest on its bonded debt.

General Fund Trends

The fund balance of the City's General Fund has shown consistent increases over the Fiscal Years 2012 – 2016. Since the low point of $7.4 million at the close of Fiscal Year 2009, the fund balance of the General Fund has increased by $145.8 million to $153.1 million at the

A-17 close of Fiscal Year 2016. In Fiscal Year 2012, the City implemented a fund balance policy requiring the General Fund to maintain a minimum unrestricted fund balance of at least 15% of the subsequent years budgeted expenditures. Over the Fiscal Years 2012 – 2016, the General Fund unrestricted fund balance increased by $30.3 million to $137.4 million or 21.8% of the Fiscal Year 2017 adopted budget of $630.4 million.

Historical General Fund Performance (2012 - 2016) – During Fiscal Year 2012, the fund balance of the General Fund increased by $32.4 million or 34.3% to $126.7 million. The increase in fund balance was enabled by revenue collections that were consistent with the adopted budget combined with closely monitored spending. The major portion of the Fiscal Year 2012 surplus was the adopted 5% budget reserve of $27.5 million which was not available for spending at the department level. Unrestricted fund balance, the combination of unassigned fund balance ($80.2 million) and assigned fund balance ($26.9 million) totaled $107.1 million. Total 2012 General Fund revenues were $494.7 million, $12.2 million less than the final budget of $506.9 million. This shortfall was offset by $13.7 million in other financing sources, including proceeds from sales of assets and the sale of City Hall East. Modest over-collections in property and other taxes as well as fines, forfeitures and penalties helped offset the budgeted revenue shortfall. Total Fiscal Year 2012 General Fund expenditures were $459.0 million, $60.8 million or 11.7% less than the final budgeted expenditures.

The fund balance of the General Fund increased by $11.4 million during Fiscal Year 2013, or 9.0% to $138.2 million. The increase in fund balance was enabled by revenue collections that were consistent with the adopted budget combined with closely monitored spending. Additionally, the budget included a 2.7% budget reserve or $14.7 million which was not available for spending at the department level. At the close of the year, $15.3 million of the annual operating surplus was transferred to deficit funds (E911 and Underground). Unrestricted fund balance, the combination of unassigned fund balance ($98.5 million) and assigned fund balance ($20.5 million) totaled $119.0 million. Total Fiscal Year 2013 General Fund revenues were $469.3 million, $29.0 million less than the final budget of $498.3 million. However, the final revenue budget included $14.7 million of prior year fund balance. Additionally, $18.7 million in pilot and franchise fees from the Department of Watershed Management were budgeted as revenue but properly recorded as transfer-in revenue. Actual revenue anticipations were $4.6 million or 1% above budget. Modest over-collections in property and other taxes as well as licenses and permits, helped offset the budgeted amount of fund balance. The Hotel- Motel excise tax is budgeted as transfer-in revenue and amounted to $13.5 million during Fiscal Year 2013. Total Fiscal Year 2013 General Fund expenditures were $453.9 million, $44.4 million or 8.9% less than the final budgeted expenditures. Major contributors to the favorable expense variance included the budgeted reserve of $14.7 and a combined public safety budget under run of $12.1 million.

The fund balance of the General Fund increased by $3.8 million during Fiscal Year 2014, or 2.8% to $142 million. Actual revenue anticipations were $18.7 million or 3.4% above budget. Current year property taxes were $174.8 million, $5.3 million or 3.1% above budget. General business license revenue was $48.6 million, $8.1 million or 20.1% above budget. The Hotel- Motel excise tax is budgeted as transfer-in revenue, amounted to $14.5 million, $2.0 million or 15.9% above budget. Total Fiscal Year 2014 General Fund expenditures on a GAAP basis were $487.1 million, $11.3 million or 2.3% less than the final budgeted expenditures. Although the Police, Public Works and Parks departments exceeded budgets due to the responses to two significant winter events, budget under runs in other City operating departments were able to

A-18 absorb the unforeseen costs. Additionally, the City budgeted a reserve amount 1% or $5.4 million of total budget, not available for spending at the department level.

During Fiscal Year 2015, the fund balance of the general fund increased by $9.4 million or 6.6% to $151.4 million. Total Fiscal Year 2015 General Fund revenues on a GAAP basis were $517.1 million, $7.0 million more than the final budget of $510.0 million. However, the final revenue budget included $3.5 million of prior year fund balance. Actual revenue anticipations were $10.5 million or 2.1% above budget. Current year property taxes were $191.0 million and $9.4 million or 5.2% above budget due mainly to new construction value coming online. Local option sales taxes totaled $102.2 million and were $2.2 million or 2.2% above budget. Licenses and permits revenue of $69.7 million was $7.4 million or 12.0% above budget. The Hotel-Motel excise tax is budgeted as transfer-in revenue, amounted to $17.2 million and was $2.9 million above the 2014 Hotel-Motel tax collections. At the close of the year, $22.0 million of the annual operating surplus was transferred to deficit funds (E911, Fleet Services, Capital Finance and Underground Atlanta). Unrestricted fund balance totaled $149.1 million at the close of Fiscal Year 2015.

During Fiscal Year 2016, the fund balance of the general fund increased by $2.1 million or 1.4% to $153.1 million. Total Fiscal Year 2016 General Fund revenues on a GAAP basis were $530.3 million, $3.1 million more than the final budget of $527.2 million. Actual revenue anticipations were $10.5 million or 2.1% above budget. Current year property taxes were $191.0 million and $9.4 million or 5.2% above budget due mainly to new construction value coming online. Local option sales taxes totaled $102.2 million and were $2.2 million or 2.2% above budget. Licenses and permits revenue of $69.7 million was $7.4 million or 12.0% above budget. The Hotel-Motel excise tax is budgeted as transfer-in revenue, amounted to $18.2 million and was $0.9 million above the 2015 Hotel-Motel tax collections. At the close of Fiscal Year 2016, $3.5 million of the annual operating surplus was transferred to Fleet Services deficit fund. Unrestricted fund balance totaled $137.4 million at the close of Fiscal Year 2016.

Fund Deficits – In 2009, the City's Department of Finance entered into an Inter- Departmental Memorandum of Understanding (the "MOU") with the Department of Watershed Management dated December 23, 2008. The City Council ratified by ordinance the MOU on June 1, 2009. Under the terms of the MOU, the City's General Fund is to repay the Department of Watershed Management enterprise fund in annual installments in the amount of $10,000,000 per year, bearing interest at 3% per annum, commencing on July 1, 2009 and continuing to be due on each July 1 thereafter, until the obligation described above is fully repaid. Specifically, the terms of the MOU call for principal reduction of $10.0 million for an 11-year period and $6.3 million in Fiscal Year 2021. Under a recent restructuring of the MOU, the Department of Watershed Management has agreed to reduce the interest rate from 3% to 1.25%. Payments equaling these principal amounts, plus accrued interest, commenced on July 1, 2009 and have since been made consistently in accordance with the terms of the MOU. The repayment schedule was designed to allow the General Fund time to restore a healthy fund balance and, at the same time, correct the deficit balances. The Department of Watershed Management expects to receive a total of $47,500,000 from Fiscal Year 2017 through Fiscal Year 2021, at which point the terms of the MOU will be fulfilled and all obligations thereunder terminated.

Deficit fund balances in E911, Solid Waste Management, Civic Center and Fleet Services, among others, totaled $63.3 million as of June 30, 2016, a reduction of $73.3 million since 2009. The City expects aggregate deficit fund balances to show a reduction at the close of

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Fiscal Year 2017. As a result of House Bill 650 recently enacted by General Assembly of the State during the 2015 State legislative session and signed into law by the Governor of the State, the City expects the full impact of the public safety assessment to address the ongoing operating shortfall in Emergency Telephone (E911) service. The proposed assessment as approved by the City Council enabled the E911 fund budget to be balanced with no General Fund subsidy. Additionally, the City is actively marketing some underperforming real estate assets which are expected to alleviate those fund deficits. The City includes deficit fund transfers as a component of the annual General Fund budget in order to continue deficit fund reductions.

General Fund Data

See "FISCAL OVERVIEW OF THE CITY" in the Official Statement for certain financial information related to the City's general fund.

Pension and OPEB Matters

See "FISCAL OVERVIEW OF THE CITY – Pension and Other Post-employment Benefits" in the Official Statement for certain financial information related to the City's pension and other post-employment benefits matters.

CITY DEBT STRUCTURE

Summary of Long-Term Debt

The information presented in this section should be read together with the City’s basic financial statements for the Fiscal Year ended June 30, 2016 which are attached as Appendix B to the Official Statement. The following table presents a summary of the City’s long-term debt balances for governmental and business-type activities.

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City of Atlanta, Georgia Summary of Long-Term Debt (in thousands)

Governmental Activities Business-type Activities Total June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 General Obligation and Annual Bonds $ 357,955 $ 395,890 $ - $ - $ 357,955 $ 395,890 Premium on Bonds 37,668 41,222 - - 37,668 41,222 Certificates of Participation 32,160 - 32,160 - Deferred Issuance Premiums 4,729 - 4,729 - APSJFA Revenue Bonds 32,900 35,110 - - 32,900 35,110 Deferred Issuance Premiums 781 917 - - 781 917 SWMA Revenue Refunding Bonds 10,980 12,530 - - 10,980 12,530 Less: Deferred Amount on Refunding - - - - Limited Obligation Bonds 438,930 464,745 - - 438,930 464,745 Discount on Bonds (695) (907) - - (695) (907) Premium on Bonds 6,446 896 6,446 896 Section 108 Loans 930 1,175 - - 930 1,175 Other General Long-term Obligations 62,829 57,639 - - 62,829 57,639 Intergovernmental Agreements 343,455 350,468 - - 343,455 350,468 Notes Payable 4,016 5,892 - - 4,016 5,892 Water and Wastewater Revenue Bonds - - 2,814,455 2,870,765 2,814,455 2,870,765 Bond Issuance Premiums - - 214,220 212,197 214,220 212,197 Bond Issuance Discounts - - (4,535) (4,311) (4,535) (4,311) GEFA Notes Payable - - 168,222 168,843 168,222 168,843 Airport Facilities Revenue Bonds - - 2,702,125 2,818,210 2,702,125 2,818,210 Bond Issuance Premiums - - 143,593 160,881 143,593 160,881 Bond Issuance Discounts - - (157) (174) (157) (174) Bond Anticipation Notes - - 300,000 - 300,000 - Atlanta Gas Light Company Rate E-1 Contract (Civic - - 1,734 1,859 1,734 1,859 Center Renovations) City Plaza - - 9,465 - 9,465 - Deferred Issuance Premiums - - 1,215 - 1,215 - Capital Leases: General Fund 19,261 50,620 - - 19,261 50,620 Water and Wastewater System - - 1,304 2,724 1,304 2,724 Parking Deck - - 18,165 18,930 18,165 18,930 Underground Atlanta - - - 7,915 - 7,915 Total $ 1,352,345 $ 1,416,197 $ 6,369,806 $ 6,257,839 $ 7,722,151 $ 7,674,036

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Year Ended June 30, 2016.

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Ratio of General Bonded Debt Outstanding

See "FISCAL OVERVIEW OF THE CITY – Ratio of General Bonded Debt Outstanding" in the Official Statement for certain financial information related to the City's ratio of general bonded debt outstanding.

Direct and Overlapping Debt

In addition to the City's debt obligations, property owners in the City are responsible for any debt obligations of other taxing entities in the proportion to which the jurisdiction of the City overlaps such entities. The following table presents the estimated direct and overlapping general obligation debt and the estimated direct and overlapping contractual (property tax supported or guaranteed revenue) debt chargeable to property owners in the City.

City of Atlanta, Georgia Direct and Overlapping Governmental Activities Debt Last Ten Fiscal Periods (1)(2) (amounts expressed in thousands)

Percentage Amount Net Debt Applicable to Applicable to City Outstanding City of Atlanta(3) of Atlanta City of Atlanta General Obligation Debt $ 357,955 100.00% $ 357,955 Less: Sinking Fund (15,145) 100.00 (15,145) Net Direct Debt 342,810 Overlapping Debt: Fulton County(3) 171,791 47.00 80,742 DeKalb County(4) 342,380 4.60 15,749 Fulton County Building Authority(3) - - Contractual General Obligation Debt: Atlanta and Fulton Recreation Authority (AFCRA) Series 2010 Bonds(5) 102,535 66.70 68,391 Series 2005A/B AFCRA Revenue & Refunding Bonds(5) 26,365 100.00 26,365 Series 2005A/B Park Improvement Bonds(5) - 100.00 - Series 2014A/B Park Improvement Bonds(5) 67,315 100.00 67,315 DDA Parking Deck Series 2006 (ADA) – COA(6) 18,930 100.00 18,930 AURA Bonds Series 2010 (ADA) – COA(6) 18,470 100.00 18,470 Urban Residential Finance Authority (URFA) – COA(7) 26,270 100.00 26,270 Underground Atlanta Refunding Series 2009 (ADA) COA(6) 15,445 100.00 15,445 AFCRA Revenue Zoo Series 2007(5) 12,460 75.00 9,345 Overlapping Contractual Obligations: Fulton-DeKalb Hospital Authority(3) 114,240 47.00 53,693

Total Overlapping Debt 400,715

Total Direct and Overlapping Debt $743,525

(1) Information and presentation has been amended to comply with GASB. (2) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit’s taxable assessed value that is within the City’s boundaries and dividing it by each unit’s total taxable assessed value. The approach was also used by the City’s capital leases and other debt.

(3) Fulton County CAFR – Year Ended December 31, 2015.

(4) DeKalb County CAFR – Year Ended December 31, 2015.

(5) AFCRA Financial Statement Years Ended December 31, 2015 and 2014.

(6) DDA Financial Statements as of June 30, 2015.

(7) URFA Financial Statements as of June 30, 2015.

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Year Ended June 30, 2016 (Statistical Section).

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Legal Debt Margin

The following table presents the Debt Limit, total net debt applicable to the Debt Limit, the legal debt margin, and the total net debt applicable to the Debt Limit as a percentage of the Debt Limit.

City of Atlanta, Georgia Legal Debt Margin Information Last Ten Fiscal Periods

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Debt Limit $ 2,464,044,067 $ 2,943,835,276 $ 2,730,015,271 $ 2,626,080,388 $ 2,434,184,113 $ 2,354,198,460 $ 2,201,603,385 $ 2,166,763,057 $ 2,247,694,484 $ 2,615,707,678

Total net debt applicable to limit 673,185,000 699,290,000 795,340,000 260,490,000 244,965,000 230,680,000 215,320,000 199,215,000 395,890,000 357,955,000

Legal debt margin 1,790,859,067 2,244,545,276 1,934,675,271 2,365,590,388 2,189,219,113 2,123,518,460 1,986,283,385 1,967,548,057 1,851,804,484 2,257,752,678

Total net debt applicable to the limit as percentage of debt limit 27.32 % 23.75 % 29.13 % 9.92 % 10.06 % 9.80 % 9.78 % 9.19 % 17.61 % 13.68 %

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Year Ended June 30, 2016 (Statistical Section).

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Proposed Issuance of General Obligation Bonds, Additional General Fund Backed Debt, Self-Supporting Debt, and Property Tax Supported Debt

See "FISCAL OVERVIEW OF THE CITY" in the Official Statement for certain financial information related to the proposed issuance of General Obligation Bonds, Additional General Fund Backed Debt, Self-Supporting Debt, and Property Tax Supported Debt.

CITY ECONOMIC AND DEMOGRAPHIC INFORMATION

The City is the central economic base of the Atlanta–Sandy Springs–Roswell Metropolitan Statistical Area (the "Atlanta MSA"), which presently encompasses 29 counties5 containing a land area of approximately 8,338.5 square miles and the 10-county6 statistical area utilized by the Atlanta Regional Commission (the "Atlanta Region"). Of the 388 metropolitan statistical areas designated by the U.S. Department of Commerce, Bureau of the Census, the Atlanta MSA is the nation's ninth largest Metropolitan Statistical Area as of July 1, 2016, according to the U.S. Bureau of the Census.

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5 The Atlanta MSA includes the following 29 counties: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar, Meriwether, Morgan, Newton, Paulding, Pickens, Pike, Rockdale, Spalding and Walton. 6 The Atlanta Region includes the following 10 counties: Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry and Rockdale.

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Population Data

The following table presents population data for the City, the Atlanta MSA, the State and the Atlanta Region for the calendar years 2007 through 2016.

City of Atlanta, Georgia Population Data(1)

% Change Area Name 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007-2016 City of Atlanta(2) 461,956 477,300 480,700 422,919 431,911 443,189 447,888 455,389 462,970 472,522 2.29 % Atlanta MSA(2) 5,267,527 5,385,586 5,475,213 5,303,929 5,373,558 5,452,145 5,517,230 5,605,765 5,699,050 5,789,700 9.91 State of Georgia(2) 9,349,988 9,504,843 9,620,846 9,713,521 9,811,610 9,914,668 9,984,938 10,087,231 10,199,398 10,310,371 10.27 (2), (3) Atlanta Region County Cherokee 202,544 208,271 212,232 215,196 217,737 220,788 224,481 230,578 235,609 241,689 19.33 Clayton 260,441 262,099 260,067 259,819 262,721 266,073 264,668 267,576 273,567 279,462 7.30 Cobb 670,438 679,822 684,776 689,697 697,552 707,629 716,873 729,146 740,144 748,150 11.59 DeKalb 680,962 685,646 690,658 692,687 698,342 708,800 715,014 722,615 732,758 740,321 8.72 Douglas 125,560 129,508 131,292 132,646 133,275 133,804 136,270 138,447 140,671 142,224 13.27 Fayette 104,989 105,192 105,493 106,993 107,208 107,463 108,287 109,550 110,546 111,627 6.32 Fulton 869,329 888,694 905,511 925,985 949,323 975,321 982,983 994,342 1,007,803 1,023,336 17.72 Gwinnett 764,129 780,721 796,276 808,264 824,537 839,357 856,374 875,418 892,926 907,135 18.71 Henry 188,736 194,658 199,622 205,142 207,039 208,275 210,371 213,439 217,004 221,768 17.50 Rockdale 82,146 83,558 84,625 85,371 85,532 85,625 86,670 87,516 88,678 89,355 8.78 Atlanta Region Total 3,949,274 4,018,169 4,070,552 4,121,800 4,183,266 4,253,135 4,301,991 4,368,627 4,439,706 4,505,067 14.07 ______(1) From time to time, the U.S. Census Bureau revises its population estimates, including the City's population estimates. (2) Certain historical annual population estimates for the City have been revised in accordance with U.S. Census Bureau practices. (2) The Atlanta Region as defined by the Atlanta Regional Commission consists of Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton, Gwinnett, Henry and Rockdale counties.

Source: U.S. Department of Commerce, Bureau of the Census, Population Estimate Program.

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Employment and Weekly Wage by Sector

The following table presents employment and weekly wage by sector for the fourth quarter of 2016 for the Atlanta MSA.

Atlanta MSA Employment and Weekly Wage by Sector(1)

Average Number Average Monthly Average Weekly of Establishments Employment Wages Goods-Producing Domain 17,718 261,949 1,193 Natural Resources, Mining and Agriculture 413 3,682 1,027 Construction 12,847 113,716 1,309 Manufacturing 5,147 161,463 1,250 Service-Providing Domain 133,091 1,839,677 1,069 Trade, Transportation and Utilities 33,669 574,196 1,020 Information 3,303 86,402 1,772 Financial Activities 17,378 156,345 1,650 Professional and Business Services 37,889 453,374 1,388 Education and Health Services 17,519 320,414 1,069 Other Services 12,255 65,236 737 Accommodation, Food, Arts & Entertainment 14,377 279,197 401 Unclassified 11,870 10,607 1,407 Average, All Industries 164,317 2,419,518 1,069 ______

(1) Information amended to reflect current NAICS categories selected by the Georgia Department of Labor. (2) Figure includes industries not listed in table.

Source: Georgia Department of Labor, Employment Growth Statistics Report, Annual Quarterly Census of Employment and Wages, Yearly Averages for 2015 and 4th Quarter, 2016.

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Principal Employers

The following table presents the top ten principal non-governmental employers located in the City for the calendar year 2015:

City of Atlanta, Georgia Principal Employers Calendar Year 2015(1) Percentage of Total City Employer Type of Business Employees Employment Delta Air Lines, Inc. Transportation 5,031 2.36 % The Coca-Cola Company Marketing and Manufacturing 4,316 2.03 Air Service Corp. Transportation 2,800 1.31 Accenture LLP Consulting 2,253 1.06 AT&T Services, Inc. Telecommunication 1,826 0.86 Turner Broadcasting System, Inc. Media/Entertainment 1,800 0.84 Cable News Network Media 1,733 0.81 Allied Barton Security Services Security Services 1,645 0.77 Tenet Health System, Inc. Healthcare 1,275 0.60 Deloitte Consulting LLP Consulting 1,231 0.58 Total(1) 23,910 11.22 % ______(1) Figures may not add due to rounding.

Source: City of Atlanta, Georgia Comprehensive Annual Financial Report for the Year Ended June 30, 2016.

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Employment

The unemployment rate for the City decreased from 2012 to 2016. The following table presents unemployment rate for the City compared to the State and the United States for the calendar years 2012 through 2016.

Unemployment Rate(1) Year City of Atlanta State of Georgia United States 2012 9.9 % 9.2 % 8.1 % 2013 8.9 8.2 7.4 2014 7.7 7.1 6.2 2015 6.5 6.0 5.3 2016 5.8 5.4 4.9 ______

(1) Revisions to population controls and other changes can affect the comparability of labor force levels over time. In recent years, updated population controls have been introduced annually with the release of January data.

Source: U.S. Department of Labor, Bureau of Labor Statistics.

Per Capita Personal Income

Per capita income in the Atlanta MSA has increased during the period from 2012 through 2016 and remains greater than the per capita income for the State. The following table presents per capita personal income for the Atlanta MSA, the State and the United States for the calendar years 2012 through 2016.

Per Capita Personal Income(1) Year Atlanta MSA(2) State of Georgia United States 2012 $ 41,164 $ 36,863 $ 44,282 2013 41,309 37,172 44,493 2014 43,493 38,873 46,464 2015 45,092 40,367 48,190 2016 - 41,835 49,571 ______

(1) Per capita personal income was computed using Census Bureau midyear population estimates. Estimates for 2012-2016 reflect county and state population estimates available as of March and December 2016, respectively.

(2) Atlanta MSA for 2016 not available at this time.

Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Accounting Data.

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APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE CITY OF ATLANTA FOR THE FISCAL YEAR ENDED JUNE 30, 2016

[THIS PAGE INTENTIONALLY LEFT BLANK] THE CITY OF ATLANTA, GEORGIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016

Kasim Reed Mayor

J. Anthony Beard Chief Financial Officer

B-1 B-2 CITY OF ATLANTA, GEORGIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016

TABLE OF CONTENTS

INTRODUCTORY SECTION (Unaudited) Page Letter of Transmittal ……………………………….....……………………..….……...………….….… i GFOA Certificate of Achievement …………………….…….……………………...…………..……… viii List of Elected and Appointed Officials …….……………...………….…………..………….………… ix Organizational Chart ………...…………….………………………..………..………...……………… xii

FINANCIAL SECTION Independent Auditors’ Report ……………...…...………….…………....…..………………………..…… 1 Management’s Discussion and Analysis (Unaudited) ………...……….……………………..…………… 4 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ...... 21 Statement of Activities …...... 23 Fund Financial Statements: Balance Sheet - Governmental Funds ……..……………..….…………………..…………………… 25 Reconciliation of Governmental Funds’ Balance Sheet to the Government-Wide Statement of Net Position ..…..….………… ………………….....…..…….….…………..……. 26 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...... 27 Reconciliation of the Governmental Funds’ Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ……….……... 28 Statement of Net Position – Proprietary Funds ………..…….…...……..…………………….……. 29 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ………………………………………………….……………………………… 31 Statement of Cash Flows – Proprietary Funds ..…………………..………….…….…….……...... 32 Statement of Fiduciary Net Position – Fiduciary Funds …………..…….….………………..….…… 34 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ……..…………..…....….….… 35 Component Units’ Financial Statements: Statement of Net Position …………………….………………….……..…………...……..………… 37 Statement of Activities ……………………....……….……………...……....……...…...…………. 39 Notes to Financial Statements …..…….…..…….…………..……………….…………………….…… 40

B-3 CITY OF ATLANTA, GEORGIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016

TABLE OF CONTENTS

Required Supplementary Information (Unaudited): Schedule of Funding Progress for Other Post-Employment Benefits…………...…………..………… 126 Schedule of Employer Net Position Liability - General Employees, Firefighters, and Police Pension Plans …………………...……………………………..…………………………….. 127 Schedule of Changes in Net Pension Liability-General Employees' Pension Plan…………… 128 Schedule of Changes in Net Pension Liability-Firefighters' Pension Plan……………………… 129 Schedule of Changes in Net Pension Liability-Police Officers' Pension Plan………………… 130 Schedule of Employer Contributions ………………………..………………………..………………… 131 Schedule of Investment Returns………………………………………………………………..……… 132 Note to Required Supplementary Information ………………………………………………..………… 133 Statement of Revenues, Expenditures, and Changes in Fund Balances – 134 Budget and Actual – General Fund ………………………………………………..……………….… 135 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Municipal Option Sales Tax (MOST) Fund ………………………………… 136

Combining and Individual Fund Statements and Schedule: Combining Balance Sheet - Nonmajor Governmental Funds ………………………………………… 139 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds ……………………………………………………………………… 141 Combining Balance Sheet - Nonmajor Governmental Funds - Tax Allocations Districts ……………………..…………………………………..…..…………………… 143 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds - Tax Allocation Districts ………………………..………………… 144 Combining Balance Sheet - Nonmajor Governmental Funds Other Special Revenue Funds ……………………………………………………………………...…… 145 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds - Other Special Revenue Funds …………………………………… 146 Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Nonmajor Special Revenue Funds …………………………………………………………...…… 147 Westside TAD 165 Combining Statement of Net Position - Nonmajor Proprietary Funds …………………………….…… 166 Combining Statement of Revenues, Expenditures and Changes in Fund Net Position - Nonmajor Proprietry Funds ……………………………………………….....………..……………… 167 Combining Statement of Cash Flows - Nonmajor Propietary Funds …………..……………………... 168 Combining Statement of Net Position - Internal Service Funds …………………………………….… 169 Combining Statement of Revenues, Expenditures and Changes in Fund Net Position - Internal Service Funds ……………..…………………………………...……..……………………… 170 Combining Statement of Cash Flows - Internal Service Funds ………….…………..………………... 171 Combining Statement of Plan Net Position - Pension Trust Funds ……………..……………..……… 172 Combining Statement of Changes in Plan: Net Position - Pension Trust Funds …………………………………………...……………………… 173 Statement of Changes in Assets and Liabilities - Agency Fund ……..…………………………..…… 174

B-4 CITY OF ATLANTA, GEORGIA Comprehensive Annual Financial Report For the Year Ended June 30, 2016

TABLE OF CONTENTS

STATISTICAL SECTION (Unaudited) Net Position by Component …………………………………………………………………………… 177 Changes in Net Position ………………………………………………………………………………. 178 Program Revenues by Function/Program …………………….………………………………………… 179 Fund Balances, Governmental Funds ...……………...………………………………………………… 180 Changes in Fund Balances, Governmental Funds ……………………………………………………… 181 Assessed and Estimated Actual Value of Taxable Property ………………….………………………… 182 Direct and Overlapping Property Tax Rates ………………………………….………………………… 183 Principal Property Tax Payers ……………………….………………………………………………… 184 Property Tax Levies and Collections ..………………………………………………………………… 185 Table Sales by Category ………………………….…………………………………………………… 186 Direct and Overlapping Sales Tax Rates ……………….……………………………………………… 187 Principal Sales Tax Remitters ……………………...…………….…………………………………… 188 Ratio of Outstanding Debt by Type ..…………………………………………………………..……… 189 Ratio of General Bonded Debt Outstanding …………………………………………………...……… 190 Direct and Overlapping Governmental Activities Debt ………………………………………………… 191 Legal Debt Margin Information ………………………………………………………………….…… 192 Schedule of Revenue Bond Coverage- Department of Aviation ……………………………………… 193 Schedule of Revenue Bond Coverage – Department of Watershed Management ……………………… 194 Demographic and Economic Statistics ………………………………………………………………… 195 Principal Employers …………………………………………………………………………………… 196 Full-time Equivalent City Government Employees by Function/Program ..…………………………… 197 Operating Indicators by Function/Program …………………………………………………………… 198 Capital Asset Statistics by Function/Program ………………………………………………………… 199

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Financial Section

B-7 B-8 KPMG LLP Suite 2000 303 Peachtree Street, N.E. Atlanta, GA 30308-3210

Independent Auditors’ Report

Honorable Mayor and Members of the City Council City of Atlanta, Georgia:

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Atlanta, Georgia (the City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Atlanta-Fulton County Recreation Authority and the Atlanta Development Authority, which collectively represent all of the City’s aggregate discretely presented component units. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the aggregate discretely presented component units, is based on the reports of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and 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 to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Atlanta, Georgia, as of June 30, 2016, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with U.S. generally accepted accounting principles.

Emphasis of Matter As discussed in note 1E to the basic financial statements, in 2016, the City adopted Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. Our opinion is not modified with respect to this matter.

Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the management’s discussion and analysis on pages 4-19, schedule of funding progress for other post-employment benefits, schedule of employer net pension liability, schedules of changes in net pension liability, schedule of employer contributions, schedule of investment returns, statement of revenues, expenditures and changes in fund balances – budget and actual – general fund, and statement of revenues, expenditures, and changes in fund balances – budget and actual – municipal option sales tax (MOST) fund pages 126-136 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and respective budgetary comparison information and the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and respective budgetary comparison information 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 Nonmajor fund financial statements and respective budgetary comparisons are fairly stated in all material respects in relation to the basic financial statements as a whole.

B-10

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2016 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance 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 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 the City’s internal control over financial reporting and compliance.

December 20, 2016

B-11 B-12 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

As management of the City of Atlanta (the “City”) we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the year ended June 30, 2016, as a part of the overall Comprehensive Annual Financial Report (CAFR). This overview compares the year ended June 30, 2016 with the year ended June 30, 2015. Readers are encouraged to consider the information presented here, in conjunction with the letter of transmittal, which can be found on pages i-vi of this report.

Overview of the Financial Statements

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

Financial Highlights

Z The assets of the City exceeded its liabilities at the close of 2016 by approximately $7.0 billion. This amount represents the City’s Net Position.

Z The City’s total net position increased by $304.2 million or 4.6% compared to 2015; an increase of $22.6 million from governmental activities and an increase of $281.6 million from business-type activities.

Z As of the close of fiscal year 2016, the City’s governmental funds reported combined ending fund balances of $779.4 million. The overall General Fund balance increased 1.4% to $153.1 million.

Z The City’s long-term debt, including capital leases, at June 30, 2016 totaled $7.7 billion, a net increase of $38.1 million or 0.5 percent.

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

The Statement of Net Position presents information on all of the City’s assets and liabilities, deferred outflows and deferred inflows with the difference between the above reported as Net Position. Over time, increases or decreases in Net Position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s Net Position changed during the most recent fiscal year. All changes in the Net Position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are designed to recover all or a significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the City include general government, public safety, highways and streets, recreation, cultural affairs and economic development. 4

B-13 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

The business-type activities of the City include the Department of Watershed Management (Water and Wastewater System), the Department of Aviation (Hartsfield-Jackson Atlanta International Airport), Sanitation, Parks and Recreational Facilities, Underground Atlanta, Parking Deck, Building Permits, and the Civic Center.

The government-wide financial statements include not only the City itself (known as the primary government), but also the legally separate Atlanta Fulton County Recreation Authority and the Atlanta Development Authority (doing business as Invest Atlanta) for which the City is financially accountable. Financial information for these component units is reported separately from the financial information presented for the primary government. The Atlanta Housing Opportunity, Inc. is a component unit but their financial statements are blended with the primary government. Other blended component units of the City include Urban Design Commission, Atlanta Public Safety and Judicial Facilities Authority and Solid Waste Management Authority. Certain organizations are not included within the scope of this report since they were established by the Constitution of the State of Georgia or state laws and are administered by separate boards that act independently of the City. Included in this category are the Atlanta Independent School System and the Atlanta Housing Authority.

The government-wide financial statements can be found following this section of the report.

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

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

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

The City utilizes four generic fund types of governmental funds (see section I note B in the notes to the financial statements). The City maintains twenty-seven individual governmental funds within the generic fund types. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, municipal option sales tax (MOST) fund, and capital project fund which are considered to be major funds. Data from the other twenty-four governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

B-14 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

The City adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget in the Required Supplementary Information section of this report. The governmental funds financial statements immediately follow the government-wide financial statements.

The City has a formal fund balance policy applicable to governmental funds included in its Charter. The policy defines fund balance categories consistent with Governmental Accounting Standards Board Statement (GASB) No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, sets spending priority within the categories, establishes the authority to commit or assign balances and establishes a minimum fund balance for the general fund. In addition, the policy addresses the time period required for the general fund to replenish any deficiency in the minimum fund balance, as well as specifying how fund balance above the recommended range may be spent. For a full discussion of the City’s fund balance policy, please refer to the Notes to the Financial Statements, section I D. Assets, Liabilities, Deferred Outflows\Inflows of Resources and Net Position/Fund Balances.

Proprietary funds - The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the business-type activities of the Water and Wastewater System (Department of Watershed Management), the Hartsfield-Jackson Atlanta International Airport (Department of Aviation), Sanitation Services, Parks and Recreational Facilities, Underground Atlanta, Parking Deck, Building Permits, City Plaza and the Civic Center.

An internal service fund is an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for the maintenance and operation of its fleet of vehicles and its group insurance fund for employees and retirees. Because these services benefit both governmental and business-type functions, the net position and change in net position is impacted through the allocation of services, based upon usage, between governmental activities and business-type activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the business-type activities in the government-wide financial statements. The proprietary fund financial statements provide separate information for the Department of Watershed Management and the Department of Aviation, which are considered to be major funds of the City. Conversely, both internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The proprietary funds financial statements follow the governmental funds statements.

Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary funds financial statements follow the proprietary funds statements.

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

B-15 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Other information - In addition to the basic financial statements, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide post-employment benefits to its employees; the changes in net pension liability, the employer contributions, and the investment returns for the three plans; and General Fund and MOST fund budgetary compliance. Required supplementary information can be found following the notes in this report. The combining and individual funds statements, referred to earlier in connection with nonmajor governmental and proprietary funds follow the required supplementary information. Required supplementary information can be found beginning on page 126 of this report.

Financial Analysis - Government-wide Statements

As noted earlier, Net Position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by approximately $7.0 billion at the close of the year ended June 30, 2016. Table 1 summarizes the major categories of assets and deferred outflows of resources, liabilities and deferred inflows of resources and Net Position for governmental activities, business-type activities, and the government as a whole.

Table 1. City of Atlanta Net Position, Year Ended June 30, 2016 and June 30, 2015 (in thousands):

Total Primary Government Governmental Activities Business-type Activities Total As of As of As of As of As of As of 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 Current and other assets $ 925,669 $ 937,934 $ 3,806,993 $ 3,494,617 $ 4,732,662 $ 4,432,551 Capital assets, net of depreciation 1,115,706 1,121,263 10,913,919 10,835,990 12,029,625 11,957,253

Total assets 2,041,375 2,059,197 14,720,912 14,330,607 16,762,287 16,389,804

Deferred outflows of resources 127,342 137,918 341,104 281,798 468,446 419,716

Total assets and deferred outflows of resources 2,168,717 2,197,115 15,062,016 14,612,405 17,230,733 16,809,520

Long-term liablities Current 182,960 172,494 480,929 478,678 663,889 651,172 Non-Current 2,390,998 2,370,768 7,070,036 6,870,394 9,461,034 9,241,162

Total liabilities 2,573,958 2,543,262 7,550,965 7,349,072 10,124,923 9,892,334

Deferred inflows of resources 96,555 178,219 35,604 69,516 132,159 247,735

Total liabilities and deferred inflows of resources 2,670,513 2,721,481 7,586,569 7,418,588 10,257,082 10,140,069

Net Position Net invesment in capital assets, net of related debt 6,564 (292,446) 5,380,368 5,174,578 5,386,932 4,882,132 Restricted 638,322 666,871 1,042,955 1,013,484 1,681,277 1,680,355 Unrestricted (1,146,682) (898,791) 1,052,124 1,005,755 (94,558) 106,964

Total Net Position $ (501,796) $ (524,366) $ 7,475,447 $ 7,193,817 $ 6,973,651 $ 6,669,451

By far the largest portion of the City’s net position, $5.4 billion (77.0%) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debts and deferred inflows of resources used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.

B-16 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis - Government-wide Statements, continued

Although the City’s investment in its capital assets is reported net of related debt and deferred inflows of resources, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City’s net position, $1.7 billion (23.9%) represents resources that are subject to external restrictions on how they may be used.

The City reported a positive balance of $ 1.1 billion in unrestricted net position for business-type activities. For governmental activities, the City reported a negative balance of $1.1 billion in unrestricted net position primarily due to the recording of the net pension liability. The general fund reported a positive balance of $137.4 million in unrestricted (assigned and unassigned) fund balance. Unrestricted fund balance represents the spendable resources available for governmental activities, without externally enforceable limitation. The major contributing factors to the difference between unrestricted fund balance and unrestricted net position is the exclusion of long term debt and capital asset balances which are not part of the current financial resources measurement focus presentation required of governmental funds.

Table 2. City of Atlanta’s Changes in Net Position, Year Ended June 30, 2016 and June 30, 2015 (in thousands): Total Primary Government Governmental Activities Business-type Activities Total Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 Revenues Program revenues Charges for services $ 157,120 $ 157,501 $ 1,031,888 $ 1,029,570 $ 1,189,008 $ 1,187,071 Operating grants and contributions 61,369 51,070 - - 61,369 51,070 Capital grants and contributions 253 77,707 271,863 259,682 272,116 337,389 General revenues Property taxes 321,991 296,721 - - 321,991 296,721 Other taxes 425,162 409,734 - - 425,162 409,734 Investment income (loss) 8,445 3,864 41,775 32,985 50,220 36,849 Other - - 245 3 245 3 Total revenues 974,340 996,597 1,345,771 1,322,240 2,320,111 2,318,837 Expenses: General government: 308,606 472,818 - - 308,606 472,818 Police 213,198 197,267 - - 213,198 197,267 Fire 86,768 86,906 - - 86,768 86,906 Corrections 34,181 33,990 - - 34,181 33,990 Public Works 93,719 73,280 - - 93,719 73,280 Parks, Recreation and Cultural Affairs 58,589 60,246 - - 58,589 60,246 Interest on long-term debt 40,686 29,788 - - 40,686 29,788 Water and Wastewater System - - 450,896 443,300 450,896 443,300 Department of Aviation - - 640,793 628,824 640,793 628,824 Sanitation - - 61,471 59,732 61,471 59,732 Other - - 27,004 27,532 27,004 27,532 Total Expenses 835,747 954,295 1,180,164 1,159,388 2,015,911 2,113,683

Change in Net Position before transfers 138,593 42,302 165,607 162,852 304,200 205,154 Transfers in(out) (116,023) (118,897) 116,023 118,897 - - Change in Net Position 22,570 (76,595) 281,630 281,749 304,200 205,154

Net Position, Beginning of Period (524,366) (447,771) 7,193,817 6,912,068 6,669,451 6,464,297 Net Position, End of Period $ (501,796) $ (524,366) $ 7,475,447 $ 7,193,817 $ 6,973,651 $ 6,669,451

B-17 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis - Government-wide Statements, continued

Revenue for the City in fiscal year 2016, which totaled approximately $2.3 billion is flat when compared to the year ended June 30, 2015. Charges for services increased $1.9 million or 0.2% for the primary government as a whole. Charges for services of governmental activities remained relatively flat at $157 million, and business-type activities charges which increased by $2.3 million or 0.2%. The increased charges for business-type activities were the result of increases in passenger traffic and increase in water consumption as a result of continued economic expansion. The increase in operating grants of $10.3 million or 20.2%, is primarily the result of increased federal funding related to the Department of Aviation projects. Governmental capital grants and contributions decreased $77.5 million mainly due to less capital infrastructure contributions. Business-type activities capital grants and contributions increased by $12.2 million due to increased Federal FAA capital contributions at the Department of Aviation. Property taxes during fiscal year 2016 increased by $25.3 million or 8.5%, due mainly to new construction throughout the City. Other taxes increased by $15.4 million or 3.8% driven primarily by a $13 million or 3.1% increase in public utility franchise and alcoholic beverage taxes as well as increased revenues from local and municipal option sales taxes.

Total expenses for the City were $2.0 billion in fiscal year 2016, a decrease of $97.8 million or 4.6% when compared to fiscal year 2015. Total expenses for governmental activities, excluding transfers, reflect a decrease of $118.4 million or 13.5% year-over-year. Expenses for business-type activities increased by $20.8 million, or 1.8% compared to fiscal 2015.

The City’s Net Position increased by $304.2 million, or 4.6% during fiscal year 2016. The net position for governmental funds increased by $22.6 million, or 4.3%, while the net position for business-type activities increased by $281.6 million, or 3.9%. The increase within governmental activities can be attributed to operating grants and contributions, while the majority of the increase within business- type activities can be attributed to charges for services, capital grants and contributions, investment income and transfers out.

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B-18 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis - Government-wide Statements, continued

Governmental Activities - A comparative analysis of the governmental activities program revenues and expenses is presented below. The net position of the City’s governmental activities increased by $22.6 million or 4.3% during fiscal year 2016.

Figure 1. Program Revenues Compared to Expenses, Year Ended June 30, 2016 (in thousands):

Figure 2. Program Revenues for Governmental Activities, Year Ended June 30, 2016

(in thousands):

B-19 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis – Business-type activities

Business-type activities – A comparative analysis and discussion of expenses and program revenues for these enterprise operations is presented below. The net position of the City’s business-type activities increased by $281.6 million, representing growth of 3.9 % over June 30, 2015. This growth is attributable primarily to the operations of the Departments of Watershed Management and Aviation.

Figure 3 - Expenses for Business-type Activities, Year Ended June 30, 2016 (in thousands):

Figure 4 - Program Revenues for Business-type Activities, Year Ended June 30, 2016 (in thousands):

B-20 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis – Business-type activities, continued

Department of Watershed Management (DWM) The net position for DWM for the twelve month period ended June 30, 2016 increased by $164.0 million or 6.4% to $2.7 billion.

Table 3 - Department of Watershed Management Revenues and Expenses – Year Ended June 30, 2016 and June 30, 2015 (in thousands): Year Ended J une 3 0 2016 2015 Change REVENUES Total operating revenues $ 466,929 $ 459,673 $ 7,256 Non-operating revenues, net 15,051 9,958 5,093 Total revenues $ 481,980 $ 469,631 $ 12,349 EXP ENS ES Total operating expenses $ 324,042 $ 296,420 $ 27,622 Non-operating expenses Loss on derivitave instrument - - 0 Interest expense 123,733 139,532 (15,799) Other expenses 3,121 7,348 (4,227) Total expenses $ 450,896 $ 443,300 $ 7,596

Income before Capital Contributions & Transfers $ 31,084 $ 26,331 $ 4,753 Capital Contributions 19,639 20,010 (371) Transfers, net 113,259 109,139 4,120 Change In Net Position $ 163,982 $ 155,480 $ 8,502

Net Position, beginning of period 2,572,027 2,416,547 155,480 Net Position, end of period $ 2,736,009 $ 2,572,027 $ 163,982

Total DWM revenues for the year ended June 30, 2016 increased $12.3 million or 2.6% to $482.0 million compared to June 30, 2015. Total operating revenues which primarily consist of water and wastewater fees, licenses and permits, and intergovernmental revenue, increased by $7.3 million or 1.6% to $467.0 million. The increase was due primarily to an increase in consumption as a result of continued economic recovery.

Non-operating revenue increased by $5.1 million or 51.1%, which was due primarily to investment income gains. Transfer amounts includes the Municipal Option Sales Tax (MOST); for fiscal year 2016 the MOST transfer totaled $132.7 million compared with $131.6 million in fiscal year 2015, an increase of 0.8%. Pilot and Franchise Fees paid by DWM are also included as an offset in net transfer amounts and totaled $19.4 million during fiscal year 2016.

Total DWM expenses increased $7.6 million or 1.7% to $450.9 million when compared to the year ended June 30, 2015. The increase is primarily driven by depreciation, consultant fees, and indirect cost expenses. Total operating revenues less operating expenses, or operating margin, was $142.9 million for fiscal year 2016, a decrease of $20.4 million or 12.5% compared to fiscal year 2015.

B-21 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis – Business-type activities, continued

Department of Aviation (DOA) The Net Position of the DOA for the twelve month period ended June 30, 2016 increased by $124.9 million or 2.7% to $4.8 billion.

Table 4 - Department of Aviation Revenues and Expenses – Year Ended June 30, 2016 and June 30, 2015 (in thousands): Year Ended J une 3 0 2016 2015 Change REVENUES Operating revenues $ 486,812 $ 483,022 $ 3,790 Investment income (loss) 26,669 22,601 4,068 Non-operating revenues, net 228,890 198,987 29,903 Total revenues $ 742,371 $ 704,610 $ 37,761 EXP ENS ES Operating expenses $ 513,939 $ 487,211 $ 26,728 Interest expense 126,072 127,941 (1,869) Total expenses $ 640,011 $ 615,152 $ 24,859

Income before Capital Contributions & Transfers $ 102,360 $ 89,458 $ 12,902 Capital Contributions 22,505 26,851 (4,346) Transfers, net - (518) Change In Net Position $ 124,865 $ 115,791 $ 9,074

Net Position, beginning of period 4,666,962 4,551,171 115,791 Net Position, end of period $ 4,791,827 $ 4,666,962 $ 124,865

Total DOA revenues for the year ended June 30, 2016 of $742.3 million increased by $37.8 million or 5.4% year over year. Operating revenues are diverse and consist primarily of inside concessions, parking, car rentals, landing fees, terminal rentals and reimbursed operating expenses. Total operating revenues increased $3.8 million, or 0.8% when compared to fiscal year 2015. Operating revenues increased primarily due to increases in concessions, and parking and rental car revenues.

Non-operating revenues consist of net investment income, passenger facility charges (PFC’s), customer facility charges (CFC’s), and other non-operating income net of expenses. PFCs were $201.1 million in fiscal 2016 compared with $187.3 million in fiscal 2015. CFCs, which are collected to fund the financing and operation of the Rental Car Center, were $28.6 million in fiscal 2016 compared with $35.2 million in fiscal 2015. Net investment income increased to $26.7 million during fiscal year 2016.

Total DOA expenses increased by $24.9 million or 4.0% to $640.0 million. Operating expenses for the period were $513.9 million which reflect an increase of $26.7 million or 5.5% over June 30, 2015. Repairs, maintenance and other contractual services contributed $11.7 million to this increase. Depreciation and amortization expenses increased by $4.6 million year over year, which is attributable to an increase of $137.2 million of depreciable assets during fiscal year 2016. Salaries and employee benefits expense increased by $3.6 million in comparison to fiscal year 2015.

B-22 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis – Business-type activities, continued

The restricted portion of the DOA's Net Position represents bond reserve funds that are restricted under the bond ordinance related to aviation debt, and capital projects restricted by Federal PFC regulations for the purposes authorized including the payment of future indebtedness. Major components of the Airport’s construction in process are concourse projects, airfield and runway projects, concourse transportation system (AGTS), terminal/passenger projects and security/operations projects. The balance in unrestricted Net Position at June 30, 2016 increased by $52.5 million or 10.4% to $558.5 million.

Financial Analysis of the Government’s Funds

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements.

Governmental funds - The focus of the City’s governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, the unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of June 30, 2016, the City’s governmental funds reported combined ending fund balances of $779.4 million, a decrease of $35.9 million or 4.4%. The decrease was primarily due to increased expenditures associated with the Capital Projects Fund. Unassigned fund balance is available for spending at the City’s discretion. As of June 30, 2016, the City’s governmental funds had an unassigned fund balance of $118.1 million, a decrease of 20.6 million compared to fiscal year 2015.

The General Fund is the chief operating fund of the City. During fiscal 2016, the fund balance of the general fund increased by $2.1 million or 1.4% to $153.1 million. The increase in fund balance was enabled by revenue collections that were consistent with the adopted budget combined with closely monitored spending. At the close of the year, $3.5 million was transferred to the Fleet Services Fund. Deficit balances in the cash management pool totaled $61.9 million at the close of fiscal 2016 and are included in Due From Other Funds on the general fund balance sheet. Unrestricted fund balance is the combination of unassigned fund balance ($130.2 million) and assigned fund balance ($7.2 million) and totals $137.4 million.

The Capital Projects Fund has numerous projects ongoing to address the infrastructure and facilities maintenance backlog of approximately $900 million. Funding is primarily from the General Obligation bond issued in fiscal year 2015.

The Municipal Option Sales Tax (MOST) fund is a special revenue fund used to report a 1% sales and use tax. These proceeds are subsequently transferred to the Department of Watershed Management (DWM) to be used for operations, debt service or improvements to the City’s water and sewer system. Collections for fiscal year 2016 increased by $1.1 million or .01% to $132.7 million. The MOST was originally approved by voters in July 2004 and subsequently reauthorized in February 2008, in March 2014 and again in March 2016 for another four years. The MOST is a significant funding source for the DWM and represents approximately 22% of total DWM revenue.

B-23 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Financial Analysis – Government Funds, continued

General Fund Budgetary Highlights

The General Fund is the principal operating fund of the City and is used to account for all activities of the City not otherwise accounted for by a specified fund. It is also the largest of the City's funds, is mostly comprised of general tax revenues, and provides basic city services such as Police, Fire & Rescue, and Parks & Recreation Services. Each departmental expenditure budget must be developed and justified each year during the legally required budget adoption process. Total 2016 General Fund revenues on a GAAP basis were $530.3 million, $3.1 million more than the final budget of $527.2 million. Fiscal year 2016 final revenue budget did not include any prior year fund balance. Current year property taxes were $193.2 million and $1.2 million less than budget. Local option sales taxes totaled $103.5 million and were $2.0 million or 2.0% above budget. Licenses and permits revenue of $78.4 million was $6.8 million or 9.5% above budget. The Hotel-Motel excise tax is budgeted as transfer-in revenue, amounted to $18.2 million and was $0.9 million above the 2015 Hotel-Motel tax collections.

Total 2016 General Fund expenditures on a GAAP basis were $545.8 million, which was $2.5 million or 0.5% more than the original budgeted expenditures. An adjustment of $2.5 million, (indicated on page 135) was made to the original budget. The Department of Police exceeded their budget due to salary adjustments and increased overtime costs. The Department of Parks, Recreation exceeded their budgets primarily due to increased programs offered through Centers of Hope and senior citizen activities. Additionally, Corrections and Police departments were involved in responding to local protests focused on national events. Although the aforementioned departments were over budget, the General Fund ended the year over budget for the reasons previously stated. Finally, the City budgeted a reserve amount of 2.5% or $14.8 million of total budget, which was not available for spending at the department level.

Capital Assets and Debt Administration

Capital assets, net of depreciation, for the governmental and business-type activities are as follows:

Table 5 - Capital Assets Schedule (in thousands): Total Primary Government Governmental Activities Business-type Activities Total

As of As of As of As of As of As of 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15

Land $ 207,754 $ 207,483 $ 1,008,118 $ 1,003,024 $ 1,215,872 $ 1,210,507 Land improvements 21,154 19,986 1,901,590 1,919,625 1,922,744 1,939,611 Buildings and building improvements 377,578 370,541 6,890,804 6,893,646 7,268,382 7,264,187 Other property and equipment 82,904 75,122 195,507 195,206 278,411 270,328 Infrastructure 358,927 368,642 - - 358,927 368,642 Construction in progress 67,389 79,489 917,900 824,489 985,289 903,978

Total $ 1,115,706 $ 1,121,263 $ 10,913,919 $ 10,835,990 $ 12,029,625 $ 11,957,253

B-24 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Capital Assets and Debt Administration, continued

Capital assets - The City’s investment in capital assets for its governmental and business type activities as of June 30, 2016 totaled $12.0 billion, net of accumulated depreciation. This investment in capital assets includes land, buildings and systems, improvements, construction in progress, machinery and equipment, park facilities, roads, highways, and bridges. The net increase in the City’s investment in capital assets for the twelve month period ended June 30, 2016 was $72.4 million or 0.6%.

Highlights of capital asset activity during the year ended June 30, 2016 included the following:

Z The City purchased for $10.6 million a 3.125 acre parcel of land adjacent to City Hall consisting of a mixed-use development with 164 one and two bedroom apartment homes, approximately 29,000 square feet of ground level retail, a 274 space structured parking deck, a 52 space surface parking lot and other related improvements and amenities, commonly known as “City Plaza”.

Z $182.0 million was added to the Construction-In-Progress (CIP) balance for various Department of Watershed Management projects and $156.5 million was removed from CIP and placed in- service.

Z $199.4 million was added to the Construction-In-Progress (CIP) balance related to various Department of Aviation projects and $131.2 million was removed from CIP and placed in-service.

Z Depreciation expense during fiscal year 2016 totaled $383.5 million city-wide.

Additional information on the City’s capital assets can be found in Note III.C in the Notes to the Financial Statements.

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B-25 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Capital Assets and Debt Administration, continued

Long-term debt balances for governmental and business-type activities are as follows:

Table 6 - Long-Term Debt Schedule (in thousands):

Governmental Activities Business-type Activities Total As of As of As of As of As of As of 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15 30-Jun-16 30-Jun-15

General obligation and annual bonds $ 357,955 $ 395,890 $ - $ - $ 357,955 $ 395,890 Premium on bonds 37,668 41,222 - - 37,668 41,222 Certificate of participation 32,160 - - - 32,160 - Deferred issuance premiums 4,729 - - - 4,729 - APSJFA revenue bonds 32,900 35,110 - - 32,900 35,110 Deferred issuance premiums 781 917 - - 781 917 SWMA revenue refunding bonds 10,980 12,530 - - 10,980 12,530 Less: Deferred amount on refunding - - - - 0 - Limited obligation bonds 438,930 464,745 - - 438,930 464,745 Discount on bonds ( 695) (907) - - (695) (907) Premium on bonds 6,446 896 - - 6,446 896 Section 108 loans 930 1,175 - - 930 1,175 Other general long-term obligations 62,829 57,639 - - 62,829 57,639 Intergovernmental agreements 343,455 350,468 - - 343,455 350,468 Notes Payable 4,016 5,892 - - 4,016 5,892 Water and Wastewater Revenue Bonds - - 2,814,455 2,870,765 2,814,455 2,870,765 Bond issuance premiums - - 214,220 212,197 214,220 212,197 Bond issuance discounts (4,535) (4,311) (4,535) (4,311) GEFA notes payable - - 168,222 168,843 168,222 168,843 Airport Facilities Revenue Bonds - - 2,702,125 2,818,210 2,702,125 2,818,210 Bond issuance premiums - - 143,593 160,881 143,593 160,881 Bond issuance discounts (157) (174) (157) (174) Bond anticipation notes - - 300,000 - 300,000 - Atlanta Gas Light Company Rate E-1 Contract (Civic Center Renovations) - - 1,734 1,859 1,734 1,859 City Plaza - - 9,465 - 9,465 - Deferred issuance premiums - - 1,215 - 1,215 - Capital Leases: General fund 19,261 50,620 - - 19,261 50,620 Water and Wastewater System - - 1,304 2,724 1,304 2,724 Parking Deck - - 18,165 18,930 18,165 18,930

Underground Atlanta - - - 7,915 - 7,915

Total $ 1,352,345 $ 1,416,197 $ 6,369,806 $ 6,257,839 $ 7,722,151 $ 7,674,036

Long-term debt - The City’s long-term debt, including capital leases, reflected a net increase of $48.1 million or 0.6% during the current twelve-month period. General and limited obligation debt decreased by $61.5 million in fiscal year 2016. The Department of Aviation debt increased by $166.6, primarily as the result of the issuance of $300 million in bond anticipation notes. The Department of Watershed Management debt, including GEFA notes payable, decreased by $56.6 million. Government-wide capital lease obligations decreased by $41.5 million during the current fiscal year.

B-26 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Capital Assets and Debt Administration, continued

The City’s underlying ratings for its bond issuances at June 30, 2016 were as follows:

Table 7 - City of Atlanta Bond Ratings

Moody's City of Atlanta Municipal Bond Ratings Investor Standard & Services Poor's Fitch

GENERAL OBLIGATION BONDS Aa1 AA+ AA+

WATER AND WASTEWATER REVENUE BONDS Aa3 AA- A+

HARTSFIELD-JACKSON ATLANTA INTERNATIONAL AIRPORT REVENUE BONDS Aa3 AA- A+

State statutes limit the amount of general obligation debt a governmental entity may issue to 10% of its total assessed valuation. The City’s outstanding general obligation debt is significantly less than the current debt limitation of $2.6 billion. See the Legal Debt Margin Information in the Statistical Section, Schedule 16 of this report.

Additional information regarding the City’s long-term obligations can be found in Note III. G. in the Notes to the Financial Statements.

Economic Factors and Next Year’s Budgets and Rates

The 2016 US economic forecast indicates that the economic recovery that began in the second half of 2009 will continue to be sustained. The 2016 baseline forecast calls for Georgia’s inflation-adjusted GDP to increase by 3.3 percent, which is almost identical to the 3.2 percent growth estimated for 2015. Georgia’s 2015 GDP growth rate will be 0.8 percentage points higher than the 2.5 percent rate estimated for US GDP. The positive differential reflects: (1) projects in the economic development pipeline, (2) more supportive demographic forces, (3) more leverage from the housing recovery, (4) more small business startups and expansions, and (5) low oil and gas prices.

In the Atlanta MSA, population growth and housing recovery will strongly underpin ongoing economic recovery. A high concentration of college-educated workers, business partners, high-tech companies, and research universities will continue to attract high technology companies in life sciences, research and development, information technology, professional and business services and advanced manufacturing. The innovation district that is developing around Tech Square has achieved the critical mass needed to attract high-tech companies.

Real GDP growth in the Atlanta MSA of 3.7% is forecasted to be above the national forecast of 2.7%. Personal income in the Atlanta area is expected to grow by 5.9% versus the national expectation of 3.5%. Invest Atlanta, the City’s economic development arm, helped relocate 49 businesses, attracting over $316 million in private sector capital creating 7,070 jobs in Atlanta during 2015. The Atlanta MSA is expected to add 69,100 jobs in 2015 or 2.8% on an average annual basis.

B-27 CITY OF ATLANTA, GEORGIA

Management’s Discussion and Analysis (Unaudited) June 30, 2016

Atlanta benefits from a reliable economic base, attributable to its diverse employment sectors and its strategic location within the southeast region. Atlanta’s newly completed international terminal helps the City maintain its reputation as one of the most desirable logistical locations in the country. One major plus for Atlanta in this new era of federal fiscal austerity is that the metro area is not overly dependent on federal jobs. Only 4.0 percent of the Atlanta area’s nonfarm earnings come from federal employment versus 7.7 percent for the state as a whole. State and local government accounts for only 8.9 percent of earnings in metro Atlanta versus 11.4 percent for the state.

Property tax, sales tax and building permits continue to be monitored closely. These are key indicators for the City in projecting overall revenue performance in fiscal year 2016. Based on the City’s internal financial reporting and forecasting processes, administration and management are able to respond quickly to changing economic and business cycles.

Highlights of the fiscal year 2017 budget include:

General Fund revenue anticipation of $607.4 million, including a slight reduction to the property tax millage rate. This represents a 2.4 % increase over the fiscal 2016 revenue anticipation of $593.1 million.

Department of Watershed Management revenue anticipation of $545.4 million, an increase of $14.2 million or 2.76% compared to fiscal 2016.

Department of Aviation revenue anticipation of $503.7 million, an increase of $11.3 million or 2.2% compared to fiscal 2016.

Requests for Information

This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City’s Chief Financial Officer, 11100 City Hall Tower, 68 Mitchell St., SW, Atlanta, Georgia 30303.

B-28 Basic Financial Statements

B-29 B-30

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B-31 CITY OF ATLANTA, GEORGIA Statement of Net Position June 30, 2016 (Dollars in Thousands)

Governmental Business-type Component Activities Activities Total Units

ASSETS Current assets: Cash and cash equivalents $ 2,002 $ 18,905 $ 20,907 $ 25,955 Restricted cash 320,194 274,024 594,218 59,923 Equity in cash management pool 195,488 1,649,376 1,844,864 - Investments - - - 759 Restricted investments 292,648 - 292,648 - Receivables (net of allowances for uncollectables) 73,923 103,643 177,566 6,241 Due from other governments 12,632 11,570 24,202 - Due from primary government - - - 4,318 Due from component unit - - - 1,642 Capital lease receivable, current portion - - - 2,225 Internal balances (10,156) 10,156 - - Inventories 934 18,879 19,813 - Other restricted assets - 40,557 40,557 - Prepaid expenses and other current assets - 1,069 1,069 421 Total current assets 887,665 2,128,179 3,015,844 101,484 Noncurrent assets: Restricted cash - 563,929 563,929 47,413 Restricted investments - 1,002,765 1,002,765 - Investments - - - 14,282 Due from primary government - - - 326,975 Capital assets: Capital assets not being depreciated 275,143 1,926,018 2,201,161 187,169 Capital assets being depreciated 2,008,910 14,112,790 16,121,700 Less accumulated depreciation (1,168,347) (5,124,889) (6,293,236) (177,225) Investments in joint venture - 77,480 77,480 - Restricted investments in escrow 18,171 - 18,171 - Due from other parties 7,962 10,640 18,602 - Due from component unit - 24,000 24,000 22,900 Other assets 11,871 - 11,871 11,409 Long-term receivable - - - 23,061

Total noncurrent assets 1,153,710 12,592,733 13,746,443 455,984 Total Assets 2,041,375 14,720,912 16,762,287 557,468 Deferred outflows of resources Pension related deferred outflows 115,593 43,354 158,947 - Accumulated decrease in fair value of derivitive instruments - 85,958 85,958 - Accumulated deferred losses on refunding 11,749 211,792 223,541 3,947 Total deferred outflows of resources 127,342 341,104 468,446 3,947 Total assets and deferred outflows of resources 2,168,717 15,062,016 17,230,733 561,415

The accompanying notes are an integral part of this statement.

B-32 CITY OF ATLANTA, GEORGIA Statement of Net Position June 30, 2016 (Dollars in Thousands)

Governmental Business-type Component Activities Activities Total Units

LIABILITIES Current liabilities Accounts payable 97,511 136,326 233,837 10,677 Accrued expenses and vacations 1,846 23,863 25,709 - Accrued interest payable - 91,691 91,691 9,960 Claims payable 325 6,675 7,000 - Contract retentions 1,716 8,348 10,064 - Due to other governments 11,140 - 11,140 - Other liabilities - 4,184 4,184 23,480 Unearned revenues 178 - 178 1,173 Commercial paper notes payables - 20,000 20,000 - Current portion of long-term debt, capital leases, SWAPS 61,832 189,842 251,674 30,611 Current portion of other liabilities 8,412 - 8,412 - Total current liabilities 182,960 480,929 663,889 75,901 Noncurrent liabilities Noncurrent portion of long-term debt 929,472 6,162,594 7,092,066 584,317 Noncurrent portion of capital leases 14,809 17,370 32,179 - Noncurrent portion of contract retentions - 4,495 4,495 - Pension liability 782,859 457,202 1,240,061 - Net OPEB obligation 253,209 194,890 448,099 - Due to other governments 10,000 - 10,000 Due to primary government - - - 24,000 Due to component unit 336,232 - 336,232 - Other long-term liabilities 64,417 233,485 297,902 31,050 Total non-current liabilities 2,390,998 7,070,036 9,461,034 639,367

Total Liabilities 2,573,958 7,550,965 10,124,923 715,268 Deferred inflows of resources Pension related deferred inflows 84,753 35,604 120,357 - Accumulated deferred gain on long term debt - - - 8,423 Accumulated increase in fair value of derivitive instruments 11,802 - 11,802 - Total deferred inflows of resources 96,555 35,604 132,159 8,423 Total liabilities and deferred inflows of resources 2,670,513 7,586,569 10,257,082 723,691 NET POSITION Net investment in capital assets 6,564 5,380,368 5,386,932 90,046 Restricted for: Debt service 229,522 413,288 642,810 - Programs 62,807 - 62,807 79,776 Capital projects 345,993 629,667 975,660 - Unrestricted (1,146,682) 1,052,124 (94,558) (18,765) Total Net Position $ (501,796) $ 7,475,447 $ 6,973,651 $ 151,057

The accompanying notes are an integral part of this statement.

B-33 CITY OF ATLANTA, GEORGIA Statement of Activities For the Year Ended June 30, 2016 (Dollars in Thousands)

Net (Expenses) Revenues and Program Revenues Changes in Net Position Operating Charges for Grants and Capital Grants and Governmental Business-type Component Functions/Programs Expenses Services Contributions Contributions Activities Activities TOTALS Units Primary Government Governmental activities: General government $ 308,606 $ 113,637 $ 34,532 $ 253 $-(160,184) $ $ (160,184) Police 213,198 28,598 7,522 - (177,078) - (177,078) Fire 86,768 906 485 - (85,377) - (85,377) Corrections 34,181 2,965 - - (31,216) - (31,216) Public Works 93,719 5,560 16,143 - (72,016) - (72,016) Parks, Recreation and Cultural Affairs 58,589 5,454 2,687 - (50,448) - (50,448) Interest on long-term debt 40,686 - - - (40,686) - (40,686)

Total Governmental activities 835,747 157,120 61,369 253 (617,005) - (617,005)

Business-type activities: Watershed Management 450,896 466,929 - 19,639 - 35,672 35,672 Aviation 640,793 486,812 - 252,177 - 98,196 98,196 Sanitation 61,471 46,527 - 47 - (14,897) (14,897) Parks and Recreational Facilities 161 15 - - - (146) (146) Underground Atlanta 4,660 1,695 - - - (2,965) (2,965) Parking Deck 1,325 857 - - - (468) (468) Permit Fund 18,943 28,155 - - - 9,212 9,212 City Plaza 190 500 - - - 310 310 Civic Center 1,725 398 - - - (1,327) (1,327)

Total Business-type activities 1,180,164 1,031,888 - 271,863 - 123,587 123,587

Total Primary Government $ 2,015,911 $ 1,189,008 $ 61,369 $ 272,116 $ (617,005) $ 123,587 $ (493,418)

Component Units $ 242,026 $ 22,451 $ 15,686 $ 32,591 $ (171,298)

General revenues: Taxes: Property Taxes Levied for general purposes 189,714 - 189,714 - Property Taxes Levied for debt service 132,277 - 132,277 - Local and Municipal Option Sales Tax 236,168 - 236,168 - Public utility, alcoholic beverage and other taxes 188,994 - 188,994 3,396 Investment income 8,445 41,775 50,220 203 Other - 245 245 598 Total General revenues 755,598 42,020 797,618 4,197 Transfers (116,023) 116,023 - - Total general revenues, special items and transfers 639,575 158,043 797,618 4,197 Change in net position 22,570 281,630 304,200 (167,101) Net Position - beginning of period (524,366) 7,193,817 6,669,451 318,158

NET POSITION- END OF PERIOD $ (501,796) $ 7,475,447 $ 6,973,651 151,057$

The accompanying notes are an integral part of this statement.

B-34

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B-35 CITY OF ATLANTA, GEORGIA Balance Sheet Governmental Funds June 30, 2016 (Dollars in Thousands)

Municipal Nonmajor Total Option Sales Tax Capital Project Governmental Governmental General Fund (MOST) Fund Funds Funds

ASSETS

Cash and cash equivalents $-1,915 $-$-$ $ 1,915 Cash and cash equivalents, restricted - 127 41,186 278,881 320,194 Equity in cash management pool 136,204 465 8,423 40,145 185,237 Restricted Investments - - 253,839 38,809 292,648 Receivables: - Taxes 8,475 10,740 - 12,681 31,896 Accounts 21,060 - - 20,319 41,379 Due from other governments - - - 9,448 9,448 Due from other funds 81,837 - 1,381 738 83,956 Other assets 69 - - - 69 Investments in escrow - - 18,171 - 18,171 TOTAL ASSETS $ 249,560 $ 11,332 $ 323,000 $ 401,021 $ 984,913

LIABILITIES, DEFERRED INFLOWS, AND FUND BALANCES

Liabilities: Accounts payable $-39,721 $ $ 15,032 $ 40,205 $ 94,958 Accrued expenditures 1,238 - 10 84 1,332 Contract retentions 11 - 1,268 437 1,716 Due to other governments - - - 11,140 11,140 Due to other funds 1,318 11,332 8,252 14,217 35,119 Advance due to other funds 46,199 - - - 46,199 Unearned revenue 64 - - 114 178

Total Liabilities 88,551 11,332 24,562 66,197 190,642

Deferred inflows of resources Deferred inflows of property taxes 7,860 - - 6,975 14,835 Total liabilities and deferred inflows of resources 96,411 11,332 24,562 73,172 205,477

Fund Balances:

Nonspendable 15,726 - - - 15,726 Restricted - - 298,438 339,884 638,322 Assigned 7,254 - - - 7,254 Unassigned 130,169 - - (12,035) 118,134

Total fund balances 153,149 - 298,438 327,849 779,436

TOTAL LIABILITIES, DEFERRED INFLOWS, AND FUND BALANCES $ 249,560 $ 11,332 $ 323,000 $ 401,021 $ 984,913

The accompanying notes are an integral part of this statement.

B-36 CITY OF ATLANTA, GEORGIA Reconciliation of Governmental Fund Balance Sheet To the Government-wide Statement of Net Position June 30, 2016 (Dollars in Thousands)

Total fund balances $ 779,436

Amounts reported for governmental activities in the Statement of Net Position are different because:

Deferred inflows for property taxes re not recognized as current year revenues and, therefore, are classified as deferred inflows in the above funds 14,835

Capital assets used in governmental activities are not financial resources and therefore are not reported in the above funds: Land and construction in progress 275,143 Cost of capital assets 2,008,910 Less: accumulated depreciation (1,168,347) 1,115,706

Deferred results and contributions to pension plans made after the measurement date are recorded as expenditures in governmental funds but must be deferred in the statement of net position Deferred outflows-General pension 25,478 Deferred outflows-Fire pension 29,155 Deferred outflows-Police pension 60,960 115,593

Other assets include amounts that used current financial resources at the fund level but will be offset against future revenues in the government-wide statements 11,749 11,749

Amount due from APS results from debt defeased by City used in governmental activities are not financial resources and therefore are not reported in the above funds: 11,146 11,146

Internal service funds are used by management to charge the costs of automotive services as well as transactions related to the provision of life, accident and medical insurance benefits through outside insurance companies for permanent employees and retirees. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Capital assets included above related to the internal service fund (446) Net Position for internal service fund (3,495) (3,941)

Certain amounts related to the net pension liability are deferred and amortized over time Deferred inflows of resources- General pension (22,368) Deferred inflows of resources- Fire pension (20,685) Deferred inflows of resources- Police pension (41,700) (84,753)

Long-term liabilities, including capital leases, are not due and payable in the current period and therefore are not reported in governmental funds. Due to component unit (343,455) Due to other government (10,000) Long-term debt (357,955) Certificate of Participation (32,160) APSJFA revenue bonds (32,900) SWMA revenue refunding bonds (10,980) Limited obligation bonds (438,930) Capital leases (19,261) Other general long-term obligations (53,759) Unamortized premiums (discounts) on bond issues (48,929) Vacation and compensated absences payable (17,928) Notes payable (4,016) Net Pension liability (782,859) Net OPEB obligation (253,209) Health, dental and general claims payable (15,390) Workers' compensation (39,836) (2,461,567)

NET POSITION OF GOVERNMENTAL ACTIVITIES $ (501,796)

The accompanying notes are an integral part of this statement.

B-37 CITY OF ATLANTA, GEORGIA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Municipal Nonmajor Option Sales Capital Project Governmental Total Governmental General Fund Tax (MOST) Fund Funds Funds

REVENUES Property taxes $ 193,217 $ - $ - $ 132,277 $ 325,494 Local and municipal option sales taxes 103,515 132,653 - - 236,168 Public utility, alcoholic beverage and other taxes 108,686 - - 80,308 188,994 Licenses and permits 78,447 - - 1,076 79,523 Charges for current services 10,230 - - 27,326 37,556 Fines, forfeitures and penalties 24,392 - - 1,941 26,333 Investment income 2,311 - 3,093 2,885 8,289 Intergovernmental revenues and contributions: - Federal revenues - - - 46,723 46,723 State and local grants and contributions - - - 14,646 14,646 Building rentals and concessions 7,411 - - 856 8,267 Other 2,101 - 666 2,674 5,441

Total revenues 530,310 132,653 3,759 310,712 977,434

EXPENDITURES Current: General government 153,949 - 20,384 130,301 304,634 Police 187,437 - 4,874 34,206 226,517 Fire 78,521 - 8,342 1,075 87,938 Corrections 34,756 - 8 1,898 36,662 Public Works 39,939 - 16,494 23,234 79,667 Parks, recreation and cultural affairs 35,689 - 2,075 13,244 51,008 Debt Service: - Principal payments 11,585 - 4,085 66,640 82,310 Interest payments 3,931 - 2,105 38,377 44,413 Bond issuance costs - 146 185 331 Paying agent fees 15 - - 29 44

Total Expenditures 545,822 - 58,513 309,189 913,524

Excess (deficiency) of revenues over expenditures (15,512) 132,653 (54,754) 1,523 63,910

OTHER FINANCING SOURCES (USES) Proceeds from sale of assets 1,278 - - 9 1,287 Payment to refunded bond escrow agent - (32,684) (44,759) (77,443) Issuance of refunding bonds - - 35,735 41,330 77,065 Issuance of capital lease 7,779 - - - 7,779 Premium from bond sold - - 5,149 5,754 10,903 Transfers in 41,361 - 20,897 7,048 69,306 Transfers out (32,771) (132,653) (3,770) (19,552) (188,746) Total Other Financing Sources (Uses) 17,647 (132,653) 25,327 (10,170) (99,849)

Net change in fund balances 2,135 - (29,427) (8,647) (35,939) Fund Balance: Beginning of the period 151,014 - 327,865 336,496 815,375

FUND BALANCE, END OF PERIOD $ 153,149 $ - $ 298,438 $ 327,849 $ 779,436

The accompanying notes are an integral part of this statement.

B-38 CITY OF ATLANTA, GEORGIA Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances To the Government-wide Statement of Activities For the Year Ended June 30, 2016 (Dollars in Thousands)

Net change in fund balance - total governmental funds $ (35,939)

Amounts reported for governmental activities in the Statement of Activities are different because:

Property tax revenues in the statement of activities that do not provide current financial resources are reported as deferred inflows in the above funds (3,503)

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

Capital outlays 60,132 Capital contributions 253 Disposal of assets (9,298) Depreciation expense (56,644) (5,557)

The issuance of long-term debt (capitalized leases) provides current financial resources to governmental funds. Repayment of debt (bonds, certificates of participation and capitalized leases) is an expenditure in the governmental funds but the repayments reduce long-term liabilities in the statement of net position. This amount is the net effect of these differences in treatment of long-term debt.

Payments on long-term debt 165,497 Proceeds from long-term debt (84,844) Recognition of due to APS (10,000) Capitalization of premiums and discounts (10,903) Amortization of premiums and discounts 4,102 63,852

Internal service funds are used by management to charge the costs of automotive services as well as transactions related to the provision of life, accident and medical insurance benefits through outside insurance companies for permanent employees and retirees. The net revenues of these activities are reported as governmental funds for affected departments. 3,011

Pension related items reported in the statement of activities that do not require the use of current financial resources to governmental funds. Deferred outflows-General pension 2,943 Deferred outflows-Fire pension (4,960) Deferred outflows-Police pension (8,523) Deferred inflows of resources- General pension 20,603 Deferred inflows of resources- Fire pension 22,511 Deferred inflows of resources- Police pension 40,583 73,157

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 governmental funds.

Change in due from other parties 11,146 Change in pension liability (57,384) Amortization of deferred losses on refunding (36) Change in health, dental and general claims payable 8,058 Change in vacation and compensated absences (836) Change in net OPEB obligation (19,345) Change in workers' compensation (14,054) (72,451)

CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 22,570

The accompanying notes are an integral part of this statement.

B-39 CITY OF ATLANTA, GEORGIA Statement of Net Position Proprietary Funds June 30, 2016 (Dollars in Thousands)

Governmental Business Activities - Enterprise Funds Activities Department of Other Watershed Department of Nonmajor Internal Service Management Aviation Funds Total Fund

ASSETS

Current assets: Cash and cash equivalents $ 18,831 $ 74 -$ $ 18,905 $ 87 Restricted cash and cash equivalents 115,589 158,435 - 274,024 - Equity in cash management pool 747,159 847,800 54,417 1,649,376 10,251 Receivables: Accounts 158,363 7,264 45,075 210,702 648 Less allowance for doubtful accounts (92,238) (3,564) (11,257) (107,059) - Total receivables, net 66,125 3,700 33,818 103,643 648

Due from other governments 11,570 - - 11,570 - Due from other funds 11,910 - - 11,910 - Advance to other funds, current portion 10,000 - - 10,000 - Inventories 11,148 7,731 - 18,879 934 Prepaid expenses - 1,069 - 1,069 - Restricted assets 426 40,131 - 40,557 -

Total current assets 992,758 1,058,940 88,235 2,139,933 11,920

Noncurrent assets: Restricted cash and cash equivalents 86,059 477,870 - 563,929 - Restricted investments 212,557 790,190 18 1,002,765 - Advance to other funds, less current portion 36,199 - - 36,199 - Investment in joint venture 77,480 - - 77,480 - Due from other parties - 10,640 - 10,640 - Due from other component units 24,000 - - 24,000 -

Capital assets: Land 124,045 584,230 22,067 730,342 136 Construction in progress 587,322 330,578 - 917,900 - Land improvements 12,195 3,276,386 6,693 3,295,274 29 Land purchased for noise abatement - 277,776 - 277,776 - Buildings and other structures - 3,911,973 101,986 4,013,959 5,508 Water collection and distribution system 4,276,723 - - 4,276,723 - Water and wastewater plant and treatment facilities 1,933,499 - - 1,933,499 - Machinery, equipment, and other 215,209 316,711 61,415 593,335 6,126 Less accumulated depreciation (2,240,339) (2,764,680) (119,870) (5,124,889) (11,353)

Capital assets, net 4,908,654 5,932,974 72,291 10,913,919 446

Total assets 6,337,707 8,270,614 160,544 14,768,865 12,366

DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 17,768 20,829 4,757 43,354 Accumulated decrease in fair value of derivitive instruments 85,958 - - 85,958 - Accumulated losses on debt refunding 151,841 59,951 - 211,792 - Total assets and deferred outflows of resources $ 6,593,274 $ 8,351,394 $ 165,301 $ 15,109,969 $ 12,366

The accompanying notes are an integral part of this statement.

B-40 CITY OF ATLANTA, GEORGIA Statement of Net Position Proprietary Funds June 30, 2016 (Dollars in Thousands)

Governmental Business Activities - Enterprise Funds Activities Department of Other Watershed Department of Nonmajor Internal Service Management Aviation Funds Total Fund LIABILITIES Liabilities: Current liabilities Accounts payable $ 32,730 $ 27,947 $ 3,360 $ 64,037 $ 2,553 Accrued expenses 5,340 16,947 1,576 23,863 514 Claims payable 6,675 - - 6,675 - Deposits and advances 7,476 - - 7,476 - Accrued interest payable - 43,027 - 43,027 Due to other funds - - 36,378 36,378 24,368 Current portion of other debt 6,002 83,945 - 89,947 - Current maturities of capital leases 1,304 - 795 2,099 - Accrued workers' compensation 1,087 140 2,957 4,184 - Curent liabilities 60,614 172,006 45,066 277,686 27,435 Current liabilities payable from restricted assets: Accounts payable 24,592 40,222 - 64,814 - Accrued interest payable 22,843 25,691 130 48,664 - Contract retention 8,034 314 - 8,348 - Commercial paper notes payables - 20,000 - 20,000 - Current maturities of long-term debt 60,120 37,535 141 97,796 - Total current liabilities payable from restricted assets 115,589 123,762 271 239,622 -

Total current liabilities 176,203 295,768 45,337 517,308 27,435

Noncurrent liabilities Long-term debt, excluding current maturities 3,126,240 3,024,081 12,273 6,162,594 - Capital lease obligations, excluding current maturities - - 17,370 17,370 - Pension liability 235,708 158,049 63,445 457,202 - Net OPEB obligation 106,924 60,465 27,501 194,890 - Claims Payable 6,111 - - 6,111 - Contract retention, excluding current portion - 4,495 - 4,495 - Accrued workers' compensation 7,474 963 20,336 28,773 - Interest rate SWAP 182,976 - - 182,976 - Landfill postclosure costs - - 15,625 15,625 - Total noncurrent liabilities 3,665,433 3,248,053 156,550 7,070,036 -

Total Liabilities 3,841,636 3,543,821 201,887 7,587,344 27,435

DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 15,629 15,746 4,229 35,604 - Total liabilities and deferred inflows of resources 3,857,265 3,559,567 206,116 7,622,948 27,435

NET POSITION Net investment in capital assets 2,148,323 3,190,333 41,712 5,380,368 446 Restricted Debt service - 413,288 - 413,288 - Capital projects - 629,667 - 629,667 - Unrestricted 587,686 558,539 (82,527) 1,063,698 (15,515)

Total Net Position $ 2,736,009 $ 4,791,827 $ (40,815) $ 7,487,021 $ (15,069)

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (11,574)

Net position of business-type activities $ 7,475,447

The accompanying notes are an integral part of this statement.

B-41 CITY OF ATLANTA, GEORGIA Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Governmental Business Activities - Enterprise Funds Activities Department of Other Watershed Department of Nonmajor Internal Service Management Aviation Funds Total Fund Operating revenues: Charges for services $ 445,718 $ 302,968 $ 73,214 $ 821,900 $ 175,909 Sewer service charges from other governmental units 20,030 - - 20,030 - Rentals, admissions and concessions 66 124,110 3,474 127,650 - Other 1,115 59,734 1,459 62,308 1,508

Total operating revenues 466,929 486,812 78,147 1,031,888 177,417

Operating expenses: Salaries and employee benefits 94,823 91,394 44,492 230,709 95,566 Utilities 20,571 9,270 642 30,483 610 Supplies and materials 19,231 4,625 1,471 25,327 10,612 Repairs, maintenance and other contractual services 13,444 21,691 480 35,615 5,648 Motor equipment services 6,302 4,134 8,306 18,742 410 Engineering and consultant fees 32,214 117,102 16,623 165,939 952 General services and other costs 38,369 42,393 8,740 89,502 64,267 Depreciation and amortization 99,088 223,330 6,158 328,576 63

Total operating expenses 324,042 513,939 86,912 924,893 178,128

Operating income (loss) 142,887 (27,127) (8,765) 106,995 (711)

Non-operating revenues (expenses): Investment income, net of capitalized interest 15,051 26,669 565 42,285 156 Interest expense (123,733) (126,072) (1,562) (251,367) (405) Passenger facility charges - 201,146 - 201,146 - Customer facility charges - 28,526 - 28,526 - Other revenue (expenses), net (3,121) (782) 244 (3,659) - Total nonoperating revenues (expenses), net (111,803) 129,487 (753) 16,931 (249)

Income before capital contributions and transfers 31,084 102,360 (9,518) 123,926 (960)

Capital contributions 19,639 22,505 47 42,191 - Transfers in 132,653 - 4,870 137,523 3,500 Transfers out (19,394) - (2,106) (21,500) - Change in net Position 163,982 124,865 (6,707) 282,140 2,540 Net Position, beginning of period 2,572,027 4,666,962 (34,108) 7,204,881 (17,609)

Net Position, end of period $ 2,736,009 $ 4,791,827 (40,815) $ 7,487,021 $ (15,069)

Change in net position 282,140 Adjustments to reflect the consolidation of internal service fund activities related to enterprise funds (510)

Change in net position of business-type activities $ 281,630

The accompanying notes are an integral part of this statement.

B-42 CITY OF ATLANTA, GEORGIA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Governmental Business Activities - Enterprise Funds Activities Department of Other Watershed Department of Nonmajor Internal Service Management Aviation Funds Total Fund

Cash flows from operating activities Cash received from user charges $ 496,769 $ 482,647 $ 82,500 $ 1,061,916 $ 177,429 Cash received for interfund services received 12,455 - - 12,455 - Cash paid for interfund services received (18,766) - - (18,766) Cash paid to employees for services (97,805) (91,513) (36,396) (225,714) (95,894) Cash paid to suppliers for goods and services (84,823) (194,491) (28,227) (307,541) (86,550)

Net cash provided by (used in) operating activities 307,830 196,643 17,877 522,350 (5,015)

Cash flows from noncapital financing activities Non-capital grants and donations (3,121) - - (3,121) - Transfers in 132,736 - 4,870 137,606 3,500 Transfers out (19,477) - (2,106) (21,583) -

Net cash provided by noncapital financing activities 110,138 - 2,764 112,902 3,500

Cash flows from capital and related financing activities Capital grants and donations 19,639 26,552 47 46,238 - Principal repayments of long-term debts (63,943) (116,085) (6,967) (186,995) - Acquisition, construction and improvements of capital assets (189,689) (206,789) (13,982) (410,460) (102) Passenger and customer facility charges - 227,522 - 227,522 - Contract retention withheld, net - (5,361) - (5,361) - Proceeds from bond/note issuances 5,592 320,000 10,680 336,272 - Premium from issuance of debt 14,361 - - 14,361 - Interest paid (159,236) (139,976) (1,495) (300,707) (445)

Net cash used in capital and related financing activities (373,276) 105,863 (11,717) (279,130) (547)

Cash flows from investing activities Change in equity in cash management pool (37,083) (52,633) (9,464) (99,180) 1,626 Interest on investments 6,597 30,819 552 37,968 196 Purchases of restricted investments (70,489) (1,481,118) (12) (1,551,619) - Sales & redemptions of restricted investments - 1,206,623 - 1,206,623 -

Net cash provided by (used in) investing activities (100,975) (296,309) (8,924) (406,208) 1,822

Increase (decrease) in cash and cash equivalents (56,283) 6,197 - (50,086) (240)

Cash and cash equivalents: Beginning of year 276,762 630,182 - 906,944 327

End of year $ 220,479 $ 636,379 $ - $ 856,858 $ 87

continued

The accompanying notes are an integral part of this statement.

B-43 CITY OF ATLANTA, GEORGIA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Governmental Business Activities - Enterprise Funds Activities Department of Other Watershed Department of Nonmajor Internal Service Management Aviation Funds Total Fund

Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 142,887 $ (27,127) $ (8,765) $ 106,995 $ (711) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 99,088 223,330 6,158 328,576 63 Changes in assets and liabilities Accounts receivables - net of allowance (3,557) 7,508 4,353 8,304 12 Materials and supplies - net of allowances (634) 315 - (319) - Due from other funds 10,122 - - 10,122 - Prepaid expenses - 32 (2,480) (2,448) (221) Due (from) other governmental units, net 45,339 - - 45,339 - Investment in joint venture 2,102 - - 2,102 - Accounts payable and accrued expenses 11,614 (8,630) (721) 2,263 (519) Other Liabilities - 1,215 10,576 11,791 (328) Claims payable 356 - - 356 - Customer deposits 513 - - 513 - Due to other funds - - 8,756 8,756 (3,311)

Net cash provided by (used in) operating activities $ 307,830 $ 196,643 $ 17,877 $ 522,350 $ (5,015)

Schedule of noncash capital and related financing activity: Acquisition of capital assets with account payables 24,592 31,550 - 56,142 - Amortization of bond discount and premium, net 12,562 17,271 - 29,833 -

The accompanying notes are an integral part of this statement.

B-44 CITY OF ATLANTA, GEORGIA Statements of Fiduciary Net Position Fiduciary Funds June 30, 2016 (Dollar amounts in thousands)

Pension Trust Funds Agency Funds

ASSETS Cash and cash equivalents $ 28,310 $ 251 Securities lending cash collateral 25,448 — Equity in cash management pool — 21,230

Receivables: Other Employee Contributions 1,650 — Other Employer Contributions 5,268 — Due from brokers 13,578 — Accrued interest receivable 3,166 — Prepaid expenses — — Other receivables 7,890 125

Total receivables 31,552 125

Investments: Cash and cash equivalents 61,487 Domestic fixed income securities 736,081 — Domestic equities 1,758,717 — International fixed income securities 6,880 — International equities 186,807 — Limited partnerships 28,411 — Alternative partnerships: — Limited partnerships 60,969 — Comingled funds 53,125 — Total investments 2,892,477 — Total assets 2,977,787 21,606

LIABILITIES

Payables: Accounts payables 3,673 21,606 Due to brokers for investments purchased 20,322 — Collateral payable for securities lending 25,448 —

Total liabilities 49,443 21,606 Net Position Held in Trust for Pension Benefits $ 2,928,344

See accompanying notes to financial statements.

B-45 CITY OF ATLANTA, GEORGIA Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Pension Trust Funds Additions Contributions: Employer contributions $ 156,575 Employee contributions 48,434 Refunds and other 365 Total Contributions 205,374

Investment income: Net change in fair value of investments (47,042) Investment income 43,990 Securities lending income 278 Less: Investment expenses (9,311) Net investment income gain (loss) (12,085)

Total Additions 193,289

Deductions Accounts payable Benefit payments 280,577 Administrative expenses 2,042

Total Deductions 282,619

Change in net position (89,330)

Net position held in trust for pension benefits: Beginning of period 3,017,674

End of period $ 2,928,344

The accompanying notes are an integral part of this statement.

B-46

Component Units

City of Atlanta and Fulton County Recreation Authority - Established to account for the acquisitions, construction, maintenance, and operation of an athletic stadium, an athletic coliseum, and the Atlanta Zoo.

Atlanta Development Authority – Atlanta Development Authority, d/b/a Invest Atlanta, is the official economic development authority for the City of Atlanta. Its purpose is to strengthen Atlanta’s economy and global competitiveness in order to create increased opportunity and prosperity for the people of Atlanta.

B-47 B-48

THIS PAGE INTENTIONALLY LEFT BLANK

B-49 CITY OF ATLANTA, GEORGIA Component Units

Statement of Net Position For the Year Ended June 30, 2016 (Dollars in Thousands)

Atlanta Fulton County Atlanta Recreation Development Authority Authority Total ASSETS Current assets: Cash and cash equivalents $ 6,847 $ 19,108 $ 25,955 Restricted cash 4,632 55,291 59,923 Restricted Investments - - - Short-term investments - 759 759 Receivables: Accounts 5 - 5 Other receivables - 6,236 6,236 Total receivables 5 6,236 6,241

Due from primary government - 4,318 4,318 Due from other component units - 1,642 1,642 Current portion of capital lease receivable - 2,225 2,225 Prepaid expenses and other assets 37 384 421 Total current assets 11,521 89,963 101,484

Noncurrent Assets: Unrestricted assets: Due from primary government 75,143 251,832 326,975 Investments - 14,282 14,282 Other receivable - 2,128 2,128 Mortgage loans receivable - 4,345 4,345 Capital lease receivable - 16,588 16,588 Due from other component units - 22,900 22,900 Other assets - 11,409 11,409

Restricted assets: Cash and cash equivalents 47,413 - 47,413 Investments - - - Other assets - - - Total restricted assets 47,413 - 47,413

Property and equipment - at cost: Land 22,644 67,703 90,347 Construction-in-progress - 96,822 96,822 Land improvements 1,012 7,830 8,842 Buildings and improvements 243,534 39,451 282,985 Other property and equipment 17,812 3,694 21,506 285,002 215,500 500,502 Less accumulated depreciation (155,873) (21,352) (177,225)

Property and equipment, net 129,129 194,148 323,277

Total assets 263,206 607,595 870,801

DEFERRED OUTFLOWS OF RESOURCES Accumulated losses on debt refunding $ 3,947 $ - $ 3,947 Total assets and deferred outflows of resources $ 267,153 $ 607,595 $ 874,748

The accompanying notes are an integral part of this statement.

B-50 CITY OF ATLANTA, GEORGIA Component Units

Statement of Net Position For the Year Ended June 30, 2016 (Dollars in Thousands)

Atlanta Fulton County Atlanta Recreation Development Authority Authority Total LIABILITIES

Current Liabilities: Accounts payable and accrued expenses $ 60 $ 10,617 $ 10,677 Accrued interest payable - 9,960 9,960 Due to primary government - - - Other liabilities 9 3,539 3,548 Deferred revenues - 1,173 1,173 Current maturities of long-term debt - 18,546 18,546 Total current liabilities 69 43,835 43,904

Liabilities payable from restricted assets: Current maturities of long-term debt 12,065 - 12,065 Other liabilities 19,932 - 19,932

Total liabilities payable from restricted assets 31,997 - 31,997

Long-term liabilities: Long-term debt, less current portion 196,610 387,707 584,317 Other long-term liabilities - 31,050 31,050 Due to primary government - 24,000 24,000

Total long-term liabilites 196,610 442,757 639,367

Total liabilities 228,676 486,592 715,268

DEFERRED INFLOWS OF RESOURCES Accumulated premiums on long term debt 8,423 - 8,423 Total liabilities and deferred inflows of resources 237,099 486,592 723,691

NET POSITION Net investment in capital assets (4,247) 94,293 90,046 Restricted 27,480 52,296 79,776 Unrestricted 6,821 (25,586) (18,765)

Total net position $ 30,054 $ 121,003 $ 151,057

The accompanying notes are an integral part of this statement. 38

B-51 CITY OF ATLANTA, GEORGIA Component Units

Statement of Activities For the Year Ended June 30, 2016 (Dollars in Thousands)

Program Revenues Net (Expenses) Revenues and Changes in Net Position

Operating Capital Grants Atlanta Fulton Atlanta Charges for Grants and and County Recreation Development Functions/Programs Expenses Services Contributions Contributions Authority Authority TOTAL Component Units Business-type activities Atlanta Fulton County Recreation Authority$ 22,904 $ 1,154 $ 148 $ 14,700 $ (6,902) -$ $ (6,902) Atlanta Development Authority 219,122 21,297 15,538 17,891 - (164,396) (164,396)

Total Business-type activities 242,026 22,451 15,686 32,591 (6,902) (164,396) (171,298)

Total Component Units $ 242,026 $ 22,451 $ 15,686 $ 32,591 $ (6,902) $ (164,396) $ (171,298)

General revenues: Other taxes 3,396 - 3,396 Investment income 125 78 203 Other - 598 598 Total General revenues 3,521 676 4,197 Change in net position (3,381) (163,720) (167,101) Net position - beginning of period 33,435 284,723 318,158 Net position - end of period $ 30,054 $ 121,003 $ 151,057

The accompanying notes are an integral part of this statement.

B-52

Notes to Financial Statements

B-53 B-54 City of Atlanta, Georgia Notes to Financial Statements

Contents

Page I. Summary of Significant Accounting Policies A. Reporting Entity …………………….………………………..……… 40 B. Basis of Presentation …………………….………………………..… 43 C. Measurement Focus and Basis of Accounting …………………….… 45 D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances ……………………………………… 45 E. New Accounting Pronouncements …………………………………… 53 F. Use of Estimates ……………………………………….…………… 55

II. Stewardship, Compliance and Accountability A. Compliance with Finance Related Legal and Contractual Provisions 55 B. Budgets and Budgetary Accounting ………………………………… 55 C. Deficit Fund Balances …………………………………..…………… 56

III. Detailed Notes on All Funds A. Deposits and Investments ...... 56 B. Property Taxes, LOST, MOST, and Car Rental Taxes …...... 67 C. Capital Assets …...... 68 D. Interfund Receivables, Payables, and Transfers ……..…………….… 70 E. Leases ..…..….……………………………….....…..…….….….…… 71 F. Notes Payable ..…..….……………………………….....…..…….… 75 G. Long-Term Obligations ………………………………..…………..… 75 H. Restricted Net Position and Restricted Assets ……………………… 95

IV. Other Information A. Risk Management …………….………..…………………….…….. 96 B. Commitments and Contingent Liabilities …………………………… 98

V. Pension and Postemployment Benefits A. Pensions ……………………………………………………………… 103 B. Post-Employment Benefits ………………………………………… 122

VI. Subsequent Events Subsequent Events …………………………………………………… 124

B-55 B-56 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

I. Summary of Significant Accounting Policies

The accounting principles of the City of Atlanta ("City") conform to accounting principles generally accepted in the United States of America ("GAAP") applicable to governmental entities. The Governmental Accounting Standards Board ("GASB") is the standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting policies of the City are described herein.

A. Reporting Entity

The Financial Reporting Entity

The City is a municipal corporation governed by the Mayor and the City Council. In evaluating how to define the City for financial reporting purposes, the management of the City has considered all potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth by GASB Statement No. 61. The component units discussed below are included in the Government’s reporting entity because of the significance of their operational or financial relationships with the Government. Each discretely presented component units is reported separately in the basic financial statements to emphasize that it is legally separate from the Government.

All blended component units have a June 30 year end. Of the discretely presented component units, the Atlanta Fulton County Recreation Authority has a December 31 year end and the Atlanta Development Authority, d/b/a Invest Atlanta (“Invest Atlanta”), has a June 30 fiscal year end.

Blended Presented Component Units

Atlanta Public Safety and Judicial Facilities Authority (“APSJFA”), Solid Waste Management Authority ("SWMA"), and Atlanta Housing Opportunity, Inc. (AHOI) are legally separate from the City, but governed by boards appointed by the Mayor and/or the City Council. There exists a financial benefit/burden relationship between the City and the entity. APSJFA, SWMA, and AHOI are reported as if they are a part of the primary government because their primary purpose is to provide services to the City. The general fund of AHOI is reported as a special revenue fund of the City. APSJFA and SWMA's capital project funds are reported as capital project funds of the City.

Separate audited financial statements for AHOI may be obtained from Invest Atlanta, 133 Peachtree Street, NE, Suite 2900, Atlanta, GA 30303. Separate financial statements are not prepared for APSJFA and SWMA.

Discretely Presented Component Units

The component unit column in the government-wide financial statements includes the Atlanta Fulton County Recreation Authority ("Recreation Authority"), and Invest Atlanta. They are reported discretely presented because the governing body of each of these component units is not reported

B-57 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Reporting Entity, continued discretely substantively the same as the primary government. All the discretely presented component units are accounted for as proprietary fund types.

Atlanta Fulton County Recreation Authority - Created in 1961, the principal activities of the Recreation Authority include the maintenance and oversight of an athletic stadium (the "Stadium"), an athletic coliseum (the "Arena"), and the Atlanta Fulton County Zoo, Inc. ("Zoo"), for which the Recreation Authority acts as lessee under a leasehold interest granted by the City. The Mayor appoints the majority (two-thirds, or six of nine) of the governing body of the Recreation Authority. The City has a two-thirds interest in the Recreation Authority and Fulton County has one-third interest. The separate financial statements which comprise the Recreation Authority may be obtained from the Atlanta Fulton County Recreation Authority, 755 Hank Aaron Drive, Atlanta, Georgia 30315.

The City, Fulton County ("the County"), and the Zoo by contractual agreement with the Recreation Authority, will fund any deficiencies in principal and interest payments on the applicable revenue bonds issued for construction and capital improvements of the Arena and the Zoo. The funding of any deficiencies related to the Arena is based on the proportionate ownership interest noted above for the City and the County. For the Arena, there were no such deficiencies during the fiscal year that required funding by the City or County. When the related Arena revenue bonds have been fully paid, the Recreation Authority will convey fee simple title of the Arena to the City and the County based on their proportionate shares noted above, upon joint request of the City and the County. The component unit presentation in these financial statements of the Recreation Authority consolidates the operations of the Stadium and Arena.

Invest Atlanta - Invest Atlanta, is the economic development agency for the City of Atlanta. Invest Atlanta was created effective January 1, 1997, to promote the revitalization and growth of the City through a comprehensive and centralized program focusing on community development and redevelopment. It combines several organizations, including the Downtown Development Authority (DDA), which perform similar economic development functions. The Mayor and City Council are responsible for appointing the members of the Board of Directors of Invest Atlanta and have the ability to impose their will on Invest Atlanta. In addition, Invest Atlanta has the potential to impose a financial burden on the City. The separate audited financial statements of Invest Atlanta may be obtained from Invest Atlanta, 133 Peachtree Street, N.E., Suite 2900, Atlanta, Georgia 30303.

Joint Ventures

The Atlanta-Fulton County Water Resource Commission ("Commission") is a joint venture between Fulton County (“the County”) and the City for the construction and operation of water treatment plant accounted for under the equity method of accounting. The Commission is governed by a seven-member management commission; three members are appointed by the City, three by the County, and one independent member is elected by majority vote of the other members. The City and County also approve the annual budget of the Commission. Under the terms of the

B-58 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Reporting Entity, continued amended Joint Venture Agreement, the City and the County equally share the costs of all capital expenditures. Capital contributions are recorded during the year in which the additions to capital assets are accrued, whether paid or recorded as a liability, including retainage. The City and County each contributed $535,000 during the fiscal year ended June 30, 2016. These capital costs are reflected as Investment in the Joint Venture.

The costs of operations of the plant are paid directly by the County as incurred. The County is subsequently reimbursed by the City for its’ pro rata share of the cost of operations, net of personnel costs paid by the City. The costs of operations, including personnel cost, are allocated between the City and the County on the basis of water delivered to each. The City's share of those operating costs was $3,079,000 for the year ended June 30, 2016. The costs are reflected in operating costs. At June 30, 2016 the City owes the County approximately $268,000 for expenses and capital costs associated with the joint venture.

Financial information for the Commission summarized below is as of and for the year ended December 31, 2015 (in thousands):

Total assets $ 156,072

Total fund net position $ 151,664

Total operating revenue $ 9,393

Total operating expenses $ 14,558

Total nonoperating losses $ (110)

Net loss $ (5,275)

The separate financial statements of the Commission may be obtained from the Commission, 9750 Spruill Road, Alpharetta, Georgia 30022.

Atlanta Regional Commission - Under Georgia law, the City, in conjunction with other cities and counties in metropolitan Atlanta, is a member of the Atlanta Regional Commission (“ARC)” and is required to pay annual dues thereto. During the fiscal year ended June 30, 2016, the City paid approximately $1,289,000 in such dues. Membership in the ARC is required by the Official Code of Georgia Annotated (OCGA) Section 50-8-34 which provides for the organizational structure of the ARC. The ARC Board membership includes the chief elected official of each county and municipality in the area. The OCGA 50-8-39.1 provides that the member governments are liable for any debts or obligations of the ARC.

B-59 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Reporting Entity, continued

Separate financial statements may be obtained from the Atlanta Regional Commission at 40 Courtland St. NE, Atlanta, Georgia 30303.

Related Organizations

The City is also responsible for appointing a majority of the members of the boards of the Atlanta Housing Authority (AHA), Atlanta Urban Redevelopment Agency (AURA), and the Downtown Development Authority of the City of Atlanta (DDA). The City's accountability for AHA does not extend beyond making appointments to the Board. AURA and DDA are reported as blended component units of Invest Atlanta.

B. Basis of Presentation

Government –wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the City and its component units. The effect of material interfund activity has been removed from these 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 user fees and charges for support. City activities are reported separately from certain legally separate component units for which the City is financially accountable. Interfund services provided and used are not eliminated in the process of consolidation.

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

Fund Financial Statements

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

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services or producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for enterprise

B-60 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

B. Basis of Presentation, continued funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The City reports the following major governmental funds:

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

The Municipal Option Sales Tax (MOST) Fund is used to account for a special 1% sales tax collected by the City for use by the Department of Watershed Management. The fund is accounted for as a special revenue fund, and carries no fund balance as all revenue collections are subsequently transferred to the Department of Watershed Management. The amount of revenue collected on an annual basis by the MOST Fund qualifies it to be reported as a major governmental fund.

The Capital Projects Fund is used to account for the acquisition, construction or improvement of capital assets. Although reported as a single fund in aggregate, it is comprised of multiple, separately tracked funds and projects funded with the proceeds of long-term debt.

The City reports the following major enterprise funds:

The Department of Watershed Management Fund (DWM) accounts for all activities associated with the provision and management of clean water, wastewater and storm water systems, and water pollution control services to individuals, organizations and other governmental units within and around the City.

The Department of Aviation Fund (DOA) accounts for the activities of the William B. Hartsfield – Maynard H. Jackson Atlanta International Airport.

Additionally, the City reports the following fund types:

Internal Service Funds account for the services and activities that provide services to the other funds and departments on a cost-reimbursement basis. Over time, the internal service funds function basically on a break-even basis. Such services include the Fleet Services as well as Group Insurance transactions related to the provisions of life, accident, and medical insurance benefits through outside insurance companies for permanent employees and retirees of the City.

Fiduciary Fund Types:

The Trust Funds account for activities in which the City acts as trustee for an individual or organization. Additionally, these funds account for Pension Trust Funds which accumulate resources for pension benefit payments to members of the Plans and their beneficiaries.

The Agency Fund accounts for various taxes and other receipts held in escrow for individuals, outside organizations, other governments and/or other funds.

B-61 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

C. Measurement Focus and Basis of Accounting

The government-wide, proprietary funds and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Agency funds, as part of fiduciary funds, while on the accrual basis, do not have a measurement focus since they do not report net position.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and interest on general long-term debt, compensated absences, claims and judgments, and worker’s compensation are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

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

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances

Cash Equivalents

The City considers all highly liquid debt securities with an original maturity of three months or less to be cash equivalents. The Georgia Fund 1 (GF1) is a stable net asset value investment pool managed by the State of Georgia (Office of State Treasurer) and is not registered with the SEC. The GF1 operates in a manner consistent with SEC Rule 2a-7 of the Investment Company Act of 1940 and is considered a SEC Rule 2a-7- like pool. The fair value of the participant shares is computed weekly with pool earnings distributed on a monthly basis based on equivalent shares owned by participants based on $1.00 per share.

Separate financial statements of the GF1 may be obtained from the Office of the Georgia State Treasurer, 200 Piedmont Avenue, Suite 1202, West Tower, Atlanta, Georgia 30334-5527.

B-62 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Investments

The OCGA 36-83-4 authorizes the City to invest in U.S. Government obligations, U.S. Government agency obligations, State of Georgia obligations, and obligations of a corporation of the U.S. Government, repurchase agreements and prime bankers’ acceptance. The City’s investment policy authorizes portfolios that consist of U.S. Treasuries, U.S. Agencies/Instrumentalities, Obligations of Other Political in the State of Georgia, Municipal Securities, Bankers Acceptances, Local Government Investment Pools and Certificate of Deposit. According to City policy, up to 75% may consist of U.S. Government Agencies securities. The City invests in repurchase agreements only when collateralized by U.S. Government or Agency Obligations. By statute, which differs from the OCGA 36-83-4, up to 55% of the cost basis of the investment portfolio for the General Employees’ Pension Plan, the Firefighters’ Pension Plan and the Police Officers’ Pension Plan (The Plans) may consist of U.S. corporate equity securities. Additionally, in accordance with authorized investment laws, the Plans can invest in various mortgage-backed securities, such as collateralized mortgage obligations ("CMOs") and government backed mortgage securities. These are separately identified in the disclosure of custodial credit risk (see Note III. A). In 2014, the General Employees’ Pension Board, the Firefighters’ Pension Board and the Police Officers’ Pension Board (The Pension Boards) authorized The Plans to invest in alternative investments, not to exceed 5% of the total investments.

Investments, except in the pension funds, consist primarily of U.S. Government securities and are stated at fair value. Pension fund investments, which also include bonds and U.S. Government and other domestic and foreign securities, are stated at quoted fair value at June 30, 2016. Repurchase agreements are reported at amortized cost.

The City maintains a cash management pool whereby operating cash is held. This pool is not considered a separate accounting entity for financial reporting purposes; instead, each participating fund's equity in the cash management pool is recorded as such on its statement of net position. Related interest income is allocated to each participating fund based on each fund's recorded equity in the pool.

Materials and Supplies

Materials and supplies are stated at cost (substantially first-in, first-out) which is not in excess of market. Inventories are accounted for using the purchase method whereby inventories are recorded as expenditures or expenses when they are used.

Prepaid Items

Payments for services that benefit future periods are recorded as prepaid expenses in accordance with the consumption method.

B-63 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Restricted Assets

Restricted assets represent amounts which are required to be maintained pursuant to City ordinances relating to the passenger and customer facility charges: construction, renewal and extension and sinking funds: funds received for specific purposes pursuant to U. S. Government grants; and municipal option sales tax; and various special purposes taxes.

Capital Assets

Capital assets, which include property, easements, plant, equipment and infrastructure (e.g. roads, bridges, sidewalks, and similar items) used in governmental and business-type activities of the City, are recorded in the statement of net position at historical cost (or estimated historical cost). Capital assets are defined by the City as assets with an initial, individual cost of $5,000 and an estimated useful life in excess of one year. Donated capital assets are recorded at their estimated fair value at the date of donation. Expenses for replacements, maintenance, repairs, and betterments, which do not materially prolong the life of the related asset, are charged to expenditures/expenses when incurred. All reported capital assets, except land and construction in progress, are depreciated.

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B-64 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Depreciation is computed using the straight-line method over the following estimated useful lives:

Governmental-type Activities: Buildings 20-50 years Building improvements 20 years Furniture and equipment 5-15 years Vehicles 5-25 years Infrastructure 25-50 years Aircraft, Helicopter 17 years Light rail, streetcar 25 years

Business-type activities: Department of Aviation: Runways, taxiways, and other land improvements 15-35 years Terminal and maintenance buildings and other structur 15-35 years Other property and equipment 2-20 years

Department of Watershed Management: Water and wastewater plant and treatment facilities 50-75 years Water collection and distribution system 75 years Wastewater system 67 years Stormwater drainage system 75 years Machinery, equipment, and other 4-10 years Land Improvements 20 years

Sanitation: Buildings 20-50 years Equipment 5-15 years

Parks and Recreational Facilities: Buildings 20-50 years Other property and equipment 5-20 years

Underground Atlanta: Parking garage 20-50 years Buildings 20-50 years Machinery, equipment, and other 5-15 years

Internal Service Fund: Buildings 20-50 years Other property and equipment 5-15 years

City of Atlanta and Fulton County Recreation Authority: (as a discretely presented component unit): Buildings and improvements 7-30 years Other property and equipment 3- 20 years

Atlanta Development Authority: (as a discretely presented component unit): Buildings and improvements 26-30 years

B-65 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

The City has elected not to capitalize works of art and historical treasures based on its policy that these items are not held for financial gain. They will be preserved and any proceeds from the sale of the items will be used to acquire other collections.

Interest is capitalized on proprietary fund assets constructed with the proceeds of tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project against interest earned on invested proceeds over the same period. The Department of Watershed Management and the Department of Aviation capitalized $8,304,000 and $9,400,000, respectively, in net interest costs during the year ended June 30, 2016.

Compensated Absences

City employees are awarded sick and vacation time as determined by personnel policies. A maximum accrual of 25 to 45 days of vacation leave is authorized, depending upon length of service. The liability for compensated absences reported in the government-wide and proprietary fund statements consists of unpaid, accumulated vacation leave balance. The liability has been calculated using the vesting method, in which vacation amounts for employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. The liability for compensated absences is only reported in governmental funds if they have matured.

Employees can accrue unlimited amounts of sick leave. Sick leave can be taken only due to personal illness or, in certain cases, illness of family members. Sick leave is not intended to be paid out except under special circumstances where the City Council has given approval and the necessary funds are available. Consequently, the City does not record an accrued liability for accumulated sick pay.

Bond Premiums and Discounts

In the government-wide financial statements, the unamortized balances of bond premiums and bond discounts are presented as adjustments to the respective liability balances. Bond premiums and discounts are amortized over the life of the bonds using the bonds outstanding method, which approximates the effective-interest method. Bonds payable are reported net of the applicable bond premium or discount. Insurance costs related to the issuance of bonds are reported as prepaid insurance and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts in the statement of revenues, expenses, and changes in fund balance in the period incurred. The face amount of debt issued is reported as other financing sources. Premiums on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses.

B-66 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Fund Balance

City of Atlanta Code of Ordinances Section 6-315 provides authority pertaining to fund balances. Fund balances are classified as: (1) Nonspendable, (2) Restricted, (3) Committed, (4) Assigned, and (5) Unassigned. Nonspendable fund balance refers to amounts that are not in spendable form or are legally required to remain intact. Restricted fund balance refers to amounts that are subject to externally enforceable legal restrictions by either debt covenants, or laws or regulations of other governments. Committed fund balance refers to amounts that can only be used for specific purposes pursuant to constraints imposed by ordinance of the City Council prior to the end of the fiscal year. The same formal action is required to remove the limitation. Assigned fund balance refers to amounts that are intended to be used for specific purposes. The Chief Financial Officer of the City may recommend assignment of fund balances subject to approval of the City Council. Unassigned fund balance refers to the residual net resources and are the excess of nonspendable, restricted, committed and assigned. Fund expenditures are from restricted fund balance to the extent of the restricted fund revenue and followed by committed then assigned and unassigned fund balance. The general fund is the only fund that reports a positive unassigned fund balance amount.

Spending Prioritization Policy

When an expenditure is incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) amounts are available, restricted amounts shall be considered to have been reduced first. When an expenditure is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, committed amounts are reduced first, followed by assigned amounts and then unassigned amounts.

Authority to Commit or Assign Funds Policy

Commitments or assignments of funds will only be used for specific purposes. Committed balances or assigned balances will only be established pursuant to formal action by the City Council, upon recommendation from the Chief Financial Officer. Such commitments or assignments cannot exceed the available fund balance in any particular fund.

Minimum Unrestricted Balance in the General Fund Policy

The City maintains a minimum unrestricted fund balance in the General Fund ranging from no less than 15% to 20% of the subsequent year’s budgeted expenditures and outgoing transfers. At any time, the unrestricted fund balance is within the range of 15% to 20% of the subsequent year’s budgeted expenditures and outgoing transfers, upon recommendation by the Chief Financial Officer, the City Council may authorize additional transfers to a fund at its discretion, up to a maximum of 5% per year of the subsequent year’s budgeted revenues in preparation for adoption of the upcoming year’s budget. If the unrestricted fund balance falls below the minimum 15% of the subsequent year’s

B-67 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

budgeted expenditures and outgoing transfers, replenishment of shortages will be made within specified time periods and upon the recommendation of the Chief Financial Officer. Should the unrestricted fund balance of the General Fund exceed the maximum of 20%, such surplus fund balance may be considered for transfer to deficit balances in other funds and for one-time expenditures that are nonrecurring. At least 50% of surplus fund balance must be used to reduce any deficit fund balance prior to allocation for any one-time expenditure.

Below are the fund balance classifications for the governmental funds at June 30, 2016 (dollars in thousands).

Capital Project Other Governmental Total Governmental General Fund Funds Funds Funds

Nonspendable Advances Receivable $ 15,726 $ - $ - $ 15,726 15,726 - - 15,726 Restricted HUD -Community Development - - 687 687 Tax Allocation Districts - - 17,146 17,146 Debt Service - - 229,522 229,522 Expendable Trust - - 31,350 31,350 HUD Section 108 Loans - - 5,238 5,238 HUD Home Investment - - 363 363 AHOI - - 8,023 8,023 Capital Projects - 298,438 47,555 345,993 - 298,438 339,884 638,322 Assigned Unrestricted encumbrances 7,254 - - 7,254 7,254 - - 7,254 Unassigned E911 - - (4,828) (4,828) Intergovernmental grants - - (7,207) (7,207) General Fund 130,169 - - 130,169 130,169 - (12,035) 118,134 Total Fund Balance $ 153,149 $ 298,438 $ 327,849 $ 779,436

In the event expenditures are incurred for purposes under which the amounts in any unrestricted fund balance could be used, committed funds would be reduced first, followed by assigned amounts, and then unassigned amounts.

B-68 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Encumbrances are commitments to unfilled purchase orders or unfilled contracts. Funds have been committed to a specific order, but the goods or services have not been billed or received. The City has outstanding encumbrances at June 30, 2016 as follows (dollars in thousands):

General Fund Contract Services $ 5,002 Supplies 2,070 Capital 146 Other 36 Total $ 7,254

Net Position

Net position is classified and displayed in three components, as applicable:

Net investment in capital assets – Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, notes, or other borrowings that are attributable to the acquisition, construction or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is excluded from the calculation of net investment in capital assets.

Restricted – Consists of assets with constraints placed on the use either by (1) external groups, such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. When an expense is incurred for purposes for which there are both restricted and unrestricted assets available, it is the City’s policy to apply those expenses to restricted assets, to the extent such are available, and then to unrestricted assets.

Unrestricted – All other assets that constitute the components of net position that do not meet the definition of “restricted” or “net investment in capital assets.”

Deferred Outflows of Resources

Deferred outflows of resources represent a consumption of net position that applies to a future period and will not be recognized as an outflow of resource (expense) until then. The deferred charge on refunding results from the difference in the carrying value of refunded debt and reacquisition price. The amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The effective portion of swaps relates to the Department of Watershed Management swaps. The swaps are considered to be derivatives, the effective of which is accounted for as a deferred outflow of resources. The amount for pensions relates to certain differences between projected and actual actuarial results, certain differences between projected and actual investment earnings, as well as contributions between measurement and reporting dates, which are accounted for as deferred outflows of resources.

B-69 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances, continued

Deferred Inflows of Resources

In addition to liabilities, the Balance Sheets and Statements of Net Position report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resource (revenue) until that time. The unavailable revenue reported in the Balance Sheet, which arises under a modified accrual basis of accounting, represents amounts that are deferred and recognized as an inflow of resources in the periods that the amounts become available. The interest rate swap, which relates to an interest rate swap agreement, is considered to be a hedging derivative. Changes in the fair market value of hedging derivatives are reported as deferred inflows or outflows of resources. The amounts for pensions relate to certain differences between projected and actual actuarial results and certain differences between projected and actual investment earnings, which are accounted for as deferred inflows of resources.

Grants from Other Governments

Federal and state governmental units represent an important source of supplementary funding used to finance housing, employment, construction programs, and other activities beneficial to the community. This funding, primarily in the form of grants, is recorded in the governmental and proprietary funds. All grant contributions in the proprietary funds are for the purpose of construction activities, principal debt service reimbursements, or land or easement acquisitions. They are recorded in the statement of revenues, expenses, and changes in net position on a separate line as capital contributions after non-operating revenues and expenses. For all funds, a grant receivable is recorded when all applicable eligibility requirements have been met.

General Services Costs

The City allocates a portion of general services costs (such as purchasing, accounting, budgeting, personnel administration, and certain other costs based on allocation methods determined by an independent study) to the Department of Aviation, the Department of Watershed Management, the Sanitation Fund and the Internal Service Fund in order to more fully reflect the actual cost of providing these services. For the year ended June 30, 2016, such allocated expenses amounted to $18,766,000 for the Department of Watershed Management, $7,147,000 for the Department of Aviation, $3,864,000 for the Sanitation Fund, and $3,277,000 for the Internal Service Funds.

E. New Accounting Pronouncements

Pronouncements effective for the 2016 Financial Statements:

Effective during fiscal year 2016, GASB Statement No. 72, Fair Value Measurement and Application, was implemented. This Statement addresses accounting and financial reporting issues related to fair value measurements. This statement provides guidance for determining a fair value

B-70 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

E. New Accounting Pronouncements, continued measurement for financial reporting purposes and for applying fair value to certain investments and disclosures related to fair value measurements. This pronouncement resulted in expanded footnote disclosures around fair value including the fair value hierarchy and valuation techniques.

In June 2015, the GASB issued Statement No.73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. This statement establishes standards of accounting and financial reporting for defined benefit pensions and defined contribution pensions that are provided to the employees not within the scope of Statement 68. Requirements are also established for the assets accumulated for the purposes of providing pensions through defined benefit pension plans that are not administered through trusts that meet the criteria within the scope of Statement 67. This pronouncement did not impact the City.

Pronouncements issued, but not yet effective, which will be adopted by the City in future years:

In June 2015, the GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. This Statement establishes financial reporting standards for Other Post-Employment Plans (OPEB) that is administered through trusts or equivalent arrangements which involve contributions from employers and nonemployer contributing entities to the OPEB plan. This Statement is effective for financial statements with fiscal years beginning after June 15, 2016. This pronouncement will not impact the City.

In June 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other Than Pensions. This Statement establishes accounting and financial reporting standards for Other Post-Employment Plans (OPEB) that is administered through trusts or equivalent arrangements which involve contributions from employers and nonemployer contributing entities to the OPEB plan. This Statement is effective for financial statements with fiscal years beginning after June 15, 2017. The City is in the process of evaluating the impact of this pronouncement on its financial statements.

In August 2015, the GASB issued Statement No. 77, Tax Abatement Disclosures. This Statement requires state and local governments to disclose tax abatement agreements entered by other governments and that reduce the reporting government’s tax revenues. The reduction in tax revenues can result from an agreement between one or more governments and an individual entity in which one or more governments promise to forgo tax revenues to which they are otherwise entitled. The individual or entity promises to take specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. This statement is effective for the City in fiscal year 2017. The City is in the process of evaluating the impact of this pronouncement on its financial statements.

In January 2016, the GASB issued Statement No. 80, Blending Requirements for Certain Component Units. This Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statement amends the blending

B-71 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

E. New Accounting Pronouncements, continued

requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires blending of a component unit incorporated as a not- for-profit corporation in which the primary government is the sole corporate member. The Statement is effective for the City in fiscal year 2017. The City is in the process of evaluating the impact of this pronouncement on its financial statements.

In March 2016, the GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. This Statement is to improve accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. Governments receiving resources pursuant to an irrevocable split- interest agreement is to recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement. This Statement requires that a government recognize revenue when the resources become applicable to the reporting period. The Statement is effective for the City in fiscal year 2018. The City is in the process of evaluating the impact of this pronouncement on its financial statements.

In March 2016, the GASB issued Statement No. 82, Pension Issues – An Amendment of GASB Statements No. 67, No. 68, and No. 73. This Statement addresses issues regarding the presentation of payroll-related measures in required supplementary information, the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The Statement is effective for the City in fiscal year 2018. The City is in the process of evaluating the impact of this pronouncement on its financial statements.

F. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenditures/expenses and disclosures. Actual results could differ from those estimates.

II. Stewardship, Compliance and Accountability

A. Compliance with Finance Related Legal and Contractual Provisions

Management, in coordination with the Law Department, is not aware the City has any material violations of finance related legal and contractual provisions as of June 30, 2016.

B. Budgets and Budgetary Accounting

Detailed information pertaining to the budget is included in the Required Supplementary Information section, page 134.

B-72 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

C. Deficit Fund Balances/Net Position

The following funds reported deficits in fund balance/net position at June 30, 2016:

Z Emergency Telephone System had an accumulated deficit of $4.8 million. During the year, the deficit was increased by $3.8 million. A Public Safety assessment was approved by the State Legislature in 2015, to increase revenue to fund the cost of operations. It is expected the full impact of the assessment to increase revenue will occur in fiscal year 2017. No funds were transferred from the general fund in fiscal year 2016.

Z Intergovernmental Grant funds had an accumulated deficit of $7.2 million. This deficit was primarily the result of timing differences between the expense and drawing down the grant funds.

Z Sanitation Fund had an accumulated deficit of $82.8 million. The operations deficit increased by approximately $16.9 million, with $52.5 million being pension liability allocation. Fee reviews and ongoing cost control measures continue to address and eliminate the operating deficit. On a cash basis the Sanitation Fund deficit is $18 million.

Z Parks and Recreation Facilities Fund had an accumulated deficit of $1.2 million. The increase in the deficit of $146 thousand is due primarily to the allocation of pension liability.

Z Civic Center had an accumulated deficit of $5.8 million. The operating deficit increased by approximately $1.3 million, because the use of the facility has decreased as the City moves forward to sell the Civic Center.

Z Fleet Services had an accumulated deficit of $25.9 million. Fleet operations are continually being reviewed and efforts are ongoing to reduce costs. During fiscal year 2016, the deficit was reduced by approximately $4.2 million, with $3.5 million being transferred from the general fund.

III. Detailed Notes on All Funds A. Deposits and Investments

Following are components of the City’s cash and cash equivalents, and investments (including the Pension and Agency Funds and the Component Units) at June 30, 2016 (dollars in thousands).

Primary Government Component Units

Unrestricted Restricted Cash Pool Total Unrestricted Restricted Cash and Cash Equivalent $ 20,907 $ 1,158,147 $ 436,766 $ 1,615,820 $ 25,955 $ 107,336 Georgia Fund 1 - - 31,943 31,943 - - State and Local Bonds 30,800 59,417 255,867 346,084 - - Federal Agency Obligations - 373,052 865,033 1,238,085 - - Equity - 241 - 241 - - US Treasury Obligations - 155,677 255,255 410,932 - - GICs (Guaranteed Investment Contracts) - 675,796 - 675,796 - - Other Investment Pools 412 18,189 - 18,601 15,041 - $52,119 $ 2,440,519 $ 1,844,864 $ 4,337,502 $ 40,996 $ 107,336

B-73 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

The OCGA 36-83-4 authorize the City to invest in obligations of the United States Treasury, obligations of states or agencies, banker’s acceptances, bank money market accounts, repurchase agreements, and the GF1 Investment pool (a local government investment pool). The General Employees’ Pension Fund is also authorized to invest in corporate bonds and debentures which are not in default as to principal and interest; corporate stocks, common or preferred; first loans on real estate where the loans are guaranteed by the Administrator of Veterans Affairs or by the Federal Housing Authority of the United States; certificates of deposit in national banks and state banks insured by the FDIC; alternative investments, and any other investments approved by the Pension Board. The Pension Trust Funds also invest in collateralized mortgage obligations (CMOs). These securities are based on cash flows from interest and principal payments on underlying mortgages. CMOs are sensitive to prepayments of mortgages, which may result from a decline in interest rates. The City invests in these securities in part to maximize yields and in part to hedge against a rise in interest rates.

Concentration of Credit Risk – Primary Government The City diversifies its use of investment instruments to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions, or maturities. The City’s investment portfolios, in aggregate, should be diversified to limit market and credit risk in general accord with the following limitations.

Maximum Portfolio Limitation Investment Type Maturity Minimum Maximum U.S. Treasuries 5 years 15% 100% U.S. Agencies/Instrumentalities 5 years 0% 75% Obligations of other political units in the State of Georgia 5 years 0% 25% Other Municipal Securities 5 years 0% 25% Repurchase Agreements (Repos)/GICs 5-20 years 0% 50% Bankers Acceptances (BA’s) 270 days 0% 10% Local Government Investment Pools N/A 0% 40% Certificates of Deposits (CD’s) 3 years 0% 25%

The allocation may be adjusted in response to changing market conditions, cash flow requirements and according to the discretion of the Chief Financial Officer.

Custodial Credit Risk – Deposits To control custodial credit risk, the City’s investment policy requires all securities and collateral to be held by an independent third-party custodian in the City’s name. The custodian provides the City with monthly values.

Concentration of Credit Risk – Investments The City’s investment policy also requires that the weighted-average maturity of the total portfolio not exceed three (3) years, and shall limit the maturity of any single security to five (5) years. However, $100 million of the aggregate portfolio can now be invested in assets with maturities no

B-74 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued longer than 10 years. The City’s General Employees’ pension funds’ investment policy sets targets of 50% invested in domestic equity, 20% in international equity, 25% in domestic fixed income, and 5% alternative investments. The City’s Firefighters’ and Police Officers’ pension funds investment policy sets targets of 61% invested in domestic equity, 9% in international equity, 25% in domestic fixed income, and 5% in alternative investments.

Pooled Cash and Investments Held in the State Treasury

The OCGA § 36-83-1 to 36-83-8 authorizes the City to invest funds in Georgia Fund 1 (GF1). The fund is managed by the State of Georgia Office of the State Treasurer. The City maintains a cash and investment pool that is available for use by all funds. Each participating fund’s portion of this pool is displayed on the accompanying financial statements as “Equity in cash management pool”. The GF1 is designed to maximize current income while preserving principal and providing daily liquidity. It is managed to maintain a constant net asset value of $1.00 value and a weighted maturity of 90 days or less, with the maximum maturity of any investment limited to 397 days. At June 30, 2016, the GF1 weighted average maturity was 42 days. Portfolio composition in GF1 consisted of Federal Home Loan Bank (“FHLB”) 25%, Federal Home Loan Mortgage Corporation (“FHLMC”) 4%, Federal National Mortgage Association (“FNMA”) 5%, Federal Farm Credit Bank (“FFCB”) 2%, overnight repo 27%, term repo 5%, negotiated deposit agreement 28% and commercial paper 4%.

The City has adopted an investment policy (the “Policy”) to minimize the inherent risks associated with deposits and investments. The primary objective of the Policy is to invest funds to provide for the maximum safety of principal.

Identified below are the investment types that are authorized for the City by the Policy. The Policy also identifies certain provisions of the Official Code of Georgia Annotated (OCGA) that address interest risk, credit risk, and concentration of credit risk. The Policy governs all governmental and business-type activities for the City, but does not govern the City of Atlanta Pension Plans.

The City’s investments are limited to U.S. Government securities and U.S. government agency securities which are limited to issues of the Federal Farm Credit Bank (“FFCB”), Federal Home Loan Bank System (“FHLBS”), Federal Home Loan Mortgage Corporation (“FHLMC”), and Federal National Mortgage Association (“FNMA”). Under the Policy, the City restricts investments in eligible obligations to discount notes and callable or non-callable fixed-rate securities with a fixed principal repayment amount. The Policy also identifies certain provisions of the OCGA that address interest rate risk, credit risk and concentration of credit risk. The Policy governs all governmental and business-type activities for the City, but does not govern the City of Atlanta Pension Plans.

The City may also invest in fully collateralized repurchase agreements provided the City has on file a signed Master Repurchase Agreement, approved by the City Attorney, detailing eligible collateral, collateralization ratios, standards for collateral custody and control, collateral valuation, and

B-75 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued conditions for agreement termination. It also requires the securities being purchased by the City to be assigned to the City, held in the City’s name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City; and is placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the state of Georgia, and is rated no less than A or its equivalent by two nationally recognized rating services.

Under the Policy, the City’s investment portfolio, in aggregate, is to be diversified to limit its exposure to interest rate, credit and concentration risks by observing the above limitations.

Fair Value Measurement - City

GASB Statement No. 72, Fair Value Measurement and Application, enhances comparability of governmental financial statements by requiring fair value measurement for certain assets and liabilities using a consistent definition and accepted valuation techniques. The standard establishes a hierarchy if inputs used to measure fair value that prioritizes the inputs in to three categories – Level 1, Level 2 and Level 3 inputs – considering the relative reliability of the inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted (unadjusted) prices in active markets for identical financial assets or liabilities that are accessible at the measurement date;

Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the financial asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the financial asset or liability.

The level in the fair value hierarchy within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

B-76 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

The following tables present the City’s financial assets carried at fair value by level within the valuation hierarchy as of June 30, 2016 (in thousands):

Level 1 Level 2 Level 3 Total Debt securities: US Treasury Obligations $ 410,932 $- $- $ 410,932 Federal Agency Obligation - 1,238,085 - 1,238,085 State and Local Bonds - 346,084 - 346,084 Total debt securities 410,932 1,584,169 - 1,995,101 Equity securities: Equity 241 - - 241 GICs (Guaranteed Investment Contracts) - 675,796 675,796 Total debt securities 241 675,796 - 676,037 Total investments at fair value $ 411,173 $ 2,259,965 $- $ 2,671,138 Other Investments Georgia Fund 1 and other investment pools 50,544 Total Investment $ 2,721,682

Debt securities classified in Level 1 are valued using prices quoted in active markets for those securities. Equity securities classified in Level 2 are valued using the following approaches:

Guaranteed investment contracts were valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

INVESTMENT RISK DISCLOSURES

Governmental and Business-Type Activities

Interest Rate Risk. Interest rate risk is the risk that changes in market rates will adversely affect the fair market value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. Additionally, the fair values of the investments may be highly sensitive to interest rate fluctuations. By policy, the City establishes maximum maturity dates by investment type in order to limit interest rate risk. The City manages its exposure to interest rate risk by purchasing a combination of shorter-term and longer-term investments, and by timing cash flows from maturities so that a portion is maturing, or coming close to maturing, evenly over time as necessary to provide the cash flow and liquidity needs for operations.

The City has the ability and generally has the intent to hold all investments until their respective maturity dates. The average maturity of the City’s pooled cash and investments governed by the Policy as of June 30, 2016, was approximately 1.8 years. If it becomes necessary or strategically prudent for the City to sell a security prior to maturity, the Policy allows for occasional restructuring of the portfolio to minimize the loss of market value and/or to maximize cash flows.

B-77 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

Credit Risk. Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This risk is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s investment policy does not specify a minimum bond rating for investments.

Interest Rate and Credit Risks

As of June 30, 2016, the City had the following investments with the corresponding credit ratings and maturities (dollars in thousands):

Maturity Credit Under 30 Type of Investments Rating Days 31 - 180 Days 181 - 365 Days 1 - 5 Years Over 5 Years Carrying Value

State and local bonds Aaa-Baa2 $ 32,625 $ 53,465 $ 95,449 $ 120,662 $ 43,883 $ 346,084 Federal Agency Obligations Aaa/AA+ - 7,184 39,990 1,190,911 - 1,238,085 US Treasury Obligations Exempt 70,012 340,920 - - - 410,932 Georgia Fund 1 and other investment pools AAAf - 50,544 - - - 50,544 Equity Exempt 241 - - - - 241 GICs * - - - - 675,796 675,796 $ 102,878 $ 452,113 $ 135,439 $ 1,311,573 $ 719,679 $ 2,721,682 Custodial Credit Risk. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. Custodial credit risk for investments is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party.

The City requires that all uninsured collected balances plus accrued interest in depository accounts be collateralized and that the market value of collateralized pledged securities must be at least 110% of the deposit balances, and 102% for repurchase agreements. All investments of the City are either held by the City or by counterparties in the City’s name; therefore the City’s investments had no custodial risk as of June 30, 2016.

Concentration of Credit Risk. The City’s investment policy contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the OCGA. At June 30, 2016, individual issuers that represent 5% or more of total financial instruments by reporting unit were as follows:

Issuer Investment Type Investment % Federal Farm Credit Bank Agency Bond 43.9% Federal Home Loan Bank Agency Bond 7.3% Freddie Mac Agency Bond 6.0% U.S. Government U.S. Government Treasuries 19.0%

B-78 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

Investments in Employee Retirement Plans

The City has three defined benefit pension plans for full-time employees; the General Employees’ Pension Plan (GEPP), the Police Officers’ Pension Plan (PPP) and the Firefighters’ Pension Plan (FPP) (collectively, the “Plans”). Each Plan is administered by its own Board of Trustees. The respective Boards are ultimately responsible for making all decisions with regard to the administration of their respective Plans, including the management of Plan assets, and for carrying out the investment policy on behalf of their respective Plans. The Plans’ investments are managed by various investment managers under contracts with the respective Plans who have discretionary authority over the assets managed by them, within the investment guidelines, established by the respective Boards. The investments are held in trust by the Plans’ custodians in the Plans’ name. These assets are held exclusively for the purpose of providing benefits to members of the Plans and their beneficiaries. Identified below are the investment types authorized by the Pension Boards for each of the Plans. The investment policies also identify certain provisions addressing interest rate risk, credit risk and concentration of credit risk.

The Plans, by policy, are to invest their cash in domestic equities, domestic fixed income securities, international equities, international fixed income, alternative investments and cash equivalents. These instruments consist of common and preferred stock, obligations of the U.S. government and agencies (GNMA, FHLMC, and FNMA securities and CMO’s), corporate bonds, and certificates of deposit. The Plans have strict limitations on the amounts managers are allowed to invest in any one issuer in all classes of securities. The Plans also invest in repurchase agreements which must be fully collateralized by U.S. government or agency guaranteed securities. As of June 30, 2016, the Plans had an alternative investment in a limited partnership totaling $60,577,000, with an outstanding commitment of $3,423,000. As part of the partnership agreement, the Plan may not voluntarily withdraw from the partnership prior to its dissolution, and no limited partnership interest is redeemable or purchasable by the partnership at the option of the Plan.

Fair Value Measurement - Pensions

B-79 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the financial asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the financial asset or liability.

The level in the fair value hierarchy within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Plans also have investments held through limited partnerships and comingled vehicles for which fair value is estimated using the NAV reported by the investment manager as a practical expedient to fair value. Such investments have not been categorized within the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of fiduciary net position.

The following tables present the fiduciary funds financial assets carried at fair value by level within the valuation hierarchy as of June 30, 2016 (in thousands): June 30, 2016 Level 1 Level 2 Level 3 Total Short term investments Cash and cash equivalent $ 61,487 - - 61,487

Debt securities: Asset backed securities - 132,440 - 132,440 Comingled bond funds - 73,251 - 73,251 Corporate and municipal bonds - 147,044 - 147,044 Bond exchange traded funds 19,455 - - 19,455 U.S. agency securities - 42,130 - 42,130 U.S. treasury securities 122,870 - - 122,870 Total debt securities 142,325 394,865 - 537,190

Equity securities: Comingled equity funds - 753,964 - 753,964 Equity mutual funds 26,713 - - 26,713 Common stock 719,551 - - 719,551 Exchange traded funds 309,788 - - 309,788 Total equity securities 1,056,052 753,964 - 1,810,016

Stable value funds - - 33,029 33,029

Total investments at fair value $ 1,259,864 1,148,829 33,029 2,441,722

Investments measured at NAV: Commingled bond funds 169,806 Commingled equity funds 191,961 Private equity funds 60,577 Real estate fund 28,411 Total investments measured at NAV 450,755

Total investments $ 2,892,477

B-80 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

Equity securities classified in Level 1 are valued using prices quoted in active markets for those securities.

Debt securities classified in Level 2 are valued using either a bid evaluation or a matrix pricing technique. Bid evaluations may include market quotations, yields, maturities, call features and ratings. Matrix pricing is used to value securities based on the securities relationship to benchmark quoted prices. These securities have nonproprietary information that was readily available to market participants, from multiple independent sources, which are known to be actively involved in the market.

Commingled equity funds classified in Level 2 are valued using prices quoted in active markets for those investment types and the readily determinable fair value per share (unit) which is determined based on the publication of the price or on the basis of current transactions.

Investments in privately held limited partnerships and comingled vehicles which do not have a readily determined fair value using the NAV provided by the general partner/investment manager as of June

30, 2016. The monthly or quarterly values of the partnership investments provided from the general partner are reviewed by the Plan to determine if any adjustments are necessary. The Plan currently has no plans to sell any of the investments resulting in these assets being carried at the NAV estimated by the general partner/investment manager.

Securities Lending

State statutes and Pension Board policies permit the Plans to lend their securities to broker dealers and other entities, provided that the securities are fully collateralized for at least 102% of securities loaned and that collateral is received prior to the release of the securities by the custodian. All securities lending can be terminated on demand by either the Plans or the borrower, with securities to the Plan within a specified period of time.

As of June 30, 2016, the General Employees’ Pension Plan had funds under a securities lending agreement with a market value of outstanding loans of $24,836,000 and collateral of $25,448,000, which consisted of cash, collateral investments, and noncash loans.

The plan has no significant credit risk exposure to borrowers. There were no violations of legal or contractual provisions, borrower or lending agent default losses during the year. The Plan records the cash received as collateral under securities lending agreements and the investments purchased with that cash as securities lending collateral investment pool with a corresponding amount recorded as a liability.

B-81 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements - Continued

A. Deposits and Investments, continued

Alternative Investments

In fiscal year 2013, the Pension Boards authorized the Plan to invest in alternative investments. As of June 30, 2016, the Plans had alternative investments totaling $60.6 million in the form of limited partnerships.

As of June 30, 2016, the related unfunded commitments of the Plan’s alternative investments and limitations and restrictions on the Plan’s ability to redeem or sell are summarized as follows (in thousands): Unfunded Redemptions frequency Redemptions commitments (if currently eligible) notice period General Employees' Pension Plan Private equity fund not eligible not eligible Real estate fund $ 3,878 quarterly 90 days

Firefighters' Pension Plan Private equity fund $ 3,868 not eligible not eligible

Police Officers' Pension Plan Private equity fund $ 4,977 not eligible not eligible

Real Estate Investments

Real estate investments may include joint ventures, partnerships and other participation interests with real estate owners, developers and others for the purpose of owning and operating any particular investment as of June 30, 2016, a total of $28,411,000 are invested in alternative investments as part of the partnership agreement.

Pension Trust Fund Investment Risk Disclosures

Interest Rate and Credit Risks. As of June 30, 2016, the City’s Pension Plans had the following fixed income investments with the corresponding credit ratings and maturities (dollars in thousands):

Maturity Type of Investments Credit Rating Under 1 year 1 - 3 years 3 - 5 years 5 - 10 years Over 10 years Fair Value U.S. Treasury Securities NR $ 4,346 $ 28,362 $ 22,668 $ 45,290 $ 22,204 $ 122,870 U.S. Government Agencies AAA/AA- - 28,023 7,343 2,798 5,450 43,614 U.S. Government Agencies NR-AGY 384 1,553 1,067 20,662 71,948 95,614 Corporate Bonds AA/A- 4,300 22,097 12,385 33,916 13,774 86,472 Corporate Bonds BBB+/B+ 1,437 13,213 3,284 17,007 12,818 47,759 Corporate Bonds NR 58,525 440 - 275 184 59,424 Municipal Bonds NR 19,455 - - - - 19,455 Comingled bond funds NR 145,515 - - - - 145,515 Automobile Loan Receivables A+/AAA - 1,002 1,030 - - 2,032 Automobile Loan Receivables NR - 434 397 - - 831 Credit Card Receivables AAA - 1,707 1,907 - - 3,614 Asset Backed Securities AAA/A - 3,044 7,017 503 - 10,564 Asset Backed Securities NR - 597 3,397 - - 3,994 CMO's AAA/A- - 65 74 - 6,961 7,100 CMO's BBB/B+ - - - - 3,114 3,114 CMO's NR - 9 - - 5,299 5,308 State and Local Obligations AAA/AA - - - 3,106 4,302 7,408 State and Local Obligations BBB+/B+ - - - 191 - 191 Other Fixed Income NR 39,017 486 2,615 - - 42,118 $ 272,979 $ 101,032 $ 63,184 $ 123,748 $ 146,054 $ 706,997

B-82 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Deposits and Investments, continued

Custodial Risk. As of June 30, 2016, the Pension Plans had no deposits or investments with custodial risk.

Concentration Credit Risk. Investments in any one issuer that represent 5% or more of total investments by each Defined Benefit Pension Plan are as follows (dollars in thousands):

Issuer Type Market Value Firefighters' Pension Plan: BlackRock Growth Index Fund Commingled Equity Fund $ 94,622 BlackRock Value Index Fund Commingled Equity Fund 65,561 Colchester Commingled Bond Fund 39,017 Johnston Commingled Equity Fund 30,195 Ishares MSCI EAFE ETF Equity Exchange Traded Fund 30,202

Police Officers' Pension Plan: Colchester Global Bond Fund Commingled Bond Fund $ 58,525 BlackRock Value Index Fund Commingled Equity Fund 104,899 BlackRock Growth Index Fund Commingled Equity Fund 149,394

General Employees' Pension Plan: BlackRock Growth Index Fund Commingled Equity Fund $ 286,494 Artisan Funds Equity Exchange Traded Fund 85,228 Johnston International Equity Group Commingled Equity Fund 77,095 SSGA U.S. Aggregate Bond Index Commingled Bond Fund 73,251 Colchester Global Bond Fund Commingled Bond Fund 72,263 Foreign Currency Risk. Foreign currency risk is the risk that changes in exchange rates could adversely affect an investment’s or deposits fair value. The Defined Benefit Plan’s investment policies allow domestic and international equities, domestic and international fixed income, alternative investments and cash equivalents.

The following table provides investments of the Defined Benefit Plans in international markets. As of June 30, 2016, the exposure to foreign currency risk is as follows (dollars in thousands):

Short Term Debt Fixed Income Equity Total Australia - 103 166 - 269 Belgium - 949 1,375 764 3,088 Bermuda - - - 1,950 1,950 Canada - 650 1,092 4,319 6,061 Cayman Islands - - - 639 639 China - - - 2,523 2,523 Denmark - - - 779 779 Europe/Far East Region - - - 346 346 France - 158 242 104 504 German y - 241 603 713 1,557 Guernsey, CI - - - 304 304 India - - - 240 240 International Region - - - 152,329 152,329 Ireland - - - 6,333 6,333 Israel - - - 2,145 2,145 Japan - - - 2,154 2,154 Jersey, C.I. - - - 48 48 Korea - - - 851 851 Liberia - - - 1 1 Netherlands - - 160 900 1,060 Switzerland - - - 734 734 Taiwan - - - 1,556 1,556 United Kingdom - 376 765 6,705 7,846 Virgin Islands - British - - - 370 370 Total Securities subject to Foreign Currency Risk - 2,477 4,403 186,807 193,687

B-83 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Property Taxes, Local Option Sales Taxes, Municipal Option Sales Tax, and Car Rental Taxes

Property taxes include amounts levied on all real, public utility, and tangible property within the City corporate limits. Senate Bill 177, Act 431 was signed April 30, 1999 and became effective January 1, 2000 (Taxpayers Bill of Rights). One key component of this legislation pertains to prevention of indirect tax increases due to property value appreciation and/or inflation. The OCGA 48-5-32.1 requires levying authorities; municipalities, counties, and school boards to either rollback property millage rates for property value appreciation by a corresponding millage equivalent or follow specific requirements if the levying authority chooses not to rollback their millage rate. The City’s tax digest is coterminous with the Atlanta Independent School System, and overlaps portions of Fulton and DeKalb counties (the “Counties”), and Grady Hospital. Property taxes are normally levied and billed by July 1, on the assessed value of all real and personal property and property owner of record as of January 1. City property taxes are due 45 days from the date of billing. The distribution of the City's 2015 millage rate (tax rate per $1,000 assessed taxable value) to its funds and to the Atlanta Independent School System (which operates as a separate legal entity and is not included in the City's financial reporting entity) is as follows:

Millage Rates: General Fund 8.890 General Obligation Bond Sinking Fund: City Bonds 1.480 School Bonds 0.100 Park Improvement Fund (included in Capital Projects Funds) 0.500 Board of Education (operations) 21.640 Special Tax District DeKalb County 1.163 33.773

The Fulton and DeKalb County Tax Assessors establish assessed values at 40% of the fair market value. The property valuation in calendar year 2016 resulted in a gross assessed value of $27,837,673,121 which includes tax exempt values. The City's millage rates are set in June of each year. Public utility values are assessed by the State Board of Equalization and billed and collected by the Fulton and DeKalb Tax Commissioner’s Offices.

The Fulton and DeKalb County Tax Commissioners’ offices act as the City’s billing and collection agents. The contracted fees due to the Counties for billing and collection services amounted to $2,722,353 in fiscal year 2016. Real and tangible property taxes are payable to the Counties on August 15th and become delinquent on August 16th. Interest accrues at the rate of 1% per month on the 16th of each month and a 10% tax penalty accrues 90 days after the due date. Any remaining unpaid property tax amounts will attach as an enforceable lien on property as of January 1 of the following year.

A 1% local option sales tax is levied in Fulton County, of which the City receives a percentage of that amount based on a pre-defined formula. This amount is collected by the State of Georgia and remitted to the City on a one-month lag. The tax law requires an offsetting reduction in property tax during each subsequent year of assessment equal to the amount of sales tax revenue received in the prior year.

B-84 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Property Taxes, Local Option Sales Taxes, Municipal Option Sales Tax, and Car Rental Taxes, continued

A 3% excise tax on all rental motor vehicles was implemented in June 1996. This car rental tax is intended to be used to promote industry trade, commerce, and tourism and to fund various capital outlay projects throughout the City. The capital outlay projects include infrastructure improvements necessary for the City to continue building a community that is stable, diverse and economically sound. See Note Section IV-C- First Amended – Consent Decree regarding the levy of a 1% Municipal Option Sales Tax.

C. Capital Assets

A summary of capital assets activity and changes in accumulated depreciation for the year ended June 30, 2016 follows (dollars in thousands):

Balance at Capital Deletions and Balance at June 30, 2015 Additions Contributions Retirements Transfers June 30, 2016

Governmental activities: Capital assets not being depreciated: Land $ 207,483 $ 153 $ - $ - $ 118 $ 207,754 Construction in progress 79,489 36,247 - (8,993) (39,354) 67,389 Total capital assets not being depreciated 286,972 36,400 - (8,993) (39,236) 275,143

Capital assets being depreciated: Land improvements 109,629 207 - - 4,973 114,809 Buildings and building improvements 560,194 - 260 (426) 22,417 582,445 Other property and equipment 276,717 23,608 - (5,739) 534 295,120 Infrastructure 1,005,307 - - - 11,229 1,016,536 Total capital assets being depreciated 1,951,847 23,815 260 (6,165) 39,153 2,008,910

Totals at historical cost 2,238,819 60,215 260 (15,158) (83) 2,284,053

Less: Accumulated Depreciation Land improvements 89,643 4,012 - - - 93,655 Buildings and building improvements 189,653 15,470 7 (263) - 204,867 Other property and equipment 201,595 16,218 - (5,597) - 212,216 Infrastructure 636,665 20,944 - - - 657,609 Total accumulated depreciation 1,117,556 56,644 7 (5,860) - 1,168,347

Governmental activities capital assets, net $ 1,121,263 $ 3,571 $ 253 $ (9,298) $ (83) $ 1,115,706

Depreciation expense was charged to governmental funds as follows (dollars in thousands):

General government $ 15,290 Police 3,796 Fire 5,583 Corrections 344 Public Works 20,151 Parks, Recreation and Cultural Affairs 11,480

Total $ 56,644

B-85 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

C. Capital Assets, continued

Balance at Deletions and Balance at June 30, 2015 Additions Retirements Transfers June 30, 2016 Business-type activities: Capital assets not being depreciated Land $ 1,003,024 $ 2,040 $ (180) $ 3,234 $ 1,008,118 Construction in progress 824,489 381,391 (1) (287,979) 917,900 Total capital assets not being depreciated 1,827,513 383,431 (181) (284,745) 1,926,018

Capital assets being depreciated Land improvements 3,224,428 - - 70,846 3,295,274 Buildings and other structures 10,018,599 10,996 (124) 194,710 10,224,181 Other property and equipment 566,486 10,794 (3,217) 19,272 593,335 Total capital assets being depreciated 13,809,513 21,790 (3,341) 284,828 14,112,790

Totals at historical cost 15,637,026 405,221 (3,522) 83 16,038,808

Less: Accumulated Depreciation Land improvements 1,304,803 88,881 - - 1,393,684 Buildings and other structures 3,124,953 208,471 (47) - 3,333,377 Other property and equipment 371,280 29,541 (2,993) - 397,828

Total accumulated depreciation 4,801,036 326,893 (3,040) - 5,124,889

Business-type activities capital assets, net $ 10,835,990 $ 78,328 $ (482) $ 83 $ 10,913,919

Construction in Progress

In addition to the capital assets and construction in progress (CIP) already recorded in the City’s financial statements, there are development and redevelopment projects ongoing through Invest Atlanta, a component unit of the City, where the CIP is recorded. Upon completion of those projects and acceptance by the City, the appropriate recording as capital assets on the City’s financial statements will take place. Through June 30, 2016, there is approximately $96,822,000 of CIP recorded in Invest Atlanta financial statements for corridor design and development that are expected to become assets of the City.

Additionally, the DWM advanced $24 million to Invest Atlanta related to the development of the Clear Creek Project. Upon completion of the project, both the project costs and any portion of the advance not expended will revert to the DWM. At June 30, 2016, total project costs to date were $23,890,000.

Invest Atlanta is holding title to land within the Beltline Tax Allocation District, that is commonly referred to as the North East Corridor proper (NE Corridor). The NE Corridor was originally purchased for an amount equal to $45 million for the purpose of redevelopment by Invest Atlanta. Subsequent to its development, certain parcels of land have been sold and as of June 30, 2016, the land value is now estimated at $44 million. Upon completion of redevelopment, it is anticipated that title to the land will be transferred to the City.

B-86 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

D. Interfund Receivables, Payables, and Transfers

During the course of its operations, the City makes transfers between funds to finance operations, provide services, acquire assets and service debt. To the extent that certain transfers between funds had not occurred as of year-end, balances of interfund amounts receivable or payable have been recorded. Interfund receivable and payable balances as of June 30, 2016, are as follows (dollars in thousands): Due to Ge ne ral Capital Watershed Non-major Total Fund Projects Management Government

General Fund $- $ 3 $ 46,776 $ 738 $ 47,517 Capital Projects 8,252 - - - 8,252 Inte rnal Se rvice 24,368 - - - 24,368 MOST - - 11,332 - 11,332

Due fromDue Non-major Enterprise 35,000 1,378 - - 36,378 Non-major Governmental 14,217 - - - 14,217

Total $ 81,837 $ 1,381 58,108 $ 738 $ 142,064

In December of 2008, the City and Department of Watershed Management (DWM) executed a Memoranda of Understanding (MOU) related to amounts owed to the DWM by the General Fund of the City. This MOU established a repayment plan in the amount of $10 million per year plus interest, until paid in full for amounts borrowed by various governmental funds from DWM equity in the cash pool. The interest rate for the MOU is 1.25% per annum as passed by City Council. The balance owed to the DWM by the City’s General Fund under this MOU at June 30, 2016 is $46.2 million in principal and $577 thousand in interest.

During the year ended June 30, 2008, the DWM advanced funds to a component unit, Invest Atlanta, for future work on a consent decree project. Due to the nature of this transaction, the interfund balances are considered long-term for financial reporting purposes. Balances as of June 30, 2016, are as follows (dollars in thousands): Due from Due to Primary Component Units Government

Department of Watershed Management $ 24,000 $ -

Atlanta Development Authority - 24,000

Total $ 24,000 $ 24,000

B-87 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

D. Interfund Receivables, Payables, and Transfers, continued

Transfers

Transfers for the year ended June 30, 2016, are as follows (dollars in thousands): Transfer from Department of General Capital Watershed Non-major Non-major Fund Projects Management MOS T Enterprise Government Total

General Fund $ $ 3,770 $ 19,394 $ - $ - $ 18,197 $ 41,361 Capital Projects 20,902 - - - (5) - 20,897 Department of Watershed Management - - - 132,653 - - 132,653 Non-major Enterprise 4,870 - - - - - 4,870

Transfer to Transfer Internal Services 3,500 - - - - - 3,500 Non-major Governmental 3,582 - - - 2,111 1,355 7,048 Total $ 32,854 * $ 3,770 $ 19,394 $ 132,653 $ 2,106 $ 19,552 $ 210,329

* There is $83,000 transfer related to capital assets presents in governmentwide financial statement

Transfers are used (1) to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) to move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments are due, and (3) to use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

E. Leases

Department of Aviation (DOA) – Tenant and concession agreements

The City leases terminal space, aircraft maintenance and overhaul facilities, cargo facilities, hangars, and other structures to air carriers and other tenants at the Airport under various operating leases, a majority of which terminate no later than 2017. During fiscal year 2016, the City entered into a new Airport Use and Lease Agreement with the Signatory Airlines, which takes effect October 1, 2017. The new agreement will replace the Airport Use Agreements, Airport Use License Agreements and CPTC Leases. The total cost of the facilities described above that are substantially leased to various tenants is $5.4 billion with a carrying value of $3.4 billion. Depreciation expense for fiscal 2016 on the facilities was $151.9 million.

Certain of the leases provide for fixed and variable rental payments, and all are generally designed to allow the DOA to meet its debt service requirements and recover certain operating and maintenance costs. Rental receipts related to the terminal are based on the cost of the facilities. In addition, certain of the agreements under which the DOA receives revenue from the operation of concessions at the Airport, provide for the payment of a fee based on the greater of an aggregated percentage of gross receipts or a guaranteed minimum.

B-88 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

E. Leases, continued

At June 30, 2016 minimum future rentals and fees to be received under non-cancelable leases or concession agreements for each fiscal year are as follows (dollars in thousands):

2017 $ 242,340 2018 290,511 2019 344,226 2020 341,664 2021 374,910 2022 - 2026 1,672,109 2027 - 2031 1,952,550 2032 - 2036 2,344,455 $ 7,562,765

The agreement covering the operation of the parking lot does not provide for a minimum fee and is therefore not included in the above table. Revenue from this source, which is solely a function of parking receipts as defined were $132.1 million for the year ended June 30, 2016.

Department of Watershed Management (DWM) – Capital Lease Obligations

The DWM has entered into two lease agreements as lessee for power generators. These lease agreements qualify as capital leases for accounting purposes and the lease payments are reflected as capital lease obligations at the present value of the aggregate payments due over the remaining life of the leases. Included in machinery and equipment is $14,787,000 of equipment acquired under capital leases. The accumulated amortization on this equipment is $14,047,000 as of June 30, 2016. Amortization expense was $986,000 for the fiscal year ended June 30, 2016. The present values of the future minimum capital lease payments as of June 30, 2016, is $1,304,000.

General Fund – Capital Lease Obligations

The City has entered into multiple lease agreements as lessee for various purposes. These lease agreements qualify as capital leases for accounting purposes.

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B-89 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

E. Leases, continued

The present value of the future minimum lease payments is as follows (dollars in thousands):

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2017 4,892 2018 4,892 2019 4,892 2020 4,892 2021-2025 800 2026-2027 - Total minimum payments 20,368 Less amounts representing interest (1,107)

Present value of minimum capital lease payments $ 19,261 Gross Capital Asset Value $ 51,079 Accumulated Depreciation (35,012)

Net Capital Asset Value $ 16,067

Downtown Development Authority of the City of Atlanta (DDA)

In 2009, the Atlanta Development Authority, through DDA issued $52,790,000 of refunding revenue bonds ($44,975,000, Series 2009A, and $7,815,000, Series 2009B). The bonds were used in part to refund the principal of the City of Atlanta Series 2002, Variable Rate Refunding Revenue Bonds (Underground Atlanta Project). The principal and interest on the Series 2009 Revenue Bonds are special limited obligations of DDA and are payable solely from monies payable to DDA by the City of Atlanta under a capital lease arrangement for the Underground Atlanta Project. The lease agreement qualifies as a capital lease for accounting purposes (titles transfer at the end of the lease term) and has been recorded in business activities of the government-wide financial statements at the present value of the future minimum lease payments as of the date of inception. See schedule of lease payments below. The final capital lease payment for the Underground Atlanta Project ($8,112,875) was made to DDA on June 30, 2016.

In 2006, the Atlanta Development Authority, through DDA, issued Revenue Bonds (Downtown Parking Deck Project) Series 2006A in the aggregate principal amount of $17,990,000 and Series 2006B $5,490,000. The Series 2006 Bonds were issued for the purpose of financing the acquisition of land, and construction, equipping and installation of a five story parking facility consisting of approximately 836 spaces. The Series 2006 Bonds are special limited obligations of DDA, payable solely from rental payments to be made by the City to DDA under a capital lease arrangement for the parking facility project.

B-90 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

E. Leases, continued

The lease agreement qualifies as a capital lease for accounting purposes (bargain purchase price at the end of the lease term) and has been recorded in the government-wide financial statements at the present value of the future minimum lease payments as of the date of inception.

The present value of the future minimum lease payments is as follows (dollars in thousands): 2017 1,620 2018 1,621 2019 1,620 2020 1,616 2021 1,620 2022-2026 8,090 2027-2031 8,003 2032 1,619 Total minimum payments 25,809 Less amounts representing interest (7,644)

Present value of minimum capital lease payments$ 18,165

The capital asset cost of the parking deck as of June 30, 2016, is $23,480,000 and accumulated depreciation totals $3,913,000.

General Fund

For its General Fund, the City has entered into several lease agreements for operating purposes. These lease agreements qualify as operating leases for accounting purposes.

The future minimum lease payments are as follows (dollars in thousands):

2017 3,860 2018 3,014 2019 2,519 2020 1,892 2021 632 Thereafter 22,326 Total minimum payments 34,243

The amount of lease expenditures for the year ended June 30, 2016, amounted to $5,303,000.

B-91 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

F. Notes Payable

General Fund

On February 27, 2008 the City, through the Atlanta Public Safety and Judicial Facilities Authority, borrowed $17 million for construction and build-out expenses related to the Public Safety Annex. The loan, in the form of a note payable, has a ten year term and is scheduled to be paid in full by February 1, 2018. The outstanding principal balance as of June 30, 2016 is $4 million.

G. Long Term Obligations Changes in long-term liabilities for governmental activities during the fiscal year ended June 30, 2016, follow (dollars in thousands): Balance at Balance at Due within One June 30, 2015 Additions Reductions June 30, 2016 Year Governmental activities: Long-term debt: General obligation and annual bonds $ 395,890 $ 3,575 $ (41,510) $ 357,955 $ 7,670 Deferred issuance premiums 41,222 420 (3,974) 37,668 - 437,112 3,995 (45,484) 395,623 7,670

Certificate of Participation - 32,160 - 32,160 2,380 Deferred issuance premiums - 4,729 - 4,729 - - 36,889 - 36,889 2,380

APSJFA revenue bonds 35,110 - (2,210) 32,900 2,310 Deferred issuance premiums 917 - (136) 781 36,027 - (2,346) 33,681 2,310

SWMA revenue refunding bonds 12,530 - (1,550) 10,980 1,620

Limited obligation bonds 464,745 41,330 (67,145) 438,930 28,890 Deferred issuance premiums 896 5,754 (204) 6,446 - Deferred issuance discounts (907) -212 (695) - 464,734 47,084 (67,137) 444,681 28,890 Other long-term debt: Due to APS - 10,000 - 10,000 - Notes payable 5,892 - (1,876) 4,016 1,962 Section 108 loans 1,175 - (245) 930 270 1998 GMA lease pool 32,444 - - 32,444 - Intergovernmental agreements 350,468 - (7,013) 343,455 7,223 Installment sale program 25,195 - (4,810) 20,385 5,055 Capital leases 50,620 7,779 (39,138) 19,261 4,452

Total long-term debt 1,416,197 105,747 (169,599) 1,352,345 61,832

Other long-term liabilities: Vacation and compensation payable 17,092 21,282 (20,446) 17,928 2,159 Health and dental claims payable 6,930 59,502 (60,502) 5,930 1,196 General claims payable 16,518 4,135 (11,193) 9,460 325 Pension liability 725,475 103,007 (45,623) 782,859 - Net OPEB obligation 233,864 47,825 (28,480) 253,209 - Workers' compensation 25,782 16,876 (2,822) 39,836 5,057

Total other long-term liabilities 1,025,661 252,627 (169,066) 1,109,222 8,737 Total governmental activities long-term liabilities $ 2,441,858 $ 358,374 $ (338,665) $ 2,461,567 $ 70,569

For the governmental activities, other long-term liabilities are primarily liquidated by the General Fund.

B-92 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long Term Obligations, continued

Changes in long-term liabilities for business-type activities during the fiscal year ended June 30, 2016, follow (dollars in thousands):

Balance at Balance at Due within June 30, 2015 Additions Reductions June 30, 2016 One Year Business-type activities: Long-term debt: Department of Aviation Facilities revenue bonds $ 2,818,210 $ - $ (116,085) $ 2,702,125 $ 121,480 Bond issuance premiums 160,881 - (17,288) 143,593 - Bond issuance discounts (174) - 17 (157) - Bond anticipation notes - 300,000 - 300,000 -

Department of Watershed Management System revenue bonds 2,870,765 - (56,310) 2,814,455 60,120 Bond issuance premiums 212,197 15,091 (13,068) 214,220 - Bond issuance discounts (4,311) (730) 506 (4,535) -

GEFA notes payable 168,843 5,592 (6,213) 168,222 6,002 Capital lease obligations (equipment) 2,724 - (1,420) 1,304 1,304

Nonmajor funds Capital lease obligation Parking deck 18,930 - (765) 18,165 795 Underground Atlana Project 7,915 - (7,915) - - Atlanta Gas Light Company Rate E-1 Contract (Civic Center Renovations) 1,859 (125) 1,734 141 Revenue Bond - City Plaza - 9,465 - 9,465 - Bond issuance premiums - 1,215 - 1,215 - Total long-term debt 6,257,839 330,633 (218,666) 6,369,806 189,842

Other long-term liabilities Landfill postclosure liability 15,470 155 - 15,625 - Contract retention 4,194 301 - 4,495 - General claims payable 12,430 411 (55) 12,786 6,675 Pension liability 432,879 48,486 (24,163) 457,202 - Net OPEB obligation 181,794 28,332 (15,236) 194,890 - Workers' compensation 27,177 6,954 (1,174) 32,957 4,184 Interest rate swaps 138,425 44,551 - 182,976 -

Total other long-term liabilities 812,369 129,190 (40,628) 900,931 10,859

Total business-type activities long-term liabilities $ 7,070,208 $ 459,823 $ (259,294) $ 7,270,737 $ 200,701

Component Units Long-term Debt Atlanta Fulton County Recreation Authority Revenue bonds 291,555 - (82,880) 208,675 12,065 Total Atlanta Fulton County Recreation Authority 291,555 - (82,880) 208,675 12,065 Atlanta Development Authority Revenue and other bonds 370,261 189 (11,850) 358,600 13,455 Bond issuance premiums 23,043 - (1,296) 21,747 - Bond issuance discounts (131) - 8 (123) - Capital leases 8 533 (236) 305 270 Notes payable 21,918 2,450 (2,310) 22,058 4,821 Other long-term liabilities: Loans payable 3,666 - - 3,666 - Due to primary government 24,000 - - 24,000 - Other long-term liabilities 28,193 10,838 (7,981) 31,050 - Total Atlanta Development Authority 470,958 14,010 (23,665) 461,303 18,546 Total component units long-term liabilities 762,513 14,010 (106,545) 669,978 30,611

B-93 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Governmental-type Activities General Obligation Bonds and Annual General Obligation Bonds are direct general obligations secured by the full faith and credit of the City. Principal and interest are payable through the general and debt service funds from ad valorem taxes levied on all taxable property within the City. On November 6, 2014 the City refunded all of the outstanding Series 2005A G.O Refunding Bonds ($37,775,000), the Series 2007A Various Purpose Bonds ($5,270,000) and the Series 2008A Public Improvement Bonds ($10,940,000) by issuing the Series 2014A and Series 2014B Taxable General Obligation Refunding Bonds. The Series 2014A Refunding Bonds ($15,365,000) were issued to refund the series 2007A and series 2008A bonds, and pay all costs associated with the bond issuance. The Series 2014B Taxable Refunding Bonds ($40,025,000) were issued to refund the Series 2005A G.O Refunding Bonds and pay all costs associated with the bond issuance. By issuing the Series 2014A and 2014B Series Bonds, the Government obtained an estimated economic gain (difference between the present values of the debt service payments on the defeased and new debt) of $3.02 million. The refunding will reduce the Government’s debt service payments over the next 13 years by an estimated $3.17 million. On June 10, 2015, the City of Atlanta issued $252,000,000 of General Obligation Bonds for the following purposes: (a) paying the cost of capital projects authorized in a city-wide election, including the acquisition, construction, reconstruction, renovation, repair, improvement, critical capital maintenance and equipping of municipal facilities including buildings, recreation centers and other facilities and related public improvements, and compliance with the Americans with Disabilities Act of 1990 in connection with certain (i) public streets, traffic control infrastructure and equipment, curbing, storm water drainage, street name and directional signage, bridges, viaducts and related public improvements including, but not limited to, streetlights, sidewalks, bicycle lanes, and transit stops so as to improve the pedestrian and transit environment and (ii) municipal facilities; including buildings recreation centers and other facilities and related public improvements (collectively, the “Series 2015 Projects”); and (b) providing for the payment of the cost of issuance relating to the 2015 Bonds. On May 12, 2016 the City issued General Obligation Various Purpose Bonds in the aggregate principal amount of $3,575,000. The Series 2016 Bonds were issued for the purpose of (a) acquiring a site or sites and constructing and equipping thereon municipal buildings and related facilities, (b) renovating, improving, adding to, and equipping existing municipal buildings and facilities, and (c) acquiring property, both real and personal, necessary or desirable for use in connection therewith and paying expenses incident thereto and (d) paying certain costs of issuance related to the Series 2016 Bonds. Public Safety Judicial Facilities Authority Facility Project Bonds - On October 1, 2006, the Atlanta Public Safety and Judicial Facilities Authority (“APSJFA”), ( a blended component unit of the City), issued $50,000,000 in revenue bonds, Public Safety Facility Project Series 2006 for the purpose of (i) financing all or a portion of the cost of acquiring, designing, constructing, improving and equipping a public safety headquarters and a parking deck and the parcel or parcels of property on which such facilities will be situated, all for lease to the City (the “Project”); and (ii) paying the costs of issuance of the bonds, including the premium for the municipal bond insurance policy. Under a lease agreement dated October 1, 2006, between APSJFA and the City, the City is obligated to make payments to APSJFA sufficient in time and amount to enable APSJFA to pay the principal of and interest on the bonds.

B-94 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Solid Waste Management Authority Revenue Refunding Bonds - On May 1, 2008, the Solid Waste Management Authority (“SWMA”), (a blended component unit of the City), issued $20,265,000 in refunding revenue bonds, Series 2008 for the purpose of (a) refunding and redeeming all of the Solid Waste Management Authority Revenue Bonds (Landfill Closure Project), Series 1996, and (b) paying the costs of issuance related to the bonds. Pursuant to a contract dated May 1, 2008 (the “Contract”), between SWMA and the City, the City is unconditionally obligated to make payments to the Issuer in amounts sufficient to provide for, among other things, the payment of the principal of, redemption premium (if any) and the interest on the bonds as the same become due and payable. Limited Obligation Bonds - Tax Allocation District Bonds are not General Obligations of the City, but Limited Obligations of the City secured solely by and payable solely from Tax Allocation Increments and Local Option Sales Tax Revenues, the income of any, derived from the investment thereof, certain reserves and payments and the Credit and Liquidity Facility and the Standby Guaranty. Neither the faith and credit nor the taxing power of the State of Georgia or any political subdivision thereof, including the City and Fulton County, is pledged as a security for the payment of principal, of redemption premium, if any and interest on the bonds. During fiscal year 2016 the Princeton Lakes and Eastside refunded bonds in the amount of $5,730,000 and $30,555,000, respectively.

Section 108 Loans - Section 108 is the loan guarantee provision of the Community Development Block Grant (“CDBG”) program. The Section 108 Program provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects. This makes it one of the most potent and important public investment tools that HUD offers to local governments. Proceeds from the loan allows communities to leverage a small portion of their CDBG funds into federally guaranteed loans large enough to undertake physical and economic revitalization projects that can renew entire neighborhoods. Such public investment is often needed to encourage private economic activity, providing the initial resources or the confidence that private firms and individuals may need to invest in distressed areas. Section 108 loans are not risk-free, however; local governments borrowing funds guaranteed by Section 108 must pledge their current and future CDBG allocations to cover the loan amount as security for the loan. Although the repayment of these loans is guaranteed through the obligation of future CDBG allocations, the City does its due diligence during the evaluation process to select the types of projects that will generate the necessary returns to flows to repay the loans from non-City sources.

1998 GMA Lease Pool - The City participates in a lease pool arrangement with 29 other local governments through the Georgia Municipal Association, Inc. (“GMA”). GMA issued Certificates of Participation (“COP”) in 1998 which are governed by a master lease agreement. The 1998 GMA grantor trust proceeds are restricted for the purchase of qualified capital equipment including rolling stock, construction and maintenance equipment, street lighting and traffic control equipment with a useful life ranging from 3-10 years. The purpose of the COP is to fund the purchase of eligible capital assets that are leased back to each of the participating governments. The City’s interest in this arrangement functions similar to a line of credit whereby eligible capital assets may be purchased up to the City’s share. The lease of eligible capital assets decreases the City’s net available credit and repayments of principal increase the City’s net available credit. Lease terms are generally between three and five years from the date the equipment is purchased. The agreements terminate upon the financial due date of the COP in 2028.

B-95 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

1998 Installment Sale Program - The Georgia Municipal Association, Inc.(“GMA”) issued Certificates of Participation (City of Atlanta, Georgia Detention Center, Municipal Court and City Hall East Projects), Series 1998 in the aggregate amount of $103,130,000 which has evidenced proportionate and undivided ownership interest in Installment Payments that has been paid by the City of Atlanta pursuant to the annual renewable Installment Sale Agreement, dated as of November 1, 1998 (the “Agreement”) between GMA, as the seller and the City, as purchaser. The Agreement will automatically renew for additional and consecutive on-year renewal terms with a final renewal term commencing January 1, 2023 and ending on December 1, 2023, subject to the City’s right to terminate the Agreement each year.

Intergovernmental Agreements:

On December 15, 2005, the Atlanta Fulton County Recreation Authority (“AFCRA”) issued $75,510,000 in revenue bonds, Series 2005A and $12,650,000 in revenue refunding bonds, Series 2005B to finance projects that include the acquisition, construction, equipping, maintenance and operation of recreation centers and areas owned and operated by the City. Upon issuance of the Series 2005B Bonds, $12,265,000 was refunded in aggregate principal amount of prior bonds Series 2000. Under an intergovernmental contract dated December 1, 2005, between AFCRA and the City, the City is obligated to make payments to AFCRA amounts sufficient in time and amount to pay the principal and interest on the Series 2005 bonds.

On June 1, 2007, the Atlanta Fulton County Recreation Authority (“AFCRA”) issued $14,315.000 in revenue bonds, Zoo Series 2007A and $7,515,000 in revenue bonds, Zoo Series 2007B to finance or refinance: (a) the cost of: (i) repair and replacement of various animal exhibits at the Zoo, (ii) improvements to the giant panda exhibit, (iii) repair and replacement of certain Zoo infrastructure, facilities, and equipment, including, administrative offices, programs offices, guest areas, computer systems, golf carts and vehicles used in connection with the operation of the Zoo, and (iv) required payments to the Chinese Association of Zoological Gardens in connection with Zoo Atlanta’s use agreement regarding its giant pandas, and (b) paying issuance costs with respect to the Series 2007 bonds (collectively, the “Zoo Project”). The Series 2007 bonds are secured by a pledge of the Issuer’s interest in semiannual payments under a Governmental Agreement Regarding the Atlanta Zoo dated as of June 1, 2007 (the “Governmental Agreement”) among the Issuer, the City and the County under which the City and the County (the “Participating Governments”) are obligated to make payments to AFCRA in amounts sufficient in time and mount to pay the principal and interest on the Series 2007 Bonds. The City has a two-thirds interest in AFCRA and Fulton County has one-third interest. The payments related to the Zoo bonds are based on this proportionate ownership.

On December 10, 2014, AFCRA issued $61,180,000 in Revenue Refunding and Improvement Bonds, Series 2014A and $9,445,000 Park Improvement Bonds, Taxable Series 2014B. The purpose of the Series 2014 Bonds is to: (a) finance the cost of the Series 2014 Project, (b) refund, redeem, and pay the costs of issuance related to the Series 2014 Bonds. The Series 2014 Project involves the construction, erection, acquisition, owning, repairing, remodeling, maintaining, additions to, improving and furnishing recreation centers and areas, including but not limited to, athletic fields, golf courses, public zoo or zoological parks, parking facilities or parking areas in connection with club houses, gymnasiums

B-96 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued and related buildings and the usual and convenient facilities pertaining to such undertakings, and extensions and improvements of such facilities. Under an intergovernmental agreement dated December 1, 2014, between AFCRA and the City, the City has guaranteed that it will make payments to ARCFA sufficient in time and amount to enable AFCRA to pay the principal and interest on the Series 2014 bonds. The City guarantees payment for a period not to exceed 50 years.

On April 11, 2007, the Urban Residential Finance Authority (“URFA”) issued $35,000,000 of Georgia Taxable Revenue Bonds (Housing Opportunity Program), Series 2007A, for the purpose of loaning the proceeds from the sale of the bonds to Atlanta Housing Opportunity, Inc. (“AHOI), a blended component unit of the City. AHOI uses the bond proceeds to finance single-family and multi-family housing purchases in the City of Atlanta. Under an intergovernmental agreement dated April 1, 2007, between AHOI and the City, the City has guaranteed that it will make payments to AHOI sufficient in time and amount to enable AHOI to pay the loan payments due to URFA.

On October 28, 2010, the Atlanta Urban Redevelopment Agency (“AURA”), issued $22,775,000 of Taxable Recovery Zone Economic Development Bonds. The Series 2010 bonds were used to finance the costs of implementing the Urban Redevelopment Plan including certain costs in connection with (1) the acquisition, rehabilitation, and improvement of real property and buildings; (2) certain public transportation projects in the Urban Redevelopment Area: and (3) the acquisition, construction and installation of other related improvements of the Urban Redevelopment Plan. Under an intergovernmental agreement dated October 28, 2010, between AURA and the City, the City has guaranteed that it will make payments to AURA sufficient in time and amount to enable AURA to pay the principal and interest on the Series 2010 bonds.

On December 11, 1997, the Atlanta Fulton County Recreation Authority (“AFCRA”), a discretely presented component unit of the City, issued taxable revenue bonds, Series 1997 (Arena Bonds) to finance the cost of privately financed improvements, primarily the new arena (“Phillips Arena”), in the aggregate principal amount of $147,510,000. The Arena Bonds were secured by gross revenues of the operator of the Arena, certain other guaranties and pledges provided by TBD (Turner Broadcasting System) and its related entities and by an intergovernmental secured by gross revenues of the Operator of the arena, certain other guaranties and pledges provided by TBS (Turner Broadcasting System) and its related entities and by an intergovernmental lease agreement between AFCRA, the City, and Fulton County. The Atlanta Hawks NBA Franchise executed a 30-year lease with the Operator to use the arena for their home games. As further security for the bonds, TBS provided an irrevocable standby letter of credit, not to exceed $15,000,000. TBS sold its interest in the Operator (Arena Operations, LLC) to the Atlanta Spirit. Effective November 8, 2007, the letter of credit and the $60,000,000 perfected lien on the Atlanta Hawks NBA Franchise was released, subject to reinstatement in accordance with the Hawks Security agreement.

On November 9, 2010, AFCRA issued $124,515,000 in revenue refunding and improvement bonds, Series 2010 to current refund the outstanding bonds Series 1997 taxable revenue bonds (Arena Bonds). The proceeds of the bond issue, along with a contribution of Arena Operations, LLC (the “Operator”) are intended to be used to refund and redeem AFCRA’s Series 1997 bonds, provide funds for certain permitted recreation and cultural facility and program costs and expenses of the City and Fulton County,

B-97 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued pay the costs of a debt service reserve insurance policy to fund the deposit to the debt service reserve fund in the amount of the reserve requirement, with respect to the Series 2010 bonds and pay the costs of issuance with respect to the 2010 bonds, including premium of the municipal bond insurance policy insuring the Series 2010 bonds. The bonds are payable from various sources delineated in the trust indenture, including Operator revenues pursuant to the Operation Agreement, collectively amended. Pursuant to the lease agreement between AFCRA, the City, and Fulton County, the City and Fulton County are obligated to fund any deficiencies in principal or interest payments on the Series 2010 bonds. The City has a two-thirds interest in AFCRA and Fulton County has one-third interest. Any payments related to the Series 2010 bonds will be based on this proportionate ownership. For the Arena, there were no such deficiencies during the fiscal year that required funding by the City.

On May 8, 2015, Invest Atlanta issued $167,530,000 of Revenue Bonds (New Downtown Atlanta Stadium Project), Senior Lien Series 2015A-1; $16,740,000 of Revenue Bonds (New Downtown Atlanta Stadium Project), Senior Lien Taxable Series 2015A-2; and $40,385,000 of Revenue Bonds (New Downtown Atlanta Stadium Project), Second Lien Series 2015B, collectively the Stadium Bonds. The Stadium Bonds were issued to provide funds to finance the development, construction and equipping of a new operable roof, state-of-the-art multi-purpose stadium to replace the existing Georgia Dome facility in the City to be located and constructed on land that is owned or controlled by the Georgia World Congress Center Authority (an unrelated entity). Invest Atlanta will not own any interest in the new stadium. The Stadium Bonds are special and limited obligations of Invest Atlanta and the City payable solely from reserve accounts created with Stadium Bond proceeds (held by Invest Atlanta and classified as restricted for debt service) and payments received under a Funding Agreement between Invest Atlanta and the City.

The Funding Agreement related to the Stadium Bonds was signed at the same time as the Stadium Bonds were issued and requires the City to remit 39.3% of the net amounts received by the City from hotel motel taxes to Invest Atlanta. These payments are required to be spent for the payments of principal and interest on the Stadium Bonds or to restore any and all reserve funds established by the Trust Indenture related to the Stadium Bonds. It is the intention of the Funding Agreement that the hotel motel tax collections will be sufficient to repay the principal and interest on the Stadium Bonds and an intergovernmental receivable from the City has been recorded by Invest Atlanta for the principal amount due on the Stadium Bonds.

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B-98 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

A summary of governmental-type activities bonds payable and other general long-term obligations as of June 30, 2016, is as follows (dollars in thousands):

Bonds payable: General Obligation Bonds: 2008 Public Imp. Issue, $36,820, 4.25%, - 5.00% due December 1, 2018 $ 8,660 2009A Refunding Issue, $78,028, 3.20% - 5.25%, due December 1, 2023 37,955 2014A Refunding Issue, $15,365, 4.00% - 5.00%, due December 1, 2026 15,365 2014B Taxable Refunding Issue, $40,025, 1.281% - 3.339%, due December 1, 2025 40,025 2015 Public Imp. Issue, $252,000, 4.50% - 5.00%, due December 1, 2034 252,000 2016 Various Purpose General Obligation Bond $3,575,000, 2.000%-4.000%, due December 1, 2025 3,575 2007A Issue, $8,000, 3.75% - 5.00%, due December 1, 2025 375 357,955 Deferred amount on bond issuance premiums 37,668 Total general obligation and annual bonds payable 395,623

Certificate of Participation: 2016 City Court of Atlanta Project, Refunding $32,160,000, 4.000%-5.000%, due December 1, 2026 32,160 Deferred amount on bond issuance premiums 4,729 Total certificate of participation 36,889

APSJFA Revenue Bonds 2006 Public Safety Facility Project, $50,000, 4.25% - 5.00%, issued by the Atlanta Public Safety Judicial Facilities Authority, due December 1, 2026 32,900 Deferred amount on bond issuance premium 781 Total APSJFA revenue bonds payable 33,681

SWMA Revenue Refunding Bonds: Series 2008, $20,265, 4.00% - 5.00% issued by the Solid Waste Management Authority due December 1, 2021 10,980

Limited Obligation Bonds: 2001 Westside Project, $14,995, fixed and variable rate (2.12% at June 30, 2016), due December 1, 2021 5,465 2005A Westside Project, $72,350, fixed and variable rate (2.12% at June 30, 2016), due December 1, 2023 39,920 2005B Westside Project, $10,215, fixed and variable rate (2.12% at June 30, 2016), due December 1, 2023 6,055 2006 Atlantic Station, $166,515, variable rate (5.00% at June 30, 2016), December 1, 2024 151,425 2007 Atlantic Station, $85,495 4.375% - 5.25%, due December 1, 2024 54,855 2008 Westside, $63,760 2.12%, due December 1, 2037 53,020 2008A BeltLine Reoffering, $26,420, 7.50%, due January 1, 2031 22,445 2008B BeltLine Reoffering, $33,725, 6.75%-7.375%, term bond due January 1, 2020; and 7.375% term bond due January 1, 2031 29,815 2008C BeltLine, $4,355 7.50%, due January 1, 2031 3,865 2009B BeltLine, $12,590, 6.75% term bond due January 1, 2020; and 7.375% term bond due January 1, 2031 11,145 2009C BeltLine, $1,030, 7.50% term bond due January 1, 2031 910 2014 Perry Bolton Project, $21,000, 3.00% - 5.00%, due July 1, 2041 18,680 2016 Eastside Refunding, $30,555, 5.00%, due January 1, 2030 30,555 2016A Princeton Lakes Refunding, $5,820,000, 2.3%, due January 2020 5,820 2016B Princeton Lake Refunding, $4,955,000, 3.25%, due January 1, 2027 4,955 438,930 Deferred amounts: Bond issuance premiums 6,446 Bond issuance discounts (695) Total limited obligation bonds payable 444,681

Total bonds payable 921,854

B-99 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Other general long-term debt Section 108 Loans, $4,850, 0.28% - 4.48%, due August 1, 2019 (MMPH II & Mechanicsville) 930 1998 GMA Loan Pool, $32,444, 4.75%, due November 30, 2028 32,444 1998 Installment Sale Program, $103,130, 5.00%, due December 1, 2023 (1998 COPS) 20,385 Due to APS 10,000 2007 Intergovernmental Agreement Guaranteed payments toward 2007A Zoo Revenue Bonds, $14,315, 4.125% - 5.00%, issued by the Atlanta Fulton County Recreation Authority, due December 1, 2022 9,345 2007 Intergovernmental Agreement guaranteed payments toward 2007A Georgia Taxable (Housing Opportunity Program) Revenue Bonds, $35,000, 5.278% - 5.802%, issued by the Urban Residential Finance Authority, due December 1, 2027 24,855 2010 Intergovernmental Agreement guaranteed payments toward Series 2010 Taxable Recovery Zone Economic Development Bonds, $22,775, 5.370%, issued by the Atlanta Urban Redevelopment Agency, due January 1, 2028 17,285 2014 Intergovernmental Agreement Guaranteed payments toward 2014A Park Improvement Revenue and Refunding Bonds, $61,180, 2.00%-5.00%, issued by the Atlanta Fulton County Recreation Authority, due December 1, 2025 59,390 2014 Intergovernmental Agreement Guaranteed payments toward 2014B Park Improvement, Revenue and Refunding Bonds, $9,445, 1.060% - 2.72%, issued by the Atlanta Fulton County Recreation Authority, due December 1, 2020 7,925 2015 Intergovernmental Agreement Guaranteed payments toward 2015 Revenue Bonds (New Downtown Atlanta Stadium Project), $224,665, 1.40% - 5.00%, issued by the Atlanta Development Authority, due July 1, 2044 224,655 Total other general long-term debt 407,214

Notes payable 4,016

Capital leases 19,261

Total long-term debt $ 1,352,345

Arbitrage Rebate

The arbitrage rebate liability on all City issued obligations is treated as a claim or judgment upon occurrence. Certain City long-term debt obligations are subject to Section 148 of the Internal Revenue Code which requires that interest earned on proceeds from tax-exempt debt be rebated to the Federal government to the extent that those earnings exceed the interest cost on the related tax-exempt debt. At June 30, 2016, the City had no arbitrage rebate liability.

Business-type Activities

Revenue bonds are payable solely from revenues generated by enterprise fund activities. The various revenue bond indentures contain significant limitations and restrictions on annual debt service requirements, maintenance of a flow of monies through various restricted accounts, minimum amounts to be maintained in various sinking funds, and minimum revenue bond coverage. There are a number of limitations and restrictions contained in the various bond indentures. As of June 30, 2016, the City believes it is in compliance with all significant limitations and restrictions.

Department of Aviation (DOA)

The City has issued various revenue bonds on behalf of the Department of Aviation to finance its extensive airport capital improvement projects. The net revenues, as defined in the 2000 Airport Master Bond Ordinance as supplemented and amended, generated by operating activities are pledged as security for the bonds. Interest is payable semi-annually on the first of January and July.

B-100 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Summary of Department of Aviation long-term debt at June 30, 2016, consists of the following (dollars in thousands):

Facilities Revenue Bonds: General Revenue and Refunding Bonds: Airport General Revenue Bonds, Series 2004F, at 5.25% due serially through 2017 $ 4,755 Airport General Revenue Bonds, Series 2010A, combination serial at 2.0% - 5.0% and term at 4.625% - 5.0% through 2024 167,590 Airport General Revenue and Refunding Bonds, Series 2010C Bonds, combination serial at 4.0% - 5.875% and term at 5.25% - 6.0% through 2030 430,760 Airport General Revenue and Refunding Bonds, Series 2011A, 3.0% - 5.0%, due serially through 2021 168,905 Airport General Revenue and Refunding Bonds, Series 2011B, 3.0% - 5.0%, due serially through 2030 175,685 Airport General Revenue Refunding Bonds, Series 2012A, 2.0% - 5.0%, due serially through 2042 61,600 Airport General Revenue Refunding Bonds, Series 2012B, 2.0% - 5.0%, due serially through 2042 179,375 Airport General Revenue Refunding Bonds, Series 2012C, 2.0% - 5.0%, due serially through 2042 218,870 Airport General Revenue and Refunding Bonds, Series 2014B, 3.0% - 5.0%, due serially through 2033 141,005 Airport General Revenue and Refunding Bonds, Series 2014C, 4.0% - 5.0%, due serially through 2030 147,215 Total General Revenue and Refunding Bonds $ 1,695,760

Passenger Facility Charge (PFC) and Subordinate Lien General Revenue Bonds: PFC and Subordinate Lien General Revenue Bonds, Series 2010B at 2.0% - 4.38%, due serially through 2026 304,845 PFC and Subordinate Lien General Revenue Refunding Bonds, Series 2014A at 4.0% - 5.0%, due serially through 2034 523,605 Total PFC and Subordinate Lien General Revenue Bonds 828,450

Customer Facility Charge (CFC) Restricted Revenue Bonds: City of College Park Taxable Revenue Bonds, (Hartsfield-Jackson Atlanta International Airport Consolidated Rental Car Facility Project, Series 2006A at 5.558% - 5.965% (Conduit Debt) 162,000 City of College Park Taxable Revenue Bonds, (Hartsfield-Jackson Atlanta International Airport Automated People Mover System Maintenance Facility Project), Series 2006B at 4.0% - 4.5% (Conduit Debt) 15,915 177,915 Total Facilities Revenue Bonds 2,702,125

Bond Anticipation Notes 300,000

Deferred amounts: Bond issuance premiums 143,593 Bond issuance discounts ( 157) Total long-term debt $ 3,145,561

B-101 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

On June 21, 2006, the City of College Park, Georgia issued $211.9 million in Taxable Revenue Bonds (Hartsfield Jackson Atlanta International Airport Rental Car Center Project), Series 2006A for the purpose of acquiring, constructing and installing a consolidated rental car facility. In addition, College Park issued $22.0 million in Revenue Bonds (Hartsfield Jackson Atlanta International Airport Automated People Mover System Maintenance Facility Project), Series 2006B for the purpose of acquiring, constructing and installing a maintenance facility for an automated people mover. The City (the Purchaser) pursuant to the terms of an Installment Purchase Agreement dated June 1, 2006 (the Agreement) with the City of College Park (the Issuer) obligates the Purchaser to make installment payment to the Issuer to cover the principal, premium and interest of the Series 2006A/B Bonds. The City has adopted an Ordinance imposing a customer facility charge (CFC) effective October 1, 2005. The CFC revenues have been pledged to secure the payments due under the Agreement. At June 30, 2016, the balance of outstanding conduit debt totaled $177.9 million.

On April 10, 2014, the City of Atlanta issued approximately $523.6 million of its Airport Passenger Facility Charge and Sub-ordinate Lien General Revenue Refunding Bonds, Series 2014A (Non-AMT), $141.0 million of its Airport General Revenue Refunding Bond, Series 2014B (Non-AMT), and $181.9 million of its General Airport Revenue Refunding Bond Series 2014C, collectively referred to as the “Series 2014 Bonds”. The Series 2014 Bonds were issued to refund and redeem all of the outstanding principal amount of the City’s Airport Passenger Facility Charge and Subordinate Lien General Revenue Bonds, Series 2004C and 2004J, the City’s Airport General Revenue Refunding Bonds, Series 2003 RF- D, the City’s Airport General Revenue Bonds, Series 2004A, Series 2004B, and a portion of the Series 2004F, and Series 2004G (the Refunded Bonds), to fund a deposit to the respective subaccounts in the Debt Service Reserve Account securing the Outstanding PFC Revenue Bonds and the Outstanding Senior Lien General Revenue Bonds, and to pay the costs of issuance with respect to the Refunded Bonds. The refunding of the Series 2014 Bonds resulted in a net present value savings of $73.6 million and a reduction in annual debt service of $3.2 million.

On March 20, 2016, the Department of Aviation issued an aggregate combined $300 million of Bond Anticipation Notes (2016 Series A&B). These notes were issued for the purpose of financing on an interim basis, in whole or in part, the costs of the planning, engineering, design, acquisition and construction of certain improvement to Hartsfield-Jackson Atlanta International Airport Master Plan. According to the note agreement, the City will refund or refinance and pay the principal of and interest related on the Series 2016 Notes with proceeds of long-term fixed rate take-out bonds issued in an amount not to exceed $350 million, maturing not later than January 1, 2050 with a not to exceed interest rate of 9.0% per annum, and a maximum principal and interest due in any year of $40 million. As the Department’s current expectation is not to refund or repay these notes during the next year, these notes have been classified as long-term debt.

On August 17, 2015, the City issued the following Commercial Paper Notes: (a) Series D-1 (Non-AMT), Series D-2 (AMT), Series D-3 (Non-AMT), Series D-4 (AMT), up to the amount of $225,000,000 (the Series D Notes) and (b) Series E-1 (Non-AMT), Series E-2 (AMT), Series E-3 (Non-AMT), Series E-4 (AMT), up to the amount of $225,000,000 (the Series E Notes). The Series D-1 Notes,

B-102 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued the Series D-2 Notes, the Series E-1 Notes and the Series E-2 Notes are referred to as the “Third Lien GARB Notes.” The Series D-3 Notes, the Series D-4 Notes, the Series E-3 Notes and the Series E-4 Notes are referred to as the “Modified Hybrid PFC Notes.” The City entered into a Letter of Credit Reimbursement Agreement with Bank of America, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. to facilitate the payment of and interest on the Series D and the Series E notes in the aggregate principal amount of $450 million (issued at $225 million each) for the Airport Commercial Paper Program. These notes were issued to finance, on an interim basis, a portion of the costs of the planning, engineering, design, acquisition and construction of certain improvements at Hartsfield-Jackson Atlanta International Airport and to refund in whole or in part the principal of and interest on any Series D or Series E Notes. The Third Lien GARB Notes are limited obligations of the City payable from and secured by a pledge of and third lien on general revenues. The Modified Hybrid PFC Notes are limited obligations of the City payable from and secured by a pledge of and second lien on PFC revenues and third lien on general revenues. The Series D Notes and the Series E Notes do not constitute a debt of the City, or a pledge of the faith and credit of the taxing power of the City. The Series D and the Series E Notes are not payable from any funds other than the revenues pledged for that purpose.

All Department of Aviation bond ordinances require the maintenance of sinking funds to provide for debt service on the related bonds. The Airport Master Bond Ordinance also requires the Department to maintain a ratio of Net Airport Revenue to Aggregate Debt Service, as defined, of at least 120%.

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B-103 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Department of Watershed Management

Summary of revenue bonds payable and GEFA notes payable at June 30, 2016 consists of the following (dollars in thousands): Revenue and Refunding Revenue Bonds: Water and Wastewater Revenue Bonds, $1,096,140 Series 1999A, (5.50%), due serially and term through 2022 $ 232,660 Water and Wastewater Revenue Bonds, $415,310 Series 2001A, (5.50%), due serially and term through 2027 85,055 Water and Wastewater Revenue Bonds, $849,330 Series 2004A, combination serial (5.75%), due serially and term through 2030 134,110 Water and Wastewater Revenue Bonds, $106,795 Series 2008, variable rate (0.81% at June 30, 2016), due serially through 2041 106,795 Water and Wastewater Refunding Revenue Bonds, $750,000 Series 2009A, combination serial (5.00% - 6.00%), due serially through 2019 64,245 Water and Wastewater Refunding Revenue Bonds, $448,965 Series 2009B, combination serial (4.00% - 5.50%) and term bonds (5.25-5.375%), due serially through 2039 438,155 Water and Wastewater Revenue Bonds, $178,835 Series 2013A1, variable rate (1.813% at June 30, 2016), due serially and term through 2038 178,735 Water and Wastewater Revenues Bonds, $50,000 Series 2013A2A (1.213% at June 30, 2016), due serially and term through 2038 49,215 Water and Wastewater Revenues Bonds, $50,000 Series 2013A2 B, (1.213% at June 30, 2016), due serially and term through 2038 49,220 Water and Wastewater Revenue Bonds, $50,000 Series 2013A2C, (1.213% at June 30, 2016), due serially and term through 2038 50,000 Water and Wastewater Refunding Revenue Bonds, $200,140 Series 2013B, (5.25% - 5.50%), due serially and term through 2030 188,860 Water and Wastewater Revenue Refunding Bonds, $1,237,405,000 Series 2015, 2.00% - 5.00%, due serially and term through 2043 1,237,405 Total Revenue Bonds 2,814,455 Deferred amounts: Bond issuance premiums 214,220 Bond issuance discounts (4,535) Total revenue bonds 3,024,140

Georgia Environmental Facilities Authority (GEFA) Notes Payable: Georgia Environmental Facilities Authority (GEFA) $4,669 Loan, 3.00% due serially through 2023 2,079 Georgia Environmental Facilities Authority (GEFA) $19,006 Loan, 3.82%, due serially through 2035 14,589 Georgia Environmental Facilities Authority (GEFA) $19,034 Loan, 3.92%, due serially through 2036 15,200 Georgia Environmental Facilities Authority (GEFA) $19,021 Loan, 4.12%, due serially through 2038 15,789 Georgia Environmental Facilities Authority (GEFA) $31,216 Loan, 3.00%, due serially through 2027 24,490 Georgia Environmental Facilities Authority (GEFA) $31,053 Loan, 3.00%, due serially through 2028 24,870 Georgia Environmental Facilities Authority (GEFA) $31,409 Loan, 3.00%, due serially through 2027 24,941 Georgia Environmental Facilities Authority (GEFA) $5,500 Loan, 3.00%, due serially through 2032 4,703 Georgia Environmental Facilities Authority (GEFA) $3,000 Loan, 3.81%, due serially through 2032 2,606 Georgia Environmental Facilities Authority (GEFA) 34,990 Loan, (3.00%), due serially through 2035 33,363 Georgia Environmental Facilities Authority (GEFA) $51,426 maximum gross loan (2.03%), due serially through 2039 5,592 Total GEFA notes payable 168,222

Capital leases 1,304

Total long-term debt $ 3,193,666

B-104 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

The City has issued various revenue bonds on behalf of the Department of Watershed Management to refinance existing bonds or finance capital improvements for its Water and Wastewater projects. The revenue bonds issued are authorized under the Master Bond Ordinance adopted March 31, 1999 as amended and supplemented from time to time with the issuance of any additional bonds. Net operating revenues from the system are pledged as security for the bonds as defined in the Constitution and laws of the State of Georgia, including the Revenue Bond Law of Georgia, as amended (the “Revenue Bond Law”). Debt service payments on outstanding bonds are made semi-annually on the first of November and May or as defined by the applicable bond indenture.

The Department of Watershed Management entered into three loan agreements with the Georgia Environmental Facilities Authority (GEFA) totaling $50 million for projects to: (1) replace the East Point sewer trunk line; (2) provide sewer rehabilitation, replacement, and capacity relief; and (3) provide piping and equipment to capture digester gas and convert it to power for use at the RM Clayton Wastewater Treatment Plant. In February 2012, the Department entered into three loan agreements totaling $41 million, with the purpose of financing final payments on three existing loans due February 2027, September 2027, and February 2028. Liabilities for these loans will be recorded at the time the funds are drawn. In fiscal year 2016, The Department received $5,592,000 in GEFA funding. As of June 30, 2016, the Department had $168,222,000 in short-term and long-term loans outstanding to GEFA. The proceeds of the GEFA loans were used to finance a portion of the cost associated with the DWM Clean Water Atlanta Program (See Note IV. C. First Amended Consent Decree).

On September 12, 2013 the City of Atlanta issued approximately $328.7 million of its Water and Wastewater Revenue Refunding Bonds, Series 2013A, and $200.1 million of its Water and Wastewater Revenue Refunding Bonds Series 2013B, collectively referred to as the “Series 2013 Bonds.” Of these amounts, $178.7 million of the Series 2013A Bonds were issued as sub-series A-1 and sold to respective bond trading institutions, and $150 million issued as sub-series A – 2 Bonds and privately placed. All of the Series 2013A bonds were issued as Variable Rate Bonds with a LIBOR index rate. The Series 2013 Bonds were issued to refinance portions of the outstanding Water and Wastewater Revenue Bonds Series 1999A, Series 2001A, Series 2004 Water, and pay all costs with respect to the issuance of the Series 2013 Bonds.

On March 12, 2015, the City of Atlanta issued approximately $1.237 billion of its Water and Wastewater Revenue and Refunding Bonds, Series 2015 collectively referred to as the “Series 2015 Bonds”. The Series 2015 Bonds were issued to refund a portion of the City’s outstanding Water and Wastewater Revenue Bonds, Series 2001A, Water and Wastewater Revenue Bonds, Series 2004, Water and Wastewater Bonds, Series 2009A, and to pay the costs of issuance with respect to the issuance of the Series 2015 Bonds. The refunding of the Series 2015 Bonds resulted in a net present value savings of $156.1 million.

The Department of Watershed Management bonds are payable from Department revenue and are collateralized by Department revenue remaining after reasonable and necessary operating and maintenance costs. In addition, the bond ordinances require the maintenance of sinking funds to provide for debt service on the related bonds. The ordinances require revenue must be 110% of maximum annual debt service.

B-105 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Commercial Paper Notes Payable

In April, 2015, the Department authorized the issuance of the following Water and Wastewater Revenue Commercial Paper Notes (Series 2015 Notes): (a) Series 2015A-1, up to the amount of $125,000,000 and (b) Series 2015A-2, up to the amount of $125,000,000. On April 1, 2015, the Department entered into a Letter of Credit and Reimbursement Agreement with PNC Bank, National Association to facilitate the payment of and interest on the Series 2015-A1 Notes in the principal amount of $125 million for the 2015 Commercial Paper Program. Also, on April 1, 2015, the Department entered into a Letter of Credit and Reimbursement Agreement with Wells Fargo Bank, National Association to facilitate the payment of interest on the Series 2015-A2 Notes in the principal amount of $125 million for the 2015 Commercial Paper Program. The Series 2015 Notes were issued to: (A) finance or refinance, on an interim basis, the costs of planning, engineering, design, acquisition, construction and reconstruction of certain additions, extensions, improvements and betterments included as a part of a multi-phase long term capital improvement program for the Department, (B) refund in whole or in part the principal of and interest on Outstanding Series 2015 Notes, and (C) pay expenses necessary to accomplish the foregoing. Revenue of the Department is pledged as security for payments on the Series 2015 Notes, which is junior and subordinate to the pledge of revenue securing the Department’s long-term debt. The Series 2015 Notes do not constitute a debt, liability, or obligation of the City’s governmental funds, or a pledge of the faith and credit or taxing power of the City. The Series 2015 Notes are considered a short term obligation of the Department and may be repaid and reissued as often as necessary to affect the purposes set out in the program. There were no draws issued on the Water and Wastewater Commercial Paper Series 2015 Notes during fiscal years 2015 or 2016.

Interest Rate Exchange Agreements (Swap’s)

Department of Watershed Management (DWM) (“Department”)

At June 30, 2016, the Department has two derivative instruments that are interest rate swaps referred to as Swap Three and Swap Four.

The Department entered into two interest rate swap agreements in December 2001. These swap agreements are currently associated with the Department’s Water and Wastewater Revenue Refunding Bonds, Series 2013A (Swap Three), and the Department’s Water and Wastewater Revenue Bonds, Series 2008 and Water and Wastewater Revenue Refunding Bonds, Series 2015 (Swap Four), and have notional amounts of $432,875,000. Swap Three became effective on January 3, 2002 and will mature on November 1, 2038. Swap Four became effective on January 3, 2002 and will mature on November 1, 2041.

B-106 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

The fair value balances and notional amounts of derivative instruments outstanding at June 30, 2016, classified by type, and the changes in fair value of such derivative instruments for the year then ended are as follows (dollars in thousands):

Changes in Fair Value Fair Value at June 30, 2016

Swap Cash Flow Hedges Classifications Amount Classification Amount Notional

Pay-fixed rate 4.09% per annum. Receive Deferred 3 67% IM LIBOR outflows $ (26,005) Debt $ (132,988) $ 327,170

Pay-fixed rate 4a 4.09% per annum. Investment (partial) Receive SIFMA expense $ - Investment$ (4,812) $ 25,265

Pay-fixed rate 4b 4.09% per annum. Deferred (partial) Receive SIFMA outflow $ (18,546) Debt $ (45,176) 80,440$

Total $ (182,976)

Swap 3 became an effective hedge during fiscal 2015 in connection with a change in hedging relationship associated with the issuance of the Series 2013A Water and Wastewater Revenue Bonds. As a result, Swap 3 is classified as an investment derivative. Amortization of the accumulated loss of Swap3, as of the date Swap 3 became an effective hedge, into deferred outflows totaled $7,875,000 for the year ended June 30, 2016. The fair values of derivative liabilities have been adjusted for nonperformance risk, which includes, but may not be limited to the City’s own credit risk. Inputs to the valuation techniques for the City’s over-the-counter interest rate swaps are both directly and indirectly observable and thus categorized as Level 2 as defined in GASB Statement No. 72.

The fair value of the swaps was estimated using the proprietary pricing model of an independent derivative valuation service. The net cash outflow (payments) related to these derivative instruments during fiscal year 2016 was approximately $14,225,000.

B-107 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Objective and Terms of Hedging Derivative Instruments (Swap 3 and 4B) - The following table displays the objective and terms of the Department's hedging derivative instrument outstanding at June 30, 2016, along with the credit rating of the associated counterparty.

Notional Counterparty Swap Type Objective Amount Effective Date Maturity Date Terms Credit Rating Pay-fiixed Hedge of changes in Receive SIFM A 4b interest rate cash flows of variable $ 80,440 1/3/2002 11/1/2041 M unicipal Swap A+/Aa3/AA- (partial) swap debt obligations Index; pay 4.09%

Pay-fixed Hedge of changes in Receive 67% IM 3 intereast cash flows of variable $ 327,170 1/3/2002 11/1/2038 A+/Aa3/AA- LIBOR pay 4.09% rate swap debt obligations Credit Risk. Credit risk is the risk that the counterparty will not fulfill its obligations. As of June 30, 2016, the two swaps were in liability positions; therefore, the Department is not exposed to credit risks. However, should interest rates change and the fair market value of the swaps to become assets, the Department would be exposed to credit risks. The Department executes hedging derivatives with one counterparty, comprising 100% of the net exposure to credit risk. This one counterparty is rated A+ as issued by Fitch, London, Aa3 as issued by Moody's, New York, and AA- as issued by Standard & Poor's, New York.

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair values of the Department's financial instruments or its cash flows. The Department is exposed to interest rate risk on its pay-fixed, receive-variable interest rate swaps. As LIBOR or the SIFMA swap index decreases the Department’s net obligation on the swap increases.

Basis Risk. Basis risk is the risk that arises when variable rates or prices of a hedging derivative instrument and a hedge item are based on different reference rates. The Department is exposed to basis risk on its pay-fixed interest rate swap hedging instruments because the variable-rate payments received by the Department on these hedging derivative instruments are based on a rate or index other than interest rates the Department pays on its hedge variable-rate debt. As of June 30, 2016, the interest rate on the Department's hedged variable-rate debt is 1.813 percent. The SIFMA swap index rate is 0.41 percent.

Termination Risk. Termination risk is the risk that a hedging derivative instrument's unscheduled end will affect the Department's asset and liability strategy or will present the Department with potentially significant unscheduled termination payments to the counterparty. Amendments to the swap transaction, dated February 26, 2010, allow either party to terminate and cancel each of the transactions in whole or in part upon one business day's prior written notice to the other party.

Additionally, Swap 3 contains a barrier option, which provides the counterparty the right, but not the obligation date to terminate the transaction upon providing 30 calendar days’ notice prior to any payment date, if the Average Rate has exceeded 7% per annum within the preceding 180 days. The Average Rate

B-108 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued is defined as the arithmetic mean of the Municipal Swap Index as determined by the Calculation Agent on each reset date during the preceding 180 days.

Such termination would not require the consent of the Department and no fees, payments or other amounts would be payable by either party in respect to the termination, without prejudice to any obligation to pay a scheduled payment on or prior to such early termination. Any such termination would serve to extinguish all rights or obligations of either party to the other party which would otherwise accrue or have accrued since the last payment date.

Rollover Risk - Rollover risk is the risk that a hedging instrument associated with a hedgeable item does not extend to the maturity of that hedgeable item. The Department is not exposed to rollover risks because the hedging derivative instruments associated with the hedgeable debt items extend to the maturity of the hedgeable debt items.

Sanitation Fund

State and federal laws and regulations require the City to place final covers on its four landfill sites when each site stops accepting waste and to perform certain maintenance and monitoring functions at the sites for 30 years after closure. The City has landfill sites at Cascade Road, Key Road, Gun Club Road, and East Confederate Road. All City landfills were certified by the State of Georgia as closed during 2001 and only post-closure care costs will be incurred in the future. Although post-closure care costs will be paid over the remaining number of post-closure years, the City accrued a liability for those costs as the landfills were accepting waste. The $15,625,000 reported as the landfill post-closure costs liability at June 30, 2016, represents the cumulative amount of post-closure costs expected to be incurred over the required 30 year monitoring period which began in 2001. These amounts are estimates calculated by the management of the City of what it would cost to perform all post-closure care. Actual costs may differ from estimates due to inflation, changes in technology or regulations. Post-closure care costs will be funded by future sanitary charges of the Sanitation Fund or from future contributions from the General Fund if necessary.

City Plaza

On March 29, 2016 the Downtown Development Authority of the City of Atlanta (the “Authority”) issued Revenue Bonds in the aggregate principal amount of $9,465,000 (City Plaza Redevelopment Project), Series 2016. The Revenue Bonds were issued for the purpose of; (a) financing the acquisition of a certain 3.125 acre parcel of land located in the central business district of the City at 133 Trinity Avenue, Atlanta, Georgia; (b) financing the acquisition of the mixed-use development consisting of 164 one and two bedroom apartment homes, approximately 29,000 square feet of ground level retail, a 274- space structured parking deck, a 52-space surface parking lot and other related improvements and amenities, commonly known as “City Plaza”; (c) providing for the provision of certain workforce housing program implementation and monitoring services and (d) paying costs of issuance related to the Series 2016 Bonds.

B-109 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Debt Service Requirements

The following summarizes the debt service requirements of long-term debt at June 30, 2016 (dollars in thousands): Governmental Activities

General Obligations Annual Bonds SWMA Revenue Bonds Year Ended June 30 Principal Interest Principal Interest Principal Interest 2017 $ 7,295 $ 15,966 $ 375 $ 7 $ 1,620 $ 488 2018 24,855 15,367 - - 1,695 405 2019 26,335 14,382 - - 1,780 318 2020 28,030 13,301 - - 1,870 227 2021 42,645 13,057 - - 1,965 131 2022-2026 74,535 45,191 - - 2,050 41 2027-2031 76,910 28,118 - - - - 2032-2036 76,975 7,757 - - - - $ 357,580 $ 153,139 $ 375 $ 7 $ 10,980 $ 1,610

APSJFA Revenue Bond Limited Obligations Other General LT Obligaions Year Ended June 30 Principal Interest Principal Interest Principal Interest 2017 $ 2,310 $ 1,579 $ 28,815 $ 18,518 $ 18,962 $ 17,964 2018 2,420 1,469 30,145 20,256 23,948 17,210 2019 2,540 1,345 31,525 18,797 17,911 16,456 2020 2,670 1,215 32,945 17,265 18,513 15,821 2021 2,810 1,078 33,515 15,600 14,810 15,833 2022-2026 16,360 3,074 200,880 37,227 100,232 65,220 2027-2031 3,790 95 58,475 14,013 57,895 49,797 2032-2036 - - 15,295 3,011 62,280 36,014 2037-2041 - - 4,960 805 52,980 22,054 2042-2046 - - 2,375 59 52,960 7,070 $ 32,900 $ 9,855 $ 438,930 $ 145,551 $ 420,491 $ 263,439

Certificate of Participation Due to APS Year Ended June 30 Principal Interest Principal Interest 2017 $ 2,380 $ 1,343 $ - $ - 2018 2,430 1,296 1,500 - 2019 2,525 1,197 2,000 - 2020 2,640 1,081 2,000 - 2021 2,775 945 2,000 - 2022-2026 15,810 2,701 21,000 - 2027-2031 3,600 90 43,500 - $ 32,160 $ 8,653 72,000 -

Business-Type Activities GA Environmental Facilities- Aviation DWM Watershed Management Year Ended Interest Rate June 30 Principal Interest Principal Interest Principal Interest Swaps, Net 2017 $ 121,480 $ 137,403 $ 6,002 $ 5,362 $ 60,120 $ 129,161 $ 16,260 2018 127,675 131,377 6,200 5,164 63,650 125,967 16,237 2019 134,710 124,996 6,404 4,960 66,850 122,492 16,214 2020 136,490 118,244 6,616 4,748 70,890 118,763 16,189 2021 143,485 111,386 6,834 4,530 74,470 114,871 16,164 2022-2026 671,330 454,351 36,802 19,138 431,170 513,370 77,217 2027-2031 809,925 258,892 42,527 12,692 548,650 398,543 62,205 2032-2036 350,165 91,698 47,584 5,201 641,605 265,605 43,012 2037-2041 176,100 33,815 9,253 206 704,190 107,044 20,474 2042-2046 30,765 1,538 - - 152,860 8,879 - $ 2,702,125 $ 1,463,700 $ 168,222 $ 62,001 $ 2,814,455 $ 1,904,695 $ 283,972

B-110 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Debt Service Requirements, continued

Business-Type Activties Year Ended Civic Center City Plaza Downtown Parking Deck June 30 Principal Interest Principal Interest Principal Interest

2017 142 198 235 465 795 825 2018 110 129 315 385 830 791 2019 120 119 330 372 865 755 2020 131 109 345 358 900 716 2021 142 98 360 344 945 675 2022-2026 917 281 2,030 1,471 5,410 2,680 2027-2031 173 6 2,605 902 6,840 1,263 2032-2036 - - 3,245 266 1,580 39 $ 1,735 $ 939 $ 9,465 $ 4,562 $ 18,165 $ 7,744

Component Units Year Ended Recreation Authority Atlanta Development Authority June 30 Principal Interest Principal Interest

2017 12,065 11,202 18,276 17,735 2018 12,665 10,599 12,565 17,101 2019 13,310 9,940 13,084 16,665 2020 14,015 9,227 13,663 16,184 2021 14,745 8,466 14,283 15,634 2022-2026 70,630 30,405 71,508 68,881 2027-2031 50,660 10,473 60,860 51,688 2032-2036 20,585 2,673 57,585 37,312 2037-2041 - - 60,230 21,164 2042-2046 - - 52,960 5,691 $ 208,675 $ 92,985 $ 375,014 $ 268,055

Defeased Debt

The City has defeased various bond issues by creating separate irrevocable trust funds. New debt was issued and the proceeds were used to purchase U.S. government securities that were placed in trust funds. The investments and fixed earnings from the investments are sufficient to fully service the defeased debt until the debt is called or matures. For financial reporting purposes, the debt has been considered defeased and therefore, removed as a liability from the City’s government-wide and proprietary fund financial statements.

B-111 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

G. Long-Term Obligations, continued

Below is a description of the City’s defeased bonds and the outstanding balances as of June 30, 2016 (dollars in thousands): Date Interest Rate Originally Original par Redemption Date Maturities Defeased Amount Outstanding Description of Bonds Issued Amount Call Date Defeased Defeased Bonds % Defeased 6/30/2016 General Obligation Bonds 1993 School Improvement 11/1/1993 $ 94,000 12/1/2003 2/28/2001 2002-2018 5.5-5.6 $ 81,760 $ 24,225 1996A Various Purpose 12/1/1996 8,000 12/1/2007 5/1/2005 2008-2021 5.0 - 5.125 2,290 310 1997A Various Purpose 11/1/1997 8,000 12/1/2007 5/1/2005 2009-2021 5.0-5.125 2,720 1,135 1999 Various Purpose 12/1/1999 8,000 12/1/2009 5/1/2005 2011-2024 5.125-5.8 2,840 2,065 2000 Various Purpose 11/1/2000 8,000 12/1/2010 5/1/2005 2013-2025 5.0-5.5 2,960 1,640 2005A Refunding 12/1/2005 85,980 12/1/2015 1/14/2016 2015-2016 4.0 - 5.0 7,020 - 2007A Refunding 3/1/2007 8,000 12/1/2016 11/6/2014 2017-2026 4.0-4.125 5,270 375 2008 Public Improvement 2/1/2008 36,820 12/1/2018 11/6/2014 2019-2021 4.0 - 5.0 10,940 8,660 2009 Refunding 5/28/2009 78,025 1/14/2016 1/14/2016 2022-2023 4.125 - 5.250 20,305 37,955

$ 334,825 $ 136,105 $ 76,365 Revenue Bonds 2009A Water & Wasterwater 6/25/2009 $ 750,000 11/1/2019 3/12/2015 2020-2039 6.0-6.25 $ 608,885 608,885

H. Restricted Net Position and Restricted Assets

The various bond covenants require certain restrictions of Net Position of the Department of Aviation. Restricted Net Position at June 30, 2016 is as follows (dollars in thousands):

Department of Aviation Debt service and debt service reserve $ 413,288 Capital Projects 629,667 Total $ 1,042,955

The General Fund, because of covenants required by the 1998 Georgia Municipal Association Certificates of Participation, is required to keep certain restricted balances. This includes the investment account related to the 1998 lease pool, as discussed further in Note III. G. The Municipal Option Sales Tax Fund (MOST), as required by City ordinance, is required to transfer all revenue collections to the Department of Watershed Management for the purpose of funding water, wastewater and storm water infrastructure improvement and repair. The Other Governmental Funds contain restricted assets representing amounts which are required to be maintained pursuant to City ordinances for capital purposes, renewal and extension and sinking funds, and funds received for specific purposes pursuant to U. S. Government grants.

B-112 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

H. Restricted Net Position and Restricted Assets, continued

Enterprise Funds, because of certain bond covenants, are required to establish and maintain prescribed amounts of resources that may be used only to service outstanding debt. Other assets are restricted by bond ordinances for capital purposes. Restricted assets of the enterprise funds at June 30, 2016 are as follows (dollars in thousands): Department of Watershed Department Management of Aviation Total Renewal and Extension Fund: Cash and cash equivalents - 23,603 23,603 Other assets - 4,421 4,421 Passenger Facility Charge Fund: Cash and cash equivalents - 153,656 153,656 Other assets - 32,360 32,360 Investments - 422,986 422,986 Customer Facility Charge Fund: Cash and cash equivalents - 35,882 35,882 Other assets - 3,221 3,221 Construction Fund: Cash and cash equivalents - 36,306 36,306 Other assets - 129 129 Investments - 340,774 340,774 Sinking Funds: Cash and cash equivalents - 386,858 386,858 Investments - 26,430 26,430 Construction Revenue Funds: Cash and cash equivalents 115,623 115,623 Sinking Fund: Cash and cash equivalents 212,557 - 212,557 Investments - Guaranteed Investment Contracts 86,025 - 86,025 Total $ 414,205 $ 1,466,626 $ 1,880,831

IV. Other Information

A. Risk Management

General

The City purchases a variety of insurance policies, including but not limited to all risks property and specific liability policies. The City also purchases distinct and separate insurance policies for Hartsfield- Jackson Atlanta International Airport, including but not limited to property, airport owners and operators liability, and environmental liability. The policy limits are established in order to maximize potential recovery via insurance in the event of loss. Policy limits may range up to $1 billion based on exposure to loss, and policies are subject to a range of deductibles.

The City also administers an Owner Controlled Insurance Program (OCIP) that provides insurance coverage for enrolled contractors for certain construction projects at the airport. These policies include, but are not limited to, builders risk, general liability, workers’ compensation and pollution liability.

B-113 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Risk Management, continued

Insurance requirements are established with contractors and consultants that do business with the City based on the scope of services and nature of the project(s). Contractors and consultants are generally required to maintain certain types of insurance coverage including but not limited to, general liability, automobile liability, workers’ compensation and professional liability. There has not been any material change to insurance coverage from the previous year.

Self-insurance

The City is self-insured for workers' compensation, parts of the medical and dental plan, and general claims liabilities. The City pays for such claims as they become due. These claim liabilities are accounted for in the governmental activities of the government-wide financial statements and the applicable enterprise funds.

Workers’ Compensation

The City's workers' compensation liability is calculated by an outside actuary. Liabilities are reported when it is probable a loss has occurred and the amount can be reasonably estimated including amounts for claims incurred but not yet reported. The calculation of the present value of future workers' compensation liabilities, as calculated by the outside actuary, is based on a discount rate of 3.5% for 2016. The City has annual excess insurance coverage with a $5 million per occurrence retention with no annual aggregate limit.

Health and Dental Insurance

The City’s medical plan under Blue Cross Blue Shield Point of Service and its dental plan under Cigna are fully self-insured. The Kaiser HMO, OHS dental access plan and Spectra vision plan are fully insured. The City’s health and dental liability is calculated by an outside actuary firm. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported.

Changes in the balances of claims liabilities for workers' compensation, health/dental insurance and general claims liabilities during the year ended June 30, 2016 were as follows (dollars in thousands):

Period claims Beginning of and changes in Claim End of period period liability estimates payments liability Workers' compensation: 2014 $ 37,292 $ 10,508 (4,261)$ $ 43,539 2015 $ 43,539 $ 16,684 (7,264)$ $ 52,959 2016 $ 52,959 $ 23,830 (3,996)$ $ 72,793

Health and Dental claims: 2014 $ 7,150 $ 59,622 $ (60,692) $ 6,080 2015 $ 6,080 $ 64,415 $ (63,565) $ 6,930 2016 $ 6,930 $ 59,502 $ (60,502) $ 5,930

General claims liability: 2014 $ 34,798 $ 12,085 $ (18,535) $ 28,348 2015 $ 28,348 $ 9,390 (8,790)$ $ 28,948 2016 $ 28,948 $ 4,546 $ (11,248) $ 22,246

B-114 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities

Litigation

The City is subject to various suits and proceedings arising in the ordinary conduct of its affairs and has been named as defendant in numerous lawsuits. The City has accrued amounts related to litigation where an outcome unfavorable to the City is probable and the amount can be reasonably estimated. The City has been named as defendant in several other suits and actions claiming personal and property damages. In the opinion of the City Attorney, all suits and actions now pending, or likely to be filed, will be resolved without a material effect on the financial position of the City.

Grants from Governments

Amounts received or receivable from grantor agencies are subject to audit and adjustment by such agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial.

Construction and Commitments

At June 30, 2016, the total estimated remaining costs on committed projects are $694,400,000 for the Department of Aviation, and $182,894,000 for the Department of Watershed Management.

Department of Aviation

In an Assignment, Assumption and Release Agreement and Claim Resolution Agreement dated February 25, 2011, the City entered into settlement agreements with Northwest and the Georgia Environmental Protection Division (EPD) to settle all claims in exchange for transfer and assumption of environmental obligations of Leased Space formerly between Northwest and the Georgia EPD.

As of June 30, 2016, a restricted noncurrent asset is recorded for approximately $5.1 million a result of this settlement.

Department of Watershed Management

Other Governments

In July 1968, the City and DeKalb County, Georgia (DeKalb County) entered into an agreement (the "Clayton Agreement") providing for the construction of a 120 million gallons per day (MGD) water pollution control facility to be known as the R.M. Clayton Water Reclamation Center (the "Plant").

Pursuant to the Clayton Agreement, the City agreed to assume responsibility for the financing, construction, operation, and maintenance of the Plant. The Clayton Agreement gives DeKalb County

B-115 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities the right to use 25 MGD, or 20.83%, of the plant capacity. The Clayton Agreement with DeKalb County was amended in 1987, to increase DeKalb County’s capacity in the Plant to 50 MGD, which is 48.54% of the 103 MGD of average daily flow capacity.

In 1977, DeKalb County entered into an agreement for 2.62 MGD, or 5.82%, of the capacity rights in the South River Water Reclamation Center and 2.60 MGD, or 12.38%, of the capacity rights in the Intrenchment Creek Water Reclamation Center. These two Water Reclamation Centers, along with the R.M. Clayton Water Reclamation Center, are hereafter referred to as the "Plants".

Additional capital improvements may be made to the Plants to relieve excessive flows and/or loads that impair the efficient operation of the City’s sewer system, to improve existing processes, to improve the efficiency of current operations, or to comply with applicable laws. In any such event, the DWM and DeKalb County have agreed to share the costs of such capital improvements, generally upon the basis of relative sewerage flow contributed by the City and DeKalb County, respectively.

DeKalb County, Fulton County, the City of Hapeville, the City of East Point and the City of College Park (collectively, the “Municipalities") share in the costs of the operation and maintenance of the R.M. Clayton, South River, Intrenchment Creek and Utoy Creek Water Reclamation Centers based upon the ratio that their sewerage flow bears to the total flows to the plants. The Municipalities’ share of the operation and maintenance costs for the plants was $20,030,000 for the period ended June 30, 2016. These payments are treated as operating revenue for the Department of Watershed Management.

The Municipalities have agreed to share in the capital improvement costs made to certain plants with their share being based on their portion of the sewerage flow. The Municipalities’ shares of the capital improvement costs was $19,639,000 for the year ended June 30, 2016. These payments are treated as non-operating revenue and are included in capital contributions. The amounts receivable from the Municipalities is included in the amount due from other governmental units in the accompanying financial statements.

Consent Decrees for Wastewater System

The Department is subject to two related consent decrees the City entered into to resolve alleged violations of the Federal Clean Water Act and the Georgia Water Quality Control Act.

On October 10, 1995, the Upper Chattahoochee Riverkeeper Fund, Inc. (the "Riverkeeper"), brought suit against the City pursuant to the citizen suit provision of the Clean Water Act seeking injunctive relief and the assessment of civil penalties. Subsequently, the United States of America, acting at the request and on behalf of the Environment Protection Agency (EPA), and the State of Georgia, at the request of the Georgia Environmental Protection Division (EPD), also filed a complaint against the City alleging violations of the Clean Water Act and seeking similar relief. The actions were consolidated.

The plaintiffs alleged that the City violated the terms of its permits that authorize discharge of wastewater from the City's Combined Sewer Overflows (CSO) Control Facilities and its wastewater

B-116 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities, continued treatment facilities. In 1998, the plaintiffs and the City agreed to the entry of a consent decree relating to the CSO Control Facilities. On December 20, 1999, the First Amended Consent Decree (the "FACD") was entered with the United States District Court for the Northern District of Georgia. The United States, the State of Georgia, and the City are the parties to the FACD. Because claims brought by Riverkeeper were resolved under the CSO Consent Decree, Riverkeeper is not a party to the FACD.

CSO Consent Decree

With respect to the October 10, 1995 action brought against the City by the Riverkeeper, the court dismissed allegations regarding the phosphorus reduction program and common law nuisance claims, but found that the City violated federal and State water pollution laws with regard to the City's operation of its Tanyard Creek, Proctors Creek/North Avenue, and Proctor Creek/Greensferry CSO treatment facilities. As mentioned, the City and the citizen plaintiffs settled the lawsuit in what is referred to as the CSO Consent Decree (EPA and the EPD also joined). The CSO Consent Decree required the City to study the performance of the existing CSO treatment facilities, evaluate treatment alternatives that may be necessary for meeting State water quality standards, and improve the performance, maintenance, operation, and management of the existing treatment facilities. As of June 30, 2016, all projects required under the CSO Consent Decree were substantially complete.

First Amended Consent Decree The FACD resolved allegations regarding the City's wastewater treatment facilities, inter-jurisdictional requirements, and the City's sewerage collection and transmission system. For the wastewater treatment facilities, the FACD requires the City to: continue its ongoing wastewater treatment facilities Capital Improvement Program to complete upgrades at the R.M. Clayton, Utoy Creek, Intrenchment Creek, and South River Water Reclamation Centers; install and implement a maintenance management system, revise the current operations program, and implement upgrades to the current laboratory information system; and review its inter-jurisdictional agreements to address over-loading and pretreatment issues. There are milestones that must be completed on schedule. The provisions regarding the wastewater treatment facilities were completed in March 2004. All capital improvements, upgrades, and repairs under the FACD had an original completion date of July 1, 2014.

Amendment to the First Amended Consent Decree

On September 24, 2012, the court entered an amendment to the FACD. This amendment contained five changes: (1) it extended the deadlines on the work to rehabilitate and provide capacity relief in the City’s sewerage collection and transmission system with the final deadline for this work under the FACD extended from 2015 to 2027; (2) it eliminated the requirement that sewer lines that were merely surcharging as opposed to overflowing be upgraded; (3) it required that the City complete one major project, the Peachtree Creek Storage and Pump Station by July 1, 2014; (4) it required the City to reassess its financial capability on July 1, 2020 and accelerate remaining projects if financial conditions substantially improve; and (5) it required the City to report certain performance metrics to federal and state environmental protection agencies on a semi-annual basis as opposed to a quarterly basis. This amendment will allow the City to continue to improve the financial condition of its water

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B-117 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities, continued and wastewater system, balance its competing system needs, and prevent a substantial increase in the burden on its ratepayers.

Clean Water Atlanta Program

The City is actively seeking federal and state grants and loans and other sources of funding to perform the tasks outlined above as part of its Clean Water Atlanta (the "CWA") Program. Key elements of the comprehensive funding and financing plan include:

Municipal Option Sales Tax (MOST) – Effective October 1, 2004, the Georgia General Assembly enacted a statute that allowed the City of Atlanta to impose a 1% sale and use tax dedicated to water and wastewater purposes subject to approval through a referendum of the voters in the City. The statute provided that the tax would be for an initial four-year term with up to two four-year extensions that were also subject to voter referendum. The voters approved the first term in July 2004, the second term in March 2008, and the third term in March 2012. In 2010, the statute was amended to allow up to three four-year extensions. The voters approved the fourth term in March 2016. The fourth four-year term will end on September 30, 2020. Since October 1, 2004, a 1% Municipal sales and use tax has been collected for retail sales and use occurring in the incorporated city limits of Atlanta. Proceeds from this tax are specifically for funding renovations to the City's water and sewer system. Each four year term of the MOST may raise an amount of revenue not to exceed $750,000,000. Proceeds from the MOST for fiscal year 2016 were $132,653,000, of which $11,332,000 were receivable from the Georgia Department of Revenue at June 30, 2016.

Federal Appropriation – Some small Federal grants have been obtained and efforts to secure additional Federal grants continue.

State GEFA Loans – The State of Georgia passed legislation to provide up to $50 million per year in low interest Georgia Environmental Facilities Authority (GEFA) loans to the City. The City is pursuing the maximum loan amount for each year of the CWA Program. Liabilities for these loans will be recorded at the time funds are drawn. In fiscal year 2016, the City received $5,592,000 in GEFA funding. As of June 30, 2016, the City had $168,222,000 in short and long-term loans outstanding to GEFA.

The Atlanta City Council approved annual increases to the current water and wastewater rates to support revenue bonds financing the five year portion (2008 – 2012) of the CWA Capital Improvement Program. The graduated three tiered rate structure is intended to minimize, to the extent possible, the impact of rate increases on ratepayers to maintain affordability and to permit water conservation. The fiscal year 20012-2016 rates are summarized below. In addition to the rates shown below, each water and wastewater bill includes a $.15 per 100 cubic feet security surcharge. In July 2012, the City Council approved holding the current water and wastewater rates at fiscal year 2012 levels through fiscal year 2016.

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B-118 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities, continued

Graduated Monthly Water Rate Structure:

Water Consumption 2012 2013 2014 2015 2016

Base charge $6.56 $6.56 $6.56 $6.56 $6.56 0-3 ccf $2.58 $2.58 $2.58 $2.58 $2.58 4-6 ccf $5.34 $5.34 $5.34 $5.34 $5.34 Above 7 ccf $6.16 $6.16 $6.16 $6.16 $6.16

Graduated Monthly Wastewater Rate Structure: Water Consumption 2012 2013 2014 2015 2016

Base charge $6.56 $6.56 $6.56 $6.56 $6.56 1-3 ccf $9.74 $9.74 $9.74 $9.74 $9.74 4-6 ccf $13.64 $13.64 $13.64 $13.64 $13.64 Above 7 ccf $15.69 $15.69 $15.69 $15.69 $15.69

Consent Orders for Drinking Water System

The City is subject to two administrative Consent Orders issued by the Georgia Department of Natural Resources Environmental Protection Division. They are dated December 9, 1997, and March 21, 2003. Those Orders require capital improvement at the Chattahoochee and Hemphill Treatment Plants, as well as operational improvement to ensure compliance with Georgia Rules for Safe Drinking water. While the City is in substantial compliance with the provisions of both Orders, certain aspects of the capital program remain to be completed.

Estimated Capital Costs to Complete Compliance with Decrees and Orders

The DWM is in the midst of a Capital Improvement Program mandated by court orders, regulatory and priority requirements. This Capital Improvement Program details all of the improvements needed through 2027 to meet the aforementioned objectives. The current cost estimate of the overall Capital Improvement Program is approximately $2.89 billion.

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B-119 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Commitments and Contingent Liabilities, continued

The following is a summary of the funded and unfunded future costs to complete projects by type based on the current estimate:

Total Project Types 2006̻2027 CIP (In Millions) Wastewater Projects: CSO Consent Decree $ 714 First Amended Decree 1,694 Regulatory 96 Renewal & Extension Fund Projects 829 Subtotal 3,333

Water Projects: Consent Order 80 Non̻Consent Order 2,017 Subtotal 2,097

Grand total $ 5,430

V. Pension and Postemployment Benefits

A. Pensions

The City maintains the following separately administered pension plans:

Plan Type Plan Name Agent multiple-employer, defined benefit The General Employees’ Pension Plan Single employer, defined benefit Firefighters’ Pension Plan Single employer, defined benefit Police Officers’ Pension Plan Single employer, defined contribution General Employees’ Defined Contribution Plan

A stand-alone audited financial report is issued for the three defined benefit plans and can be obtained at the below address. The defined contribution plan does not have separately issued financial statements. At page 120 is a condensed financial statement for the defined contribution plan. City of Atlanta 68 Mitchell Street, S.W. Suite 1600 Atlanta, Georgia 30335

The valuation date for the three defined benefit plans is July 1, 2014, with the results rolled forward to the measurement date of June 30, 2015. The allocation of the pension liability is based upon fiscal year 2015 contributions from the various departments. The City is presenting net pension liability as of June 30, 2015 for the fiscal year 2016 financials.

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B-120 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Pensions, continued

The General Employees’ Pension Plan Plan Description The General Employees’ Pension Plan (GEPP) is an agent multiple-employer defined benefit plan and was established by a 1924 Act of the State of Georgia Legislature to provide retirement benefits for full-time permanent employees of the City of Atlanta (the City), excluding sworn personnel of the Police and Fire Rescue Departments, and the employees of the Atlanta Board of Education (the School System) who are not covered under the Teachers Retirement System of Georgia. Until 1983, the Georgia Legislature established all requirements and policies of the GEPP. By a constitutional amendment, effective July 1983, control over all aspects of the GEPP transferred to the City under the principle of Home Rule. The types of benefits offered by the GEPP are: retirement, disability, and pre-retirement death benefits. Classified employees and certain nonclassified employees pay grade 18 and below not covered by either the Firefighters’ or Police Officers’ Pension Plans, and hired after September 1, 2005 are required to become members of the GEPP.

The funding methods and determination of benefits payable were established by the legislative acts creating the GEPP, as amended, and in general, provide that funds are to be accumulated from employee contributions, City and School System contributions, and income from the investment of accumulated funds.

General Employees’ Pension Plan a. Administration of the GEPP The GEPP is administered as an agent multiple-employer defined benefit pension plan by the Board of Trustees (the Board). Board membership includes The Mayor or his designee, the City’s Chief Financial Officer, a member of the City Council, two active City employee representatives, one retired City representative, one active School System representative, and one retired School System Representative. All modifications to the GEPP must be supported by actuarial analysis and receive the recommendations of the City Attorney, the Chief Financial Officer, and the Board of Trustees. Each pension law modification must be adopted by at least two-thirds vote of the City Council and approved by the Mayor.

b. Contribution requirements of the GEPP – The City Under the Georgia Legislature principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Pension Board has the authority to administer the GEPP. The funding methods and determination of benefits payable were established by the Atlanta Code of Ordinances, Part 1, Section 6 legislative acts creating the GEPP, as amended, and in general, provide that funds are to be accumulated from employee contributions, City contributions, and income from the investment of accumulated funds.

Employees hired on or after September 1, 2011 who are below pay grade 19 or its equivalent are required to participate in a hybrid defined benefit plan with a mandatory defined contribution component. The defined benefit portion of the GEPP includes a 1% multiplier, which includes a mandatory employee contribution of 3.75% of salary which is matched 100% by the City.

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B-121 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Pensions, continued

Additionally, these employees may voluntarily contribute up to an additional 4.25% of salary, which is also matched 100% by the City. Employees vest in the amount of the City’s contributions at a rate of 20% per year and become fully vested in the City’s contribution after 5 years of participation.

Beginning on November 1, 2011, employees participating in the GEPP and hired before September 1, 2011, or after January 1, 1984, had an increase of 5% in their mandatory contributions into the GEPP fund in which they participate. The contribution is such that the new contribution is 12% of salary (without a designated beneficiary) or 13% of salary (with a designated beneficiary).

Beginning in fiscal year 2012, there is a cap on the maximum amount of the City’s contribution to the GEPP measured as a percentage of payroll. The City’s annual contribution to the Plan may not exceed 35% of payroll of the participants in the City’s three defined benefit plans, which include General Employees’, Firefighters’ and Police Officers’ Pension Plans. In the event that this 35% cap is reached, the City will fund any overage for the first 12-month period from its reserves. During that period, the City’s management must agree on an alternative method to reduce the overage. If no alternative is reached, beginning in the second 12-month period, the City and the participants will equally split the cost of the coverage, subject only to a provision that employee contributions may not increase more than 5%. Contribution requirements may be amended by the Board under the authority of the City ordinance, but the employer contribution requirement is subject to State minimums. During fiscal year 2015, the City had an actuarial assessment conducted to review the pay cap. The assessment determined the City was at 26.9%, well within the cap. The 35% cap is not projected to occur over the next 30 years based on the fiscal year 2016 results projected forward with Pension Reform. During the year ended June 30, 2016 the City contributions were $54,236,000.

Contribution requirements to the GEPP – the School System Employee contributions for the School System are: Unmarried employees without dependents 7% of base salary Unmarried employees with dependent minor children 8% of base salary Married employees 8% of base salary

Employer contributions for the School System changed in 2014 as a result of the Atlanta Board of Education adopting a resolution (Report 13/14-01177) dated June 2, 2014, to the funding policy. Beginning fiscal year 2015 contributions under the prior policy are based on a level percent of payroll amortization method using a closed amortization period with 12.5 years remaining as of July 1, 2013. The new policy increases the prior year’s contribution 3.0% annually until the Plan is fully funded. c. Description of GEPP benefit terms – The City In June 2011, the City Council approved changes for the City’s GEPP, effective on September 1, 2011 for new hires, and November 1, 2011 for existing employees.

Prior to the change approved in June 2011, the GEPP provided monthly retirement benefits that initially represent 3% for each year of credited service times the participants’ final average three-year earnings

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(limited to 80% of the average). Retirement benefits were adjusted annually based on the change in the consumer price index, limited to 3% per year. Upon the death of a vested participant who has beneficiary coverage, his or her eligible beneficiary(ies) would be entitled to three fourths of the amount the deceased participant was receiving or would have been entitled to receive.

The retirement age increased to age 62 for participants in the GEPP. Early Retirement Age is changed from any age (as long as vested) with penalty to age 52 for hires after September 1, 2011. Upon retirement, these participants will receive an annually calculated cost of living increase to their pension benefit that may not exceed 1% and is based upon the Consumer Price Index. Sick and vacation leave are no longer applied to retirement benefits for employees hired after September 1, 2011.

Below are the terms the GEPP has established to receive benefits.

Normal Pension: Hired before July 1, 2010: Age 65 or Age 60 after completing five years of service. Monthly benefit is 2.5% of average monthly salary for each year of credited service. Hired between July 1, 2010 and October 31, 2011: Age 65 or Age 60 after completing 10 years of service. Monthly benefit is 2.0% of average monthly salary for each year of credited service. Hired after October 31, 2011: Age 65 or Age 62 after completing 15 years of service. Monthly benefit is 1.0% of average monthly salary for each year of credited service. This amount cannot be less than $12 per month for each year of service, capped at 80% of average monthly salary.

The average monthly salary for participants hired before November 1, 2011, is the average of the highest consecutive 36 months of salary. For those employees hired after October 31, 2011, the average monthly salary is the average of the highest consecutive 120 months of salary.

Early Pension: The monthly benefit for employees hired before November 1, 2011, is reduced by one half of 1% per month for the first 60 months and by one quarter of 1% per month for the remaining months by which age at retirement is less than 60. More favorable early retirement adjustments may apply to participants in prior plans. Unreduced early retirement is available with 30 years of credited service. For employees hired after October 31, 2011, the monthly benefit amount is reduced by one half of 1% per month before age 62.

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Disability: Service requirement: Five years of credited service for non-job-related disability. None for job related disability. Normal pension based on service accrued and final average salary at disability, payable immediately; cannot be less than 50% of average monthly salary. This amount is payable until attainment of normal retirement age at which time the benefit is recalculated to include years while disabled as years of service. d. Description of GEPP benefit terms – the School System

The major provisions of the GEPP for the School System are as stated below.

Normal Pension: a participant may retire at age 65 or age 60 after completing 15 years of service. The monthly benefit is 2.5% of the average monthly salary for each year of credited service. This amount cannot be less than $17 per month for each year of service, and is capped at 80% of average monthly salary. Average monthly salary is defined as the highest average monthly base compensation over any 36-month period.

Early Pension: a participant must have 5 years of credited service. The normal pension monthly amount is reduced by one half of 1% per month for the first 60 months and one quarter of 1% per month for the remaining months by which age at retirement is less than 60. Unreduced early retirement is available with 30 years of credited service.

Disability: a participant must have 5 years of credited service for non-job related disability. For job-related disability there is no service requirement. Normal pension is based on service accrued and final average salary at disability, payable immediately; cannot be less than 50% of the average monthly salary. This amount is paid until attainment of normal retirement age at which time the benefit is recalculated to value years while disabled as years of service.

Firefighters’ and Police Officers’ Plan Plan Description City of Atlanta, Georgia Firefighters’ (FPP) and Police Officers’ (PPP) Pension Plans are single- employer defined benefit plans and were established by a 1924 Act of the State of Georgia Legislature to provide retirement benefits for full-time sworn firefighters and police officers’ of the City of Atlanta (the City) Fire Rescue Department and the Police Department. Until 1983, the Georgia Legislature established all requirements and policies of the FPP and PPP. By a constitutional amendment, effective July 1983, control over all aspects of the FPP and PPP transferred to the City under the principle of Home Rule. The types of benefits offered by the FPP and PPP are: retirement, disability, and pre-retirement death benefits. Participants should refer to the Atlanta, Georgia, Code of Ordinances, Section 6 (Plan agreement) for more complete information. Under the principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Board has the authority to establish and amend benefit terms and contributions.

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a. Administration of the FPP and PPP The FPP and PPP are administered as a single-employer defined-benefit plan by separate Boards of Trustees with each Board including an appointee of The Mayor or his designee, the City’s Chief Financial Officer, a member of City Council, two active employee representatives and one retired employee representative. All modifications to the FPP and PPP must be supported by actuarial analysis input and receive the recommendations of the City Attorney, the Chief Financial Officer, and the pertinent Board of Trustees. Each pension law modification must be adopted by at least two thirds vote of the City Council and approved by the Mayor.

b. Contribution Requirements to the FPP and PPP Under the Georgia Legislature principle of Home Rule and the Atlanta Code of Ordinances, Section 6, the Board has the authority to administer the FPP and PPP including establishing and amending contribution requirements. The funding methods and determination of benefits payable were established by the Atlanta Code of Ordinances, Section 6 legislative acts creating the FPP and PPP, as amended, and in general, provide that funds are to be accumulated from employee contributions, City contributions, and income from the investment of accumulated funds.

Sworn personnel employed by the Fire Rescue Department and Police Department are required to contribute to the FPP and PPP. Employees must contribute either 8% of base pay, if hired after August 31, 2011, 12% of base pay if hired before September 1, 2011 without an eligible beneficiary, or 13% of base pay if hired before September 1, 2011 with an eligible beneficiary. Contribution requirements may be amended by the Board under the authority of the City ordinance, but the employer contribution requirement is subject to State minimums.

On November 1, 2011, the sworn personnel of the Fire Rescue Department and Police Department participating in the FPP and PPP and hired before September 1, 2011, or after January 1, 1984, had an increase of 5% in their mandatory contributions into the FPP and PPP. The contribution is such that the new contribution is 12% of salary (without a designated beneficiary) or 13% of salary (with a designated beneficiary). Beginning in fiscal year 2012, there is a cap on the maximum amount of the City’s contribution to the defined benefit pension funds measured as a percentage of payroll. The City’s annual contribution to the funds may not exceed 35% of payroll of the participants in the three Plans in aggregate. In the event that this 35% cap is reached, the City will fund any overage for the first 12 month period from its reserves. During that period, the City’s Management must agree on an alternative method to reduce the overage. If no alternative is reached, beginning in the second 12 month period, the City and the participants will equally split the cost of the overage, subject only to a provision that employee contributions may not increase more than 5%. During fiscal year 2015 the City had an actuary assessment conducted to review the pay cap. The assessment determined the City was at 26.9%, well within the cap.

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Retirement Age is changed from any age (as long as vested) with penalty to age 52 for hires after September 1, 2011. Upon retirement, these participants will receive an annually calculated cost of living increase to their pension benefit that may not exceed 1% and is based upon the Consumer Price Index. Sick and vacation leave are no longer applied to retirement benefits for hires after September 1, 2011.

Contributions to the FPP and PPP during the year ended June 30, 2016 were $16,454,000 and $25,441,000 respectively.

c. Description of the Benefit Terms for FPP and PPP In June 2011, the City Council approved changes to the benefits for the FPP and PPP, effective on September 1, 2011 for new hires, and November 1, 2011 for existing employees. Currently, sworn personnel employed by the Fire Rescue Department and Police Department are required to contribute to the FPP and PPP.

Prior to the change approved in June 2011, the FPP and PPP provided monthly retirement benefits that initially represent 3% for each year of credited service times the participants’ final average three-year earnings (limited to 80% of the average). Retirement benefits were adjusted annually based on the change in the consumer price index, limited to 3% per year. Upon the death of a vested participant who has beneficiary coverage, his or her eligible beneficiary(ies) would be entitled to three fourths of the amount the deceased participant was receiving or would have been entitled to receive. Below are the terms the FPP and PPP has established to receive benefits. Normal retirement age: Age 65 with at least five years of service Age 57 with at least 15 years of service Age 55 with at least 15 years of service (hired before September 1, 2011) Age 55 with at least 10 years of service (hired before July 1, 2010) Any age with at least 30 years of service

For early retirement there is an adjustment of the retirement benefit being reduced by 0.5% for each month by which the participant’s early retirement age precedes normal retirement age (for employees hired after August 31, 2011). The retirement benefit is reduced by 0.5% for each of the first 60 months and by 0.25% for each additional month by which the participant’s early retirement age precedes the normal retirement age (for employees hired before September 1, 2011).

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Early retirement age: Age 47 with at least 15 years of service (hired after August 31, 2011) Any age with at least 15 years of service (hired during the period July 1, 2010 through August 31, 2011) Any age with at least 10 years of service (hired before July 1, 2010)

For participants who incur a catastrophic injury in the line of duty, the basic pension formula is 100% of the top salary for the grade and position occupied by the participant at the time of disability. For a service-connected disability for participants hired before 1986, the basic pension formula is the greater of 70% of the top salary for the employee’s grade and position occupied by the participant at the time of disability or basic pension formula, offset by worker’s compensation payments such that the combination of payments does not exceed 100% of the participant’s salary at the time of disability.

For participants hired on or after January 1, 1986, the basic pension formula is the greater of 50% of average monthly earnings at the time of disability or basic pension formula, offset by worker’s compensation payments such that the combination of payments does not exceed 75% of the participant’s salary at the time of disability (payable until the earlier of recovery from disability or Normal Retirement Age).

Pre-retirement death benefit: 75% of the basic pension formula (payable to the eligible beneficiary upon death not in the line-of-duty). 100% of base pay offset by worker’s compensation or other payments (payable to the eligible beneficiary for first two years after death in the line-of-duty). 75% of the larger of the basic pension formula or 70% of top salary for the employee’s grade (payable to the eligible beneficiary beginning two years after death in the line-of-duty). 75% of the basic pension formula (payable to the eligible beneficiary beginning two years after death in the line-of-duty if the employee was covered by the 1986 amendment).

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Membership

As of the beginning of the fiscal year ended June 30, 2015, pension plan membership consisted of the following:

General Employees - Police The City Firefighters Officers Inactive plan members or beneficiaries currently receiving benefits 3,897 1,004 1,420 Inactive plan members entitled to, but not yet receiving benefits 209 12 35 Active plan members 2,920 1,043 2,025

Total membership 7,026 2,059 3,480

The Plans’ Investments

The investments for the Plans are made within the Public Retirement Systems Investment Authority Law of the Georgia Code (OCGA 47-20-80). The Boards have been granted the authority by City Ordinance to establish and amend the Plan investment policy. The Boards are responsible for making all decisions with regard to the administration of their Plan, including the management of Plan assets, establishing the investment policy and carrying out the policy on behalf of the Plan.

The Plan’s investments are managed by various investment managers under contract with the respective Board who have discretionary authority over the assets managed by them and within the Plan’s investment guidelines as established by the Board. The investments are held in trust by the Plan’s custodian in the Plan’s name. These assets are held exclusively for the purpose of providing benefits to members of the respective Plan’s and their beneficiaries.

State of Georgia Code and City statutes authorize the Plans to invest in U.S. government obligations, U.S. government agency obligations, State of Georgia obligations, obligations of a corporation of the U.S. government, the Georgia Fund 1 (a government investment pool maintained by the State of Georgia), and alternative investments. The Plans invest in repurchase agreements only when they are collateralized by U.S. government or agency obligations. The Plans are also authorized to invest in collateralized mortgage obligations (CMOs) to maximize yields. These securities are based on cash flows from interest payments on underlying mortgages. CMOs are sensitive to prepayment by mortgagees, which may result from a decline in interest rates. For example, if interest rates decline and mortgagees refinance their mortgages, thereby prepaying the mortgages underlying these securities, the cash flows from interest payments are reduced and the value of these securities declines. Likewise, if mortgagees pay on mortgages longer than anticipated, the cash flows are greater and the return on the initial investment would be higher than anticipated.

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In the development of the current asset allocation plan, each of the Boards reviews the long-term performance and risk characteristics of various asset classes, balancing the risks and rewards of market behavior, and reviewing state legislation regarding investments options. There were no changes to the policy in fiscal year 2016. The policy may be amended by the Board with a majority vote of its members.

The long-term expected rate of return on pension plan investments was determined using a building-block method 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 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. Estimates of real rates of return for each major asset class included in the Plan’s target asset allocation as of June 30, 2016, are summarized in the following tables.

General Employees' Plan Long-Term Expected Real Asset Class Target Allocation Rate of Return Domestic equity 50% 6.6% International equity 20% 2.2% Fixed income 25% 7.1% Alternative investments 5% 6.2% 100%

Firefighters' and Police Officers' Plans Long-Term Expected Real Asset Class Target Allocation Rate of Return Broad equity market 7% 6.0% Domestic large-cap equity 30% 6.9% Domestic mid-cap equity 15% 8.9% Domestic small-cap equity 9% 5.0% International equity 9% 3.3% Fixed income 25% 0.8% Alternative investments 5% 7.5% 100%

For the year ended June 30, 2016, the annual money-weighted rate of return for General Employees’, Firefighters’ and Police Officers’ Pension Plan investments, net of pension plan investment expense was 1.24%, -1.13%, and -0.71%, respectively. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

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Net Pension Liability

The total pension liability is based on the July 1, 2014 actuarial valuation rolled forward to June 30, 2015 using standard roll-forward techniques (dollars in thousands):

Gen eral Employees' - Police the City Firefighters' Offciers' Total

Total pension liability $ 1,873,213 853,690 1,294,907 4,021,810 Plan fiduciary net position 1,153,715 644,649 983,385 2,781,749 Net pension liabililty 719,498 209,041 311,522 1,240,061

Plan fiduciary net position as a percentage of the total pension liability 61.59% 75.51% 75.94% 69.17%

The net pension liability of the General Employees’ (the City), Firefighters’ and Police Officers’ Plans allocated among the general government, the Department of Aviation, the Department of Watershed Management and Other Non-major Enterprise Funds as June 30, 2016 (dollars in thousands):

General Police Employees' Firefighters' Officers' Total General Government $ 337,674 $ 158,244 $ 286,941 $ 782,859

Department of Airport 82,671 50,797 24,581 158,049

Department of Watershed Management 235,708 — — 235,708

Other Non-major Enterprise 63,445 — — 63,445

Total $ 719,498 $ 209,041 $ 311,522 $ 1,240,061

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Changes in Net Pension Liability

The City is presenting net pension liability for the year June 30, 2016 based on the June 30, 2015 measurement date, as follows (dollars in thousands):

General Employees' - the City Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $ 1,832,883 1,145,333 687,550 Changes for the year: Service cost 20,191 — 20,191 Interest expense 133,276 — 133,276 Difference between expected and actual investments earnings (1,399) — (1,399) Contributions - employer — 48,015 (48,015) Contributions - employee — 16,975 (16,975) Net investment income — 56,575 (56,575) Benefit payments and refunds (111,738) (111,738) — Administrative expenses — (1,445) 1,445 Net changes 40,330 8,382 31,948 Balances at June 30, 2015 $ 1,873,213 1,153,715 719,498

Firefighters' Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $ 846,325 658,508 187,817 Changes for the year: Service cost 12,612 — 12,612 Interest expense 60,396 - 60,396 Difference between expected and actual investment earnings — 2,833 (2,833) Demographic experience (23,053) (178) (22,875) Assumption changes — — — Contributions - employer — 20,866 (20,866) Contributions - employee — 5,637 (5,637) Net investment income — — — Benefit payments and refunds (42,590) (42,590) - Administrative expenses — (427) 427 Net changes 7,365 (13,859) 21,224 Balances at June 30, 2015 $ 853,690 644,649 209,041

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Police Officers' Increase (Decrease) Total Pension Plan Net Net Pension Liability Position Liability Balances at June 30, 2014 $ 1,270,494 987,507 282,987 Changes for the year: Service cost 22,387 — 22,387 Interest expense 91,326 — 91,326 Difference between expected and actual investment earnings — 9,235 (9,235) Demographic experience (33,047) (497) (32,550) Contributions - employer — 32,693 (32,693) Contributions - employee — 11,224 (11,224) Benefit payments and refunds (56,253) (56,253) — Administrative expenses — (524) 524 Net changes 24,413 (4,122) 28,535 Balances at June 30, 2015 $ 1,294,907 983,385 311,522

Discount Rate

The discount rates used to measure the total pension for the Plans is as indicated below. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the actuarial determined contributions rates from employers and employees. 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 plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Following are the discount rates as of June 30, 2015:

General Employees' Plan City School System Firefighters' Police Officers'

7.50% 7.50% 7.41% 7.41%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the Plans, calculated using the discount rates for each Plan as of June 30, 2016, as well as what the Plan net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher that the current rate (dollars in thousands):

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Discount Rate 1% Decrease Current 1% Increase 6.50% 7.50% 8.50% General Employees - the City $ 935,841 719,498 537,382 General Employees - School System $ 559,931 500,583 449,684

6.41% 7.41% 8.41% Firefighters' Pension $ 317,918 209,041 119,100 Police Officers' Pension $ 490,760 311,522 165,534

Actuarial Assumptions

The total pension liability was determined by an actuarial valuation as of July 1, 2014 rolled forward to the June 30, 2015 measurement date, using the following actuarial assumptions, applied to all periods included in the measurement.

Investment rate of Inflation Salary increases return General Employees' 2.75% 3.5% 7.5% Firefighters' 2.5% 4.0% 7.41% Police Officers' 2.5% 4.0% 7.41%

Each of the Plans last experience study was conducted in 2011.

The actuarially determined contribution rates are calculated as of June 30, one year prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the most recent contribution rate are as follows: General Employees’ -

the City Firefighters’ Police Officers’ Valuation date July 1, 2014 July 1, 2014 July 1, 2014

Actuarial cost method Entry age normal Entry age normal Entry age normal Level percentage, Level percentage, Level percentage, Amortization method closed closed closed

Remaining amortization period 26 years 27 years 27 years Market value Asset valuation method Market value Market value

For the General Employees’ Plan, the mortality rates were based on the RP-2000 Combined Healthy Mortality Table set to reasonably reflect future mortality improvement based on a seven and a half year

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A. Pensions, continued review of mortality experience for the 2003 – 2011 period. The mortality will be assessed again at the time of the next review, and further adjustment or expected improvement in life expectancy will be made if warranted.

Firefighters’ and Police Officers’ Pension Plans mortality rates were based on the sex-distinct rates set forth in the RP-2000 Mortality Table projected to 2015 by Scale AA, as published by the Internal Revenue Code (IRC) Section 430; future generational improvements in mortality have not been reflected.

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

The City recognized total pension expense of $69,762,000 for the year ended June 30, 2016. Of the total pension expense, $45,599,000 was recognized in the governmental activities and $24,163,000 was recognized in the business type activities.

Deferred outflows of resources totaling $158,947,000, with $96,130,000 of contributions made after the plan’s measurement date, $38,250,000 for demographic gains/losses, $24,567,000 for assumption changes.

The deferred inflows of resources totaling $120,357,000 with $68,854,000 represents the pension plans net differences between projected and actual investment earnings and $51,503,000 for demographic and assumption changes.

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The following table presents a summary of deferred inflows and outflows of resources related to the pension plans (dollars in thousands):

Amortization Beginning Year of period of year End of year deferral (in years) balance Additions Deductions balance

General employees' Deferred Inflows Net difference between projected and actual pension investments 2014 5.00 $ (91,564) $ — $ 22,891 $ (68,673) 2015 5.00 — 27,518 (5,504) 22,014

Difference between expected and actual experience 2015 4.00 — (1,399) 350 (1,049) $ (47,708) Deferred Outflows Contributions subsequent to the measurement date — 54,235 — 54,235 $ 54,235

Firefighters' Deferred Inflows Net difference between projected and actual pension investments 2014 5.00 (57,062) — 14,265 (42,797) 2015 5 — 45,540 (9,108) 36,432 Demographic gain/loss 2015 11.95 — (22,875) 1,914 (20,961) $ (27,326)

Deferred Outflows Contributions subsequent to the measurement date — 16,454 — 16,454 Demographic gain/loss 2014 12 9,271 — (820) 8,451 Assumption changes 2014 12 14,930 — (1,321) 13,609 $ 38,514 Police Officers' Deferred Inflows Net difference between projected and actual pension investments 2014 5.00 (89,340) — 22,335 (67,005) 2015 5.00 — 63,969 (12,794) 51,175 Demographic gain/loss 2015 10.65 — (32,549) 3,056 (29,493) $ (45,323)

Deferred Outflows Contributions subsequent to the measurement date — 25,440 — 25,440 Demographic gain/loss 2014 11.08 33,081 — (3,282) 29,799 Assumption changes 2014 11.08 12,166 — (1,207) 10,959 $ 66,198

Grand total of deferred inflows $ (120,357)

Grand total of deferred outflows $ 158,947

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The following table presents a summary of allocations to the departments in the collective deferred outflows and deferred inflows of resources as indicated above for the year ended June 30, 2016 (amounts in thousands): Department of Balance General Watershed Department of Other non-major June 30, 2016 Government Management Aviation enterprise funds General employees' Deferred Inflows Net difference between projected and actual pension investments $ (46,659) $ (21,876) $ (15,285) $ (5,361) $ (4,137) Difference between expected and actual experience (1,049) (492) (344) (121) (92) (47,708) (22,368) (15,629) (5,482) (4,229) Deferred Outflows Contributions subsequent to the measurement date 54,235 25,478 17,768 6,232 4,757 54,235 25,478 17,768 6,232 4,757

Deferred amount to be amortized $ (47,708) $ (22,368) $ (15,629) $ (5,482) $ (4,229)

Firefighters' Deferred Inflows Net difference between projected and actual pension investments $ (6,365) $ (4,818) $ — $ (1,547) $ —

Demographic gain/loss (20,961) (15,867) — (5,094) — (27,326) (20,685) — (6,641) — Deferred Outflows Contributions subsequent to the measurement date 16,454 12,456 — 3,998 — Demographic gain/loss 8,451 6,397 — 2,054 — Assumption changes 13,609 10,302 — 3,307 — 38,514 29,155 — 9,359 —

Deferred amount to be amortized $ (5,266) $ (3,986) $- $ (1,280) $-

Police Officers' Deferred Inflows Net difference between projected and actual pension investments $ (15,830) $ (14,506) $ — $ (1,324) $ —

Demographic gain/loss (29,493) (27,194) — (2,299) — (45,323) (41,700) — (3,623) — Deferred Outflows Contributions subsequent to the measurement date 25,440 23,426 — 2,014 — Demographic gain/loss 29,799 27,442 — 2,357 — Assumption changes 10,959 10,092 — 867 — 66,198 60,960 — 5,238 —

Deferred amount to be amortized $ (4,565) $ (4,166) $- $ (399) $-

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Contributions subsequent to the measurement date of $ 96,129,000 will be recognized as a reduction of the net pension liability during the year ended June 30, 2017. Other amounts reported as deferred outflow of resources and deferred inflow of resources related to pensions will be recognized in pension expense as follows (amount in thousands):

General employees' Department of Amortization General Watershed Department amount Government Management of Aviation 2017 $ 17,736 $ 8,317 $ 5,811 $ 2,038 2018 17,736 8,317 5,811 2,038 2019 17,736 8,317 5,811 2,038 2020 (5,500) (2,583) (1,804) (632) 2021 and thereafter — — — — $ 47,708 $ 22,368 $ 15,629 $ 5,482

Firefighters' 2017 $ 4,930 $ 3,732 $ — $ 1,198 2018 4,930 3,732 — 1,198 2019 4,930 3,732 — 1,198 2020 (9,335) (7,067) — (2,268) 2021 and thereafter (189) (143) — (46) $ 5,266 $ 3,986 $ — $ 1,280

Police Officers'

2017 $ 8,109 $ 7,452 $ — $ 657 2018 8,109 7,452 — 657 2019 8,109 7,452 — 657 2020 (14,228) (13,113) — (1,115) 2021 and thereafter (5,534) (5,077) — (457) $ 4,565 $ 4,166 $ — $ 399

Defined Contribution Plan

Atlanta, Georgia Code of Ordinances Section 6-2(c) sets forth the City's General Employees' Defined Contribution Plan. The Plan provides funds at retirement for employees of the City and in the event of death, provides funds for their beneficiaries, through an arrangement by which contributions are made to the Plan by employees and the City. The current contribution of the City is 6% of employee payroll. Employees also make a mandatory pretax contribution of 6% plus have the option to contribute amounts up to the amount legally limited for retirement contributions.

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B-137 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Pensions, continued

Each employee directs how the funds in their retirement account shall be invested. The employee may direct lump sum distributions from their retirement account upon separation from the City, death, disability (pursuant to the City’s disability retirement provisions), or retirement. There are no assets in a Trust accumulated to pay benefits.

All modifications to the Plan, including contribution requirements, must receive the recommendations and advice from the offices of the Chief Financial Officer and the City Attorney, respectively. Each pension law modification must be adopted by at least two-thirds vote of the City Council and approved by the Mayor.

All new employees, hired after July 1, 2001, who previously would have been enrolled in the General Employees' Defined Benefit Plan, were enrolled in the General Employees' Defined Contribution Plan.

During 2002, persons employed prior to July 1, 2001 were given the option to transfer to the General Employees' Defined Contribution Plan.

Effective September 1, 2005, classified employees and certain non-classified employees pay grade 18 and below then enrolled in the General Employees' Defined Contribution Plan had the one-time option of transferring to the General Employees’ Pension Plan. Classified employees and certain non-classified employees pay grade 18 and below, not covered by either the Police Officers’ or Firefighters’ Pension Plans, hired after September 1, 2005 are required to become members of the General Employees’ Pension Plan.

Amendments to Defined Contribution Plan

Employees hired on or after September 1, 2011, who are either sworn members of the police department or the Fire Rescue Department, or who are below payroll grade 19 or its equivalent, are required to participate in the mandatory defined contribution component which includes a mandatory employee salary contribution of 3.75% and is matched 100% by the City. Additionally, these employees may voluntarily contribute up to an additional 4.25% of salary which is also matched 100% by the City. Employees vest in the amount of the City’s contributions at a rate of 20% per year and become fully vested in the City’s contribution after 5 years of participation.

As of June 30, 2016, there were 1,603 participants in the General Employees' Defined Contribution Plan. The covered payroll for employees in the Plan was approximately $113,913,000. Employer contributions for the year ended June 30, 2016, were approximately $9,647,000 and employee contributions were approximately $9,727,000, totaling 17.0% of covered payroll. In addition, there were another 2,883 Defined Contribution Plan participants in the hybrid plans.

The General Employees' Defined Contribution Plan uses the accrual basis of accounting. Investments are reported at fair value, based on quoted market prices and there were no nongovernmental individual investments that exceeded 5% of the net position of the Plan.

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B-138 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

A. Pensions, continued

Condensed financial statement information for the Defined Contribution Plan for the year ended June 30, 2016, is shown below (dollars in thousands):

Current assets: Investment Domestic fixed income securities $ 35,965 Domestic equities 23,255 Alternative partnerships 392 Comingled funds 53,125

Other assets 5,893

Total $ 118,630

Additions: Employer contributions 10,044

Employee contributions 10,106

Refunds and other 693 Total additions 20,843

Deductions:

Benefit Payments 6,946

Administrative expenses 59 Total deductions 7,005

Change in Net Assets held in trust for pension benefits $ 13,838

B. Post-Employment Benefits

Plan Description: The City of Atlanta Retiree Healthcare Plan (Plan) is a single-employer defined benefit healthcare plan which provides Other Post-employment Benefits (OPEB) to eligible retirees, dependents and their beneficiaries. The Plan was established by legislative acts and functions in accordance with existing City laws. OPEB of the City includes health, dental, and vision care and life insurance. Separate financial statements are not prepared for the Plan.

Funding Policy: The City is not required by law or contractual agreement to provide funding for OPEB other than the pay-as-you-go amounts necessary to provide current benefits to retirees, eligible dependents and beneficiaries. For the fiscal year ended June 30, 2016, the City made $43.7 million “pay-as-you-go” payments on behalf of the Plan. Retiree contributions vary based on the plan elected, dependent coverage and Medicare eligibility. Eligible retirees receiving benefits contributed $47.5 million through their required contributions.

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B-139 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Post-Employment Benefits, continued

Annual OPEB Cost and Net OPEB Obligation: The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC); an amount actuarially determined using the Entry Age Normal actuarial method. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years.

The following table shows the elements of the City’s OPEB cost for the year, the amount actually contributed on behalf of the Plan, and changes in the City’s net OPEB obligation to the Plan for the year ended June 30, 2016 (dollars in thousands):

Other General City-Wide DWM DOA Business-type Government Annual Required Contribution $ 78,424 $ 13,896 $ 10,170 $ 5,110 $ 49,248 Interest on Net OPEB Obligation 16,626 2,946 2,156 1,083 10,441 Adjustment to Annual Required Contribution (18,892) (3,348) (2,450) (1,231) (11,863) Annual OPEB Cost (expense) 76,158 13,494 9,876 4,962 47,826 "Pay As You Go" Payments Made (43,717) (7,479) (5,610) (2,147) (28,481) Increase in Net OPEB Obligation 32,441 6,015 4,266 2,815 19,345 Net OPEB Obligation - Beginning of Year 415,658 100,909 56,199 24,686 233,864 Net OPEB Obligation - End of Year $ 448,099 $ 106,924 $ 60,465 $ 27,501 $ 253,209

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the fiscal years ended June 30, 2014 – 2016 were as follows (dollars in thousands): Percentage of Annual Annual OPEB Cost Net OPEB Fiscal Year Ended OPEB Cost Paid Obligation

June 30, 2014 103,766$ 42.1%$ 384,826 June 30, 2015 74,141$ 58.4%$ 415,658 June 30, 2016 76,158$ 60.4%$ 448,099

Funded Status and Funding Progress: As of June 30, 2014, the most recent actuarial valuation date, the Plan was not funded. The unfunded actuarial accrued liability (UAAL) for benefits was $1.12 billion. The covered payroll was $348 million, and the ratio of the UAAL to the covered payroll was 321.42%. The Plan membership as of July 1, 2014, was 14,804; consisting of 7,656 current retirees, beneficiaries and dependents and 7,148 current active participants. There are no terminated participants entitled but not yet eligible.

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B-140 CITY OF ATLANTA, GEORGIA Notes to Financial Statements Year Ended June 30, 2016

Notes to the Financial Statements – Continued

B. Post-Employment Benefits, continued

results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, shown as required supplementary information following the notes to the financial statements, presents multiyear trend information on the actuarial value of plan assets relative to the actuarial accrued liability for benefits. Under the provisions of GASB 45, Accounting and Financial reporting by employers for postemployment benefits other than pensions, the City elected to use the June 30, 2014, actuarial report as the basis for determining the current year ARC requirement.

Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of the sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the June 30, 2014, actuarial valuation, the Individual Entry Age Normal actuarial cost method was used. It is amortized as a level percent of payroll over a 23 year period and a closed amortization method. The actuarial assumptions included 4.0 percent investment rate of return (net of administrative expenses) and an annual medical cost trend rate of 9 percent initially reduced by decrements to an ultimate trend rate of 5 percent after eight years. Both rates include a 3 percent inflation assumption. Currently there are no assets set aside that are legally held exclusively for OPEB. Deferred Compensation Plan

The City has adopted a deferred compensation plan in accordance with the 1997 revisions of Section 457 of the Internal Revenue Code. The plan, available to all City employees, allows an employee to voluntarily defer up to 25% of his/her gross compensation, not to exceed certain limits per year. Each participant selects one of three providers to administer the investment of the deferred funds. Administrative costs of the plan are deducted from the participants' accounts. The plan assets are held in custodial accounts for the exclusive benefit of the plan participants and their beneficiaries, and are therefore not included in the City's financial statements.

VI. Subsequent Events Business Activities Permits Fund

In September 2016, the City Council approved legislation to dissolve the Building Enterprise Fund, to anticipate and appropriate fund balances in the building permits fund and in the building renewal and extension fund into the General Fund. The Building Enterprise Fund fund balance of $52,219,000, as of June 30, 2016 will be transferred to the general fund and segregated such that they are expended only for the purposes for which they were collected. General Government

On September 1, 2016, the City of Atlanta issued Revenue Refunding Bonds (Public Safety Facility Project), Series 2016 Bonds for $27,150,000. The Series 2016 Bonds were issued for the purpose of refunding the Series 2006 Bonds and paying certain costs of issuance related to the Series 2016 Bonds.

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B-141

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B-142 Required Supplementary Information

B-143 B-144 CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Funding Progress for Other Post-Employment Benefits Year Ended June 30 (Dollars in thousands) (Unaudited)

Schedule of Funding Progress for OPEB (in thousands) Actuarial AAL Actuarial Value of Projected Unfunded AAL Funded Covered Percentage of Valuation Date Assets Entry Age (UAAL) Ratio Payroll Covered Payroll

July 1, 2010 - $ 1,408,268 $ 1,408,268 - $ 312,984 449.9% July 1, 2012 - $ 1,482,842 $ 1,482,842 - $ 321,056 461.9% July 1, 2014 - $ 1,119,869 $ 1,119,869 - $ 348,412 321.4%

See accompanying notes to required supplementary schedules and accompanying independent auditors' report

B-145 CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Employer Net Pension Liability Year Ended June 30 (Dollars in thousands) (Unaudited)

General Employees' Firefighters' Police Officers' 2015 2014 2015 2014 2015 2014 Total pension liability $ 1,873,213 $ 1,832,883 853,690 $ 846,325 1,294,907 $ 1,270,494 Plan fiducuiary net position $ 1,153,715 $ 1,145,333 644,649 $ 658,508 983,385 $ 987,507 Employers net pension liability $ 719,498 $ 687,550 209,041 $ 187,817 311,522 $ 282,987 Plan fiduciary net position as a percentage of total pension liability 61.59% 62.49% 75.51% 77.81% 75.94% 77.73% Covered-employee payroll $ 145,654 $ 142,494 47,181 $ 44,508 93,836 $ 91,840 Employers net pension B-146 liability as a percentage of covered-employee 12 payroll 493.98% 482.51% 443.06% 421.98% 331.99% 308.13%

Note: Schedule is intended to show information for 10 years. Additional years will be displayed as the information becomes available.

See accompanying notes to required supplementary information and accompanying independent auditors’ report. CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Changes in Net Pension Liability General Employees’ Pension Plan Years ended June 30 (Dollars in thousands) (Unaudited)

Total pension liability - ending 1,873,213 1,832,883

Plan fiduciary net position: Contributions - employer 48,015 42,145 Contributions - member 16,975 17,366 Net investment income 56,575 188,381 Benefit payments, including member refunds (111,738) (108,175) Administrative expenses (1,445) (8,813) Net change in plan fiduciary net position 8,382 130,904

Plan fiduciary net position - beginning 1,145,333 1,014,429 Plan fiduciary net position - ending 1,153,715 1,145,333 Plan net pension liability - ending $ 719,498 $ 687,550

Note: Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

See accompanying notes to required supplementary information and accompanying independent auditors’ report.

B-147 CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Changes in Net Pension Liability Firefighters’ Pension Plan Year ended June 30 (Dollars in thousands) (Unaudited)

Total pension liability - ending 853,690 846,325 Plan fiduciary net position: Contributions - employer 20,866 20,656 Contributions - member 5,637 5,670 Net investment income (loss) (45,540) 71,328 Interest 48,195 41,046 Benefit payments, including member refunds (42,590) (41,268) Administrative expenses (427) (374) Net change in plan fiduciary net position (13,859) 97,058 Plan fiduciary net position - beginning 658,508 561,450 Plan fiduciary net position - ending 644,649 658,508 Plan net pension liability - ending $ 209,041 $ 187,817

Note: Schedule is intended to show information for 10 years. Additional years will be displayed as the information becomes available.

See accompanying notes to required supplementary information and accompanying independent auditors’ report.

B-148 CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Changes in Net Pension Liability Police Officers’ Pension Plan Years ended June 30 (Dollars in thousands) (Unaudited)

Total pension liability - ending 1,294,907 1,270,494 Plan fiduciary net position: Contributions - employer 32,693 30,197 Contributions - member 11,224 11,157 Net investment income 72,706 108,004 Interest (63,968) 60,960 Benefit payments, including member refunds (56,253) (51,299) Administrative expenses (524) (327) Net change in plan fiduciary net position (4,122) 158,692 Plan fiduciary net position - beginning 987,507 828,815

Plan fiduciary net position - ending 983,385 987,507 Plan net pension liability - ending $ 311,522 $ 282,987

Note: Schedule is intended to show information for 10 years. Additional years will be displayed as the information becomes available.

See accompanying notes to required supplementary information and accompanying independent auditors’ report.

B-149 CITY OF ATLANTA, GEORGIA Required Supplementary Information Schedule of Employer Contributions Years ended June 30 (Dollars in thousands) (Unaudited)

General Employees' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 1

Actuarily determined contributions 54,236$ 48,015$ 42,145$ 38,688$ 35,237$ 46,068$ 51,762$ 69,991$ $ 59,780 $ 51,772

Contributions in relation to the actuarily determined contribution 54,236 48,015 42,145 38,688 35,237 46,068 51,762 69,991 59,780 51,772

Contribution deficiency (excess) $ - $ - $ - $ - $ - -$ -$ -$ -$ $ -

Covered-employee payroll 151,625$ 145,654$ 142,494$ 133,069$ 139,107$ 135,636$ 142,597$ 150,312$ $ 179,982 $ 155,185

Contributions as a percentage of covered-employee payroll 35.8% 33.0% 29.6% 29.1% 25.3% 34.0% 36.3% 46.6% 33.2% 33.4%

Firefighters' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarily determined contributions 16,454$ 20,866$ 20,656$ 17,491$ 21,092$ 24,912$ 25,864$ 28,752$ $ 26,373 $ 25,502

Contributions in relation to the actuarily determined contribution 16,454 20,866 20,656 17,491 21,092 24,912 25,864 28,752 26,373 25,502

Contribution deficiency (excess) $ - $ - -$ -$ $ - -$ -$ -$ $ - $ -

Covered-employee payroll 46,918$ 47,181$ 44,508$ 42,797$ 39,482$ 42,963$ 43,910$ 43,275$ $ 45,561 $ 45,686 Contributions as a percentage of covered-employee payroll 35.1% 44.2% 46.4% 40.9% 53.4% 58.0% 58.9% 66.4% 57.9% 55.8%

Police Officers' 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarily determined contributions 25,441$ 32,693$ 30,197$ 26,525$ 33,748$ 39,135$ 41,713$ 44,810$ $ 45,730 $ 45,365

Contributions in relation to the actuarily determined contribution 25,441$ 32,693$ 30,197 26,525 33,748 39,135 41,713 44,810 45,730 45,365 Contribution deficiency (excess) $ - $ - $ - $ - $ - -$ -$ -$ -$ $ -

Covered-employee payroll 92,965$ 93,836$ 91,840$ 88,297$ 73,688$ 83,551$ 78,519$ 82,030$ $ 84,015 $ 77,168 Contributions as a percentage of covered-employee payroll 27.4% 34.8% 32.9% 30.0% 45.8% 46.8% 53.1% 54.6% 54.4% 58.8%

1 The General Employees’ Plan year was changed from January 1 to July 1, 2007. Therefore, the amounts as of June 30, 2007 represent the 18-month period from January 1, 2006 through June 30, 2007.

See accompanying notes to required supplementary information and accompanying independent auditors’ report.

B-150 CITY OF ATLANTA, GEORGIA Notes Required Supplementary Information Schedule of Investment Returns Years ended June 30 (Unaudited)

General Employees' Pension Plan - the City 2016 2015 2014 2013 2012 2011 2010 2009

Annual money-weight rate of return 1.24% 4.64% 19.26% 17.55% 0.93% 19.69% 12.92% -9.56%

Firefighters' Pension Plan 2016 2015 2014 2013 2012 2011 2010 2009

Annual money-weight rate of return -1.13% 0.79% 21.01% 15.34% 1.68% 25.58% 14.40% -13.86%

Police Officers' Pension Plan 2016 2015 2014 2013 2012 2011 2010 2009

Annual money-weight rate of return -0.71% 1.22% 21.37% 15.73% 0.99% 21.30% 12.07% -13.15%

Note: Schedule is intended to show information for 10 years. Additional years will be displayed as the information becomes available.

See accompanying notes to required supplementary information and accompanying independent auditors’ report.

B-151 CITY OF ATLANTA, GEORGIA Notes Required Supplementary Information Year ended June 30, 2016 (Unaudited)

(1) Schedule of Changes in the Net Pension Liability The total pension liability contained in this schedule was provided by the General Employees’ Plan actuary, Segal Actuarial Services and the Firefighters’ and Police Officers’ Pension Plan actuary, Southern Actuarial Services. A separate actuarial valuation is completed separately for The City and the School System. The net pension liability is measured as the total pension liability less the amount of the fiduciary net position of the Plan’s. There are no assets accumulated in a Trust to pay benefits.

(2) Schedule of Employer Contributions The required contributions and percentage of those contributions actually made are presented in the schedule.

(3) Changes of Assumptions and Benefit Terms Changes of assumptions: For fiscal year 2016, the General Employees’ Pension Plan, used the RP- 2000 Combined Healthy Mortality Table. The Firefighters’ and Police Officers’ Pension Plan mortality rates were based on the sex-distinct rates set forth in the RP-2000 Mortality Table projected to 2015 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430; future generational improvements in mortality have not been reflected. Changes of benefit terms: Amounts reported for fiscal year 2015 reflect no change in benefit terms.

B-152 CITY OF ATLANTA, GEORGIA Notes Required Supplementary Information Year ended June 30, 2016 (Unaudited)

Budgetary Data

The City is required to adopt a balanced budget each year and maintain budgetary controls to ensure compliance with legal provisions of the annual appropriated budget approved by the Mayor and City Council. Annual budgets are adopted for the Major funds consisting of the General Fund, MOST fund, as well as the following non-Major funds: Community Development, Emergency Telephone System, Intergovernmental Grant, Tax Allocation Districts, Other Special Revenue, and the Debt Service Fund with the level of legal budgetary control established by the City Council at the department level. The General Government presented on the next page consists of central support such as Executive Offices, Finance, Human Resources, Information Management, Procurement, and Planning. The budgetary comparisons for these non-major funds are included in the combining statements. The Capital Projects Funds adopt project-length budgets. In preparing the budgets, the Government utilizes generally accepted accounting principles (GAAP) for all legally required budgeted funds. The budget is prepared and presented to City Council for adoption. The adopted budget is available on the City Web-site.

The amounts of anticipated revenues and appropriated expenditures for the annual budget are controlled by the City Charter and various ordinances adopted by the City Council.

The responsibility for revenue anticipations and specified appropriations is fixed by law by the Budget Commission, which is composed of the Mayor, the Chief Financial Officer, the Chair of the City Council Finance Committee, and two other members of City Council. The Budget Commission may not anticipate in any year an amount in excess of 99% of the normal revenues of the City actually collected during the previous year (unless tax rates or fees are increased) plus any accumulated cash surplus carried forward from the previous year. Grant revenues are anticipated in the Community Development and Intergovernmental Grant Funds in the year the grant is awarded to the City, although the funds may not be received in the same year. Grant revenue is therefore not considered to be over-anticipated until the activity for which the funds were granted is completed, and actual revenues are less than anticipated revenues.

After the initial annual budget is adopted, it may be amended for interdepartmental transfers of appropriations with the approval of City Council. Intradepartmental transfers of appropriations among individual budgetary accounts may be initiated by a department head with the approval of the Chief Operating Officer, the Chair of the City Council Finance Committee, and the Chief Financial Officer.

Total appropriations for any fund may be increased if, during the year, sources of revenue become available to the City in excess of original anticipations, and these amounts are anticipated by the Budget Commission and subsequently appropriated by City Council. No such additional appropriations were required during the year ended June 30, 2016.

All appropriations, except for the General Fund's construction, bond proceed funds, and Special Revenue funds, lapse at the end of the year, but are considered during the following year's budgeting process. Contractually encumbered appropriations and certain unencumbered appropriations in the General Fund do not lapse, but are carried forward to the ensuing budget year as budgetary amendments.

During 2016, neither the General Fund nor the MOST funds had expenditures that exceeded appropriations at the fund level.

B-153 CITY OF ATLANTA General Fund Statement of Revenues, Expenses and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2016 (Dollars in Thousands) Notes and Comments: Total revenue for Original and Final, per Council approval, was $593,110 To ensure the Actual Column is consistent with the Statement of Revenues, Expenses and Changes in Fund Balance, the Original and Final Budget figures reflect the following adjustments: Total Budget for Revenues: $ 593,110 less: Operating Transfer Budget (35,179) Reflected in other financing sources and uses as a transfer in less:Proceeds from sales of assets (651) Reflected in other financing sources and uses less: Indirect Cost Recovery (30,097) Reflected as an offset to General Government expenditures Total Revenues $ 527,183

Budgeted Amounts

Original Adjustment Final Budget Actual Amounts Variance with Budget Revenues: Property taxes $ 194,394 $ - $ 194,394 $ 193,217 $ (1,177) Local option sales taxes 101,517 - 101,517 103,515 1,998 Public utility, alcoholic beverage and other taxes 106,292 - 106,292 108,686 2,394 Licenses and permits 71,652 - 71,652 78,447 6,795 Charges for current services 10,467 - 10,467 10,230 (237) Fines, forfeitures and penalties 30,095 - 30,095 24,392 (5,703) Investment income 2,646 - 2,646 2,311 (335) Building rentals and concessions 8,170 - 8,170 7,411 (759) Other 1,950 - 1,950 2,101 151 Fund Balance Appropriation - - - - Total revenues 527,183 - 527,183 530,310 3,127 Expenditures: General government 173,020 (19,071) 153,949 153,949 - Police 173,325 14,112 187,437 187,437 - Fire 79,985 (1,464) 78,521 78,521 - Corrections 32,840 1,916 34,756 34,756 - Public works 33,004 6,935 39,939 39,939 - Parks, recreation and cultural affairs 34,067 1,622 35,689 35,689 - Debt service Principal payments 12,620 (1,035) 11,585 11,585 - Interest payments 4,422 (491) 3,931 3,931 - Paying agent fees 28 (13) 15 15 - Bond issuance costs - - - - Other - - Total expenditures 543,311 2,511 545,822 545,822 -

Excess (Deficiency) of revenues over expenditures (16,128) (2,511) (18,639) (15,512) 3,127 Other financing sources (uses): Proceeds from sale of assets 651 - 651 1,278 627 Proceeds from general bond - - - 7,779 7,779 Transfers in 35,179 - 35,179 41,361 6,182 Transfers out (19,702) 2,511 (17,191) (32,771) (15,580) Total other financing sources (uses): 16,128 2,511 18,639 17,647 (992)

Net change in fund balance - - - 2,135 2,135 Fund balance, beginning of the period 151,014 -151,014 151,014 - Fund balance, end of period $ 151,014 $ - $ 151,014 $ 153,149 $ 2,135

B-154 CITY OF ATLANTA, GEORGIA Municipal Option Sales Tax (MOST) Fund of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2016 (In Thousands)

Municipal Option Sales Tax Fund

Original Final Budgeted Budgeted Actual Variance with Amounts Amounts Amounts Final Budget

REVENUES Local and municipal option sales taxes $ 125,000 $ 125,000 $ 132,653 $ 7,653 Investment Income - - - - Other income - - - - Total revenues 125,000 125,000 132,653 7,653

EXPENDITURES Total expenditures - - - -

Excess (deficiency) of revenues over (under) expenditures 125,000 125,000 132,653 7,653

OTHER FINANCING SOURCES (USES): Transfer out (125,000) (125,000) (132,653) (7,653) Total other financial sources and uses (125,000) (125,000) (132,653) (7,653)

Excess of revenues and other sources over expenditures and other uses - - - -

Fund balance - beginning - - - Fund balance - ending $ - $ - $ -

See accompanying notes to the Auditor's report

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B-156 Nonmajor Governmental Funds Special Revenue Funds Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for specific purposes.

Community Development Fund - Established to account for the revenue and expenditures provided under the Title I of the Housing and Community Development Act of 1974 which provides for development of viable urban communities, including decent housing and suitable living environments and expansion of economic opportunities, principally for persons of low and moderate incomes.

Emergency Telephone System Fund - Established to account for the revenues and expenditures associated with the operation and management of the Emergency Telephone System.

Inter-Governmental Grant Fund - Established to account for the revenues and expenditures for miscellaneous grants except for those recorded in the Department of Aviation, Department of Watershed Management, and the Community Development Funds.

Tax Allocation Districts – Established by the law creating the district to account for the use of tax increments to develop a specific area. The Districts include: Northwest Atlanta Metropolitan Parkway Hollowell/M.L. King Stadium Neighborhoods Campbelton Road Other Special Revenue – Accounts for other restricted monies (expendable trust funds) that are classified as Special Revenue Funds. Established to account for activities in which the city acts as trustee for an individual organization, or other governmental units. These funds include: Expendable Trust Fund Car Rental Excise Tax Fund Home Investment Partnership Trust Fund Hotel/Motel Excise Tax Fund Section 108 Loan Trust Atlanta Housing Opportunity, Inc.

Debt Service Fund Bond Service Fund - Established for the accumulation of resources to meet current and future debt service requirements on general long-term debt. Additionally, Tax Allocation Districts were established to account for the proceeds of bonds issued and the collection of the tax increments created for developments within the specific Districts and repayment of the bonds. The Districts include: Atlantic Station Eastside Westside Atlanta Beltline Princeton Lake Capital Projects Funds Park Improvement Fund – For permanent improvements to parks, the zoo, and recreation facilities funded by an ad valorem tax levy.

Special Assessment Fund – For the accumulation and expenditures of resources for various public improvements, which are financed through assessment to individual property owners.

General Government Capital Outlay Fund – Established to record the acquisition, construction or improvement of capital assets which are funded by working capital obtained from certificates of participation and funds allocated from general government resources (transfers): dedicated taxes or a combination of financing sources which are not funded by the issuance of general obligation bonds.

Solid Waste Management Authority Fund – Established to account for the revenues and expenditures associated with the operation and management of debt financings related to post-closure costs of City landfills. The Solid Waste Management Authority, a blended component unit of the City, is legally separate from the City, and is governed by a board appointed by the Mayor and City Council.

B-157 B-158

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165

B-186 Nonmajor Proprietary Funds

Enterprise Funds

Enterprise funds are used to report any activity for which a fee is charged to external users for good or services.

Operations of enterprise funds are designed to be self-supporting. The Department of Watershed Management, Department of Aviation, Sanitation Services, Parks and Recreational Facilities, Underground Atlanta Project, Parking Deck, Building Permits and Civic Center are accounted for as enterprise funds. The latter six were determined to be nonmajor proprietary funds and are presented herein.

Sanitation Services Fund – Established to account for the operation of sanitary services activities, including collection and disposal of garbage, recycled materials and yard trimmings.

Parks and Recreation Facilities Fund - Established to account for the financial activities of the Cyclorama.

Underground Atlanta – Established to account for the City’s portion of a major public/private downtown economic development project paid for by public funds, and expenses associated with project.

Parking Deck – Established to account for the operations of the parking deck located between Capital Avenue and Washington Street, south of Trinity Avenue and adjacent to City Hall.

Building Permits – Established to account for the City’s building permit activities including certain occupancy taxes.

Civic Center- Established to account for the fiscal activities of the Boisfeuillet Jones Atlanta Civic Center.

City Plaza- Established to account for the financial activities of the City Plaza.

B-187 B-188 CITY OF ATLANTA, GEORGIA Nonmajor Proprietary Funds

Combining Statement of Net Position June 30, 2016 (Dollars in Thousands)

Parks and Recreational Underground Permits City Civic Sanitation Facilities Atlanta Parking Deck Fund Plaza Center Totals ASSETS

Current assets: Equity in cash management pool $ - -$ -$ $ 52 $ 53,692 $ 68 $ 605 $ 54,417 Receivables: Accounts 44,498 - - 77 - 500 - 45,075 Less allowance for doubtful accounts (11,257) - - - - - (11,257) Total receivables 33,241 - - 77 - 500 - 33,818

Total current assets 33,241 - - 129 53,692 568 605 88,235

Noncurrent assets: Restricted investments - - - - 16 2 - 18 Other assets ------

Capital assets: Land 446 - 21,621 - - - - 22,067 Construction-in-progress ------Land improvements 1,327 - - - - - 5,366 6,693 Buildings and other structures 2,335 1,024 57,821 23,480 151 10,680 6,495 101,986 Other property and equipment 44,777 134 12,670 - 3,282 - 552 61,415 Less accumulated depreciation (31,973) (1,008) (70,491) (3,913) (1,836) - (10,649) (119,870)

Property and equipment, net 16,912 150 21,621 19,567 1,597 10,680 1,764 72,291

Total assets $ 50,153 150$ $ 21,621 $ 19,696 $ 55,305 $ 11,250 $ 2,369 $ 160,544

DEFERRED OUTFLOWS OF RESOURCES Pension related deferred outflows 3,656 49 - - 911 - 141 4,757 Total assets and deferred outflows of resources $ 53,809 $ 199 $ 21,621 19,696$ 56,216$ 11,250$ 2,510$ $ 165,301

LIABILITIES AND NET POSITION

Current liabilities: Accounts payable $ 1,745 -$ 73$ -$ $ 1,448 -$ $ 94 $ 3,360 Accrued salaries and vacation 1,071 - - - 471 - 34 1,576 Due to other funds 19,580 365 12,746 - - - 3,687 36,378 Current maturities of capital leases - - - 795 - - - 795 Accrued workers' compensation 2,957 ------2,957

Current liabilities 25,353 365 12,819 795 1,919 - 3,815 45,066

Liabilities payable from restricted assets: Accrued interest payable - - - 70 - - 60 130 Current maturities of long-term debt ------141 141

Total liabilities payable from restricted assets - - - 70 - - 201 271 Total current liabilities 25,353 365 12,819 865 1,919 - 4,016 45,337

Long-term liabilities : Long-term debt, excluding current maturities - - - - - 10,680 1,593 12,273 Capital lease obligation, excluding current maturities shown above - - - 17,370 - - - 17,370 Pension liability 48,838 648 - - 12,088 - 1,871 63,445 Net OPEB obligation 23,185 322 - - 3,263 - 731 27,501 Accrued workers' compensation 20,336 ------20,336 Landfill postclosure costs 15,625 ------15,625

Total long-term liabilities 107,984 970 - 17,370 15,351 10,680 4,195 156,550

Total liabilities 133,337 1,335 12,819 18,235 17,270 10,680 8,211 201,887

DEFERRED INFLOWS OF RESOURCES Pension related deferred inflows 3,261 43 - - 801 - 124 4,229 Total liabilities and deferred inflows of resources $ 136,598 1,378$ 12,819$ 18,235$ 18,071$ 10,680$ 8,335$ $ 206,116

Net Position: Investment in capital assets, net of related debt 16,912 150 21,621 1,402 1,597 - 30 41,712 Unrestricted (99,701) (1,329) (12,819) 59 36,548 570 (5,855) (82,527)

Total net position (82,789) (1,179) 8,802 1,461 38,145 570 (5,825) (40,815)

See accompanying independent auditors report

166

B-189 CITY OF ATLANTA, GEORGIA Nonmajor Proprietary Funds

Combining Statement of Revenues, Expenses and Changes in Net Position For the Year Ended June 30, 2016 (Dollars in Thousands)

Parks and Recreational Underground Permits City Civic Sanitation Facilities Atlanta Parking Deck Fund Plaza Center Total

Operating revenues: Charges for services $ 45,044 $ 15 -$ $ - $ 28,150 -$ $ 5 $ 73,214 Rentals, admissions, and concessions 29 -$ 1,695 857 - 500 393 3,474 Other 1,454 -- - 5 - -1,459

Total operating revenues 46,527 15 1,695 857 28,155 500 398 78,147

Operating expenses: Salaries and employee benefits 33,640 78 - - 10,131 - 643 44,492 Utilities 228 40 - - - - 374 642 Materials and supplies 1,282 - - - 159 - 30 1,471 Repairs, maintenance, and other contractual services 169 - - - 175 - 136 480 Motor equipment service 8,224 - - - 82 - - 8,306 Engineering and consultant fees 10,501 18 1,848 - 4,151 - 105 16,623 General services and other costs 4,669 1 86 - 3,794 190 - 8,740 Depreciation and amortization 2,756 20 2,211 470 451 - 250 6,158

Total operating expenses 61,469 157 4,145 470 18,943 190 1,538 86,912

Operating income (loss) (14,942) (142) (2,450) 387 9,212 310 (1,140) (8,765)

Nonoperating revenues (expenses): Interest expense - (4) (516) (855) - - (187) (1,562) Other revenues (expenses) (2) - 1 - - 245 244 Investment income (loss) 46 - 13 - 480 15 11 565

Total nonoperating revenues (expenses) 44 (4) (502) (855) 480 260 (176) (753)

Income (loss) before transfers (14,898) (146) (2,952) (468) 9,692 570 (1,316) (9,518)

Capital contributions 47------47 Transfers in 83 - 4,000 787 - - - 4,870 Transfers out (2,106) ------(2,106)

Net income (loss) (16,874) (146) 1,048 319 9,692 570 (1,316) (6,707)

Net Position, beginning of period (65,915) (1,033) 7,754 1,142 28,453 - (4,509) (34,108)

Net Position, end of period $ (82,789) (1,179)$ $ 8,802 $ 1,461 $ 38,145 $ 570 $ (5,825) $ (40,815)

See accompanying independent auditors report

167

B-190 CITY OF ATLANTA, GEORGIA Nonmajor Proprietary Funds

Combining Statement of Cash Flows For the Year Ended June 30, 2016 (Dollars in Thousands)

Parks and Sanitation Recreational Underground Building City Civic Services Facilities Atlanta Parking Deck Permits Plaza Center Total

Cash flow from operating activities Cash received from user charges $ 51,381 $ 15 $ 1,695 $ 856 $ 28,155 $ - $ 398 $ 82,500 Cash payments to employees for services (25,759) (113) - - (9,840) - (684) (36,396) Cash payments to suppliers for goods and services (24,191) 102 2,722 - (7,203) (190) 533 (28,227)

Net cash provided by (used in) operating activities 1,431 4 4,417 856 11,112 (190) 247 17,877

Cash flows from noncapital financing activities Transfers in 83 - 4,000 787 - - - 4,870 Transfers out (2,106) ------(2,106)

Net cash provided by (used in) noncapital financing activities (2,023) - 4,000 787 - - - 2,764

Cash flows from capital and related financing activities Capital grants and donations 47 ------47 Proceeds from bond/note issuances - - - - - 10,680 - 10,680 Principal paid on long term debt 155 - (6,232) (765) - - (125) (6,967) Interest paid (2) (4) (515) (858) - - (116) (1,495) Acquisition of capital assets (1,824) - (1,683) (1) (39) (10,435) - (13,982)

Net cash provided by (used in) capital and related financing activities (1,624) (4) (8,430) (1,624) (39) 245 (241) (11,717)

Cash flows from investing activities Change in equity in cash management pool 2,170 - - (19) (11,541) (68) (6) (9,464) Purchases of restricted investments ----(12)- (12) Interest on investments 46 - 13 - 480 13 - 552

Net cash provided by (used in) investing activities 2,216 - 13 (19) (11,073) (55) (6) (8,924)

Net increase (decrease) in cash and cash equivalents ------

Cash and cash equivalents, beginning of period ------

CASH AND CASH EQUIVALENTS, END OF PERIOD $ - $ - $ - $ - $ - $ - $ - $ -

Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ (14,942) $ (142) $ (2,450) $ 387 $ 9,212 $ 310 $ (1,140) $ (8,765) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 2,756 20 2,211 470 451 - 250 6,158 Increase (decrease) in receivables 4,854 - - (1) - (500) - 4,353 Increase (decrease) in other assets (1,906) (26) - - (475) - (73) (2,480) Increase (decrease) in due from other funds ------Increase (decrease) in accounts payable (1,444) (2) (368) - 1,158 - (65) (721) Increase (decrease) in other liabilities 9,787 (9) - - 766 - 32 10,576 Increase (decrease) in due to other funds 2,326 163 5,024 - - - 1,243 8,756

Net cash provided by (used in) operating activities $ 1,431 $ 4 $ 4,417 $ 856 $ 11,112 $ (190) $ 247 $ 17,877

See accompanying independent auditors report

168

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B-193 CITY OF ATLANTA, GEORGIA Internal Service Funds

Combining Statement of Cash Flows For the Year Ended June 30, 2016 (Dollars in Thousands)

Fleet Group Services Insurance Total

Cash flow from operating activities Cash received from user charges $ 33,556 $ 143,873 $ 177,429 Cash payments to employees for services (12,084) (83,810) (95,894) Cash payments to suppliers for goods and services (24,509) (62,041) (86,550)

Net cash used in operating activities (3,037) (1,978) (5,015)

Cash flows from noncapital financing activities Transfers in 3,500 -3,500 Transfers out - - -

Net cash used in noncapital financing activities 3,500 -3,500

Cash flows from capital and related financing activities Interest paid (405) (40) (445) Acquisition of capital assets (102) - (102)

Net cash used in capital and related financing activities (507) (40) (547)

Cash flows from investing activities Change in equity in cash management pool - 1,626 1,626 Interest on investments 44 152 196

Net cash provided by investing activities 44 1,778 1,822

Net increase in cash and cash equivalents - (240) (240)

Cash and cash equivalents, beginning of period - 327 327

CASH AND CASH EQUIVALENTS, END OF PERIOD $ - $ 87 $ 87

Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 1,061 $ (1,772) $ (711) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 63 - 63 (Increase) decrease in accounts receivable - 12 12 (Increase) decrease in Inventories (221) - (221) Increase (decrease) in accounts payable (323) (196) (519) Increase (decrease) in other liabilities (306) (22) (328) Increase (decrease) in due to other funds (3,311) - (3,311)

Net cash used in operating activities $ (3,037) $ (1,978) $ (5,015)

See accompanying independent auditors report

B-194 Fiduciary Funds

Fiduciary Funds are used to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government’s own programs.

PENSION TRUST FUNDS

General Employees’ Defined Benefit Pension Fund – To account for the operations of the defined benefits pension plan covering general officers and employees of the City.

General Employees’ Defined Contribution Pension Fund – To account for the operation of the defined contribution pension plan covering general officers and employees of the City.

Firefighters’ Pension Fund – To account for the operations of the defined benefit pension plan covering fire fighting employees of the City.

Police Officers’ Pension Fund – To account for the operations of the defined benefit pension plan covering sworn police employees of the City.

AGENCY FUNDS

Agency Fund – To account for various taxes, bond deposits and other receipts held in escrow for individuals, outside organizations, other governments or other funds.

B-195 B-196 CITY OF ATLANTA, GEORGIA Combining Statement Net Position-Pension Trust Funds Fiduciary Funds For the Year Ended June 30, 2016 (Dollars in Thousands)

Pension Trust Funds General General Employees' Employees' Defined Defined Police Benefit Contribution Firefighters' Officers' Total

ASSETS

Current assets: Cash and cash deposit $ 15,025 $- $ 5,433 $ 7,852 $ 28,310 Securities lending 25,448 - - - 25,448

Receivables Other Employee Contribution 680 378 174 418 1,650 Other Employer Contribution 2,724 395 1,005 1,144 5,268 Due from brokers 9,479 - 1,622 2,477 13,578 Accrued interest receivable 1,114 - 825 1,227 3,166 Other receivables 2,356 5,120 85 329 7,890 Total receivables 16,353 5,893 3,711 5,595 31,552

Investments: Short term investments 24,176 16,874 20,437 61,487 Domestic fixed income securities 301,973 35,965 153,756 244,387 736,081 Domestic equities 747,352 23,255 387,848 600,262 1,758,717 International fixed income securities - - 2,477 4,403 6,880 International equities 110,622 - 26,856 49,329 186,807 Limited partnerships 19,119 - 4,646 4,646 28,411 Alternative partnerships: Limited partnerships 24,702 392 15,560 20,315 60,969 Comingled funds 53,125 - - 53,125 Total Investments 1,227,944 112,737 608,017 943,779 2,892,477

Total assets 1,284,770 118,630 617,161 957,226 2,977,787

LIABILITIES AND NET POSITION HELD IN TRUST FOR PENSION BENEFITS

Current liabilities: Accounts payable and other liabilities $ 2,612 $- $ 618 $ 443 $ 3,673 Due to brokers for securities purchased 10,048 3,906 6,368 20,322 Collateral payable for securities lending 25,448 - - - 25,448

Total liabilities 38,108 - 4,524 6,811 49,443

Net Position Held in Trust for Pension Benefits: $ 1,246,662 $ 118,630 $ 612,637 $ 950,415 $ 2,928,344

See accompanying independent auditors report

B-197 CITY OF ATLANTA, GEORGIA Pension Trust Funds

Combining Statement of Changes in Plan Net Position For the Year Ended June 30, 2016 (Dollars in Thousands)

Pension Trust Funds General General Employees' Employees' Defined Defined Police Benefit Contribution Firefighters' Officers' Totals Additions: Contributions: Employer contributions $ 104,636 $ 10,044 $ 16,454 $ 25,441 $ 156,575 Employee contributions 20,836 10,106 5,667 11,825 48,434 Refunds and other 22 - 150 193 365 Total contributions 125,494 20,150 22,271 37,459 205,374

Investment income: Net appreciation (depreciation) in fair value of investments (4,212) 130 (18,709) (24,251) (47,042) Investment income 14,660 733 11,401 17,196 43,990 Securities lending income 278 - - -278 Less: Investment expenses (3,432) (170) (2,587) (3,122) (9,311) Net investment income 7,294 693 (9,895) (10,177) (12,085)

Total additions 132,788 20,843 12,376 27,282 193,289

Deductions: Benefit payments 169,808 6,946 44,000 59,823 280,577 Administrative expenses 1,166 59 388 429 2,042

Total deductions 170,974 7,005 44,388 60,252 282,619

Net increase in net position held in trust for pension benefits (38,186) 13,838 (32,012) (32,970) (89,330)

Net position held in trust for pension benefits:

Beginning of period 1,284,848 104,792 644,649 983,385 3,017,674

End of period $ 1,246,662 $ 118,630 $ 612,637 $ 950,415 $ 2,928,344

See accompanying independent auditors report

B-198 CITY OF ATLANTA, GEORGIA Agency Fund

Statement of Changes in Assets and Liabilities For the Year Ended June 30, 2016 (Dollars in Thousands)

ASSETS

June 30, 2015 Additions Deductions June 30, 2016 Assets: Cash and cash equivalents $ 251 $ - $ - $ 251 Equity in cash management pool 22,822 - (1,592) 21,230 Investments: Equities - - - - Prepaid expenses 945 - (945) - Other receivables 95 30 - 125

Total Assets $ 24,113 $ 30 $ (2,537) $ 21,606

LIABILITIES

Liabilities: Accounts payable $ 24,113 $ 718 $ (3,225) $ 21,606

Total Liabilities $ 24,113 $ 718 $ (3,225) $ 21,606

See accompanying independent auditors report

B-199 [THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX C

FORM OF THE BOND RESOLUTION

[THIS PAGE INTENTIONALLY LEFT BLANK] BOND RESOLUTION

A RESOLUTION OF THE CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY (THE “ISSUER”) AUTHORIZING THE ISSUANCE OF ITS CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017 IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $37,000,000, PURSUANT TO, AND IN CONFORMITY WITH, THE CONSTITUTION AND STATUTES OF THE STATE OF GEORGIA, PAYABLE SOLELY FROM THE FUNDS HEREIN PROVIDED, FOR THE PURPOSE OF FINANCING THE COST OF ACQUIRING, CONSTRUCTING, INSTALLING AND EQUIPPING OF A STRUCTURED PARKING FACILITY AND RELATED IMPROVEMENTS AT ZOO ATLANTA; TO PROVIDE FOR THE CREATION OF A SINKING FUND TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON, THE BONDS AUTHORIZED HEREIN; TO PROVIDE FOR THE REMEDIES OF THE OWNERS OF THE BONDS; TO DESIGNATE AN AUTHENTICATION AGENT, A BOND REGISTRAR, A SINKING FUND CUSTODIAN, A PAYING AGENT AND CERTAIN OTHER CUSTODIANS; TO AUTHORIZE THE PREPARATION, USE AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND FINAL OFFICIAL STATEMENT; TO AUTHORIZE AN INTERGOVERNMENTAL LEASE AGREEMENT AMONG THE ISSUER AND THE CITY OF ATLANTA; AND FOR OTHER PURPOSES.

Adopted on May 22, 2017

This document was prepared by:

Hunton & Williams LLP 600 Peachtree Street, Suite 4100 Atlanta, Georgia 30308 Telephone: (404) 888-4000

Bond Resolution C-1

RESOLUTION

TABLE OF CONTENTS

(The Table of Contents for this Resolution is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Resolution.)

ARTICLE I DEFINITIONS AND FINDINGS

Section 101. Definitions of Certain Terms ...... 5 Section 102. Rules of Construction ...... 10

ARTICLE II FORM AND REGISTRATION OF BONDS

Section 201. Authorized Parameters for Series 2017 Bonds ...... 12 Section 202. Issuance of Series 2017 Bonds ...... 12 Section 203. Designation of the Series 2017 Bonds ...... 13 Section 204. Execution of Bonds ...... 14 Section 205. Authentication of Bonds ...... 14 Section 206. Security; Limited Obligation ...... 14 Section 207. Superiority of Lien ...... 16 Section 208. Medium and Places of Payment ...... 16 Section 209. Registration of Transfer and Exchange of Bonds ...... 16 Section 210. Mutilated, Destroyed or Lost Bonds ...... 17 Section 211. Destruction of Cancelled Bonds ...... 17 Section 212. Temporary Bonds ...... 17 Section 213. Form of Series 2017 Bonds ...... 17 Section 214. Book Entry System ...... 18 Section 215. Authorization of Series 2017 Bonds ...... 19

ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY

Section 301. Optional Redemption ...... 21 Section 302. Mandatory Sinking Fund Redemption ...... 21 Section 303. Partially Redeemed Bonds; Order of Redemption ...... 21 Section 304. Reserved ...... 21 Section 305. Notice of Redemption ...... 21 Section 306. Purchase of Bonds in Market ...... 22

ARTICLE IV REVENUE AND FUNDS

Section 401. Source of Payment of Bonds ...... 23 Section 402. Creation of the Sinking Fund ...... 23 Section 403. Payments into the Sinking Fund ...... 23

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Section 404. Use of Moneys in the Sinking Fund ...... 23 Section 405. Custody of the Sinking Fund ...... 24 Section 406. Creation of and Disbursements from the Issuance Cost Fund ...... 24 Section 407. Creation of the Renewal and Extension Fund ...... 24 Section 408. Disbursements from the Renewal and Extension Fund ...... 24 Section 409. Creation of and Disbursements from the Project Fund ...... 24 Section 410. Additional Parity Bonds ...... 25 Section 411. Non-Presentment of Bonds ...... 26 Section 412. Amounts Remaining in Funds and Accounts ...... 26 Section 413. Investment and Valuation of Amounts in Sinking Fund ...... 26

ARTICLE V CUSTODY AND APPLICATION OF PROCEEDS OF SERIES 2017 BONDS

Section 501. Deposits in the Funds ...... 28

ARTICLE VI DEPOSITORIES OF MONEYS AND SECURITIES FOR DEPOSIT; DESIGNATION OF AUTHENTICATING AGENT, PAYING AGENT AND BOND REGISTRAR

Section 601. Depositories and Custodians ...... 29 Section 602. Administrative Fees and Expenses ...... 29 Section 603. Appointment of Authenticating Agent, Paying Agent and Bond Registrar ...... 30 Section 604. Employment of Attorneys, Agents, Etc ...... 30 Section 605. Reliance on Documents ...... 30 Section 606. Evidence of Facts ...... 30

ARTICLE VII PARTICULAR COVENANTS AND FINDINGS

Section 701. Conditions of Issuer’s Obligations; Payment of Bonds ...... 32 Section 702. Maintenance and Repair ...... 32 Section 703. Maintenance of Insurance ...... 32 Section 704. Books and Records ...... 32 Section 705. Sale of the Parking Facility ...... 32 Section 706. Tax Covenants ...... 32 Section 707. Prohibited Activities ...... 32 Section 708. Limitation on Private Use ...... 33 Section 709. Establishment of Rebate Fund ...... 33 Section 710. No Diminishment of Lien Granted ...... 34 Section 711. Maintenance of Existence ...... 34 Section 712. Issuer will not Cancel Intergovernmental Lease Agreement ...... 34

ARTICLE VIII DEFAULTS AND REMEDIES

Section 801. Events of Default ...... 35

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Section 802. No Acceleration ...... 35 Section 803. Other Remedies ...... 35 Section 804. Abandonment of Proceedings ...... 35 Section 805. Limitation of Actions by Bondholders ...... 35 Section 806. Non-Exclusivity of Remedies ...... 36 Section 807. Delays ...... 36 Section 808. Insufficiency of Moneys in Sinking Fund ...... 36

ARTICLE IX DEFEASANCE

Section 901. Payment and Defeasance ...... 38 Section 902. Termination of Liability ...... 38

ARTICLE X MISCELLANEOUS PROVISIONS

Section 1001. Validation ...... 39 Section 1002. Severability ...... 39 Section 1003. Resolution as a Contract ...... 39 Section 1004. Modification, Alteration, Supplementation or Amendment of Resolution ...... 39 Section 1005. Amendments to Intergovernmental Lease Agreement Not Requiring Consent of Owners ...... 41 Section 1006. Amendments to Intergovernmental Lease Agreement Requiring Consent of Owners ...... 41 Section 1007. Payments Due on Saturdays, Sundays and Holidays ...... 42 Section 1008. Applicable Provisions of Law ...... 42 Section 1009. Repeal of Conflicting Resolutions ...... 42 Section 1010. Authorization of Intergovernmental Lease Agreement ...... 42 Section 1011. No Individual Responsibility of Members and Officers of Issuer ...... 43 Section 1012. Acknowledgment of Continuing Disclosure Certificate ...... 43 Section 1013. General Authority ...... 43 Section 1014. Manner of Evidencing Ownership of Bonds ...... 43 Section 1015. Bond Purchase Agreement ...... 44 Section 1016. Requirements and Conditions Met ...... 44 Section 1017. Limitation of Rights ...... 44 Section 1018. Adoption of Supplemental Pricing Resolution ...... 44 Section 1019. Approval of Bond Insurer ...... 44 Section 1020. No Public Benefit Conferred Subject to Systematic Verification Statute ...... 45 Section 1021. Approval of Official Statement ...... 45 Section 1022. Official Statement Deemed Final ...... 45 Section 1023. Waiver of Performance Audit and Review ...... 45 Section 1024. Effective Date ...... 45

EXHIBIT A - FORM OF SERIES 2017 BONDS EXHIBIT B - FORM OF INTERGOVERNMENTAL LEASE AGREEMENT EXHIBIT C - FORM OF REQUISITION

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WHEREAS, the City of Atlanta and Fulton County Recreation Authority, a body corporate and politic and a political subdivision of the State of Georgia (herein, the “Authority” or “Issuer”) has been created pursuant to an act of the General Assembly of the State of Georgia entitled “City of Atlanta and Fulton County Recreation Authority Act” approved March 17, 1960 (Ga. L. 1960, p. 2810 et seq.), as amended by an act approved April 5, 1961 (Ga. L. 1961, p. 3106), as amended by an act approved June 16, 1964 (Ga. L. 1964, p. 2058), as amended by an act approved March 2, 1966 (Ga. L. 1966, p. 2848), as amended by an act approved March 27, 1985 (Ga. L. 1985, p. 4235), and as amended by an act approved April 1, 1996 (Ga. L. 1996, p. 3791) (the “Act”); and

WHEREAS, pursuant to Article IX, Section III, Paragraph 1(a) of the 1983 Constitution of the State of Georgia and the Act, any political subdivision of the State of Georgia, including the City of Atlanta (the “City”), may contract for any period not exceeding fifty (50) years with any public authority for joint services, for the provision of services, or for the joint or separate use of facilities or equipment, provided such contracts deal with activities, services or facilities which the contracting parties are authorized by law to undertake or provide; and

WHEREAS, pursuant to the Act, the Issuer exists for, among other reasons, the purpose of acquiring, constructing, equipping, maintaining and operating recreational centers and areas, including, among others, public zoos or zoological parks and parking facilities or parking areas in connection therewith, and the usual and convenient facilities appertaining to such undertakings and extensions and improvements such facilities, and is permitted to acquire the necessary property therefor, both real and personal, and to lease, sell and license any part or all of such facilities, including real and personal property, to any persons, firms, or corporations whether public or private so as to assure the efficient and proper development, maintenance and

C-5

operation of such facilities and areas, and to issue revenue bonds to finance and refinance, in whole or in part, the cost of such undertakings in accordance with the provisions of Official Code of Georgia Annotated Sections 36-82-60, et seq. (the “Revenue Bond Law”); and

WHEREAS, the City owns an approximately eight (8) acre parcel of land at Grant Park on Boulevard, which currently serves as a surface parking lot (the “Parking Site”) for the use and benefit of visitors to the park and the adjacent public zoo (“Zoo Atlanta”); and

WHEREAS, the Issuer desires to finance a portion of the costs of the design, acquisition, construction, installation and equipping of a structured parking garage complex at Zoo Atlanta to be located on the Parking Site consisting of (i) a 3-story structured parking deck totaling approximately 400,000 square feet and 1,000 parking spaces (the “Parking Facility”); (ii) a “green” roof, steel framed and glass dine-in regional-cuisine restaurant featuring casual dining on the first level, totaling approximately 4,000 square feet, and fine dining on the upper level with balconies overlooking green roof elements, totaling approximately 5,000 square feet (the “Restaurant”); and (iii) and related improvements (collectively, the “Parking Complex Project”); and

WHEREAS, the City has requested that the Issuer authorize the issuance of its revenue bonds to be designated the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017” (the “Series 2017 Bonds”) in the aggregate principal amount of not to exceed $37,000,000 for the purpose of financing (i) the design, acquisition, construction, installation and equipping of the Parking Facility portion of the Parking Complex Project (the “2017 Project”), (ii) certain fund and accounts related to the Series 2017 Bonds, and (iii) certain costs of issuance related to the Series 2017 Bonds; and

WHEREAS, in connection with the issuance of the Series 2017 Bonds and the financing of the 2017 Project, the City will transfer ownership of the Parking Site to the Issuer and enter into an Intergovernmental Lease Agreement, to be dated as of the first day of the calendar month in which the Series 2017 Bonds are issued (the “Intergovernmental Lease Agreement”) pursuant to which the City will cause the 2017 Project to be designed, constructed and installed on the Parking Site and the Issuer will lease the 2017 Project to the City, as lessee; and

WHEREAS, the Issuer has duly appointed the City as its agent for the design, construction and installation of the Parking Facility and the Parking Complex Project; and

WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Series 2017 Bonds and any Additional Parity Bonds (as defined herein) (collectively, the “Bonds”), the Issuer agreed and does hereby agree to assign and pledge all of its right, title and interest in the Intergovernmental Lease Agreement, and all revenues, payments, receipts, and moneys to be received and held thereunder to and for the benefit of the owners of the Bonds and their successors or assigns; and

WHEREAS, upon the completion of the design, construction and installation of the Parking Facility the Issuer has agreed to enter into a parking management contract, on behalf of the City, with a third-party parking company to manage, maintain and collect parking fees and charges from the operation of the Parking Facility, which gross fees and charges, net of the management fees and other operating expenses (“Net Parking Fees”) are available to the Issuer for deposit into the Sinking Fund up to an amount equal to the Basic Payments due in the then

2 C-6

current Bond Year; provided that Bondholders (as defined herein) have not been granted a lien on, or security interest in, the Parking Management Agreement or Net Parking Fees derived therefrom; and

WHEREAS, in order to ensure that sufficient sums are available to pay the principal, premium, if any, and interest on the Series 2017 Bonds, the City has absolutely and unconditionally agreed pursuant to the Intergovernmental Lease Agreement to make certain “Basic Payments” in an amount equal to the principal, redemption premium, if any, and interest on the Series 2017 Bonds and to make certain “Additional Payments” to cover the fees and charges for, among others, the Paying Agent, the Bond Registrar, the Issuer, the Sinking Fund Custodian and any Rebate Analyst hired in connection with the Series 2017 Bonds; and

WHEREAS, the City shall pledge its full faith and credit and taxing power for the obligation to make Basic Payments and to perform its other obligations under the Intergovernmental Lease Agreement and has agreed in such agreement to make necessary funds available in its general revenue and budget appropriations to fully satisfy the payment of Basic Payments from its general funds and any other lawfully available amounts, including amounts deposited to the Sinking Fund by the Issuer from Net Parking Fees; and

WHEREAS, to the extent that Net Parking Fees collected in any Bond Year exceed the amount of Basic Payments in such Year, the excess shall be deposited to the Renewal and Extension Fund to pay for additions, extensions, renewals, replacements or repairs to the Parking Facility; and

WHEREAS, additional amounts may be necessary to further improve the Parking Facility and Parking Complex Project, and as a result authority should be granted for the issuance of additional parity bonds of the Issuer from time to time (hereinafter sometimes referred to as the “Additional Parity Bonds”); and

WHEREAS, the Issuer proposes to authorize the preparation, use and distribution of a Preliminary Official Statement relating to the Series 2017 Bonds; and

WHEREAS, the Issuer proposes to enter into a Bond Purchase Agreement dated the date of sale of the Series 2017 Bonds (the “Bond Purchase Agreement”) among the Issuer, the City and an underwriter representative on behalf of the underwriting syndicate (collectively, the “Underwriter”) to be named in such agreement; and

WHEREAS, the Issuer desires to acknowledge the City’s execution, delivery and performance of a Continuing Disclosure Agreement, to be dated as of the first day of the calendar month in which the Series 2017 Bonds are issued (the “Continuing Disclosure Agreement”), with respect to the Series 2017 Bonds for the purpose of enabling the Underwriter to comply with the requirements of Securities and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”); and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY, legally constituted and acting as a body corporate and politic and a political subdivision of the State of Georgia, in a public meeting lawfully called and assembled, that the issuance of the Series 2017 Bonds and all other actions of the Issuer contemplated herein are determined to be in furtherance of the purposes of the Issuer,

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and that the actions described in this preamble to be taken by, or on behalf of, the Issuer are approved and shall be taken, and that:

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ARTICLE I

DEFINITIONS AND FINDINGS

Section 101. Definitions of Certain Terms. In addition to the words and terms elsewhere defined in this Resolution (including the preamble hereto), the following words and terms used in this Resolution shall have the following meanings:

“Act” means an Act creating the Issuer, approved March 17, 1960 (Ga. L. 1960, p. 2810), as amended by an Act approved April 5, 1961 (Ga. L. 1961, p. 3106), as amended by an Act approved June 16, 1964 (Ga. L. 1964, p. 2058), as amended by an Act approved March 2, 1966 (Ga. L. 1966, p. 2848), as amended by an Act approved March 27, 1985 (Ga. L. 1985, p. 4235), and as amended by an Act approved April 1, 1996 (Ga. L. 1996, p. 3791).

“Additional Parity Bonds” means any City of Atlanta and Fulton County Recreation Authority Revenue Bonds which might hereafter be issued pursuant to the terms of a supplemental bond resolution and Section 410 of this Resolution and ranking on a parity with the Series 2017 Bonds as to the lien on the moneys derived from the Intergovernmental Lease Agreement.

“Annual Fee” means an amount equal to 0.05% (5 basis points) of the original par amount of the Series 2017 Bonds payable to the Issuer annually in advance on each anniversary of the date of issuance of the Series 2017 Bonds.

“Authenticating Agent” means the financial institution at the time serving as authenticating agent pursuant to Section 603 of this Resolution.

“Basic Payments” means the portion of the Intergovernmental Payments to be provided for by the City pursuant to the Intergovernmental Lease Agreement from its general funds and other lawfully available amounts for payment of the principal of, redemption premium (if any) and interest on Bonds, when due, less any amounts held in the Sinking Fund.

“Bond Purchase Agreement” shall mean the Bond Purchase Agreement among the Underwriter, the Issuer and the City in connection with the sale of the Series 2017 Bonds.

“Bond Registrar” means the financial institution at the time serving as bond registrar pursuant to Section 603 of this Resolution.

“Bond Year” means the period commencing on June 1 of a calendar year and ending on May 31 of the next succeeding calendar year, except that the first Bond Year will begin on the date the Series 2017 Bonds are issued and end on May 31, 2018.

“Bonds” means the Series 2017 Bonds, and, from and after the issuance of any Additional Parity Bonds, unless the context clearly indicates otherwise, such Additional Parity Bonds.

“Business Day” means any day other than a Saturday, a Sunday or any day which shall be in the City of Atlanta, a legal holiday or a day on which banking institutions are authorized or obligated by law or administrative order to close.

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“City” means the City of Atlanta, a municipal corporation of the State.

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

“Depository Bank” means the financial institution at the time serving in such capacity pursuant to Section 601 of this Resolution.

“DTC” means The Depository Trust Company, a corporation organized and existing under the laws of the State of New York, and any other securities depository appointed pursuant to this Resolution, and their successors.

“Event of Default” means the occurrence of an event of default as described in Article VIII.

“Government Obligations” means direct general obligations of the United States of America or obligations which are unconditionally guaranteed by the United States of America, in either case which are not callable except at the option of the holder thereof.

“Holder,” “Bondholder” or “Owner” mean the registered owner of any Bond, including the Series 2017 Bonds.

“Intergovernmental Lease Agreement” means the Intergovernmental Lease Agreement to be dated as of the first day of the calendar month in which the Series 2017 Bonds are issued, between the Issuer and the City, pursuant to which the Issuer will agree to issue the Series 2017 Bonds to finance the costs of the Parking Facility; and in consideration therefore, the City will agree to (i) make payments to the Issuer for such services in amounts sufficient to enable the Issuer to pay, when due, the principal of, premium, if any, and interest on the Series 2017 Bonds, and (ii) pledge its full faith and credit and taxing power to the extent necessary to make the payments required by the Intergovernmental Lease Agreement.

“Intergovernmental Payments” means the Basic Payments to be made by the City to the Issuer pursuant to the Intergovernmental Lease Agreement in an amount sufficient to pay the principal of, redemption premium (if any) and interest on the Series 2017 Bonds, and the Additional Payments for certain costs and expenses of the 2017 Project and the costs of administering the Series 2017 Bonds.

“Issuance Cost Fund” means the fund created in Section 406 of this Resolution.

“Issuance Cost Fund Custodian” means the financial institution serving at the time in such capacity pursuant to Section 601 of this Resolution.

“Issuance Costs” means all expenses of issuing a related series of Bonds, including but not limited to financial advisory fees, printing expenses, legal fees, initial fees of the Paying Agent, Bond Registrar, the Issuer’s Fee assessed by the Issuer in connection with the issuance of the Bonds and any and all other similar out-of-pocket expenses of the Issuer, City or County for the purpose of issuing the Bonds.

“Issuer” means the City of Atlanta and Fulton County Recreation Authority, a public body corporate and politic and a public corporation of the State of Georgia, duly created 6 C-10

and validly existing pursuant to the Act, and any public corporation, entity, body or authority to which is hereafter transferred or delegated by law the duties, power, authorities, obligations or liabilities of the Issuer, either in whole or in part.

“Issuer’s Fee” means a one-time fee payable at closing to the Issuer equal to one- eighth of one percent (0.125%) of the original aggregate principal amount of each series of Bonds.

“Letter of Representations” means the Blanket Issuer Letter of Representations dated November 8, 2005, from the Issuer, relating to a book-entry system to be maintained by DTC.

“Net Parking Fees” shall mean the gross fees and charges paid to the Issuer pursuant to the Parking Management Agreement, net of management fees and other operating expenses incurred in the operation of the Parking Facility.

“Outstanding” means, with reference to the Bonds, all Bonds which have been authenticated, executed and delivered pursuant to this Resolution except:

(a) Bonds redeemed or otherwise cancelled at or prior to such date;

(b) Bonds for the payment or redemption of which funds or securities in which such funds are invested in Government Obligations and shall have been theretofore deposited with a duly designated Paying Agent for the Bonds (whether upon or prior to the maturity or redemption date of any such Bonds) provided that if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given or provision satisfactory to such Paying Agent shall have been made therefor, or a waiver of such notice, satisfactory in form to such Paying Agent shall have been filed with such Paying Agent; and

(c) Bonds in lieu of which other Bonds have been executed and delivered under Sections 207, 208, 210 or 212 of this Resolution.

“Parking Complex Project” means the financing of a portion of the costs of the construction, installation and equipping of a parking garage at Zoo Atlanta consisting of (i) the Parking Facility; (ii) a “green” roof, steel framed and glass dine-in regional-cuisine restaurant featuring casual dining on the first level, totaling approximately 4,000 square feet, and fine dining on the upper level with balconies overlooking green roof elements, totaling approximately 5,000 square feet; and (iii) and related improvements.

“Parking Facility” means the three-story structured parking garage consisting of approximately 1000 spaces and totaling approximately 400,000 square feet.

“Parking Management Agreement” means an agreement entered into between the Issuer and the Parking Manager, as consented to by the City, which agreement is, in the opinion of nationally recognized bond counsel, is a “qualified management contract” within the meaning of the Internal Revenue Code and applicable Treasury Regulations.

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“Parking Manager” means the parking management company or entity designated by the Issuer at the direction of the City.

“Parking Site” means the approximately eight acre site located at Grant Park in Atlanta on which the Parking Facility will be constructed.

“Paying Agent” means the financial institution at the time serving as paying agent for the Bonds pursuant to Section 603 of this Resolution.

“Payment Date” means, as to the Bonds, June 1 and December 1 of each year, commencing December 1, 2017, except that with respect to any series of Additional Parity Bonds, the Issuer may provide in a supplemental resolution for any other payment dates as it deems appropriate.

“Permitted Investments” means the local government investment pool created in Chapter 83 of Title 36 of the Official Code of Georgia Annotated, as amended, or investments in the following securities, and no others;

(a) bonds or obligations of the State, or other states, or of other counties, municipal corporations, and political subdivisions of the State;

(b) bonds or other obligations of the United States or of subsidiary corporations of the United States government which are fully guaranteed by such government;

(c) obligations of and obligations guaranteed by agencies or instrumentalities of the United States government, including those issued by the Federal Land Bank, Federal Home Loan Bank, Federal Intermediate Credit Bank, and the Central Bank for Cooperatives, and any other Issuer or instrumentality now or hereafter in existence; provided, however, that all such obligations shall have a current credit rating from a nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market;

(d) bonds or other obligations issued by any public housing Issuer or municipal corporation in the United States, which such bonds or obligations are fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing Issuer, urban renewal Issuer, or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan, or payment agreement with the United States government;

(e) certificates of deposit of national or state banks located within the State which have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting

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as depository, custodian, or trustee for any of the proceeds of the Bonds. The portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, if any, shall be secured by deposit, with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State, or with a trust office within the State, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and general obligations of the State or other states or of any county or municipal corporation in the State, obligations of the United States or subsidiary corporations referred to in paragraph (b) above, obligations of the agencies and instrumentalities of the United States government referred to in paragraph (c) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities referred to in paragraph (d) above;

(f) securities of or other interests in any no load, open-end management type investment company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as:

(i) the portfolio of such investment company or investment trust or common trust fund is limited to the obligations referred to in paragraphs (b) and (c) above and repurchase agreements fully collateralized by any such obligations;

(ii) such investment company or investment trust or common trust fund takes delivery of such collateral either directly or through an authorized custodian;

(iii) such investment company or investment trust or common trust fund is managed so as to maintain its shares at a constant net asset value; and

(iv) securities of or other interests in such investment company or investment trust or common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State;

(g) interest-bearing time deposits, repurchase agreements, reverse repurchase agreements, rate guarantee agreements, or other similar banking arrangements with a bank or trust company having capital and surplus aggregating at least $50 million or with any government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York having capital aggregating at least $50 million or with any corporation which is subject to registration with the Board of Governors of the Federal Reserve System pursuant to the requirements of the Bank Holding Company Act of 1956, provided that each such interest-bearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement, or other similar banking arrangement shall permit the moneys so placed to be available for use at the time provided with respect to the investment or reinvestment of such moneys; and

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(h) any other investments authorized by the laws of the State.

“Project Fund” means the fund created in Section 409 of this Resolution.

“Project Fund Custodian” means the financial institution at the time serving in such capacity pursuant to Section 601 of this Resolution.

“Record Date” means (a) with respect to any Payment Date, the fifteenth (15th) day of the calendar month next preceding such Payment Date, and (b) with respect to any date of redemption, the fifteenth (15th) day (whether or not a Business Day) next preceding such date of redemption; provided, that with respect to any Additional Parity Bonds, the Issuer may designate any other or additional record dates as it may deem appropriate.

“Renewal and Extension Fund” means the fund created in Section 408 of this Resolution.

“Renewal and Extension Fund Custodian” means the financial institution at the time serving in such capacity pursuant to Section 601 of this Resolution.

“Resolution” or “Bond Resolution” means this Resolution, including any amendments or supplements hereto.

“Sinking Fund” means the fund created in Section 402 of this Resolution.

“Sinking Fund Custodian” means the financial institution at the time serving in such capacity pursuant to Section 601 of this Resolution.

“Sinking Fund Year” means the twelve-month period ending on June 30 of each year.

“State” means the State of Georgia.

“Supplemental Pricing Resolution” shall mean the supplemental resolution adopted by the Issuer, upon consultation with the Chief Financial Officer of the City, setting forth the final aggregate principal amount and interest rates that the Series 2017 Bonds shall bear and which bonds will be designated as term bonds and be subject to mandatory redemption and which bonds will be subject to optional redemption and the terms of any bond insurance policy.

“Zoo Atlanta” means the certain public buildings and facilities located on an approximately 36.42-acre parcel of land at Grant Park owned by the City which is currently operated as a public zoo for amusement and educational purposes.

Section 102. Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, the words “certificate”, “owner”, “holder”, and “person” shall include the plural, as well as the singular, number. The terms “herein”, “hereby”, “hereunder”, “hereof”, “hereinbefore”, “hereinafter” and other equivalent words refer to this Resolution and not solely to the particular portion hereof in which any such term is used.

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The titles preceding each Section hereof are for convenience of reference only and are not intended to define, limit or describe the scope or intent of any provisions of this Resolution. Reference herein to an Article number or to a Section number should be construed to be in reference to the designated Article number or Section number hereof unless the context or use clearly indicates another or different meaning or intent.

Any terms defined in the Intergovernmental Lease Agreement and not defined herein are hereby incorporated herein by reference as if fully set forth in this Article.

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ARTICLE II

FORM AND REGISTRATION OF BONDS

Section 201. Authorized Parameters for Series 2017 Bonds. Under the authority of the Act, for the purpose of financing the Parking Complex Project and to pay Issuance Costs related to the issuance of the Series 2017 Bonds, there are hereby authorized to be issued the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017,” in the aggregate principal amount of not to exceed $37,000,000, provided that that interest rate on the Series 2017 Bonds shall not exceed 5.00% per annum, and the maximum principal and interest due in any Sinking Fund Year shall not exceed $3,000,000. The final maturity of the Series 2017 Bonds shall be December 1, 2036. The Issuer, in consultation with and at the direction of the City, shall adopt a Supplemental Pricing Resolution as provided in Section 1018 hereof following the pricing and prior to the issuance of the Series 2017 Bonds.

Section 202. Issuance of Series 2017 Bonds. The Series 2017 Bonds shall be issued in the denomination of $5,000 each and any integral multiple thereof as provided herein. The Series 2017 Bonds shall mature on the first day of December in the years and amounts and shall bear interest (calculated on the basis of a 360-day year consisting of twelve 30-day months all as set forth in the Supplemental Pricing Resolution). The provisions for the dates, authentication, payment, registration and optional and mandatory redemption shall be in accordance with Article II and Article III of this Resolution and the Supplemental Pricing Resolution.

The Series 2017 Bonds as originally issued and delivered shall be dated their date of initial issuance and delivery. Each Series 2017 Bond issued in exchange or replacement for a Series 2017 Bond as originally issued and delivered shall be dated the date of its authentication.

The Series 2017 Bonds, if tax-exempt, shall be lettered and numbered from R-1 upwards and if taxable, shall be lettered and numbered from TR-1 upwards according to the records maintained by the Bond Registrar.

A validation certificate of the Clerk of the Superior Court of Fulton County, State of Georgia, properly executed by said clerk evidencing the conduct of the proceedings required under Section 1001 hereunder shall be endorsed on each Series 2017 Bond and will be essential to its validity.

The Series 2017 Bonds shall, except as otherwise provided in this Section or in a supplemental resolution or the Supplemental Pricing Resolution, bear interest, payable semiannually on June 1 and December 1 of each year, commencing on December 1, 2017, from the June 1 or December 1, as the case may be, next preceding the date of such Series 2017 Bond to which interest on the Series 2017 Bonds has been paid, unless the date of such Series 2017 Bond is a date to which interest has been paid, in which case from the date of such Series 2017 Bond, or unless no interest has been paid on the Series 2017 Bonds, in which case from the date of original issuance and delivery. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Series 2017 Bonds, all Series 2017 Bonds authenticated by the Authenticating Agent after the close of business on the record date (as hereinafter defined in this Section) for any interest payment date (June 1 or December 1, as the case may be) and

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prior to such interest payment date shall be dated the date of authentication but shall bear interest from such interest payment date; provided, however, that if and to the extent that the Issuer shall default in the payment of the interest due on such interest payment date, any such Series 2017 Bond shall bear interest from the June 1 or December 1, as the case may be, next preceding the date of such Series 2017 Bond to which interest on the Bonds has been paid, unless no interest has been paid on the Series 2017 Bonds, in which case the date of original issuance and delivery.

The person in whose name any Series 2017 Bond is registered at the close of business on any record date (whether or not such date is a business day) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Series 2017 Bond upon any transfer or exchange subsequent to such record date and prior to such interest payment date; provided, however, that if and to the extent that the Issuer shall default in the payment of interest due on such interest payment date, such interest shall be paid to the persons in whose names outstanding Series 2017 Bonds are registered on a subsequent record date established by notice given by first class mail by the Bond Registrar to the owners of the Series 2017 Bonds not less than ten (10) days preceding such subsequent record date. The terms “record date” as used in this Section with respect to any interest payment date shall mean the fifteenth day of the calendar month next preceding such interest payment date.

The principal of and the interest and redemption premium, if any, on the Series 2017 Bonds shall be payable in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts. The principal of the Series 2017 Bonds shall be payable upon the presentation and surrender of said Series 2017 Bonds at the principal corporate trust office in Atlanta, Georgia of the Paying Agent. The interest on the Series 2017 Bonds shall be paid by check or draft mailed by first class mail to the respective owners of said Series 2017 Bonds at their addresses as they appear on the bond register kept by the Bond Registrar.

Regions Bank, a state banking association duly organized under the laws of the State of Alabama (“Trustee”), is hereby designated as the Bond Registrar, Paying Agent and Authentication Agent for the Series 2017 Bonds.

The Series 2017 Bonds shall be issued as fully registered bonds substantially in the forms which are hereinafter set forth.

Section 203. Designation of the Series 2017 Bonds. The Series 2017 Bonds authorized and issued hereunder shall be known as the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017,” and shall be in substantially the form set out in Exhibit “A” hereto. Changes may be made therein and legends or text may be endorsed thereon as may be necessary or appropriate to conform to, and as may be required or permitted by, this Resolution and any resolution of the Issuer supplemental hereto. The Series 2017 Bonds may bear such legend or contain such further provisions as may be necessary to comply with or conform to the rules and requirements of any brokerage board, securities exchange or municipal securities rules making board. All Bonds issued under this Resolution, as Additional Parity Bonds shall be equally and ratably secured hereunder with the Series 2017 Bonds. The Series 2017 Bonds issued under this Resolution are limited obligations of the Issuer as described in Section 206.

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Section 204. Execution of Bonds. The Bonds as issued may be printed or typed. The Bonds shall be executed in the name of the Issuer by the manual or facsimile signature of the Chair or Vice Chair of the Issuer and the official seal of the Issuer shall be printed or impressed thereon and attested by the manual or facsimile signature of the Secretary or Assistant Secretary of the Issuer. In case any officer who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed have been actually authenticated and delivered, such Bonds shall nevertheless be authenticated and delivered as herein provided and may be issued as though the person who signed or sealed such Bonds had not ceased to be such officer, and also any Bonds may be signed and sealed on behalf of the Issuer by such persons as at the actual time of the execution of such Bonds shall be the proper officers of the Issuer, although at the date of issuance such Bonds such persons may not have been officers of the Issuer.

Section 205. Authentication of Bonds. Only such Bonds as shall have endorsed thereon a certificate of authentication executed by an officer or employee of the Authenticating Agent shall be entitled to any right, benefit or security hereunder. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been so executed by the Authenticating Agent, and such executed certificate of the Authenticating Agent upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered hereunder. Said certificate of authentication on any Bond shall be deemed to have been executed by the Authenticating Agent if signed by an authorized officer or employee of the Authenticating Agent, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds issued hereunder.

Section 206. Security; Limited Obligation. In order to secure the payment of the principal of, and the interest on, all Bonds issued under this Resolution according to their tenor and effect, and the performance and observance of each and every one of the covenants and conditions herein and in the Bonds contained, the Issuer has pledged, assigned and set over, and by these presents does pledge, assign and set over, all to the extent and upon the conditions herein set forth, unto the Owners and their successors and assigns forever:

(a) all right, title and interest of the Issuer in, to and under the Intergovernmental Lease Agreement and all revenues to be received by the Issuer therefrom; provided, however, the pledging, assigning and setting over accomplished in this granting clause shall not operate to prevent the reconveyance of the Parking Site and Parking Facility to the City under the terms and conditions of the Intergovernmental Lease Agreement; and

(b) all right, title and interest of the Issuer in and to amounts on deposit from time to time in the Project Fund, Sinking Fund and any and all other moneys and securities from time to time held by any Bank Depository or Custodian appointed hereunder (except for any amounts on deposit in the Rebate Fund, the Renewal and Extension Fund and the Issuance Costs Fund); and

(c) any and all other property of every kind and nature from time to time which heretofore or hereafter is by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder, by the Issuer or by any other person, firm or corporation with the consent of the Issuer.

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The Bonds, together with interest thereon, shall be limited and not general obligations of the Issuer giving rise to no pecuniary liability of the Issuer, shall be payable solely from the revenues and receipts derived by the Sinking Fund and the authority under the Intergovernmental Lease Agreement, and shall be a valid claim of the respective owners thereof only against such fund and the revenues and receipts from the Intergovernmental Lease Agreement which have been pledged to such fund, which revenues and receipts are hereby again specifically pledged and assigned for the equal and ratable payment of the Series 2017 Bonds and shall be used for no other purpose than to pay the principal of, premium, if any, and interest on the Series 2017 Bonds, except as may be otherwise expressly authorized in this Resolution. The Series 2017 Bonds and the interest thereon shall not constitute a general or moral obligation of the Issuer nor a debt, indebtedness, or obligation of, or a pledge of the faith and credit of the City, the County, the State, or any other political subdivision within the meaning of any constitutional or statutory provision whatsoever. Neither the faith and credit nor the taxing power of the City, the County, the State, or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Issuer has no taxing power.

THE SERIES 2017 BONDS SHALL NOT CONSTITUTE A DEBT NOR A MORAL OR GENERAL OBLIGATION OF THE ISSUER, NOR CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE OF GEORGIA, FULTON COUNTY, GEORGIA, THE CITY OF ATLANTA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER, BUT THE SERIES 2017 BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR AS PROVIDED IN THE BOND RESOLUTION AND THE ISSUANCE OF THE SERIES 2017 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF GEORGIA, FULTON COUNTY, GEORGIA OR THE CITY OF ATLANTA, GEORGIA TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATEVER FOR THE PAYMENT HEREOF. THE ISSUER HAS NO TAXING POWER. NO OWNER OF THE SERIES 2017 BONDS SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT HEREOF AGAINST ANY PROPERTY OF THE STATE OF GEORGIA, FULTON COUNTY, OR THE CITY OF ATLANTA, NOR SHALL THE SERIES 2017 BONDS CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY SUCH PROPERTY, PROVIDED, HOWEVER, THAT IN ACCORDANCE WITH THE PROVISIONS OF THE CONSTITUTION AND LAWS OF THE STATE OF GEORGIA, THE OBLIGATION OF THE CITY OF ATLANTA TO MAKE THE PAYMENTS IT HAS CONTRACTED TO MAKE BY THE PROVISIONS OF THE INTERGOVERNMENTAL LEASE AGREEMENT, AS HEREINAFTER DEFINED, SHALL CONSTITUTE A GENERAL OBLIGATION AND A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY OF ATLANTA, AND THE OBLIGATION WHICH THE CITY OF ATLANTA HAS UNDERTAKEN TO MAKE SUCH PAYMENTS FROM TAXES TO BE LEVIED FOR THAT PURPOSE IS A MANDATORY OBLIGATION TO LEVY AND COLLECT SUCH TAXES FROM YEAR TO YEAR IN AN AMOUNT SUFFICIENT TO FULFILL AND FULLY COMPLY WITH THE TERMS OF SUCH OBLIGATION. NEITHER THE MEMBERS OF THE GOVERNING BODY OF THE ISSUER NOR ANY PERSON EXECUTING THE SERIES 2017 BONDS SHALL BE LIABLE PERSONALLY ON THE SERIES 2017 BONDS BY REASON OF THE ISSUANCE THEREOF. THE ISSUER HAS NO TAXING POWER.

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Section 207. Superiority of Lien. The lien created on the moneys in the Sinking Fund, moneys payable to the Issuer under the Intergovernmental Lease Agreement and any other moneys of funds pledged therefore to secure the Bonds shall be prior and superior to any lien that may hereafter be created to secure any obligations having as their security a lien on such moneys, and the Bonds shall enjoy a first lien on all of the moneys described above.

Section 208. Medium and Places of Payment. The principal of and interest and redemption premium (if any) on the Bonds shall be payable in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts. The principal of and redemption premium (if any) on the Bonds shall be payable upon the presentation and surrender of the Bonds at the principal corporate trust office of the Paying Agent. Interest payments on the Bonds shall be paid by check or draft mailed by first class mail on the date on which they are due by the Paying Agent to the owner of the Bond at the owner's address as it appears on the Record Date relating to such Payment Date on the bond register kept by the Bond Registrar. Notwithstanding the foregoing, the principal and interest on the Bonds shall be paid in accordance with Article III hereof and the form of the Bonds and additional or different provisions as to the payment of principal, redemption premium (if any) and interest on any Additional Parity Bonds may be provided by the supplemental resolution authorizing the same.

The person in whose name any Bond is registered at the close of business on any Record Date with respect to any Payment Date shall be entitled to receive the principal and interest payable on such Payment Date notwithstanding any registration of transfer or exchange subsequent to such Record Date and prior to such Payment Date; provided, however, that if and to the extent that the Issuer shall default in the payment of principal or interest due on such Payment Date, such principal or interest shall be paid to the persons in whose name the Bond is registered on a subsequent record date established by notice given by mail by the Paying Agent to the owner of the Bond not less than ten (10) days preceding such subsequent record date.

Section 209. Registration of Transfer and Exchange of Bonds. The Bond Registrar of the Issuer shall keep a register for registration of transfer of the Bonds. The Bond Registrar is hereby also designated as Authenticating Agent for purposes of authenticating the Bonds issued hereunder or issued in exchange or in replacement for Bonds previously issued. Such registration of transfer shall be accomplished by the procedure and with the effect provided in the following paragraph.

The Bonds may be transferred only on the bond register of the Bond Registrar with respect to the Bonds. No transfer of any Bond shall be effective for any purpose hereunder except upon presentation and surrender of such Bond at the office of the Bond Registrar with a written assignment signed by the registered owner of such Bond in person or by a duly authorized attorney in form and with guaranty of signature satisfactory to the Bond Registrar. The Issuer, its agents, the Paying Agent and the Bond Registrar may deem and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal thereof and the interest thereon and for all purposes hereunder, notwithstanding any notice, actual or constructive, to the contrary.

Upon surrender for registration of transfer or exchange of any Bond at the principal corporate trust office of the Bond Registrar, the Issuer shall execute and the Bond Registrar shall authenticate and deliver to the transferee or transferees a new Bond of a like

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aggregate principal amount and of like interest rate and maturity. Every Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Bond Registrar duly executed by the Holder thereof or his attorney duly authorized in writing. The execution by the Issuer of any Bond shall constitute full and due authorization of such Bond and the Bond Registrar shall thereby be authorized to authenticate and deliver such Bond. No charge shall be made to any Bondholder for the privilege of registration of transfer or exchange, but any Bondholder requesting any such registration of transfer or exchange shall pay any tax or other governmental charge required to be paid with respect thereto.

The inclusion of the foregoing provisions shall constitute a continuing request from the Issuer to the Clerk of the Superior Court of Fulton County, Georgia, unless the signature of such Clerk shall appear by facsimile, to execute the certificate of validation on any replacement Bond issued.

Section 210. Mutilated, Destroyed or Lost Bonds. In case any Bond shall become mutilated or be destroyed or lost, the Issuer may cause to be executed and delivered a new Bond of like type, date and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the Holder paying the reasonable expenses and charges of the Issuer in connection therewith and, in the case of a Bond destroyed or lost, the filing with the Issuer of evidence satisfactory to the Issuer that such Bond was destroyed or lost, and of his ownership thereof, and furnishing the Issuer with indemnity satisfactory to the Issuer. If any such Bond shall have matured, instead of issuing a new Bond therefor, the Issuer may pay the same.

Section 211. Destruction of Cancelled Bonds. The Issuer covenants and agrees that all Bonds paid, purchased or redeemed, either at or before maturity, shall be delivered to the Bond Registrar when such payment or redemption is made. All Bonds so cancelled shall be mutilated or destroyed upon their delivery to the Bond Registrar in accordance with the practice then prevailing with the Bond Registrar and such Bonds shall thereupon be cancelled and shall not be reissued and the record of such cancellation and destruction shall be given to the Issuer and preserved in the permanent records of said Issuer.

Section 212. Temporary Bonds. All Bonds issued and to be issued under this Resolution may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds shall be of such denominations as may be determined by the Issuer, and may contain such references to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed by the Issuer and shall be authenticated by the Authenticating Agent upon the same conditions and in substantially the same manner as the definitive Bonds. If the Issuer issues temporary Bonds, it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds may be surrendered for cancellation in exchange therefor at an office designated by the Paying Agent, and the Authenticating Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations and of the same maturities and interest rates. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds authenticated and delivered hereunder.

Section 213. Form of Series 2017 Bonds. The Series 2017 Bonds, the form of assignment, the form of authentication certificate and the certificate of validation shall be in

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substantially in the forms set forth in Exhibit “A” hereto, with such variations, omissions and insertions as are required or permitted by this Resolution.

Section 214. Book Entry System. The Series 2017 Bonds shall be initially registered in the name of Cede & Co., as nominee for DTC, as registered Owner of the Series 2017 Bonds, and held in the custody of DTC or its nominee. The Issuer and the Paying Agent acknowledge that they have executed and delivered a Letter of Representations with DTC and that the terms and provisions of the Letter of Representations shall govern with respect to any inconsistency between the provisions of this Resolution and the Letter of Representations. Upon issuance of the Series 2017 Bonds, one fully registered Series 2017 Bond for each maturity will be issued and delivered to DTC, each in the aggregate principal amount of such maturity. For so long as DTC continues to serve as securities depository for the Series 2017 Bonds as provided herein, the Holders of the Series 2017 Bonds or registered owner of the Series 2017 Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the Series 2017 Bonds (the “Beneficial Owners”).

Transfers of beneficial ownership interest in the Series 2017 Bonds will be accomplished by book entries made by DTC and, in turn, by DTC Participants who act on behalf of the Beneficial Owners. For so long as DTC continues to serve as securities depository for the Series 2017 Bonds as provided herein, no investor or other party purchasing, selling or otherwise transferring beneficial ownership of Series 2017 Bonds is to receive, hold or deliver any Series 2017 Bond certificate. The Issuer, the Paying Agent, and the Bond Registrar have no responsibility or liability for transfers of beneficial ownership interest in the Series 2017 Bonds.

The Issuer, the Bond Register and the Paying Agent shall recognize DTC or its nominee, Cede & Co., as the absolute owner of the Series 2017 Bonds for all purposes of this Resolution, including notices and voting. Conveyance of notices and other communications by DTC to DTC Participants and by DTC Participants to Beneficial Owners, will be governed by arrangements among DTC and the DTC Participants, subject to any statutory and regulatory requirements as my be in effect from time to time.

NEITHER THE ISSUER, THE PAYING AGENT, NOR THE BOND REGISTRAR WILL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO THE DTC PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE SERIES 2017 BONDS WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY SUCH DTC PARTICIPANT; (ii) THE PAYMENT BY DTC OR ANY SUCH DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OR PREPAYMENT PRICE OF OR INTEREST ON THE SERIES 2017 BONDS; (iii) THE DELIVERY BY DTC OR ANY SUCH DTC PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED TO BE GIVEN TO HOLDERS OF THE SERIES 2017 BONDS UNDER THE TERMS OF THIS RESOLUTION; (iv) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2017 BONDS; OR (v) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER OF THE SERIES 2017 BONDS.

DTC may determine to discontinue providing its service with respect to the Series 2017 Bonds at any time upon giving ninety (90) days’ notice to the Issuer, and discharging its responsibilities with respect thereto under the applicable law. In addition, the Issuer may 18 C-22

determine to discontinue participation in the system of book-entry transfer through DTC at any time by giving reasonable notice to DTC. In either such event, a successor securities depository may be identified to replace DTC. If the book-entry system is terminated and a successor depository is not identified to replace DTC, Series 2017 Bond certificates will be delivered to and registered in the name of the Beneficial Owners in accordance with DTC’s rules and procedures. The Beneficial Owners, upon registration of certificates held in the Beneficial Owners’ names, will become the registered owners of the Series 2017 Bonds.

Notwithstanding any other provision of this Resolution to the contrary, so long as DTC is acting as securities depository with respect to the Series 2017 Bonds, interest on the Series 2017 Bonds and all notices with respect to the Series 2017 Bonds, including any notices of redemption or refunding of all or part of the Series 2017 Bonds, shall be made and given, respectively, at the time, in the manner and in accordance with the Letter of Representations.

Whenever during the term of the Series 2017 Bonds the beneficial ownership thereof is determined by a book entry at DTC, the requirements of this Resolution of holding, delivering or transferring Series 2017 Bonds shall be deemed modified to require the appropriate person to meet the requirements of DTC as to registering or transferring the book entry to produce the same effect.

If at any time DTC ceases to hold the Series 2017 Bonds, all references herein to DTC will be of no further force or effect. If a book-entry system through DTC is discontinued and another book-entry system is not used, the Issuer and the Paying Agent will execute a supplemental resolution to the extent necessary to accommodate delivery of definitive certificates.

Section 215. Authorization of Series 2017 Bonds. The Series 2017 Bonds shall be executed substantially in the form and the manner set forth in Exhibit “A” and shall be deposited with the Bond Registrar for authentication. Before the Series 2017 Bonds are delivered by the Bond Registrar, there must be delivered to the Issuer the following:

(a) a copy, certified by the Secretary or any Assistant Secretary of the Issuer, of this Resolution and the Supplemental Pricing Resolution authorizing the issuance of the Series 2017 Bonds;

(b) a certified copy of the validation proceedings in which the Series 2017 Bonds were validated and a certificate of the Clerk of the Superior Court of Fulton County that no appeal has been taken therefrom;

(d) an opinion of Counsel to the Issuer to the effect that this Resolution, the Intergovernmental Lease Agreement, the Supplemental Pricing Resolution and other financing documents to which the Issuer is a party have been duly authorized, executed and delivered by the Issuer and are legal, valid and binding obligations enforceable against the Issuer in accordance with their respective terms;

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(e) an opinion of the City Attorney as to the due authorization and delivery of the Intergovernmental Lease Agreement and as to the enforceability against the City in accordance with its terms;

(f) an opinion of Bond Counsel to the effect that the interest on the Series 2017 Bonds is excluded from gross income for federal income tax purposes and that the interest on the Series 2017 Bonds will be exempt from income taxation by the State;

(g) an original executed counterpart of a certificate of the Issuer establishing its reasonable expectations to the effect that the Series 2017 Bonds will not be “arbitrage bonds” within the meaning of the Code; and

(h) a copy of completed IRS Form 8038-G to be filed by or on behalf of the Issuer pursuant to Section 149(e) of the Code.

When the documents mentioned in paragraphs (a) through (h), inclusive, of this Section have been filed or deposited with the Issuer, the Issuer shall execute and deliver the Series 2017 Bonds as provided in Section 205 hereof, but only on payment of the purchase price of the Series 2017 Bonds and compliance with the applicable provisions of the Bond Purchase Agreement.

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ARTICLE III

REDEMPTION OF BONDS BEFORE MATURITY

Section 301. Optional Redemption. (a) The Series 2017 Bonds shall be subject to optional redemption prior to their stated maturity as determined by the Issuer, at the direction of the City, as specified in the Supplemental Pricing Resolution, to be adopted following the pricing of the Series 2017 Bonds.

If less than all of the Series 2017 Bonds are called for redemption, the maturities of such Series 2017 Bonds to be redeemed shall be selected at the direction of the City in such manner may be determined to be in the best interest of the Issuer. If less than all the Bonds of a particular maturity are called for redemption, the Series 2017 Bonds to be redeemed shall be selected by the Bond Registrar by lot in such manner as the Bond Registrar in its discretion may determine. In either case, (a) a portion of any Series 2017 Bond to be redeemed shall be in the principal amount of $5,000 or some integral multiple thereof, and (b) in selecting Series 2017 Bonds for redemption, each Series 2017 Bond shall be considered as representing that number of Series 2017 Bonds that is obtained by dividing the principal amount of such Series 2017 Bond by $5,000.

(b) Any optional redemption of the Bonds pursuant to the provisions of this Section 301 need not be pro rata among series of Bonds at the time outstanding. The Issuer may redeem all or any of the Bonds of any series before it redeems any of the Bonds of any other series, and it may redeem a portion of the Bonds of one series before, at the same time or after it redeems all or a portion of any other series.

Section 302. Mandatory Sinking Fund Redemption. The Series 2017 Bonds shall be subjected to mandatory Sinking Fund redemption as determined by the Issuer, at the direction of the City, as specified in the Supplemental Pricing Resolution to be adopted following the pricing of the Series 2017 bonds.

Section 303. Partially Redeemed Bonds; Order of Redemption. If any Bond shall be redeemed in part only, upon the surrender of such Bond for partial redemption, the Issuer shall execute and the Authentication Agent shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Owner thereof, at the expense of the Issuer, a Bond or Bonds of the same series and maturity (but only in authorized denominations), for the unredeemed portion of such partially-redeemed Bond. No surrender shall be required for mandatory Sinking Fund redemption of “term bonds” unless requested by the Holder. Redemption need not be pro rata among series of Bonds. The Issuer may redeem any or all of the Bonds of any series before it redeems any of the Bonds of any other series, or it may redeem a portion of the Bonds of one series before, or at the same time that, it redeems all or a portion of any other series.

Section 304. Reserved.

Section 305. Notice of Redemption. (a) Notice of any redemption of Bonds shall be given at least one time not more than sixty (60) and not less than thirty (30) days prior to the date fixed for redemption to the holders of the Bonds being called for redemption by first class mail at the address shown on the register of the Bond Registrar pertaining to the Bonds.

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The failure of the Bond Registrar to give any such notice or the failure of the holder of any Bond to receive any such notice as so given shall not affect the validity of the proceedings for the redemption of any Bond as to which proper notice of redemption has been given as provided herein. All future interest on the Bonds or portions thereof so called for redemption shall cease to accrue from and after the date fixed for redemption unless default shall be made in payment of the redemption price with respect to the Bonds or portions thereof so called for redemption.

Notice of Redemption pursuant to this Section 305 may (1) be conditioned upon the Issuer having on deposit amounts sufficient to pay the redemption price of Bonds on or prior to the scheduled redemption date or (2) shall state that the Issuer retains the right to rescind such notice on or prior to the scheduled redemption date (in either case a “Conditional Redemption”), and such notice and optional redemption shall be of no effect if such moneys are not deposited or if the notice is rescinded as described herein.

(b) In addition to the foregoing, the redemption notice shall contain, with respect to each Bond being redeemed, (1) the CUSIP number, (2) the date of issue, (3) the interest rate, (4) the maturity date and (5) any other descriptive information determined by the Paying Agent and Bond Registrar to be needed to identify the Bonds. If a redemption is a Conditional Redemption, the notice shall so state. The Paying Agent shall also send each notice of redemption at least thirty (30) days before the redemption date to (A) any rating service then rating the Bonds to be redeemed, (B) all of the registered clearing agencies known to the Trustee to be in the business of holding substantial amounts of bonds of a type similar to the Bonds and (C) one or more national information services that disseminate notices of redemption of bonds such as the Bonds.

(c) Any Conditional Redemption may be rescinded in whole or in part at any time prior to the redemption date if the Issuer delivers written notice to the Paying Agent and Bond Registrar instructing the them to rescind the redemption notice. The Paying Agent and Bond Registrar shall give prompt notice of such rescission to the affected Bondholders. Any Bonds subject to Conditional Redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default. Further, in the case of a Conditional Redemption, the failure of the Issuer to make funds available in whole or in part on or before the redemption date shall not constitute an Event of Default, and the Paying Agent and Bond Registrar shall give immediate notice to the Securities Depository or the affected Bondholders that the redemption did not occur and that the Bonds called for redemption and not so paid remain Outstanding. The Issuer shall pay, or cause to be paid, all costs associated with transmitting notice of Conditional Redemption or the rescission of such notice.

Section 306. Purchase of Bonds in Market. Nothing herein contained shall be construed to limit the right of the Issuer to purchase Bonds in the open market, at a price not exceeding the then applicable redemption price of the Bonds to be acquired, or at par and accrued interest for Bonds not then subject to redemption, from funds in the Sinking Fund not needed to pay principal of or interest on the Bonds on the next succeeding Payment Date. Any such Bonds so purchased shall not be reissued and shall not be cancelled.

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ARTICLE IV

REVENUE AND FUNDS

Section 401. Source of Payment of Bonds. The Bonds herein authorized, together with the interest thereon, and all payments required of the Issuer hereunder are not and shall never become general or moral obligations of the Issuer but are special, limited obligations payable solely and only from the City’s Intergovernmental Payments collaterally assigned and pledged under the terms of the Intergovernmental Lease Agreement and from such other sources as authorized and provided in this Resolution.

The Basic Payments to be paid by the City to the Issuer pursuant to Section 5.3 of the Intergovernmental Lease Agreement are to be paid directly to the Sinking Fund for the account of the Issuer. Basic Payments are required to be sufficient in amount to pay the principal of, premium, if any, and interest on, the Bonds, and the entire amount of revenues and receipts from said Intergovernmental Lease Agreement are pledged to the payment of the principal of, premium, if any, and interest on, the Bonds. The Issuer hereby covenants and agrees that it will not create any lien or security interest upon said revenues, except as set forth herein.

Section 402. Creation of the Sinking Fund. There is hereby created by the Issuer and ordered established with the Sinking Fund Custodian a fund to be designated the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 - Sinking Fund” which shall be used as a sinking fund to pay the principal of, premium, if any, and interest, on the Bonds.

Section 403. Payments into the Sinking Fund. There shall be deposited into the Sinking Fund, as and when received, all Basic Payments specified in Section 5.3 of the Intergovernmental Lease Agreement, Net Parking Fees as provided in Section 5.2 of the Intergovernmental Lease Agreement and all other moneys received by the Sinking Fund Custodian under and pursuant to any of the provisions of the Intergovernmental Lease Agreement.

The Issuer hereby covenants and agrees that, so long as any of the Bonds issued hereunder are Outstanding, it will deposit, or cause to be deposited, promptly into the Sinking Fund sufficient sums from payments received pursuant to the Intergovernmental Lease Agreement to meet and pay the principal of, premium, if any, or interest on, the Bonds as and when the same become due and payable. Nothing herein shall be construed as requiring the Issuer to use or to provide any funds or revenues from any source other than the sources herein provided.

Section 404. Use of Moneys in the Sinking Fund. Moneys in the Sinking Fund shall be used solely as a fund for the payment of the principal of, premium, if any, and interest, on the Bonds, for the redemption of the Bonds at or prior to maturity, and to purchase Bonds in the open market pursuant to Section 306 of this Resolution. Except as provided in Article III hereof or any corresponding article in a resolution supplement hereto, no part of payments in the Sinking Fund shall be used to redeem, prior to maturity, a part of the Bonds Outstanding; provided, that whenever the amount in the Sinking Fund from any source whatsoever is sufficient to redeem all of the Bonds Outstanding hereunder, to pay interest to accrue thereon to such redemption date, and to pay all costs and expenses accrued and to accrue

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to such redemption date, the Issuer, at the direction of the City, covenants and agrees to take, and cause to be taken, the necessary steps to redeem all of said Bonds on the next succeeding redemption date for which the required redemption notice may be given; and, provided further that any moneys in the Sinking Fund, other than payments received pursuant to the Intergovernmental Lease Agreement, may be used to redeem a part of the Bonds Outstanding on the next succeeding redemption date for which the required notice of redemption may be given or to purchase Bonds pursuant to Section 305 of this Resolution to the extent said moneys are in excess of the amount required for payment of Bonds theretofore matured or called for redemption and past due interest in all cases where such Bonds have not been presented for payment.

Section 405. Custody of the Sinking Fund. The Sinking Fund shall be in the custody of the Sinking Fund Custodian but in the name of the Issuer, and the Issuer will cause the Sinking Fund Custodian to deliver to the Paying Agent sufficient funds from the Sinking Fund to pay principal of, and interest and premium, if any, on the Bonds as the same become due and payable.

Section 406. Creation of and Disbursements from the Issuance Cost Fund. There is hereby created by the Issuer and ordered established with the Issuance Cost Fund Custodian a fund to be designated the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 - Issuance Cost Fund”, and within such fund a Series 2017 Account, which shall be used as a fund to pay Issuance Costs. There shall be deposited into the Issuance Cost Fund the amount specified in Section 501 hereof. Moneys held in the Issuance Cost Fund will be disbursed upon receipt by the Issuance Cost Fund Custodian of a requisition in substantially the form of Exhibit “C” attached hereto signed by an authorized representative of the City, as approved by the Issuer. Amounts in the Series 2017 Account of the Issuance Cost Fund on the six-month anniversary of the issuance of the Series 2017 Bonds shall be transferred to the Series 2017 Account of the Project Fund.

Section 407. Creation of the Renewal and Extension Fund. There is hereby created by the Issuer and ordered established with the Renewal and Extension Fund Custodian a fund to be designated the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 - Renewal and Extension Fund.” Moneys shall be deposited from time to time into the Renewal and Extension Fund in accordance with this Resolution, and shall be withdrawn by the Issuer and used for the purpose of making additions, extensions, renewals, replacements or emergency repairs to the Parking Facility. The money and any securities held in the Renewal and Extension Fund do not, and shall not, constitute security for the payment of the Bonds.

Section 408. Disbursements from the Renewal and Extension Fund. Withdrawals from the Renewal and Extension Fund shall be by check signed by a duly authorized agent of the Issuer at the direction of the City.

Section 409. Creation of and Disbursements from the Project Fund. There is hereby created by the Issuer and ordered established with the Project Fund Custodian a fund to be designated the “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 - Project Fund,” and within such fund a Series 2017 Account. Moneys held in the Project Fund will be disbursed upon receipt by the Project Fund Custodian of a requisition in substantially the form of Exhibit “C” attached hereto signed 24 C-28

by an authorized representative of the Issuer and countersigned by an authorized officer of the City.

Section 410. Additional Parity Bonds. Except as provided below, the Issuer covenants and agrees that it will not hereafter issue any other certificates, bonds or obligations of any kind or nature payable from the moneys payable to the Issuer under the Intergovernmental Lease Agreement, moneys held in the Sinking Fund or any other moneys or funds pledged to the payment of the Bonds.

The Issuer reserves the right, from time to time, to issue Additional Parity Bonds, at the direction of the City, ranking as to lien on such moneys (pari passu with the lien thereon of Series 2017 Bonds) in an unlimited amount, provided that all of the followings conditions are met:

(a) None of the Outstanding Bonds are in default as to the payment of principal or interest.

(b) The payments covenanted to be made pursuant to the Intergovernmental Lease Agreement into the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any Additional Parity Bonds, must be currently being made in the full amount as required and said funds must be at their proper balances immediately prior to the issuance of such Additional Parity Bonds.

(c) The Issuer shall authorize the issuance of said Additional Parity Bonds and shall provide in such proceedings, among other things, the date and the rate or rates of interest such Additional Parity Bonds shall bear, and the payment dates, maturity dates and redemption provisions with respect to such Additional Parity Bonds and any other matters applicable thereto as the Issuer may deem advisable.

(d) Such Additional Parity Bonds and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law.

(e) The Issuer and the City shall enter into an amendment or supplement to the Intergovernmental Lease Agreement or another contract substantially similar to the Intergovernmental Lease Agreement expressly extending the obligation of the City to pay amounts to the Issuer sufficient to provide for payment of the amounts due on such series of Additional Parity Bonds as the same become due and payable.

(f) The Issuer shall receive an opinion of Counsel to the City to the effect that the Intergovernmental Lease Agreement, as so amended or supplemented, or such contract as described in this Section 410 constitutes a valid and binding obligation of the City, enforceable in accordance with its terms, subject to the customary bankruptcy exceptions.

(g) The Chair or Vice Chair of the Issuer shall execute simultaneously with the issuance of Additional Parity Bonds a certificate certifying that the Issuer is in compliance with all requirements of this Section 410.

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(h) The Issuer shall receive an opinion of Counsel to the Issuer to the effect that (i) the proceedings authorizing the issuance of Additional Parity Bonds have been duly adopted by the Issuer; (ii) the Intergovernmental Lease Agreement, as amended or supplemented as required by this Section 410; or the separate contract, if one is entered into, has been duly authorized, executed and delivered by the Issuer and constitutes a valid and binding obligation of the Issuer, enforceable in accordance with its terms, subject to the customary bankruptcy exceptions.

(i) The Chair or Vice Chair of the Issuer shall execute an order authorizing the authentication of such Additional Parity Bonds upon such conditions as may be specified therein and directing the application of the proceeds of such Additional Parity Bonds.

Section 411. Non-Presentment of Bonds. In the event any Bonds shall not be presented for payment when the principal thereof becomes due, either at maturity or at the date fixed for redemption thereof, or otherwise, if funds sufficient to pay such Bonds shall have been made available to the Paying Agent for the benefit of the Owner or Owners thereof, all liability of the Issuer to the Owner or Owners thereof for the payment of such Bonds shall forthwith cease, determine, and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such fund or funds, without liability for interest thereon, for the benefit of the Owner or Owners of such Bonds, who shall thereafter be restricted exclusively to such fund or funds for any claim of whatever nature on his or their part under this Resolution or on, or with respect to, said Bonds.

Any moneys so deposited with and held by the Paying Agent not so applied to the payment of Bonds, if any, within five (5) years after the date on which the same shall have become due (or such earlier date as immediately precedes the date on which such funds would be required to escheat or be payable to the State or any other governmental unit under any laws governing unclaimed funds) shall be paid by the Paying Agent to the Issuer upon receipt of a written request of the Issuer, and thereafter Owners shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Section 412. Amounts Remaining in Funds and Accounts. Upon payment in full of the principal, premium, if any, and interest on the Bonds, any moneys remaining on deposit in any fund created hereunder shall be paid to the City.

Section 413. Investment and Valuation of Amounts in Sinking Fund. The Sinking Fund Custodian shall separately invest and reinvest the moneys held in the Sinking Fund and the accounts therein in Permitted Investments for the benefit of the Bondholders and the Issuer and at the written direction of the City. Any such investments shall be held by or under the control of the custodian of said fund or account and while so held shall be deemed a part of the fund or account in which such moneys were originally held, and, except as otherwise set forth in this Bond Resolution, the interest accruing thereon and any profit realized from such investments shall be credited to such fund or account and any loss resulting from such investments shall be charged to such fund or account. The funds custodian shall sell and reduce to cash a sufficient amount of such investments whenever the cash balance in any fund is insufficient for the purposes thereof.

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Investment of moneys held in the funds created by the Bond Resolution shall be subject to the following limitations which shall be observed by the city in making such investments for the accounts held by it or in directing such investments (and such direction may be relied on by the Custodian of said fund or account for such purposes) for the funds and accounts held by the Custodian of said fund or account:

(a) for the Sinking Fund, investment in securities and obligations maturing not later than the dates on which such moneys will be needed to pay principal of and interest on the Bonds.

In computing the amount in any fund or account under this Bond Resolution, or any supplement thereto, obligations purchased as an investment of moneys therein shall be valued at cost or fair market value, whichever is lower, plus accrued interest. Such valuations shall be made by the custodian of the various funds at least annually, not later than June 30th of each year or such other times the City may deem appropriate.

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ARTICLE V

CUSTODY AND APPLICATION OF PROCEEDS OF SERIES 2017 BONDS

Section 501. Deposits in the Funds. Upon the issuance and delivery of the Series 2017 Bonds, the Issuer shall deposit or cause the original purchaser to deposit from the net proceeds of the Series 2017 Bonds (after deducting therefrom the underwriting compensation) funds, as specified in the Supplemental Pricing Resolution or written direction of the Issuer:

(a) a specified portion of the proceeds of the Series 2017 Bonds shall be transferred to any bond insurer to pay the premium due on a municipal bond insurance policy, if one is specified in the Supplemental Pricing Resolution;

(b) a specified portion of the Series 2017 Bonds shall be transferred to the Project Fund to be used as described in Section 409 hereof; and

(c) a specified portion of the Series 2017 Bonds shall be transferred to the Issuance Cost Fund to be used in the manner specified by the written direction of the Issuer and the City.

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ARTICLE VI

DEPOSITORIES OF MONEYS AND SECURITIES FOR DEPOSIT; DESIGNATION OF AUTHENTICATING AGENT, PAYING AGENT AND BOND REGISTRAR

Section 601. Depositories and Custodians. All moneys constituting proceeds of the Bonds or payments under the Intergovernmental Lease Agreement shall, subject to the giving of security as hereinafter provided, be deposited with the pertinent custodian in the name of the Issuer and shall constitute trust funds to be applied in accordance with the terms and for the purposes as set forth in this Resolution and shall not be subject to lien or attachment by any creditor of the Issuer or the City.

No moneys belonging to any of the funds created hereunder shall be deposited or remain on deposit with any depository or custodian in an amount in excess of the amount guaranteed or insured by the Federal Deposit Insurance Corporation or other federal agency, unless such institution shall have pledged for the benefit of the Issuer and the Bondholders as collateral security for the moneys deposited, obligations of the type or types in which the depository or custodian is permitted to directly invest the moneys of the particular fund as hereinabove provided, and having a market value (exclusive of accrued interest) at least equal to the amount of such deposits.

Regions Bank is hereby designated as the Project Fund Custodian, the Issuance Cost Fund Custodian, the Sinking Fund Custodian and the Renewal and Extension Fund Custodian. The Issuer, at the direction of the City, may, from time to time, designate a successor custodian or depository of any of the Funds created hereunder; provided such custodian or depository complies with all of the provisions of this Article. In the event any custodian or depository shall resign or fail to perform its duties hereunder, the Issuer shall appoint a new custodian or depository for such fund.

In the event the Sinking Fund Custodian and the Paying Agent are the same bank acting in both such capacities, then the Sinking Fund Custodian shall, without any further direction on the part of the Sinking Fund Custodian or any further authorization from the Issuer, use, invest and disburse the moneys in the Sinking Fund as required by this Resolution. If the Sinking Fund Custodian and the Paying Agent are not the same bank, the Sinking Fund Custodian shall, without further authorization, transfer to the Paying Agent from moneys held in the Sinking Fund in immediately available funds, moneys in amounts as shall be required to pay the principal of, redemption premium (if any) and interest on the Series 2017 Bonds as and when the same are payable.

Section 602. Administrative Fees and Expenses. The Issuer shall pay, or cause the City to pay, to the custodians and depositories appointed in accordance with Section 601, and to their successors and assigns, and to the Paying Agent, Bond Registrar and Authenticating Agent and to their respective successors and assigns from time to time, as the same are due and payable their reasonable fees and reasonable expenses for serving under this Resolution and shall pay to the Issuer the Annual Fee. The Issuer's obligation to pay such fees and expenses shall be limited to the moneys it receives pursuant to the Intergovernmental Lease Agreement.

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Section 603. Appointment of Authenticating Agent, Paying Agent and Bond Registrar. Regions Bank is hereby designated as the Authenticating Agent, Paying Agent and Bond Registrar. The Issuer may, from time to time, designate a successor Authenticating Agent, Paying Agent or Bond Registrar. In the event the Authenticating Agent, the Paying Agent or the Bond Registrar shall resign or fail to perform its duties hereunder, the Issuer shall appoint a new Authenticating Agent, Paying Agent or Bond Registrar, as appropriate.

Section 604. Employment of Attorneys, Agents, Etc. The Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent and Bond Registrar may execute any of the powers hereof and perform any of their duties by or through attorneys, agents, receivers or employees, but shall not be answerable for the conduct of the same if appointed with due care, and shall be entitled to advice of counsel concerning their duties hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the exercise of powers hereunder. The Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent and Bond Registrar may act upon the opinion or advice of any attorney (who may be the attorney or attorneys for the Issuer) selected by the Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent and Bond Registrar, respectively, in the exercise of reasonable care. The Sinking Fund Custodian, Project Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent, and Bond Registrar shall not be responsible for any loss or damage resulting from any action or inaction taken or not taken, as the case may be, in good faith in reliance upon such opinion or advice.

Section 605. Reliance on Documents. The Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent, and Bond Registrar shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed to be genuine and correct and to have been signed or sent by the proper person or persons.

Section 606. Evidence of Facts. As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent and Bond Registrar shall be entitled to rely upon a certificate signed by a duly authorized representative of the Issuer or the City as sufficient evidence of the facts therein contained and prior to the occurrence of an event of default, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Project Fund Custodian, Sinking Fund Custodian, Issuance Cost Fund Custodian, Renewal and Extension Fund Custodian, Authenticating Agent, Paying Agent, and Bond Registrar may accept a certificate of such officials of the Issuer who executed the Series 2017 Bonds (or their successors in office) to the effect that a resolution in the form therein set forth has been adopted by the Issuer as conclusive evidence that such resolution has been duly adopted and is in full force and effect.

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ARTICLE VII

PARTICULAR COVENANTS AND FINDINGS

Section 701. Conditions of Issuer’s Obligations; Payment of Bonds. The Issuer covenants that it will promptly pay the principal of and interest on each and every Bond at the place, on the dates and in the manner herein, and in the Bonds specified, and any premium required for the redemption of the Bonds, according to the true intent and meaning thereof. The principal of, interest on, and redemption premium (if any) are payable solely out of moneys in the Sinking Fund, which shall be sufficient to make all payments required to be made as such payments may be enlarged and extended to provide for the payment of Additional Parity Bonds pursuant to the provisions of this Resolution.

Section 702. Maintenance and Repair. The Issuer agrees, to cause the Parking Facility to be kept in as reasonably safe condition by the Parking Manager as its operation shall permit, and subject to the provisions of the Intergovernmental Lease Agreement, to cause to be made all needed repairs so that the Parking Facility shall at all times be kept in good repair and in good operating condition.

Section 703. Maintenance of Insurance. The Issuer shall cause the City to maintain, with reputable insurance companies authorized to do business in the State, all necessary insurance with respect to the Parking Facility in accordance with its customary insurance practices. The Issuer shall be named as an additional insured on all such policies.

Section 704. Books and Records. The Issuer covenants that it will keep the funds and accounts created hereunder separate from all other funds and accounts of the Issuer, or any of its departments, and of the revenues collected from the Intergovernmental Lease Agreement and from the Parking Management Agreement and the application thereof. Such records and accounts shall be open to the inspection of all interested persons at reasonable times and upon reasonable request.

Section 705. Sale of the Parking Facility. The Issuer shall agree that it will not sell or otherwise dispose of the Parking Facility or any integral part thereof, or interest therein, without the written consent of the City.

Section 706. Tax Covenants. The Issuer further covenants to take any and all action which may be required from time to time in order to insure that interest on the Series 2017 Bonds shall remain excludable from the gross income of the Owners of the Series 2017 Bonds for federal income tax purposes and to refrain from taking any action which would adversely affect such status.

Section 707. Prohibited Activities.

(a) The Issuer shall not (i) use or knowingly permit the use, directly or indirectly, of any proceeds to the Series 2017 Bonds, or any other funds of the Issuer or any funds of a Depository Bank on behalf of the Issuer, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer in any manner, and (ii) shall not take or permit to be taken any other action or actions, that would cause any Series 2017 Bond to be an “arbitrage bond” within the meaning of Section 148 of the Code or which would

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otherwise cause interest on the Series 2017 Bonds to become subject to Federal income tax. If at any time the Issuer is of the opinion that for purposes of this subsection (a) it is necessary to restrict or limit the yield on or change in any way the investment of any moneys held by the Project Fund Custodian or other Custodian of Funds under this Resolution, the Issuer shall so instruct the Custodian in writing, and the Custodian shall take such action as may be necessary in accordance with such instructions.

(b) The Issuer shall at all times do and perform all acts and things permitted by law and necessary or desirable in order to assure that interest paid by the Issuer on the Series 2017 Bonds shall, for the purposes of Federal income tax, be exempt from all income taxation under any valid provision of law.

(c) The Issuer shall not use or permit the use of any proceeds of Bonds or any other funds of the Issuer, directly or indirectly, in any manner, and shall not take or permit to be taken any other action or actions, which would result in any of the Bonds being treated as a “private activity bond,” as defined in Section 141 of the Code.

(d) Reference is made to the tax compliance and non-arbitrage certificate by the Issuer delivered concurrently with the issuance of the Series 2017 Bonds; the representations and covenants made therein are hereby incorporated by reference as if contained herein and shall constitute part of this Resolution.

(e) The Issuer covenants that it will invest moneys in the Project Fund only in Permitted Investments.

Section 708. Limitation on Private Use. The Issuer further covenants that it shall not permit the proceeds of the Series 2017 Bonds to be used in any manner that would result in (a) 5% or more of such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code or an organization created pursuant to Section 501(c)(3) of the Code, as provided in Section 145 of the Code, (b) 5% or more of such proceeds being used with respect to any output facility, within the meaning of Section 141(b)(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Section 141(c) of the Code or an organization created pursuant to Section 501(c)(3) of the Code, as provided in Section 145 of the Code; provided, however, that if the Issuer receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Series 2017 Bonds from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law, the Issuer need not comply with such covenant.

Section 709. Establishment of Rebate Fund. There is hereby established with the Sinking Fund Custodian a fund which shall be designated the “City of Atlanta and Fulton County Recreation Authority Series 2017 – Zoo Atlanta Parking Facility Project - Rebate Fund.” Moneys in the Rebate Fund shall be kept separate and apart from any other moneys of the Issuer. Moneys in the Rebate Fund are pledged to secure payments to the United States as required by Section 148(f) of the Code and no owner of any Series 2017 Bonds shall have any rights in or claim to any moneys or investments held in the Rebate Fund. The moneys and securities held in the Rebate Fund do not, and shall not, constitute security for the payment of the Series 2017 Bonds.

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Within 60 days of the end of each fifth (5th) Bond Year, upon the written instruction of the Issuer (as directed by the City in consultation with a rebate analyst retained by the City) an amount shall be deposited into the Rebate Fund as required by the Issuer and in compliance with the tax certifications delivered in connection with the issuance of the Bonds. The custodian of the Rebate Fund shall pay, as and when directed in writing by the Issuer (at the direction of the City) the amounts deposited to the Rebate Fund to the United States Treasury.

Section 710. No Diminishment of Lien Granted. Except as permitted in connection with the issuance of Additional Parity Bonds, so long as any of the Bonds shall be outstanding, the Issuer shall not hereafter create, or cause to be created, any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien hereof and of the Bonds upon any revenues which are derived by the Issuer from the Intergovernmental Lease Agreement. The Issuer shall not transfer, convey, or otherwise alienate its ownership interest in the Parking Facility, except as provided in the Intergovernmental Lease Agreement except that the Issuer may transfer and convey its ownership interest in the Parking Facility as a whole if simultaneously with such transfer and conveyance the Issuer shall deposit in the Sinking Fund an amount which with other moneys then in said fund shall be sufficient to pay or redeem all Outstanding Bonds on their respective dates of stated maturity or on the earliest date upon which they could be redeemed in accordance with their terms and also to pay all interest which shall have accrued thereon on or before such stated maturity date or redemption date.

Nothing herein shall be construed to be a grant to the Bondholders of a security interest in any properties now owned or hereafter acquired by the Issuer (or the revenues therefrom) which are physically remote from or functionally disassociated with the Parking Facility. Bondholders have not been granted a lien on or security interest in the Parking Facility.

Section 711. Maintenance of Existence. The Issuer will undertake reasonable efforts to maintain its existence or assure the assumption of its obligations hereunder and under the Intergovernmental Lease Agreement by any corporation or political subdivision succeeding to its powers under the Act.

Section 712. Issuer will not Cancel Intergovernmental Lease Agreement. The Issuer agrees that so long as any of the Bonds shall be Outstanding, it will not consent or agree to any change, amendment, modification or termination of the Intergovernmental Lease Agreement except as provided in Sections 1005 and 1006 hereof (provided the rights of the Issuer to reconvey the leasehold interest in the Parking Facility to the City shall not be affected by the foregoing agreement); that it will promptly, faithfully and satisfactorily perform all of the agreements and obligations made and undertaken by it pursuant to said Intergovernmental Lease Agreement required to enforce said Intergovernmental Lease Agreement; and that it will enforce said Intergovernmental Lease Agreement in accordance with their terms.

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ARTICLE VIII

DEFAULTS AND REMEDIES

Section 801. Events of Default. An “Event of Default” shall mean the occurrence of any one or more of the following events:

(a) failure to pay the principal of any Bond when the same shall become due and payable, either at maturity, by proceedings for redemption, by acceleration or otherwise; or

(b) failure to pay any installment of interest on any Bond when the same shall become due and payable; or

(d) an “Event of Default” shall have occurred under the Intergovernmental Lease Agreement; or

(e) failure by the Issuer or the City in the due and punctual performance of any other of its agreements contained in the Bonds or the Intergovernmental Lease Agreement, or herein, and such failure shall continue for thirty (30) days after written notice specifying such failure and requiring the same to be remedied shall have been given to the Issuer and the City by any Bondholder.

Section 802. No Acceleration. The remedy of acceleration is not permitted.

Section 803. Other Remedies. Upon the happening and continuance of any Event of Default, then and in every such case any Bondholder may proceed, subject to the provisions of Section 805, to protect and enforce the rights of the Bondholders hereunder by a suit, action or special proceeding in equity or at law for the specific performance of any covenant or agreement contained herein or in the Intergovernmental Lease Agreement or in aid or execution of any power herein granted, or for the enforcement of any proper legal or equitable remedy as such Bondholder shall deem most effectual to protect and enforce the rights aforesaid, insofar as such may be authorized by law.

Section 804. Abandonment of Proceedings. In case any proceeding taken by any Bondholder on account of any Event of Default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such Bondholder, then and in every such case the Issuer and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, power and duties of the Bondholders shall continue as though no such proceedings had been taken.

Section 805. Limitation of Actions by Bondholders. No one or more Holders of the Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Holders of such Outstanding Bonds.

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Section 806. Non-Exclusivity of Remedies. No remedy herein conferred upon the Bondholders is intended to be exclusive of any other remedy, or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity, or by statute.

Section 807. Delays. No delay or omission of any Bondholder to exercise any right or power accruing upon any Event of Default occurring and continuing, as aforesaid, shall impair any Event of Default or be construed as an acquiescence therein; and every power and remedy given by this Article to the Bondholders may be exercised from time to time and as often as may be deemed expedient.

Section 808. Insufficiency of Moneys in Sinking Fund. If at any time the moneys in the Sinking Fund shall be insufficient to pay the principal of or the interest on the Bonds as the same become due and payable, such moneys as are at the time in said fund, together with any moneys thereafter becoming available for such purpose, whether through the exercise of the remedies in this Article provided for or otherwise, shall be applied as follows:

(a) unless the principal of all of the Bonds shall have become due and payable, all such moneys shall be applied

First: to the payment of the persons entitled thereto of all installments of interest then due and payable, in the order of the maturity of the installment of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference;

Second: to the payment to the persons entitled thereto of the principal of any of the Bonds which have become due and payable (other than Bonds theretofore called for redemption for the payment of which moneys are held pursuant to the provisions of this Resolution), in the order of their maturity or due dates, with interest upon such Bonds from the respective dates upon which they matured or became due, and, if the amount available shall not be sufficient to pay in full Bonds due and payable on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due and payable on such date, and then to the payment of such principal, ratably according to the amount of such principal due and payable on such date, to the persons entitled thereto without any discrimination or preference; and

Third: to the payment of the interest on and the principal of the Bonds in accordance with the provisions of Article V hereof.

(b) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and payable and unpaid upon the Bonds, with interest thereon, as aforesaid, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any

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other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference.

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ARTICLE IX

DEFEASANCE

Section 901. Payment and Defeasance. If (a) the Issuer shall pay or cause to be paid to the Holders of all Bonds then Outstanding the principal of and the interest to become due thereon at the times and in the manner stipulated therein and herein; (b) all fees, charges and expenses of the Paying Agent, Authenticating Agent, Bond Registrar, depositories and custodians shall have been paid or provision for such payment has been made; and (c) the Issuer shall keep, perform and observe all of its agreements in the Bonds and herein expressed as to be kept, performed and observed by it or on its part, then these presents and the rights hereby granted shall cease, determine and be discharged; provided, however, that no such discharge shall affect the Issuer's obligations under Sections 706 and 707 hereof.

Bonds shall be deemed to be paid within the meaning of this Resolution if (a) sufficient moneys shall have been irrevocably deposited with the Paying Agent to pay the same when they become due; (b) there shall have been irrevocably deposited with the Paying Agent moneys or Government Obligations, which, without any reinvestment thereof or of the interest thereon, will produce moneys sufficient to pay the same when they become due (whether upon or prior to the stated maturity or the redemption date of such Bonds); provided, however, that if such Bonds are to be redeemed prior to their stated maturities, notice of such redemption shall have been duly given as provided herein or irrevocable arrangements satisfactory to the Paying Agent shall have been made for the giving thereof. Any such deposit is subject to Section 706 hereof. In the event the Issuer shall have made a deposit of moneys or Government Obligations, the Issuer shall retain the right to substitute Government Obligations for those previously pledged provided that such Government Obligations will provide sufficient moneys in a timely fashion (without any reinvestment as described above) to make the required payments of principal and interest on such Bonds, and the Issuer shall receive at the time of such substitution an opinion of a firm of recognized bond attorneys to the effect that such substitution will not adversely affect the status of interest on the Bonds (or any of the Bonds) as being excludable from gross income for federal income tax purposes under the Code. The Issuer at its option may defease all of the Bonds, any series of the Bonds or any portion of any such series as it may elect.

Section 902. Termination of Liability. If the Issuer shall determine that it is desirable to terminate the rights and liens hereunder of the Holders of any Bonds (pursuant to a refunding or otherwise) and shall cause the Bonds (or such portion thereof) to be deemed to be paid within the meaning of Section 901 hereof, then such Bonds shall thereafter have no right or lien under this Resolution other than the right to receive payment from said special fund and the same shall not be considered to be Outstanding hereunder for any purpose.

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ARTICLE X

MISCELLANEOUS PROVISIONS

Section 1001. Validation. The validity of the Bonds shall be adjudicated in accordance with the Act, as amended, and to that end notice of the adoption of this Resolution and a certified copy thereof shall be immediately served on the District Attorney of the Atlanta Judicial Circuit in order that proceedings for the confirmation and validation of the Bonds by the Superior Court of Fulton County may be instituted by said District Attorney.

Section 1002. Severability. In case any one or more of the provisions of this Resolution, or the Bonds, shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution, or the Bonds, but this Resolution and the Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein.

If any one or more of the provisions of this Resolution or of the Bonds shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution or of said Bonds, but this Resolution and said Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein. If any covenant, stipulation, obligation or agreement contained in the Bonds or in this Resolution shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the Issuer to the full extent that the power to incur such obligation or to make such covenant, stipulation or agreement might have been conferred on the Issuer by law.

Section 1003. Resolution as a Contract. The provisions of this Resolution shall constitute a contract by and between the Issuer and the owners of the Bonds, and after the issuance of the Bonds, this Resolution shall not be repealed, revoked, amended, supplemented or rescinded in any respect which will adversely affect the rights and interests of the Owners of the Bonds, nor shall the Issuer, except as provided in Section 1004, pass any resolution in any way adversely affecting the rights of such Owners, so long as any of the Bonds, or the interest thereon, shall remain unpaid. Any amendment to this Resolution shall be effected as hereinafter provided in Section 1004.

The provisions of this Resolution and every sentence hereof shall be construed as including and as being applicable to any future series of Additional Parity Bonds, as well as to the Series 2017 Bonds, and any such Additional Parity Bonds shall be treated for all intents and purposes, unless otherwise specifically stated, just as if they had been issued together with the Series 2017 Bonds and pursuant to the terms of this Resolution.

Any subsequent proceedings authorizing the issuance of Additional Parity Bonds, as provided in Article IV of this Resolution, shall in no way conflict with the terms and conditions of this Resolution but shall, for all purposes, reaffirm all of the applicable covenants, agreements and provisions of this Resolution for the equal protection and benefit of all Bondholders.

Section 1004. Modification, Alteration, Supplementation or Amendment of Resolution. (a) The Issuer may, from time to time, modify, amend, supplement or alter this

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Resolution without the consent of, or notice to any of the owners of the Bonds for any one or more of the following purposes:

(i) to cure any ambiguity or formal defect or omission in this Resolution;

(ii) to grant to or confer any additional rights, remedies, powers or authorities that may be lawfully granted to or conferred upon the owner of the Bonds;

(iii) to subject to the lien and pledge of this Resolution additional rents, revenues, receipts, properties or other collateral;

(iv) to evidence the appointment of successors to any depositories, custodians, Paying Agent(s) or Bond Registrar(s);

(v) to provide for the issuance of Additional Parity Bonds as more fully provided in Article IV;

(vi) to modify, amend or supplement this Resolution or any proceedings supplemental hereto in such manner as to permit the qualification of this Resolution under the Trust Indenture Act of 1939 or any federal statute hereinafter in effect, and similarly to add to this Resolution, or to any proceedings supplemental hereto, such other terms, conditions and provisions as may be permitted or required by said Trust Indenture Act of 1939 or any similar federal statute;

(vii) to make any modification or amendment of this Resolution required in order to make the Bonds eligible for acceptance by The Depository Trust Company or any similar holding institution or to permit the issuance of the Bonds or interests therein in book-entry form;

(viii) to modify any of the provisions of this Resolution in any respect provided that such modification shall not be effective until after the Bonds outstanding immediately prior to the effective date of such supplemental resolution shall cease to be outstanding and further provided that any Bonds issued contemporaneously with or after the effective date of such supplemental proceedings shall contain a specific reference to the modifications contained in such subsequent proceedings; or

(ix) to make any other change which, in the opinion of counsel, is not materially adverse to the interests of the Bondholders.

(b) The Issuer may, from time to time, modify, amend, alter, or supplement this Resolution other than as provided in Section 1004(a) above provided that the Issuer shall give notice to the registered Owners of the Bonds in the manner herein described and shall receive the written consent of the registered Owners of a majority in aggregate principal amount of the Bonds then outstanding; provided, however, that no such supplemental proceedings shall:

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(i) extend the maturity date or due date of any mandatory Sinking Fund redemption with respect to any Bond outstanding hereunder;

(ii) reduce or extend the time of payment of the principal of, redemption premium or interest on any Bond outstanding hereunder;

(iii) reduce any premium payable upon the redemption of any Bond hereunder or advance the date upon which any Bond may first be called for redemption prior to its stated maturity date;

(iv) give to any Bond or Bonds a preference over any other Bond or Bonds;

(v) except as expressly permitted in this Resolution, permit the creation of any mortgage, lien or any other encumbrance on the moneys received pursuant to the Intergovernmental Lease Agreement having a lien equal to prior to the lien created hereunder for the Bonds; or

(vi) reduce the percentage of Bonds the registered Owners of which are required to consent to any proceedings amending or supplementing the provisions hereof.

In the event that the Issuer intends to enter into or adopt any modification, alteration or amendment of this Resolution as described in this Section 1004(b), the Issuer shall mail, by registered or certified mail, to the registered Owners of the Bonds at their addresses as shown on the registration books maintained by the Bond Registrar, a notice of such intention along with a description of such amendment or modification not less than 30 days prior to the proposed effective date of such amendment or modification. The consents of the registered Owners of the Bonds need not approve the particular form of wording of the proposed amendment, modification or supplement, but it shall be sufficient if such consents approve the substance thereof. Failure of the Owner of any Bond to receive the notice required herein shall not affect the validity of any proceedings supplemental hereto if the required number of Owners of the Bonds shall provide their written consent to such amendment or modification.

Section 1005. Amendments to Intergovernmental Lease Agreement Not Requiring Consent of Owners. The Issuer and the City, without the consent of or notice to the Owners, may amend the Intergovernmental Lease Agreement, without the consent of the Owners, for the purpose of (i) making any change required by this Resolution, (ii) substituting or adding additional property, (iii) releasing any portion of the Parking Facility as a result of additions, deletions, alterations, modifications or improvements to the Parking Facility, (iv) curing ambiguities, defects or inconsistent provisions, (v) making any change required in connection with the issuance of Additional Parity Bonds, or (vi) providing for any other amendment which does not adversely affect the obligations of the City to make payments with respect to the Series 2017 Bonds as provided in Section 10 of the Intergovernmental Lease Agreement.

Section 1006. Amendments to Intergovernmental Lease Agreement Requiring Consent of Owners. (1) Except for the amendments as provided in Section 1005, neither the Issuer nor the City may amend the Intergovernmental Lease Agreement, without the

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written consent of the Owners of majority in aggregate principal amount of the Bonds at the time outstanding given and procured as in this Section provided; provided that without the written consent of the Owners of all the Bonds then outstanding, no such amendments shall ever affect the obligations of the City to pay amounts due under the provisions of the Intergovernmental Lease Agreement.

(2) If at any time the Issuer and the City shall propose any such amendment to the Intergovernmental Lease Agreement, the Issuer shall cause notice of such proposed amendment to be given in the same manner as provided by Section 1004 hereof with respect to supplemental resolutions. Such notice shall briefly set forth the nature of such proposed amendment and shall state that copies of the instrument embodying the same are on file at the principal office of the Issuer for inspection by all Owners. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to provide such notice, and any such failure shall not affect the validity of such amendment when consented to and approved as provided in this Section. If the Owners of not less than a majority in aggregate principal amount of the Bonds outstanding hereunder at the time of the execution of any such amendment shall have consented to and approved the execution thereof as herein provided, no Owner of any Bond shall have any right to object to any of the terms and provisions contained therein or the operation thereof or in any manner to question the propriety of the execution thereof or to enjoin or restrain the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such amendment as in the Section permitted and provided, the Intergovernmental Lease Agreement, shall be deemed to be modified and amended in accordance therewith.

Section 1007. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of payment of the principal of or interest on the Bonds or the date fixed for redemption of any Bonds shall not be a Business Day, then payment of such principal or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date of stated maturity or the date fixed for redemption, and no interest shall accrue for the period after such date; provided, however, that the Issuer may, in connection with the issuance of any Additional Parity Bonds bearing interest at a variable rate, provide that interest shall accrue for any such period.

Section 1008. Applicable Provisions of Law. This Resolution shall be governed by and construed and enforced in accordance with the laws of the State.

Section 1009. Repeal of Conflicting Resolutions. Any and all resolutions, or parts of ordinances or resolutions, if any, in conflict with this Resolution are hereby repealed, and this Resolution shall be in full force and effect from and after its adoption.

Section 1010. Authorization of Intergovernmental Lease Agreement. The execution, delivery and performance of the Intergovernmental Lease Agreement, a copy of which is attached hereto as Exhibit “B”, is hereby authorized. The Intergovernmental Lease Agreement shall be in substantially the form presented to the Issuer at this meeting and on file with the Secretary of the Issuer, with such changes, insertions or omissions as may be approved by the Chair, Vice Chair, Executive Director of the Issuer and the execution and delivery by the Issuer of the Intergovernmental Lease Agreement as hereby authorized shall be conclusive evidence of the approval of any such changes, insertions or omissions.

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Section 1011. No Individual Responsibility of Members and Officers of Issuer. No stipulations, obligations or agreements of any member or of any officer of the Issuer shall be deemed to be stipulations, obligations or agreements of any such member or officer in his or her individual capacity.

Section 1012. Acknowledgment of Continuing Disclosure Certificate. For purposes of enabling the Underwriter to comply with the requirements of Rule 15c2-12, the Issuer hereby acknowledges the City’s delivery of the Continuing Disclosure Agreement in substantially the form presented to the Issuer.

Section 1013. General Authority. The Issuer is hereby authorized to execute and file with the Internal Revenue Service an Information Return for Tax-Exempt Governmental Bond Issues, Form 8038-G. The Issuer, at the direction of and in consultation with the City, shall execute and deliver a tax and non-arbitrage certificate and all other documents and certificates necessary to effectuate the transactions contemplated by this Resolution. All actions heretofore taken and all documents heretofore executed in connection with the issuance of the Series 2017 Bonds are hereby ratified and approved. It is hereby ratified and approved that the Chair or Vice Chair and any other proper officers, members, agents and employees of the Issuer hereby are authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of this Resolution and further are authorized to take any and all further actions and execute and deliver any and all other certificates, papers and documents as may be necessary or desirable to effect the actions contemplated by this Resolution. Such other certificates, papers and documents shall be in such form and contain such terms and conditions as may be necessary or desirable to effect the actions contemplated by this Resolution. Such other certificates, papers and documents shall be in such form and contain such terms and conditions as may be approved by the Chair or Vice Chair of the Issuer, and the execution of such other certificates, papers and documents by the Chair or Vice Chair of the Issuer as herein authorized shall be conclusive evidence of any such approval. The Secretary or any Assistant Secretary of the Issuer is hereby authorized to attest the signature of the Chair or Vice Chair of the Issuer and impress, imprint or otherwise affix the seal of the Issuer on any of the certificates, papers and documents executed in connection with this Resolution, but shall not be obligated to do so, and the absence of the signature of the Secretary or Assistant Secretary or the Issuer’s seal on any such other certificates, papers and documents shall not affect the validity or enforceability of the Issuer’s obligations thereunder.

Section 1014. Manner of Evidencing Ownership of Bonds. Any consent, request, direction, approval or other instrument required by this Resolution to be signed or executed by Bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondholders in person or by agent appointed in writing. Proof of the execution of any such consent, request, direction, approval or other instrument, or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any purpose of this resolution and shall be conclusive in favor of the Issuer with regard to any action taken by it under such consent, request, direction, approval or request:

(a) The fact and date of the execution by any person of any such writing may be proved by the certificate of any officer in any jurisdiction, who, by the laws thereof, has power to take acknowledgments within said jurisdiction, to the effect that the person

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signing such writing acknowledged before him the execution thereof, or by an affidavit of a witness to such execution.

(b) The ownership of Bonds shall be proved by the registration book maintained by the Bond Registrar.

Section 1015. Bond Purchase Agreement. The execution, delivery and performance by the Chair, Vice Chair or Executive Director of the Issuer of a Bond Purchase Agreement for the sale of the Series 2017 Bonds, among the Issuer, the Underwriter and the City is hereby authorized, subject to the requirement that (i) the terms of such agreement are within and conform to the authorized parameters set forth in Section 201 hereof and (ii) that prior to the issuance of the Series 2017 Bonds a Supplemental Pricing Resolution shall be approved by the governing body of the Issuer, as required by law.

Section 1016. Requirements and Conditions Met. The Issuer agrees that all the terms, conditions, requirements of all acts and things required to be done, both under the Constitution of the State of Georgia and the Act, have been done as required, and the Issuer agrees to maintain the Parking Facility as provided by law, and agrees to take any and all necessary steps to comply with each and every requirement and condition referred to herein.

Section 1017. Limitation of Rights. Except as herein expressly otherwise provided, nothing in this resolution expressed or implied is intended or shall be construed to confer upon any person other than the Issuer and the Bondholders, any right, remedy or claim, legal or equitable, under or by reason of this resolution, this resolution being intended to be and being for the sole and exclusive benefit of the Issuer and the Bondholders.

Section 1018. Adoption of Supplemental Pricing Resolution. The Issuer shall, after the Series 2017 Bonds have been priced, adopt a Supplemental Pricing Resolution, which among other things will specify the interest rate or rates per annum which the Series 2017 Bonds shall bear, the principal amount of the Series 2017 Bonds to mature in each year, the maturities of such bonds, if any, which shall be designated as term bonds subject to mandatory Sinking Fund redemption, and the optional redemption provisions, if any, applicable to the Series 2017 Bonds, the terms and covenants associated with any bond insurance policy with respect to the Series 2017 Bonds, provide for the sale of the Series 2017 Bonds, authorize, ratify, and approve the preparation, use and distribution of a Preliminary Official Statement with respect to the Series 2017 Bonds and the execution and delivery of an Official Statement in final form with respect to the Series 2017 Bonds and the initial deposits to the funds created under Section 501 of this Resolution. The terms set forth in the Supplemental Pricing Resolution shall conform with final terms specified to the Issuer in writing by the Chief Financial Officer of the City and conform to and be within parameters for the maximum aggregate principal amount, the maximum interest rate, the maximum principal and interest due in any Sinking Fund Year and the final maturity date provided in Section 201 hereof.

Section 1019. Approval of Bond Insurer. The Chair, Vice-Chair and Executive Director are hereby authorized, on behalf of the Issuer, in consultation with the Chief Financial Officer of the City, to approve the selection and use of a municipal bond insurer and municipal bond insurance policy if it is deemed to be in the best interests of the Issuer and the City. If such a policy is to be obtained the Chair, Vice-Chair and Executive Director are further authorized to

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execute any insurance commitment required to secure such policy, subject to the prior review by the Chief Financial Officer of the City.

Section 1020. No Public Benefit Conferred Subject to Systematic Verification Statute. The adoption of this Resolution and the subsequent issuance of the Series 2017 Bonds and any Additional Bonds to finance the 2017 Project or other project will not constitute a “business loan” or confer any other “public benefit” within the meaning of Official Code of Georgia Annotated, Section 50-36-1; therefor, neither the participants in this transaction, nor their counsel, are subject to the Systematic Alien Verification provisions of such law.

Section 1021. Approval of Official Statement. The Issuer does hereby authorize the preparation, use and distribution of a Preliminary Official Statement with respect to the Series 2017 Bonds and the execution and delivery of an Official Statement in final form and the execution and delivery of the Official Statement by the Chair or Vice Chair in final form be and the same is hereby authorized and approved.

Section 1022. Official Statement Deemed Final. The Chair or Executive Director of the Issuer are authorized, on behalf of the Issuer, to deem the Preliminary Official Statement and the Official Statement in final form, each to be final as of its date within the meaning of Rule 15c2-12 of the Securities and Exchange Commission, except for the omission in the Preliminary Official Statement of certain pricing and other information allowed to be omitted pursuant to such Rule 15c2-12. The distribution of the Preliminary Official Statement and the Official Statement in final form shall be conclusive evidence that each has been deemed final as of its date by the Issuer, except for the omission in the Preliminary Official Statement of such pricing and other information.

Section 1023. Waiver of Performance Audit and Review. The Issuer hereby directs the Chair to provide, in connection with the issuance of the Series 2017 Bonds, a report which accounts for the planned expenditure of the proceeds of the Series 2017 Bonds. The Issuer hereby approves the publication of the requisite legal notice waiving the performance audit and performance review requirements of Section 36-82-100 of the Official Code of Georgia Annotated.

Section 1024. Effective Date. This Resolution shall take effect immediately upon its adoption.

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Adopted and approved this 22nd day of May, 2017.

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY (SEAL)

By: Chair ATTEST

Secretary

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EXHIBIT A

(FORM OF SERIES 2017 BOND)

UNITED STATES OF AMERICA

STATE OF GEORGIA

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

REVENUE BOND

SERIES 2017

INTEREST RATE: MATURITY DATE: CUSIP: ____% Per Annum ______1, 20______

REGISTERED OWNER: PRINCIPAL AMOUNT: DATED DATE:

CEDE & CO. ______, 20___

FOR VALUE RECEIVED, the City of Atlanta and Fulton County Recreation Authority, a body corporate and politic and a political subdivision of the State of Georgia (the “Issuer”), hereby promises to pay solely from the special fund provided therefor, as hereinafter set forth, to the registered owner hereof, the Principal Amount specified above and interest on such principal sum from the date of authentication hereof, at the interest rate set forth above (calculated on the basis of a 360-day year consisting of twelve 30-day months) unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of Regions Bank, as Paying Agent for this Bond, and to pay, solely from said special fund, to the registered owner hereof by check or draft mailed by first class mail to such owner at his or her address as it shall appear on the bond register kept by Regions Bank, as Bond Registrar for this bond (the “Bond Registrar”), interest on such principal sum, at the interest rate per annum specified above, payable on December 1, 2017, and semiannually thereafter on the first day of June and the first day of December of each year, from the interest payment date next preceding the Bond Date hereof to which interest has been paid (unless the date hereof is prior to ______1, 20___, in which event from ______, 20___) until payment of such principal sum in full. Both the principal of and interest on this Bond are payable in any coin-or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts.

The principal and interest so payable on any such June 1 or December 1 (each is a “Payment Date”) or on any redemption date applicable hereto will be paid to the person in whose name this Bond is registered at the close of business on the fifteenth day of the calendar month preceding such Payment Date or redemption date (a “Record Date”). Any such principal and interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on the Record Date specified in the preceding sentence, and shall be paid to the person in whose name this Bond is registered at the close of business on a special record date for

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the payment of such defaulted interest to be fixed by the Paying Agent, notice of which shall be given to Bondholder not less than 10 days prior to such special record date.

The Issuer desires to finance a portion of the costs of the acquisition, construction, installation and equipping of a parking garage complex at Zoo Atlanta located on the Parking Site consisting of (i) a 3-story parking deck totaling approximately 400,000 square feet and 1,000 parking spaces (the “Parking Facility”); (ii) a “green” roof, steel framed and glass dine-in regional-cuisine restaurant featuring casual dining on the first level, totaling approximately 4,000 square feet, and fine dining on the upper level with balconies overlooking green roof elements, totaling approximately 5,000 square feet (the “Restaurant”); and (iii) and related improvements (collectively, the “Parking Complex Project”).

This Bond is being issued by the Issuer for the purpose of financing (i) the acquisition, construction, installation and equipping of the Parking Facility portion (the “2017 Project”) of the Parking Site, (ii) certain fund and accounts related to the Bonds, and (iii) certain costs of issuance related to the Bonds. This Bond is being issued under the authority of the Constitution of the State of Georgia and the laws of the State of Georgia, including the “City of Atlanta and Fulton County Recreation Authority Act” (Ga. Laws 1960, p. 2810) as amended (the “Act”) and is duly authorized by a resolution of the Issuer adopted on May 22, 2017, as supplemented and amended by a Supplemental Pricing Resolution of the Issuer, adopted on ______, 2017 (collectively, the “Resolution”). This Bond is one of a series of revenue bonds duly authorized by the Issuer and each designated “City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017.” This Bond is of like tenor with the other bonds of its series and other subseries except as to series, denominations, interest rates, and maturities.

This Bond is payable from and secured by the moneys received by the Issuer pursuant to the Intergovernmental Lease Agreement, to be dated as of the first day of the calendar month in which the Series 2017 Bonds are issued (the “Intergovernmental Lease Agreement”) in respect of the Parking Complex Project, between the Issuer and the City of Atlanta (the “City”). Pursuant to the Intergovernmental Lease Agreement, the City has agreed, inter alia, to pay amounts sufficient to permit the Issuer to pay, when due, the principal of, premium (if any) and interest on this Bond (“Basic Payments”). The payments to be received by the Issuer pursuant to the Intergovernmental Lease Agreement have been pledged pursuant to the provisions of the Resolution for the benefit of the registered owner of any Series 2017 Bond and any Additional Parity Bonds (hereinafter defined) issued under the Resolution. The Intergovernmental Lease Agreement provides that the obligation of the City shall be absolute and unconditional and such payments shall not be abated or reduced for any reason whatsoever; provided that the City’s obligation to make Basic Payments when due shall be offset to the extent of amounts in the Sinking Fund from Net Parking Fees derived from the operation and management of the Parking Facility provided further that the amounts due by the City under the Intergovernmental Lease Agreement are separate obligations of the City. The City has agreed in the Intergovernmental Lease Agreement to levy such annual taxes on the taxable property located within its jurisdiction, at such rate or rates, within any limits prescribed by law, as might be necessary to make the payments called for by the Intergovernmental Lease Agreement.

The Issuer may, upon the meeting of certain conditions as provided in the Resolution, issue additional parity bonds (“Additional Parity Bonds”) payable from the moneys received pursuant to the Intergovernmental Lease Agreement and ranking pari passu with this A-2 C-52

Bond as to said moneys and secured by the same pledge thereto and lien thereon. The Resolution and the Intergovernmental Lease Agreement may be amended without the consent of the owner of this Bond or any other Bond upon certain terms and conditions.

Reference to the Resolution is hereby made for a description of the funds charged with and pledged to the payment of the principal of and interest on this Bond and any Additional Parity Bonds, the nature and extent of the security for the payment of this Bond and any Additional Parity Bonds, a statement of the rights, duties and obligations of the Issuer, and the terms and conditions under which Additional Parity Bonds may be issued, to all the provisions of which Resolution the owner hereof, by the acceptance this Bond, assents.

The principal of and interest on this Bond shall be payable solely from the moneys payable to the Issuer under the Intergovernmental Lease Agreement, moneys held in the Sinking Fund and any other moneys or funds pledged therefor. This Bond shall not be deemed to constitute a debt or obligation of the State of Georgia, the City, Fulton County, Georgia or any political subdivision of the State of Georgia within the meaning of any constitutional or statutory limitation upon indebtedness. Except as provided in the Intergovernmental Lease Agreement, this Bond shall not directly, indirectly or contingently obligate the State of Georgia, the City, Fulton County, Georgia or any political subdivision of the State of Georgia to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its payment.

The Series 2017 Bonds are subject to optional and mandatory redemption prior to maturity as set forth in the Resolution.

Should the Issuer hereafter elect to issue Additional Parity Bonds, as it is hereinafter authorized to do, it shall have the right to redeem the obligations of any such future series before the Series 2017 Bonds are paid in full, provided that within each series, if the Bonds or obligations are redeemed in part, such redemption shall be in the inverse order of maturity and by lot within a maturity in such manner as may be directed by the Issuer.

Any such redemption, either in whole or in part, shall be made following notice to the owners of the affected bonds mailed by first class mail not more than 60 and not less than 30 days prior to the redemption date in the manner and upon the terms and conditions provided in the Resolution. If this bond or any portion hereof shall be called for redemption, interest shall cease to accrue on this bond or such portion hereof from and after the date fixed for redemption unless default shall be made in payment of the redemption price hereof upon presentation and surrender hereof; and, except as otherwise provided in the Resolution, the owner of this bond shall not be entitled to any rights under the Resolution except the right to receive payment and this bond and the portion hereof so called shall not be considered to be outstanding. Upon surrender of this bond paid or redeemed in part only, the Issuer shall execute, the Authentication Agent shall authenticate and the Bond Registrar shall deliver to the owner hereof, at the expense of the Issuer, a new bond or bonds of the same type, of authorized denomination or denominations and in the aggregate principal amount equal to the unpaid or unredeemed portion of the bond.

The person in whose name this Bond is registered shall be deemed and regarded as the absolute owner hereof for all purposes, and payment of or on account of either principal or interest made to such registered owner shall be valid and effectual to satisfy and discharge the liability upon this Bond to the extent of the sum or sums so paid. This Bond may be registered

A-3 C-53

as transferred by the owner hereof in person or by his attorney duly authorized in writing at the principal corporate trust office of the Bond Registrar, all subject to the terms and conditions of the Resolution.

The Bonds are issuable as fully registered bonds in denominations of $5,000 and any integral multiple thereof. Subject to the limitations provided in the Resolution, Bonds may be exchanged at the principal corporate trust office of the Bond Registrar for a like principal amount of Bonds of the same maturity and interest rate and of other authorized denominations.

No member of officer of the Issuer shall be subject to any personal liability by reason of the issuance of the Bonds, all of such liability being expressly waived and released by each owner hereof by the acceptance hereof.

This Bond is issued with the intent that the laws of the State of Georgia shall govern its construction and enforcement.

It is hereby certified and recited that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law.

THIS BOND SHALL NOT CONSTITUTE A DEBT NOR A MORAL OR GENERAL OBLIGATION OF THE ISSUER, NOR CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE OF GEORGIA, FULTON COUNTY, GEORGIA, THE CITY OF ATLANTA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER, BUT THIS BOND SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR AS PROVIDED IN THE RESOLUTION AND THE ISSUANCE OF THIS BOND SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF GEORGIA OR FULTON COUNTY, GEORGIA OR THE CITY OF ATLANTA TO LEVY OR PLEDGE ANY FORM OF TAXATION WHATEVER FOR THE PAYMENT HEREOF. THE ISSUER HAS NO TAXING POWER. NO OWNER OF THIS BOND SHALL HAVE THE RIGHT TO ENFORCE THE PAYMENT HEREOF AGAINST ANY PROPERTY OF THE STATE OF GEORGIA, FULTON COUNTY, GEORGIA, OR THE CITY OF ATLANTA, NOR SHALL THIS BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY SUCH PROPERTY, PROVIDED, HOWEVER, THAT IN ACCORDANCE WITH THE PROVISIONS OF THE CONSTITUTION AND LAWS OF THE STATE OF GEORGIA, THE OBLIGATION OF THE CITY OF ATLANTA AND FULTON COUNTY, GEORGIA TO MAKE THE PAYMENTS IT HAS CONTRACTED TO MAKE BY THE PROVISIONS OF THE INTERGOVERNMENTAL LEASE AGREEMENT, AS HEREINAFTER DEFINED, SHALL CONSTITUTE A GENERAL OBLIGATION AND A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY OF ATLANTA AND FULTON COUNTY, GEORGIA, AND THE OBLIGATION WHICH THE CITY OF ATLANTA AND FULTON COUNTY, GEORGIA HAVE UNDERTAKEN TO MAKE SUCH PAYMENTS FROM TAXES TO BE LEVIED FOR THAT PURPOSE IS A MANDATORY OBLIGATION TO LEVY AND COLLECT SUCH TAXES FROM YEAR TO YEAR IN AN AMOUNT SUFFICIENT TO FULFILL AND FULLY COMPLY WITH THE TERMS OF SUCH OBLIGATION. NEITHER THE MEMBERS OF THE GOVERNING BODY OF THE

A-4 C-54

ISSUER NOR ANY PERSON EXECUTING THIS BOND SHALL BE LIABLE PERSONALLY ON THIS BOND BY REASON OF THE ISSUANCE THEREOF.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF, WHICH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH FULLY AT THIS PLACE.

This Bond shall not be entitled to any benefit under the Resolution and shall not become valid or obligatory for any purpose until it shall have been authenticated by execution by the Authenticating Agent, by manual signature of the certificate hereon endorsed.

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IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed by its Chair and its corporate seal to be printed hereon and attested by its Secretary.

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY (SEAL)

By: Chair ATTEST:

Secretary

A-6 C-56

AUTHENTICATION CERTIFICATE

The above bond is the Bond described in the within-mentioned Resolution, and is hereby authenticated as of the date shown below.

REGIONS BANK, as Authentication Agent

By: Authorized Signatory

Date of Authentication: ______, 20___

A-7 C-57

VALIDATION CERTIFICATE

STATE OF GEORGIA

FULTON COUNTY

I, the undersigned Clerk of the Superior Court of Fulton County, State of Georgia, DO HEREBY CERTIFY that this bond was confirmed and validated by judgment of the Superior Court of Fulton County, Georgia, on the ____ day of ______, 2017 Civil Action File Number ______, that no intervention or objection was filed opposing the validation of said bond and that no appeal of said judgment of validation has been taken.

WITNESS my signature and the official seal of the Superior Court of Fulton County, Georgia.

Clerk, Superior Court, Fulton County, Georgia (SEAL)

* * * * * * * * * *

A-8 C-58

ASSIGNMENT OF FULLY REGISTERED BOND

For value received, ______hereby sells, transfers and assigns unto ______the foregoing bond and hereby irrevocably constitutes and appoints ______attorney-in-fact to transfer the same on the registration books with full power of substitution in the premises.

Dated:______

NOTE: The signature to this assignment must correspond with the name(s) on the face of the foregoing bond in every particular, without alteration or enlargement.

(END OF FORM OF SERIES 2017 BOND)

* * *

A-9 C-59

EXHIBIT B

FORM OF INTERGOVERNMENTAL LEASE AGREEMENT

C-60

EXHIBIT C

FORM OF REQUISITION

(Disbursement from [Project Fund] [Issuance Cost Fund]) (Series 2017 Account) _____

(Check One)

Regions Bank Atlanta, Georgia

Re: Request and Direction to Make Disbursement from [Project Fund][Issuance Cost Fund] for the City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017

To the Addressee:

Pursuant to Section ____ of the Bond Resolution of the City of Atlanta and Fulton County Recreation Authority (the “Issuer”), adopted on May 22, 2017, as supplemented and amended by a Supplemental Pricing Resolution, adopted on ______, 2017 (collectively, the “Bond Resolution”), and the Intergovernmental Lease Agreement, dated as of ______1, 2017 (the “Intergovernmental Lease Agreement”), between the Issuer and the City of Atlanta (the “City”), you are hereby directed to disperse from the [Project Fund] [Issuance Cost Fund] referred to in the Bond Resolution (the “[Project Fund”] “Issuance Cost Fund”) the amounts set forth below in connection with the above referenced bond issue (the “Bonds”). All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Bond Resolution. I, as an Authorized Representative of the City, hereby submit for payment for the costs of issuance of the Bonds and, in connection therewith, I HEREBY CERTIFY as follows:

(i) That an obligation in the amount of $______has been incurred by the Issuer, and that the same is a proper charge against the funds allocated for costs of issuance for the Bonds, such amounts were incurred for all or a portion of the costs of issuance of the Bonds and has not been the basis of any previous requisition for costs of issuance.

(ii) Such obligations should be paid for costs of issuance from the net proceeds of the Bonds.

(iii) Such obligations were incurred by the Issuer for the following:

See attached

Payment should be made to:

See attached

C-61

(iv) All bills, statements of account, invoices or other evidence of the payment obligations to which such requisition relates are on file at the office of the Issuer.

Date: ______, 2017

CITY OF ATLANTA

By: ______Authorized Representative

Approved:

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

By: ______Authorized Issuer Representative

C-2 C-62

SECRETARY'S CERTIFICATE

STATE OF GEORGIA

FULTON COUNTY

I, the undersigned Secretary of City of Atlanta and Fulton County Recreation Authority (the “Issuer”) and keeper of the records and seal thereof, DO HEREBY CERTIFY that the foregoing pages of typewritten matter constitute a true and correct copy of the Resolution adopted by the Issuer in a meeting duly called and assembled on the 22nd day of May, 2017, which meeting was open to the public and at which a quorum was presenting and acting throughout, the original of which Resolution has been duly recorded in the Minute Book of the Issuer which is in my custody and control.

WITNESS my official hand and seal of the Issuer, this 22nd day of May, 2017.

Secretary (CORPORATE SEAL)

C-63 [THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX D

FORM OF THE INTERGOVERNMENTAL LEASE AGREEMENT

[THIS PAGE INTENTIONALLY LEFT BLANK]

INTERGOVERNMENTAL LEASE AGREEMENT

between

CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

and

CITY OF ATLANTA, GEORGIA

Dated as of ______1, 2017

This Intergovernmental Lease Agreement and certain rights of the City of Atlanta and Fulton County Recreation Authority (the “Issuer”) under this Intergovernmental Lease Agreement have been assigned and pledged to and for the benefit of the holders of $______in aggregate principal amount of the Issuer’s Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017. Information concerning such security interest may be obtained from the Regions Bank, 1180 West Peachtree Street, Suite 1200, Atlanta, Georgia 30309, Attention: Corporate Trust Department.

This instrument was prepared by:

Hunton & Williams LLP 600 Peachtree Street, N.E., Suite 4100 Atlanta, Georgia 30308-2216 Telephone: (404) 888-4000

D-1

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1. Definitions...... 3

ARTICLE II

REPRESENTATIONS

Section 2.1. Representations by the Issuer...... 6 Section 2.2. Representations and Warranties by the Lessee ...... 6

ARTICLE III

LEASING CLAUSES AND WARRANTY OF TITLE

Section 3.1. Demise ...... 7 Section 3.2. Warranty of Title...... 7 Section 3.3. Quiet Enjoyment ...... 7 Section 3.4. Title to the Leased Property ...... 8

ARTICLE IV

ISSUANCE OF THE SERIES 2017 BONDS; PROCEEDS; REPORTING REQUIREMENTS OF LESSEE

Section 4.1. Agreement to Issue Bonds; Application of Bond Proceeds ...... 8 Section 4.2. Continuing Disclosure ...... 9 Section 4.3. Arbitrage Covenant ...... 9

ARTICLE V

EFFECTIVE DATE OF THIS INTERGOVERNMENTAL LEASE AGREEMENT; DURATION OF LEASE TERM; PAYMENT PROVISIONS

Section 5.1. Effective Date of this Intergovernmental Lease Agreement; Duration of Lease Term ...... 9 Section 5.2. Delivery and Acceptance of Possession ...... 9 Section 5.3. Payments...... 10 Section 5.4. Payment Split ...... 10 Section 5.5. Place of Payments ...... 11 Section 5.6. Obligations of Lessee Hereunder Absolute and Unconditional ...... 11 Section 5.7. Tax Levy to Pay Basic Payments...... 12 Section 5.8. Prior Lien of Bonds ...... 12

D-2

ARTICLE VI

MAINTENANCE AND LIENS

Section 6.1. Use, Operation, Maintenance, and Repair ...... 13 Section 6.2. Taxes, Other Governmental Charges, and Utility Charges...... 13 Section 6.3. Permitted Encumbrances ...... 13

ARTICLE VII

SPECIAL COVENANTS

Section 7.1. No Warranty of Condition or Suitability by the Issuer ...... 14 Section 7.2. Special Covenants Regarding Federal Code Compliance...... 14 Section 7.3. Further Assurances and Corrective Instruments, Recordings and Filings ...... 15

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

Section 8.1. Events of Default Defined ...... 15 Section 8.2. Remedies on Default ...... 16 Section 8.3. No Remedy Exclusive...... 16 Section 8.4. No Additional Waiver Implied by One ...... 17 Section 8.5. Waiver of Appraisement, Valuation, Etc ...... 17

ARTICLE IX

MISCELLANEOUS

Section 9.1. Notices ...... 17 Section 9.2. Binding Effect ...... 18 Section 9.3. Severability ...... 18 Section 9.4. Certain Amounts Remaining in Bond Resolution ...... 18 Section 9.5. Amendments, Changes and Modifications ...... 18 Section 9.6. Execution in Counterparts...... 18 Section 9.7. Captions ...... 18 Section 9.8. Recording of Agreement ...... 18 Section 9.9. Law Governing Construction of Agreement...... 19 Section 9.10. Beneficiary ...... 19

Exhibit A – Description of Leased Property Exhibit B – Debt Service Payment Schedule for the Series 2017 Bonds

D-3 INTERGOVERNMENTAL LEASE AGREEMENT

THIS INTERGOVERNMENTAL LEASE AGREEMENT (this “Intergovernmental Lease Agreement”) is entered into as of the 1st day of ______, 2017, by and between the CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY (the “Issuer”), a body corporate and politic and a political subdivision and instrumentality of the State of Georgia (the “Issuer”) and the CITY OF ATLANTA (the “City” or “Lessee”), a municipal corporation of the State of Georgia;

W IT N E S S E T H:

WHEREAS, the Issuer was duly created and is validly existing pursuant to an act of the General Assembly of the State of Georgia known as the “City of Atlanta and Fulton County Recreation Authority Act” approved March 17, 1960 (Ga. L. 1960, p. 2810, et seq.), as amended by an act approved April 5, 1961 (Ga. L. 1961, p. 3106), as amended by an act approved June 16, 1964 (Ga. L. 1964, p. 2058), as amended by an act approved March 2, 1966 (Ga. L. 1966, p. 2848), as amended by an act approved March 27, 1985 (Ga. L. 1985, p. 4235), and as amended by an act approved April 1, 1996 (Ga. L. 1996, p. 3791) (the “Act”); and

WHEREAS, pursuant to the Act, the Issuer is authorized to undertake and finance the acquisition, construction, equipping, maintenance and operation of recreational centers and areas, including, among others, public zoos or zoological parks and parking facilities or parking areas in connection therewith, and the usual and convenient facilities appertaining to such undertakings and extensions and improvements such facilities, and is permitted to acquire the necessary property therefor, both real and personal, and to lease, sell and license any part or all of such facilities, including real and personal property, to any persons, firms, or corporations whether public or private so as to assure the efficient and proper development, maintenance and operation of such facilities and areas, deemed by the Issuer to be necessary, convenient, or desirable; and

WHEREAS, the Act authorizes the Issuer to provide for the issuance of revenue bonds for the purpose of paying all or any part of the costs of projects permitted thereunder; and

WHEREAS, under Article IX, Section II, Paragraph III(a) of the Constitution of the State of Georgia, the Lessee has the power to provide parks, recreational areas, programs and facilities and parking facilities; and under Official Code of Georgia Annotated Section 36-82-60 et seq., as amended (the “Revenue Bond Law”), the Issuer and the Lessee each have the power to provide certain “undertakings,” including, among others, the provision of parks and the erection and construction of buildings to be used for amusement purposes or educational purposes or a combination of the two, and public parking areas and public parking buildings; and

WHEREAS, pursuant to Section 1-102 of the Charter of the City (Ga. Laws 1996, p. 4469) (the “Charter”), the City is authorized to (i) acquire, construct, operate and maintain parks and recreational facilities inside or outside the corporate limits of the City (ii) to lease, construct, operate, maintain parks, public grounds, public buildings and facilities and (iii) to make contracts with state, city and county governments and their authorities for constructing, expanding or performing any function which the City may be authorized by law to provide or perform; and

D-4

WHEREAS, in accordance with the Act and by proper corporate action, the Issuer has authorized the issuance and sale of $______in aggregate principal amount of its Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 (the “Series 2017 Bonds”), pursuant to a Bond Resolution adopted on May 22, 2017, as supplemented and amended by a Supplemental Pricing Resolution, adopted on ______, 2017 (collectively, the “Bond Resolution”), in order to finance (i) the design, acquisition, construction, installation and equipping of the Parking Facility portion of the Parking Complex Project, (ii) certain fund and accounts related to the Series 2017 Bonds, and (iii) certain costs of issuance related to the Series 2017 Bonds (the “2017 Project”); and

WHEREAS, pursuant to Section 6-101 of the City’s Charter, the City is authorized, for the purpose of raising revenue for permanent improvements in the parks of the City, including, facility maintenance, repair, replenishment, enhancement and the purchase of equipment for such parks, and other purposes, to assess, levy and collect an ad valorem tax on all real and personal property, subject to taxation within the corporate limits of the City, as provided by the laws of the State of Georgia, in the amount of one-half mill on each dollar of assessed valuation thereon (the “Park Tax”); and

WHEREAS, the City will finance the Restaurant portion of the Parking Complex Project on a pay-as-you-go basis, in part, from revenues derived from the Park Tax; and

WHEREAS, Article IX, Section III, Paragraph I(a) of the 1983 Constitution of the State of Georgia authorizes any county, municipality or other political subdivision of the State to contract for any period not exceeding fifty (50) years with each other or with any other public agency, public corporation or public authority for joint services, for the provision of services, for the joint or separate use of facilities or equipment, but such contracts must deal with activities, services or facilities which the contracting parties are authorized by law to undertake or provide, and in connection with such contracts are authorized to convey any existing facilities or equipment to any public agency, public corporation or public authority; and the Issuer has the power under the Act to make contracts, leases and to execute all instruments necessary or convenient, including contracts for construction of projects and leases of projects or contracts with respect to the use of projects which it causes to be erected or acquired, and any and all firms, corporations, cities, towns and counties and any and all political subdivisions,

2 D-5

departments, institutions or agencies of the State of Georgia are authorized under the Act to enter into the contracts, leases or agreements with the Issuer upon such terms and for such purposes as they deem advisable; and

WHEREAS, the Issuer and the Lessee propose to enter into this Intergovernmental Lease Agreement, pursuant to which the Lessee will (i) transfer ownership of the Parking Site to the Issuer and (ii) cause the 2017 Project to be constructed and installed on the Parking Site and, in turn, the Issuer will lease the 2017 Project (the “Leased Property”) to the City, as lessee in consideration the Lessee agreeing to exercise its taxing power and pledge their full faith and credit, to the extent necessary, to provide for payments sufficient to pay the principal of, redemption premium (if any) and interest on the Series 2017 Bonds (the “Basic Payments”) and certain Additional Payments (as defined herein) with respect to other costs and expenses; and

WHEREAS, upon completion of the construction and installation of the Parking Facility the Issuer expects to enter into a Parking Management Agreement (as defined herein) with a third-party parking company to manage, maintain and collect parking fees and charges from the operation of the Parking Facility, which gross fees and charges, net of the management fees and other operating expenses (“Net Parking Fees”) will be paid to the Issuer for deposit into the Sinking Fund up to an amount equal to Basic Payments due in the then current Bond Year (as defined in the Resolution; provided that the Holders of Bonds authorized by the Bond Resolution have not been granted a lien on, or security interest in, the Parking Management Agreement or the Net Parking Fees derived therefrom; and

WHEREAS, the Lessee has absolutely and unconditionally agreed to make certain “Basic Payments” in an amount equal to the principal, redemption premium, if any, and interest on the Series 2017 Bonds and to make certain “Additional Payments” to provide for the fees and charges of, among other, the Paying Agent, the Bond Registrar, the Issuer, the Sinking Fund Custodian and other depositories and custodians, and any rebate analyst hired in connection with the Series 2017 Bonds; and

NOW, THEREFORE:

In consideration of the respective representations and agreements hereinafter contained, the Issuer and the Lessee agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. Definitions. In addition to the words and terms elsewhere defined in this Intergovernmental Lease Agreement, the following words and terms as used in this Intergovernmental Lease Agreement shall have the following meanings unless the context or use indicates another or different meaning or intent and any other words and terms defined in the Bond Resolution shall have the same meanings when used herein as assigned them in the Bond Resolution unless the context or use clearly indicates another or different meaning or intent, and such definitions shall be equally applicable to both the singular and plural forms of the words and terms herein defined:

3 D-6

“Act” means an act of the General Assembly of the State of Georgia (Ga. Laws 1960, p. 2810), as amended as described in the recitals hereto.

“Additional Payments” means those payments payable by the Lessee pursuant to Section 5.3(b) hereof.

“Authorized Lessee Representative” means the person at the time designated to act on behalf of a Lessee by written certificate furnished to the Issuer and the Paying Agent containing the specimen signature of such person and signed on behalf of the Lessee by an authorized officer. Such certificate may designate an alternate or alternates.

“Basic Payments” means the portion of Intergovernmental Payments to be provided for pursuant to Section 5.3(a) hereof to pay the principal of, redemption premium (if any) and interest on the Series 2017 Bonds.

“Bonds” means the Series 2017 Bonds and any Additional Bonds permitted by the Bond Resolution.

“Bond Resolution” means the resolution of the Issuer, adopted on May 22, 2017 as supplemented by the Supplemental Pricing Resolution adopted ______, 2017.

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

“Holder,” “Bondholder” or “Owner” mean the registered owner of any Bond, including the Series 2017 Bonds.

“Intergovernmental Lease Agreement” means this Intergovernmental Lease Agreement as it now exists and as it may hereafter be amended in accordance with the terms hereof and of the Bond Resolution.

“Intergovernmental Payments” means the Basic Payments and Additional Payments to be made by the Lessee to the Issuer pursuant to this Intergovernmental Lease Agreement.

“Issuer” means the City of Atlanta and Fulton County Recreation Authority, a public body corporate and politic and an instrumentality and public corporation of the State of Georgia created by the Act and its successors and assigns.

“Lease Term” means the duration of the leasehold interest created by this Intergovernmental Lease Agreement as specified in Section 5.1 hereof.

“Leased Property” means the real and personal property components of the Parking Facility to be located on the Parking Site as described on Exhibit A attached hereto and by this reference made a part hereof.

“Lessee” means the City of Atlanta, a municipal corporation of the State of Georgia, and its successors and assigns.

4 D-7

“Net Parking Fees” shall mean the gross fees and charges paid to the Issuer pursuant to the Parking Management Agreement, net of the management fees and other operating expenses incurred in the operation of the Parking Facility.

“Parking Facility” shall have the meaning assigned to it in the recitals hereto.

“Parking Management Agreement” means an agreement entered into between the Issuer and the Parking Manager, as consented to by the Lessee, which agreement is, in the opinion of nationally recognized bond counsel, is a “qualified management contract” within the meaning of the Code.

“Parking Manager” means the parking management company or entity designated by the Issuer at the direction of the Lessee.

“Parking Site” shall have the meaning assigned to it in the recitals as further delineated on Exhibit A hereto.

“Paying Agent” means Regions Bank or any successor trustee under the Bond Resolution.

“Permitted Encumbrances” means, as of any particular time,

(a) liens for ad valorem taxes, if any, and special assessments not then delinquent;

(b) the Bond Resolution and the security interests created therein and the specific title exceptions (if any) applicable to the Leased Property prior to ______, 2017;

(c) such utility, access or other easements and rights-of-way, restrictions, reservations, reversions and exceptions other than those referred to in (b) above and which do not, in the opinion of an independent engineer, materially interfere with or impair the operations being conducted in the Parking Facility (or, if no operations are being conducted therein, the operations for which the Parking Facility was designed or last modified);

(d) unfiled and inchoate mechanics’ and materialmen’s liens for construction work in progress;

(e) architects’, contractors’ subcontractors’ mechanics’ materialmen’s, suppliers’, laborers’, vendors’, workers’, repairmen’s, carriers’, land surveyors’ and engineers’ liens or other similar liens not then payable; and

(f) such minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as normally exist with respect to properties similar in character to the Parking Facility and as do not, in the opinion of Independent Counsel, materially interfere with or impair the operations being conducted in the Parking Facility (or, if no operations are being conducted therein, the operations for which the Parking Facility was designed or last modified).

5 D-8

“Series 2017 Bonds” means the Issuer’s $[______] Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 authorized by the Bond Resolution.

“Herein”, “hereby”, “hereunder”, “hereof”, “hereinabove” and “hereinafter” and other equivalent words refer to this Intergovernmental Lease Agreement and not solely to the particular portion hereof in which any such word is used.

ARTICLE II

REPRESENTATIONS

Section 2.1. Representations by the Issuer. The Issuer makes the following representations as the basis for the undertakings on its part herein contained:

(a) The Issuer is authorized to enter into the transactions contemplated by this Intergovernmental Lease Agreement and to carry out its obligations hereunder, has been duly authorized to execute and deliver this Intergovernmental Lease Agreement, and will do or cause to be done all things necessary to preserve and keep in full force and effect its status and existence as a political subdivision of the State;

(b) The leasing of the Leased Property to the City, the execution, delivery and performance of a Parking Management Agreement, the issuance and sale of the Bonds and the execution and delivery of this Intergovernmental Lease Agreement, and the performance of all covenants and agreements of the Issuer contained in this Intergovernmental Lease Agreement and of all other acts and things required under the Constitution and laws of the State to make this Intergovernmental Lease Agreement a valid and binding obligation of the Issuer in accordance with its terms are authorized by law and have been duly authorized by proceedings of the Issuer adopted at public meetings thereof duly and lawfully called and held;

(c) The Issuer has not made, done, executed or suffered, and warrants that it will not make, do, execute or suffer any act or thing whereby its title to and interest in the Leased Property will or may be, impaired or encumbered in any manner except as permitted herein and except for acts or things done or omitted by the Lessee; and

(d) There is no litigation or proceeding pending, or to the knowledge of the Issuer threatened, against the Issuer or against any person having a material adverse effect on the right of the Issuer to execute this Intergovernmental Lease Agreement or the ability of the Issuer to comply with any of its obligations under this Intergovernmental Lease Agreement.

Section 2.2. Representations and Warranties by the Lessee. The Lessee make the following representations and warranties as the basis for the undertakings on their part herein contained:

(a) The City is a municipal corporation and a political subdivision under the laws of the State having power to enter into and execute and deliver this Intergovernmental Lease Agreement and, by proper action of its governing body, has

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authorized the execution and delivery of this Intergovernmental Lease Agreement and the taking of any and all such actions as may be required on its part to carry out, give effect to, and consummate the transactions contemplated by this Intergovernmental Lease Agreement, and no approval, referendum or other action by any governmental authority, agency, or other person or persons is required in connection with the delivery and performance of this Intergovernmental Lease Agreement by it except as shall have been obtained as of the date hereof;

(b) This Intergovernmental Lease Agreement has been duly executed and delivered by the City and constitutes the legal, valid, and binding obligation of the City, enforceable in accordance with its terms, except as enforcement may be limited by the application of equitable principles;

(c) The design, acquisition, construction, installation and equipping of the Leased Property and the execution, delivery, and performance by the City of this Intergovernmental Lease Agreement and compliance by the City with the provisions hereof do not and will not violate the laws of the State relating to the City or constitute a breach of or a default under, any other law, court order, administrative regulation, or legal decree, or any agreement, or other instrument to which it is a party or by which it is bound; and

(d) There is no litigation or proceeding pending, or to the knowledge of the City threatened, against the City or any other person having a material adverse effect on the right of the City to execute this Intergovernmental Lease Agreement or its ability to comply with any of its obligations under this Intergovernmental Lease Agreement.

ARTICLE III

LEASING CLAUSES AND WARRANTY OF TITLE

Section 3.1. Demise. The Issuer hereby leases to the Lessee, and the Lessee hereby lease from the Issuer the Leased Property for the payments set forth in Section 5.3 hereof and in accordance with the provisions of this Intergovernmental Lease Agreement.

Section 3.2. Limited Warranty of Title. The Issuer for itself, its successors and assigns, warrants to the Lessee, their successors and assigns that, to the extent of the interests conveyed to the Issuer by the City, title in and to the Leased Property free from all liens or encumbrances except for Permitted Encumbrances. There are no implied general warranties of title provided herein.

Section 3.3. Quiet Enjoyment. The Issuer warrants and covenants that it will defend the Lessee in the quiet enjoyment and peaceable possession of the Leased Property, free from all claims of all persons whomsoever except for Permitted Encumbrances, throughout the Lease Term, so long as the Lessee shall perform the covenants, conditions and agreements to be performed by the Lessee hereunder, or so long as the period for remedying any default in such performance shall not have expired under Section 8.1(b).

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Section 3.4. Title to the Leased Property; Conveyance at End of Term. Fee title to the Lease Property shall continue to vest in the Issuer or its successors at all times during the Lease Term, subject only to the leasehold interest and estate for years and any additional rights expressly and specifically granted to the Lessee in this Intergovernmental Lease Agreement. The Issuer shall, at the written demand of the City, re-convey all right, title and interest in the Leased Property to the City, provided that all payments due to the Issuer hereunder have been paid and no Bonds are outstanding under the Bond Resolution.

ARTICLE IV

ISSUANCE OF THE SERIES 2017 BONDS; CONSTRUCTION AND INSTALLATION OF THE PROJECT; PROCEEDS; REPORTING REQUIREMENTS OF LESSEE

Section 4.1. Agreement to Issue Bonds; Application of Bond Proceeds. The Issuer agrees that it will validate and cause to be issued the Bonds and will cause, simultaneously with the issuance and delivery of the Bonds, the proceeds of the Bonds to be applied as provided in the Bond Resolution.

Section 4.2. Agreement to Construct and Install the Parking Facility and Enter Into a Parking Management Agreement.

The City and Issuer agree as follows:

(a) The Issuer does hereby appoint the City as its agent for the purpose of the Parking Complex Project to be design, constructed and installed on the Leased Property;

(b) The City will proceed immediately and with due diligence to cause the Parking Facility to be constructed and installed on the Leased Property consistent with such plans and specifications as approved by the City in its sole discretion;

(c) The City shall enter into any and all required contracts and agreement necessary to cause the Parking Facility to be constructed and installed;

(d) In the event of default of any contractor or subcontractor under any contract or agreement made in connection with the Parking Facility, the City will promptly proceed to exhaust all remedies against the contractor or subcontractor so in default and against such surety for the performance of such contract;

(e) The City acknowledges that the Issuer bears no responsibility for the design, construction or installation of the Parking Facility, except to the extent of the amounts properly requisitioned and applied from the proceeds of the Series 2017 Bonds and any Additional Bonds issued in connection with the Parking Facility or the Parking Complex Project, as, and to the extent applicable. The City shall, to the fullest extent permitted by law, hold the Issuer, its officers, officials, agents and counsel harmless for all claims arising out of the design, construction or installation of the Parking Facility or the Parking Complex Project; and

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(f) The Issuer agrees to enter into a Parking Management Agreement for the Parking Facility and to cause the Parking Manager to manage, maintain and collect parking fees and charges from the operation of the Parking Facility and to pay the Net Parking Fees as provided in Section 5.2 hereof; provided that the Issuer shall ensure that the Parking Management Agreement qualifies with any provisions of the Code required to maintain the tax-exemption on the Bonds authorized by the Bond Resolution.

Section 4.3. Continuing Disclosure. The Lessee hereby covenant and agree to provide annual financial information and reports of other listed events as required pursuant to Rule 15c2-12 promulgated by the Securities and Exchange Commission as described in any agreement or undertaking delivered by the respective Lessee in connection with the issuance and delivery of the Bonds.

Section 4.4. Arbitrage Covenant. The Lessee and the Issuer each covenant that neither the proceeds (including interest on proceeds) of the Bonds nor moneys in the Project Fund or interest thereon, nor moneys in the Sinking Fund, or interest thereon shall be invested or reinvested or used in such manner that any of the Bonds would be “arbitrage bonds” within the meaning of Section 148 of the Code, and applicable regulations thereunder. The Lessee further covenants to retain a rebate analyst to ensure compliance with this arbitrage covenant and to perform the periodic analysis required within 60 days of the end of each fifth (5th) Bond Year as provided for in Section 709 of the Bond Resolution.

ARTICLE V

EFFECTIVE DATE OF THIS INTERGOVERNMENTAL LEASE AGREEMENT; DURATION OF LEASE TERM; PAYMENT PROVISIONS

Section 5.1. Effective Date of this Intergovernmental Lease Agreement; Duration of Lease Term. This Intergovernmental Lease Agreement shall become effective upon its delivery and the leasehold interest created by this Intergovernmental Lease Agreement shall then begin, and, subject to the other provisions of this Intergovernmental Lease Agreement, shall expire on the date on which Payment in Full of the Bonds has occurred, including that any Basic Payments made have been reimbursed pursuant to the Bond Resolution, but in no event shall this Intergovernmental Lease Agreement expire later than fifty (50) years from its effective date (the date that the Series 2017 Bonds are delivered). Upon such expiration if all other financial obligations of the parties hereto have been paid, the Lessee shall be relieved of any further payments hereunder and, upon the demand of the Lessee, the Issuer or its successors or assigns shall convey fee simple title to the Leased Property to the City.

Section 5.2. Delivery and Acceptance of Possession; Operation and Management of Parking Facilities. (a) The Issuer agrees to immediately deliver to the Lessee possession of the Leased Property, subject to the terms of the Parking Management Agreement (when executed and delivered), the right of the Issuer to enter thereon for inspection purposes and to Permitted Encumbrances; and the Lessee agrees to accept possession of the Leased Property upon such delivery.

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(b) The Issuer hereby agrees that upon the completion of the Parking Facility that it will enter into the Parking Management Agreement with a Parking Manager on such terms and conditions as agreed to between the Issuer, Lessee and the Parking Manager, subject to the requirements of the Code to ensure the continued tax-exemption on the Bonds authorized by the Bond Resolution.

(c) The Issuer shall require that the Parking Manager to pay directly to the Sinking Fund Custodian for deposit into the Sinking Fund created by the Bond Resolution, the Net Parking Fees as and when collected by the Parking Manager, not less frequently than monthly, in connection with its management of the Parking Facility; provided that, to the extent that Net Parking Fees exceed the amount of Basic Payments in any Bond Year (as defined in the Bond Resolution) such additional amounts shall be paid to the Renewal and Extension Fund established under the Bond Resolution to be applied by the Issuer, for any lawful purpose permitted by the Act, at the direction of the City.

Section 5.3. Payments.

(a) The Lessee hereby covenants to make Basic Payments for the payment of the principal of, redemption premium (if any) and interest on the Bonds. In furtherance of this obligation to provide for Basic Payments, the Lessee agrees that, pursuant to Section 403 of the Bond Resolution, on the 25th day of each May and November (or the next Business Day if such day is not a Business Day) during the Lease Term, the Lessee shall pay to the Issuer, by payment directly to the Sinking Fund Custodian, in immediately available funds, a sum equal to the amount payable on the next succeeding June 1 or December 1, respectively, with respect to (i) the principal of, redemption premium (if any) and interest on the then Outstanding Bonds, including without limitation, amounts due with respect to redemption of Bonds, less any amount held by the Sinking Fund Custodian in the Sinking Fund on such day. If the amount held by the Sinking Fund Custodian in the Sinking Fund should be sufficient to pay at the times required the principal of, redemption premium (if any) and interest on all Bonds then remaining unpaid, the Lessee shall not be obligated to make any further such payments under the provisions of this subsection. The debt service schedule for the Bonds is attached hereto as Exhibit B.

(b) The Lessee shall also pay as Additional Payments hereunder, (i) to the Issuer its reasonable costs and expenses in connection with the management of the Parking Facility, including, but not limited to, the Issuer’s Fee, Annual Fee, advisor fees, counsel fees and any unreimbursed costs of issuance of the Bonds or costs of the Issuer with respect to the financing of the Parking Facility and the related public improvements not paid from the proceeds of the Bonds and (ii) any other obligations of the Issuer under the Bond Purchase Agreement dated the date of sale of the Series 2017 Bonds (the “Bond Purchase Agreement”) among the Issuer, the City and an underwriter representative on behalf of the underwriting syndicate, relating to disclosure with respect to the Bonds.

Section 5.4. Additional Payments required under Bond Purchase Agreement. All Intergovernmental Payments and any other amounts payable hereunder are obligations of the

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Lessee; provided if the Additional Payments under Section 5.3(b) relate to the indemnification obligation of the Issuer under the Bond Purchase Agreement and arise solely because of a misstatement or alleged misstatement of a fact with respect to Lessee or the omission of or alleged omission of a fact with respect to Lessee, that Lessee shall be solely responsible for all such Additional Payments.

Section 5.5. Place of Payments. The Basic Payments shall be paid directly to the Sinking Fund Custodian for the account of the Issuer and will be deposited in the Sinking Fund. The Additional Payments shall be paid directly to the persons entitled thereto for their own use.

Section 5.6. Obligations of Lessee Hereunder Absolute and Unconditional. The obligations of the Lessee to make the full amount of Intergovernmental Payments provided under Section 5.3 hereof and to perform and observe the other agreements on their part contained herein shall be absolute and unconditional. As security for the Basic Payments required to be made under Section 5.3(a) hereof and the obligations required to be performed by the Lessee under this Intergovernmental Lease Agreement, the Lessee hereby pledges to the Issuer its full faith and credit and taxing power for such payment and performance. The Lessee covenants that, in order to make any payments of Basic Payments when due from its general funds to the extent required hereunder, it will exercise its power of taxation to the extent necessary to pay the amounts required to be paid hereunder and will make available and use for such payments all taxes levied and collected for that purpose together with funds received from any other sources. The Lessee further covenants and agrees that in order to make funds available for such purpose in each Fiscal Year, it will, in its general revenue, appropriation, and budgetary measures through which its tax funds or revenues and the allocation thereof are controlled or provided for, include sums to satisfy any such payments of Basic Payments that may be required to be made hereunder, whether or not any other sums are included in such measure, until all sufficient payments so required to be made hereunder shall have been made in full. The obligation of the Lessee to make any payments that may be required to be made from its general funds shall constitute a general obligation of the Lessee and a pledge of the full faith and credit of the Lessee to provide the funds required to fulfill any such obligation. In the event for any reason any such provision or appropriation is not made as provided in this Section, then the fiscal officers of the Lessee are hereby authorized and directed to set up as an appropriation on their accounts in the appropriate Fiscal Year the amounts required to pay the obligations that may be due from the general funds of the Lessee. The amount of such appropriation shall be due and payable and shall be expended for the purpose of paying any such obligations, and such appropriation shall have the same legal status as if the Lessee had included the amount of the appropriation in its general revenue, appropriation, and budgetary measures, and the fiscal officers of the Lessee shall make such payments of Basic Payments to the Issuer if for any reason the payment of such obligations shall not otherwise have been made.

The Lessee further covenants and agrees that, during the term of this Intergovernmental Lease Agreement (including any amendments or supplements), it shall, to the extent necessary, levy an annual ad valorem tax on all taxable property located within the territorial limits of the Lessee, as now existent and as the same may hereafter be extended, as may be necessary to produce in each year revenues that will be sufficient to fulfill the Lessee’s obligations under this Intergovernmental Lease Agreement, from which revenues the Lessee agrees to appropriate sums sufficient to pay in full when due all of the Lessee’s obligations hereunder. The Lessee hereby

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creates and grants a lien in favor of the Issuer on any and all revenues realized by the Lessee from such tax, to make the payments that are required under this Intergovernmental Lease Agreement. Nothing herein contained, however, shall be construed as limiting the right of the Lessee to make the payments called for by this Intergovernmental Lease Agreement out of any funds lawfully available to it for such purpose, from whatever source derived, including Net Parking Fees.

Notwithstanding the prior paragraph, each party hereto reserves, and shall retain, all rights and remedies it may have for breach of any representation, warranty or covenant or defaults in the performance or payment of any obligation owed hereunder provided such rights and remedies are pursued as independent causes of action in separate proceedings.

Section 5.7. Tax Levy to Pay Basic Payments. The obligation of the Lessee to make Intergovernmental Payments under Section 5.3(a) hereof, and to perform its other obligations hereunder, are absolute and unconditional as herein provided, and the Lessee hereby pledges its full faith and credit to such performance and the full amount of Intergovernmental Payments, regardless of the source of funds applied for such purposes. The Lessee covenants that it will exercise their power of taxation to the extent necessary to pay the amounts required to be paid hereunder and they will make available and use for the payment of their obligations incurred hereunder all such taxes levied and collected for that purpose together with funds received from any other sources.

Section 5.8. Security for Bonds; Prior Lien of Bonds. (a) As security for the payment of the Bonds, the Issuer has adopted the Bond Resolution. The Lessee hereby assents to the assignment and pledge of the Lessee’s payment obligation under Section 5.3 hereof which assignment and pledge is provided for in the Bond Resolution and hereby agrees that its obligations to make all payments under this Intergovernmental Lease Agreement shall be absolute and shall not be subject to any defense (except payment) or to any right of setoff, counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Lessee, whether hereunder or otherwise, or arising out of any indebtedness or liability at any time owing to the Lessee by the Issuer. The Lessee further agrees that all payments required to be made under this Intergovernmental Lease Agreement, except for those arising out of Unassigned Rights, shall be paid directly to the Sinking Fund Custodian for the account of the Issuer for deposit in the Sinking Fund. The Bondholders shall have all rights and remedies herein accorded to the Issuer (except for Unassigned Rights), and any reference herein to the Issuer shall be deemed, with the necessary changes in detail, to include the Bondholders, and the Bondholders are deemed to be and are third party beneficiaries of the representations, covenants, and agreements of the Lessee herein contained.

(b) The Issuer will not hereafter issue any other bonds or obligations of any kind or nature payable from or enjoying a lien on the security provided for in Section 206 and Section 207 of the Bond Resolution superior to the lien herein created for the payment of the Bonds therein.

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ARTICLE VI

MAINTENANCE; INSURANCE AND LIENS

Section 6.1. Use, Operation, Maintenance, and Repair. The Parking Facility will only be used as permitted under the Act.

Section 6.2. Taxes, Other Governmental Charges, and Utility Charges.

(a) The Issuer and the Lessee acknowledge that under present law the Issuer’s ownership interest in the Leased Property will not be subject to ad valorem taxation by the State of Georgia or by any political or taxing subdivision thereof and that under present law the income and profits, if any, of the Issuer from the Leased Property are not subject to either federal or Georgia taxation. The Lessee will pay, as the same respectively become lawfully due and payable, (i) any and all taxes and governmental charges of any kind whatsoever levied upon or with respect to the Lessee’ interest in this Intergovernmental Lease Agreement and the Leased Property, (ii) any and all taxes and governmental charges of any kind whatsoever levied upon or with respect to the Leased Property or any machinery, equipment, or other property installed or brought by the Lessee therein or thereon, (iii) all utility and other charges incurred in the operation, maintenance, use, occupancy, and upkeep of the Leased Property, and (iv) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by lien on the Leased Property; provided that, with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as are required to be paid during the Lease Term.

(b) The Lessee may, at their expense and in their own name and on behalf or in the name and on behalf of the Issuer, in good faith, contest any such taxes, assessments, and other charges and, in the event of any such contest, may permit the taxes, assessments, or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. The Issuer will cooperate fully with the Lessee in any such contest. In the event that the Lessee shall fail to pay any of the foregoing items required by this Section to be paid by the Lessee, the Issuer may (but shall be under no obligation to) pay the same, and any amounts so advanced by the Issuer, together with interest thereon at a per annum rate equal to the highest interest rate on any of the Bonds, shall become an additional obligation of the Lessee to the Issuer.

Section 6.3. Insurance. The Lessee hereby covenants and agrees that it shall, at no expense to Issuer, obtain, keep and maintain, or cause to be obtained, kept and maintained or shall self-insure and provide the Issuer with evidence of the same, the following insurance policies:

(a) A policy or policies of property insurance against “All Risk” or otherwise known as “Special Causes of Loss” of direct physical loss or damage to real or personal property belonging to Lessee, in the amount of the full replacement cost of the Parking Facility, including coverage for terrorism and loss of rents coverage equal to twelve months projected rental income. The addition of broader coverage, including flood, earthquake, etc. will be considered if property is deemed to be in a high hazard area.

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(b) A commercial general liability policy, with policy limits of $1,000,000 combined single limit for bodily injury and property damage and $2,000,000 aggregate, umbrella/excess liability insurance in excess of primary commercial general liability insurance in the minimum amount of $5,000,000 per occurrence and $5,000,000 aggregate; provided, however, that Lessee may provide any insurance required hereunder by self-insurance. For a long as this agreement is in effect, Lessee agrees to have Issuer named as an additional insured on any liability policies maintained by the Lessee with respect to the Parking Facility.

(c) Lessee shall provide Issuer at the earliest possible time evidence of its election to self-insure or duly authorized certificate or certificates of insurance evidencing the insurance coverage required to be obtained and maintained by the Issuer hereunder.

(d) The amount and types of insurance coverages required herein shall not be construed to be a limitation of liability on the part of the Lessee.

Section 6.4. Permitted Encumbrances. The Lessee will not permit any lien, debt, pledge, assessment, encumbrance, or charge thereon, or on any part thereof, upon the Leased Property except for Permitted Encumbrances.

ARTICLE VII

SPECIAL COVENANTS

Section 7.1. No Warranty of Condition or Suitability by the Issuer. The Issuer makes no warranty, either express or implied as to the condition of the Leased Property.

Section 7.2. Special Covenants Regarding Federal Code Compliance.

(a) The Issuer and the Lessee covenant and agree that no use (directly or indirectly) will be made of the proceeds of the Bonds which would cause any of the Bonds to be a “private activity bond” within the meaning of Section 141(a) of the Code, “arbitrage bonds” within the meaning of Section 148 of the Code or “hedge bonds” within the meaning of Section 149 of the Code. The Lessee shall not take any action or fail to take any action that will adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes.

(b) The Lessee in conjunction with the Issuer, shall comply with any provision of law that may require the Issuer at any time to rebate to the United States of America any part of the earnings derived from the Investment of gross proceeds of any Bonds.

(c) The Issuer and the Lessee shall not permit the proceeds of the Bonds to be used in any manner that would result in (a) 10% or more of such proceeds or the facilities being financed with such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141(b) of the Code, provided that not more than 5% of such proceeds or the facilities being financed with such proceeds may be used in a trade or business unrelated to the governmental use of the Parking Facility, (b) 5% or more of such proceeds or the facilities being financed with such proceeds being used with respect to any output facility (other than a facility for the furnishing of water), within the meaning of Section

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141(b)(4) of the Code, or (c) 5% or more of such proceeds or the facilities being financed with such proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Section 141(c) of the Code; provided, however, that if the Lessee receive an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Bonds from being includable in the gross income for federal income tax purposes of the registered owners thereof under existing law, the Issuer and the Lessee need not comply with such covenant.

(d) The Issuer and the Lessee shall ensure compliance with the tax covenants, prohibited activities, limitations on private use and the establishment of the Rebate Fund provided for in Sections 706, 707, 708 and 709 of the Bond Resolution.

Section 7.3. Further Assurances and Corrective Instruments, Recordings and Filings. The Issuer and the Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the property hereby leased or intended so to be or for carrying out the intention of or facilitating the performance of this Intergovernmental Lease Agreement.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

Section 8.1. Events of Default Defined. The following shall be “events of default” under this Intergovernmental Lease Agreement and the terms “event of default” or “default” shall mean, whenever they are used in this Intergovernmental Lease Agreement, anyone or more of the following events:

(a) Failure by either of the Lessee to provide for Intergovernmental Payments required to be paid under Section 5.3 hereof at the times specified therein;

(b) Failure by the Lessee to observe and perform any covenant, condition or agreement of this Intergovernmental Lease Agreement on their part to be observed or performed, other than as referred to in subsection (a) of this section, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Lessee by the Issuer, unless the Issuer shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the period specified herein, the Issuer will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected; and

The foregoing provisions of this Section are subject to the following limitations: If by reason of force majeure the Lessee are unable in whole or in part to carry out the agreements on their part herein contained, other than the obligations on the part of the Lessee contained in

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Section 5.3 hereof, the Lessee shall not be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of God; strikes; lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States of America or of the State or any of their departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; riots; epidemics; landslides, lightning; earthquakes, fires, hurricanes, storms: floods, icebergs; boll weevils, washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Lessee. The Lessee agree, however, to remedy with all reasonable dispatch the cause or causes preventing the Lessee from carrying out their agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Lessee, and the Lessee shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is, in the judgment of the Lessee, unfavorable to the Lessee.

Section 8.2. Remedies on Default. Whenever any event of default referred to in Section 8.1 hereof shall have happened and be subsisting, the Issuer may take anyone or more of the following remedial steps:

(a) The Issuer may require the Lessee to furnish copies of all books and records of the Lessee pertaining to the Leased Property;

(b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the rents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Intergovernmental Lease Agreement; and

Any amounts collected pursuant to action taken under this section for Basic Payments shall be paid into the Sinking Fund and applied in accordance with the provisions of the Bond Resolution or, if payment in full of the outstanding Bonds has been made (or provision for payment thereof has been made in accordance with the provisions of the Bond Resolution.

Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Intergovernmental Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon the occurrence of any event of default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice or notices as may be herein expressly required. Such rights and remedies as are given to the Issuer hereunder shall

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also extend to the holders of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein contained.

Section 8.4. No Additional Waiver Implied by One. If any agreement contained in this Intergovernmental Lease Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

Section 8.5. Waiver of Appraisement, Valuation, Etc. If the Lessee should default under any of the provisions of this Intergovernmental Lease Agreement the Lessee agree to waive, to the extent they may lawfully do so, the benefit of all appraisement valuation, stay, extension or redemption laws now or hereafter in force, and all right of appraisement and redemption to which they may be entitled.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, return receipt requested, postage prepaid addressed as follows:

(a) If to the Issuer: City of Atlanta Fulton County Recreation Authority 101 Marietta Street, N.W., Suite 1070 Atlanta, Georgia 30303 Attention: Executive Director

with a copy to: Hunton & Williams LLP 600 Peachtree Street, Suite 4100 Atlanta, Georgia 30308 Attention: Douglass P. Selby

(b) If to the Lessee: City of Atlanta Finance Department 68 Mitchell Street, Suite 11100 Atlanta, Georgia 30303 Attention: Chief Financial Officer

with a copy to: City of Atlanta Law Department 55 Trinity Avenue, Suite 5000 Atlanta, Georgia 30303 Attention: City Attorney

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(c) If to the Paying Regions Bank Agent and Sinking Fund 1180 West Peachtree Street, Suite 1200 Custodian: Atlanta, Georgia 30309 Attention: Corporate Trust Department

A duplicate copy of each notice, certificate or other communication given hereunder by either the Issuer, the Lessee or the Paying Agent or Sinking Fund Custodian to anyone of the others shall also be given to all of the others and the Issuer, the Lessee and the Paying Agent or Sinking Fund Custodian may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Notwithstanding any provision of this Intergovernmental Lease Agreement to the contrary, whenever a specified number of days is required with respect to any notice such number of days can be reduced upon the agreement of the Lessee, the Issuer and the Paying Agent or Sinking Fund Custodian.

Section 9.2. Binding Effect. This Intergovernmental Lease Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Lessee, and their respective successors and assigns, subject, however, to the limitations contained in this Intergovernmental Lease Agreement.

Section 9.3. Severability. If any provision of this Intergovernmental Lease Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 9.4. Certain Amounts Remaining in Bond Resolution. It is agreed by the parties hereto that, subject to and in accordance with the terms and conditions of the Bond Resolution, certain surplus moneys remaining in the funds thereunder shall belong to and be paid to the Lessee by the Sinking Fund Custodian as a reimbursement of Basic Payments.

Section 9.5. Amendments, Changes and Modifications. After the initial issuance of Bonds and prior to their payment in full (or provision for the payment thereof having been made in accordance with the provisions of the Bond Resolution), this Intergovernmental Lease Agreement may not be effectively amended, changed, modified, altered or terminated by the parties hereto without the concurring written consent of the all parties thereto.

Section 9.6. Execution in Counterparts. This Intergovernmental Lease Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 9.7. Captions. The captions and headings in this Intergovernmental Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Intergovernmental Lease Agreement.

Section 9.8. Recording of Agreement. This Intergovernmental Lease Agreement (or a memorandum thereof) and every assignment (other than the assignment in the Bond Resolution to Regions Bank) and modification hereof shall be recorded in the Superior Court Clerk’s Office,

18 D-21

Fulton County, Georgia or in such other office as may be at the time provided by law as the proper place for such recordation.

Section 9.9. Law Governing Construction of Agreement. This Intergovernmental Lease Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia without regards to conflict of law principles.

Section 9.10. Beneficiary. The Issuer’s rights hereunder have been assigned to the Owners and it is agreed that, upon an Event of Default hereunder, the Owners may exercise all rights and remedies at law or in equity to enforce the provisions hereof, including specifically Section 5.7.

19 D-22

IN WITNESS WHEREOF, the Issuer and the Lessee have caused this Intergovernmental Lease Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written.

Attest: CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY

By: Secretary Chairman

(SEAL)

As to the Issuer, signed and sealed in the presence of:

Witness

Notary Public

My commission expires:

[NOTARIAL SEAL]

[Intergovernmental Lease Agreement] D-23

Attest: CITY OF ATLANTA, GEORGIA

By: Municipal Clerk Mayor

(SEAL)

Approved as to Form:

By: City Attorney

As to the City, signed and sealed in the presence of:

Witness

Notary Public

My commission expires:

[NOTARIAL SEAL]

[Intergovernmental Lease Agreement] D-24

EXHIBIT A

[DESCRIPTION OF LEASED PROPERTY]

A-1 D-25

EXHIBIT B

DEBT SERVICE PAYMENT SCHEDULE FOR THE SERIES 2017 BONDS

A-1 D-26

APPENDIX E

FORM OF OPINION OF CO-BOND COUNSEL

[THIS PAGE INTENTIONALLY LEFT BLANK] Set forth below is the proposed opinion of Co-Bond Counsel. This opinion is preliminary and subject to change prior to the issuance and delivery of the Series 2017 Bonds.

HUNTON & WILLIAMS LLP BANK OF AMERICA PLAZA SUITE 4100 600 PEACHTREE STREET, N.E. ATLANTA, GEORGIA 30308-2216

TEL FAX

______, 2017

City of Atlanta and Fulton County Recreation Authority Atlanta, Georgia

$______City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017

Ladies and Gentlemen:

As Co-Bond Counsel to the City of Atlanta and Fulton County Recreation Authority (the “Authority”), we have examined the applicable law, including the City of Atlanta and Fulton County Recreation Authority Act of the General Assembly of the State of Georgia (Ga. Laws et seq.), as amended (the “Act”), certified copies of documents and proceedings relating to the organization of the Authority and certified copies of certain documents and proceedings, including, without limitation, a certified copy of the validation proceeding conducted in the Superior Court of Fulton County, Georgia, relating to the issuance and sale by the Authority of its $______Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 (the “Series 2017 Bonds”). The Series 2017 Bonds are being issued for the purpose of financing the design, acquisition, construction, installation and equipping of a 3-story structured parking deck totaling approximately 400,000 square feet and 1,000 parking spaces to be located at Zoo Atlanta (the “Parking Facility”). Reference is made to the form of the Series 2017 Bonds for information concerning their details, including payment and redemption provisions, their purpose and the proceedings pursuant to which they are issued. Capitalized terms used but not defined herein are as defined in the form of Series 2017 Bonds or the Bond Resolution (as defined herein).

The Series 2017 Bonds are issued pursuant to a Bond Resolution adopted by the Authority on May 22, 2017 (the “Bond Resolution”). The Series 2017 Bonds are secured by the Authority’s pledge under the Bond Resolution of the rents and other payments to be received by the Authority from the City of Atlanta (the “City”) pursuant to an Intergovernmental Lease Agreement, dated as of ______1, 2017 (the “Intergovernmental Lease Agreement”), between the Authority and the City, amounts on deposit from time to time in the Project Fund,

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City of Atlanta and Fulton County Recreation Authority ______, 2017 Page 2

Sinking Fund and any and all other funds and property pledged therefor under the Bond Resolution (the “Pledged Property”). As security for the payments required to be made by the City under the Intergovernmental Lease Agreement, the City has pledged to the Authority its full faith and credit and taxing power for such payment.

Reference is made to the opinion of the City Attorney, dated today, as to, among other things, the due authorization, execution and delivery of the Intergovernmental Lease Agreement and related documents by the City and the enforceability of such documents against the City, upon which you are relying as to matters therein. Reference is also made to our opinion of even date, as counsel to the Authority, upon which you are relying as to matters therein.

Without undertaking to verify the same by independent investigation, we have relied on certifications by representatives of the Authority and other parties as to certain facts relevant to ! " # “Code”). The Authority has covenanted to comply with the provisions of the Code regarding, among other matters, the use, expenditure and investment of the proceeds of the Series 2017 Bonds and the timely payment to the United States of any arbitrage rebate amounts with respect to the Series 2017 Bonds, all as set forth in the proceedings and documents relating to the issuance of the Series 2017 Bonds (the “Covenants”).

Based on the foregoing, in accordance with customary legal opinion practice, and assuming due authorization, execution and delivery of all documents by parties other than the Authority, we are of the opinion that:

1. The Bond Resolution has been duly adopted, is in full force and effect, and is valid and enforceable against the Authority in accordance with its terms.

2. The Series 2017 Bonds have been duly authorized and issued in accordance with the Constitution and laws of the State of Georgia, including the Act, and constitute valid and binding limited obligations of the Authority payable solely from, and secured by a lien on, the Pledged Property. The Series 2017 Bonds, the premium, if any, and the interest thereon do not constitute a pledge of the faith and credit of the State of Georgia or any municipality or political subdivision thereof, including, without limitation, the City.

3. The Intergovernmental Lease Agreement has been duly authorized, executed and delivered by the Authority and constitutes a valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms.

4. The rights of the holders of the Series 2017 Bonds and the enforceability of such rights, including enforcement of the obligations of the Authority under the Bond Resolution and the Intergovernmental Lease Agreement and of the City under the Intergovernmental Lease

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City of Atlanta and Fulton County Recreation Authority ______, 2017 Page 3

Agreement, may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws affecting the rights of creditors generally and (b) principles of equity, whether considered at law or in equity.

5. Under current law, interest[, including accrued original issue discount (“OID”),] on the Series 2017 Bonds (a) will not be included in gross income for Federal income tax purposes and (b) will not be an item of tax preference for purposes of the Federal alternative minimum income tax imposed on individuals and corporations; however, with respect to corporations (as defined for Federal income tax purposes) subject to the alternative minimum income tax, such interest is taken into account in determining adjusted current earnings for purposes of computing such tax. The opinion in this paragraph 5 is subject to the condition that there is compliance subsequent to the issuance of the Series 2017 Bonds with all requirements of the Code that must be satisfied in order that interest thereon not be included in gross income for Federal income tax purposes. [The initial public offering prices of the Series 2017 Bonds maturing in the year[s] 20___ and 20___ (the “OID Bonds”) are less than their stated principal amounts. Under existing law, the difference between the stated principal amount and the initial public offering price of each maturity of OID Bonds to the public (excluding bond houses and brokers) at which a substantial amount of such maturity is sold will constitute OID; OID will accrue on a constant-yield-to-maturity method based on regular compounding; and a holder’s basis in an OID Bond will be increased by the amount of OID treated for Federal income tax purposes as having accrued on the OID Bond while the holder holds the OID Bond.] Failure by the Authority to comply with the Covenants, among other things, could cause interest on the Series 2017 Bonds[, including OID,] to be included in gross income for Federal income tax purposes retroactively to their date of issue. We express no opinion regarding other Federal tax consequences of the ownership of or receipt or accrual of interest on the Series 2017 Bonds.

6. Under current law, interest on the Series 2017 Bonds is exempt from income taxation by the State of Georgia.

Our services as Co-Bond Counsel have been limited to delivering the foregoing opinion based on our review of such proceedings and documents as we deem necessary to approve the validity of the Series 2017 Bonds and the tax-exempt status of the interest thereon. We express no opinion herein as to the financial resources of the Authority or the City, the Authority’s or City’s ability to provide for payment of the Series 2017 Bonds or the accuracy or completeness of any information, including the Authority’s Preliminary Official Statement, dated ______, 2017, and its Official Statement, dated ______, 2017, that may have been relied upon by anyone in making the decision to purchase Series 2017 Bonds.

Very truly yours,

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APPENDIX F

FORM OF CONTINUING DISCLOSURE AGREEMENT

[THIS PAGE INTENTIONALLY LEFT BLANK]

CONTINUING DISCLOSURE AGREEMENT

by and between

CITY OF ATLANTA

and

DIGITAL ASSURANCE CERTIFICATION, L.L.C.

relating to:

$______CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017

Dated ______, 2017

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This CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement") dated as of ______, 2017, is executed and delivered by the CITY OF ATLANTA, a municipal corporation duly organized and existing under the laws of the State of Georgia (the "City") and DIGITAL ASSURANCE CERTIFICATION, L.L.C., a limited liability company duly organized and existing under the laws of the State of Florida, and any successor dissemination agent serving hereunder pursuant to Section 11 hereof (the "Dissemination Agent" or "DAC").

RECITALS:

A. Contemporaneously with the execution and delivery of this Disclosure Agreement, the City of Atlanta and Fulton County Recreation Authority (the "Issuer") issued and delivered those certain $______in aggregate principal amount of its City of Atlanta and Fulton County Recreation Authority Revenue Bonds (Zoo Atlanta Parking Facility Project), Series 2017 (the "Series 2017 Bonds"), pursuant to, among other things, that certain resolution adopted on May 22, 2017, as supplemented by that certain supplemental pricing resolution adopted on [July 13], 2017 (together, the "Bond Resolution"). B. The Series 2017 Bonds are limited obligations payable solely from the revenues pledged therefor as provided in the Bond Resolution, including the Basic Payments to be received by the Issuer from the City pursuant to that certain Intergovernmental Lease Agreement dated as of [July 1], 2017 (the "Intergovernmental Lease Agreement"). C. The Series 2017 Bonds are being issued for the purpose of financing: (a) the design, acquisition, construction, installation and equipping of the Parking Facility portion of the Parking Complex Project; (b) certain fund and accounts related to the Series 2017 Bonds, and (c) paying certain costs of issuance related to the Series 2017 Bonds. D. The Issuer and the City authorized the preparation and distribution of the Preliminary Official Statement dated June 28, 2017 with respect to the Series 2017 Bonds (the "Preliminary Official Statement") and, on or before the date of the Preliminary Official Statement, the Issuer and the City deemed that the Preliminary Official Statement was final within the meaning of the Rule (as defined herein). E. Upon the initial sale of the Series 2017 Bonds to the Participating Underwriter (as defined herein), the Issuer and the City authorized the preparation and distribution of the Official Statement dated ______, 2017 with respect to the Series 2017 Bonds (the "Official Statement"). F. As a condition precedent to the initial purchase of the Series 2017 Bonds by the Participating Underwriter in accordance with the terms of the Bond Purchase Agreement dated ______, 2017, by and among the Participating Underwriter, the Issuer and the City, and in compliance with the Participating Underwriter's obligations under the Rule, the City has agreed to undertake for the benefit of the holders of the Series 2017 Bonds, to provide certain annual financial information and notice of the occurrence of certain events as set forth herein and in the continuing disclosure undertakings of the City.

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NOW THEREFORE, in consideration of the purchase of the Series 2017 Bonds by the Participating Underwriter and the mutual promises and agreements made herein, the receipt and sufficiency of which consideration is hereby mutually acknowledged, the City and the Dissemination Agent do hereby certify and agree as follows:

Section 1. Incorporation of Recitals. The above recitals are true and correct and are incorporated into and made a part hereof.

Section 2. Definitions.

(a) For the purposes of this Disclosure Agreement, all capitalized terms used, but not otherwise defined herein shall have the meanings ascribed thereto in the Bond Resolution and the Official Statement, as applicable.

(b) In addition to the terms defined elsewhere herein, the following terms shall have the following meanings for the purposes of this Disclosure Agreement:

"Actual Knowledge" as used herein, and for the purposes hereof, a party shall be deemed to have "actual knowledge" of the occurrence of any event only if and to the extent the individual or individuals employed by such party and directly responsible for the administration of this Disclosure Agreement on behalf of such party have actual knowledge of or receive written notice of the occurrence of such event.

"Annual Filing" means any annual report provided by the City, pursuant to and as described in Sections 4 and 6 hereof.

"Annual Filing Date" means the date, set forth in Sections 4(a) and 4(e) hereof, by which the Annual Filing is to be filed with the MSRB.

"Annual Financial Information" means annual financial information as such term is used in paragraph (f)(9) of the Rule and specified in Section 6(a) hereof.

"Audited Financial Statements" means the financial statements (if any) of the City for the prior Fiscal Year prepared in accordance with generally accepted accounting principles, as in effect from time to time, and audited by an independent certified public accountant in conformity with auditing standards and Government Auditing Principles issued by the Comptroller General of the United States.

"Beneficial Owner" means any beneficial owner of the Series 2017 Bonds. Beneficial ownership is to be determined consistent with the definition thereof contained in Rule 13d-3 of the SEC, or, in the event such provisions do not adequately address the situation at hand (in the opinion of nationally recognized bond counsel), beneficial ownership is to be determined based upon ownership for federal income tax purposes.

"Business Day" means a day other than: (a) Saturday or a Sunday, (b) a day on which banks are authorized or required by law to close, or (c) a day on which the City is authorized or required to be closed.

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"Disclosure Representative" means the Chief Financial Officer of the City or his or her designee, or such other person as the City shall designate in writing to the Dissemination Agent from time to time as the person responsible for providing Information to the Dissemination Agent.

"EMMA" means the Electronic Municipal Market Access system, a service of the MSRB, or any successor thereto.

"Filing" means, as applicable, any Annual Filing, Notice Event Filing, Voluntary Filing or any other notice or report made public under this Disclosure Agreement.

"Fiscal Year" means the fiscal year of the City, which currently is the twelve month period beginning July 1 and ending on June 30 of the following year or any such other twelve month period designated by the City, from time to time, to be its fiscal year.

"Information" means the Annual Financial Information, the Audited Financial Statements (if any), the Notice Event Filings, and the Voluntary Filings.

"MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, as amended.

"Notice Event" means an event listed in Sections 5(a) and 5(b) hereof.

"Notice Event Filing" shall have the meaning specified in Section 5(c) hereof.

"Obligated Person" means the City and any person who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Series 2017 Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity facilities). The City confirms that as of the date hereof it is an Obligated Person with respect to the Series 2017 Bonds. "Participating Underwriter" means, collectively, the original purchasers of the Series 2017 Bonds required to comply with the Rule in connection with the offering of the Series 2017 Bonds.

"Repository" means each entity authorized and approved by the SEC from time to time to act as a repository for purposes of complying with the Rule. The repositories currently approved by the SEC as of the date hereof may be found by visiting the SEC's website at http://www.sec.gov/info/municipal/nrmsir.htm. As of the date hereof, the only Repository recognized by the SEC for such purpose is the MSRB, which currently accepts continuing disclosure filings through the EMMA website at http://emma.msrb.org.

"Rule" means Rule 15c2-12 of the SEC promulgated pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time.

"SEC" means the United States Securities and Exchange Commission.

"Third-Party Beneficiary" shall have the meaning specified in Section 3(b) hereof.

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"Unaudited Financial Statements" means the financial statements (if any) of the City for the prior Fiscal Year which have not been certified by an independent auditor.

"Voluntary Filing" means the information provided to the Dissemination Agent by the City pursuant to Section 8 hereof.

Section 3. Scope of this Disclosure Agreement.

(a) The City has agreed to enter into this Disclosure Agreement and undertake the disclosure obligations hereunder, at the request of the Participating Underwriter and as a condition precedent to the Participating Underwriter's original purchase of the Series 2017 Bonds, in order to assist the Participating Underwriter with compliance with the Rule. The disclosure obligations of the City under this Disclosure Agreement relate solely to the Series 2017 Bonds. Such disclosure obligations are not applicable to any other securities issued or to be issued by the Issuer, whether issued for the benefit of the City or otherwise, nor to any other securities issued by or on behalf of the City.

(b) Neither this Disclosure Agreement, nor the performance by the City or the Dissemination Agent of their respective obligations hereunder, shall create any third-party beneficiary rights, shall be directly enforceable by any third-party, or shall constitute a basis for a claim by any person except as expressly provided herein and except as required by law, including, without limitation, the Rule; provided, however, the Participating Underwriter and each Beneficial Owner are hereby made third-party beneficiaries hereof (collectively, and each respectively, a "Third-Party Beneficiary") and shall have the right to enforce the obligations of the parties hereunder pursuant to Section 9 hereof.

(c) This Disclosure Agreement shall terminate upon: (i) the defeasance, redemption or payment in full of all Series 2017 Bonds, in accordance with the Bond Resolution, as amended, or (ii) the delivery of an opinion of counsel expert in federal securities laws retained by the City to the effect that continuing disclosure is no longer required under the Rule as to the Series 2017 Bonds.

Section 4. Annual Filings.

(a) The City shall provide, annually, an electronic copy of the Annual Filing to the Dissemination Agent on or before the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Filing, the Dissemination Agent shall provide the Annual Filing to the Repository, in an electronic format as prescribed by the MSRB. Not later than the January 31st immediately following the preceding Fiscal Year ended June 30, commencing with the Fiscal Year ending June 30, 2017, shall be the Annual Filing Date. If January 31st falls on a day that is not a Business Day, the Annual Filing will be due on the first Business Day thereafter. Such date and each anniversary thereof is the Annual Filing Date. The Annual Filing may be submitted as a single document or as separate documents composing a package, and may cross-reference other information as provided in Section 6 hereof.

(b) If on the second (2nd) Business Day prior to the Annual Filing Date, the Dissemination Agent has not received a copy of the Annual Filing, the Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by email)

F-5

to remind the City of its undertaking to provide the Annual Filing pursuant to Section 4(a) hereof. Upon such reminder, the Disclosure Representative shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Filing no later than 6:00 p.m. on the Annual Filing Date (or if such Annual Filing Date is not a Business Day, then the first Business Day thereafter), or (ii) instruct the Dissemination Agent in writing as to the status of the Annual Filing within the time required under this Disclosure Agreement, and state the date by which the Annual Filing for such year is expected to be provided. If the Dissemination Agent has not received either (i) the Annual Filing by 6:00 p.m. on the Annual Filing Date, or (ii) notice from the City that it intends to deliver the Annual Filing to the Dissemination Agent by 11:59 p.m. on the Annual Filing Date, the City hereby irrevocably directs the Dissemination Agent, and the Dissemination Agent agrees, to immediately send an Notice Event Filing to the Repository the following Business Day in substantially the form attached hereto as "Exhibit A" without reference to the anticipated filing date for the Annual Filing.

(c) If the Audited Financial Statements are not available prior to the Annual Filing Date, the City shall provide the Unaudited Financial Statements and when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Dissemination Agent for filing with the Repository.

(d) The Dissemination Agent shall:

(i) upon receipt and no later than the Annual Filing Date, promptly file each Annual Filing received under Section 4(a) hereof with the Repository in an electronic format as prescribed by the MSRB;

(ii) upon receipt and no later than the Annual Filing Date, promptly file each Audited Financial Statement or Unaudited Financial Statement received under Sections 4(a) and 4(c) hereof with the Repository in an electronic format as prescribed by the MSRB;

(iii) provide the City evidence of the filings of each of the above when made, which shall be made by means of the DAC system, for so long as DAC is the Dissemination Agent under this Disclosure Agreement.

(e) The City may adjust the Annual Filing Date upon change of its Fiscal Year by providing written notice of such change and the new Annual Filing Date to the Dissemination Agent and the Repository, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year.

(f) Each Annual Filing shall contain the information set forth in Section 6 hereof.

Section 5. Reporting of Notice Events.

(a) In accordance with the Rule, the City or the Dissemination Agent shall file a Notice Event Filing with the Repository, in the appropriate format required by the MSRB and in a timely manner not in excess of ten (10) Business Days after it has actual knowledge of the occurrence of any of the following Notice Events with respect to the Series 2017 Bonds:

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(i) Principal and interest payment delinquencies; (ii) Non-payment related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers or their failure to perform; (vi) Adverse tax opinions, 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 Series 2017 Bonds, or other material events affecting the tax status of the Series 2017 Bonds; (vii) Modifications to rights of holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution or sale of property securing repayment of the Series 2017 Bonds, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the Obligated Person. Such an event is considered to occur when there is an appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person; (xiii) The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of 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, if material; or

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(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) In accordance with the Rule, the City or the Dissemination Agent shall file a Notice Event Filing with the Repository, in the appropriate format required by the MSRB and in a timely manner, after the occurrence of a failure of the City to provide the Annual Filing on or before the Annual Filing Date. (c) The City shall promptly notify the Dissemination Agent in writing upon having Actual Knowledge of the occurrence of a Notice Event; provided, however, to the extent any such Notice Event has been previously and properly disclosed by or on behalf of the City, the City shall not be required to provide additional notice of such Notice Event in accordance with this subsection. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to Section 5(e) hereof. Such notice shall be accompanied with the text of the disclosure that the City desires to make (each a "Notice Event Filing"), the written authorization of the City for the Dissemination Agent to disseminate such information, and the date on which the City desires the Dissemination Agent to disseminate the information. The Dissemination Agent is under no obligation to notify the City or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will instruct the Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made, or (ii) a Notice Event has occurred and provide the Dissemination Agent with the Notice Event Filing and the date the Dissemination Agent should file the Notice Event Filing.

(d) The Dissemination Agent shall upon receipt, and no later than the required filing date, promptly file each Notice Event Filing received under Sections 5(a) and 5(b) hereof, with the Repository in an electronic format as prescribed by the MSRB.

Section 6. Content of Annual Filings.

(a) Each Annual Filing shall contain the following annual financial information set forth in the Official Statement:

(i) the table entitled "City of Atlanta, Georgia Statement of Revenues, Expenditures and Changes in Fund Balances General Fund" for the last five Fiscal Years under the heading "FISCAL OVERVIEW OF THE CITY – Statement of Revenues, Expenditures and Changes in General Fund Balances;"

(ii) the table entitled "City of Atlanta, Georgia Ratio of General Bonded Debt Outstanding (Unaudited)" under the heading "FISCAL OVERVIEW OF THE CITY – Ratio of General Bonded Debt Outstanding;"

(iii) the table entitled "Direct and Overlapping Property Tax Rates Last Ten Fiscal Periods" under the heading "APPENDIX A – AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT – Ad Valorem Taxation;"

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(iv) the table entitled "Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Periods" under the heading "APPENDIX A – AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT – Assessed Value;"

(v) the table entitled "City of Atlanta, Georgia Property Tax Levies and Collections Last Ten Fiscal Periods" under the heading "APPENDIX A – AD VALOREM TAXATION, COLLECTION AND ENFORCEMENT – Collection and Enforcement;"

(vi) the table entitled "City of Atlanta, Georgia Summary of Long-Term Debt" under the heading "APPENDIX A – CITY DEBT STRUCTURE – Summary of Long- Term Debt;"

(vii) the table entitled "City of Atlanta, Georgia Direct and Overlapping Governmental Activities Debt Last Ten Fiscal Periods" under the heading "APPENDIX A – CITY DEBT STRUCTURE – Direct and Overlapping Debt;"

(viii) the table entitled "City of Atlanta, Georgia Legal Debt Margin Information Last Ten Fiscal Periods" under the heading "APPENDIX A – CITY DEBT STRUCTURE - Legal Debt Margin;" and

(ix) the table entitled "City of Atlanta, Georgia Principal Employers" under the heading "APPENDIX A – CITY ECONOMIC AND DEMOGRAPHIC INFORMATION – Principal Employers."

(b) If available at the time of such filing, the Audited Financial Statements for the prior Fiscal Year. If the Audited Financial Statements are not available by the time the Annual Filing is required to be filed pursuant to Section 4(a) hereof, the Annual Filing shall contain Unaudited Financial Statements of the City prepared in accordance with generally accepted accounting principles, as in effect from time to time, and the Audited Financial Statements shall be filed in the same manner as the Annual Filing when they become available. The Audited Financial Statements (if any) will be provided pursuant to Section 4(c) hereof.

Any or all of the items listed above may be included by specific reference to documents previously filed with the Repository or the SEC, including, but not limited to, official statements of debt issues with respect to which the City is an Obligated Person and the City's Comprehensive Annual Financial Report. If the document incorporated by reference is a final official statement, it must be available from the Repository. The City will clearly identify each such document so incorporated by reference.

Section 7. Responsibility for Content of Reports and Notices.

(a) The City shall be solely responsible for the content of each Filing (or any portion thereof) provided to the Dissemination Agent pursuant to this Disclosure Agreement.

(b) Each Filing distributed by the Dissemination Agent pursuant to Section 4 or 5 hereof shall be in a form suitable for distributing publicly and shall contain the CUSIP numbers of the Series 2017 Bonds and such other identifying information prescribed by the MSRB from

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time to time. Each Notice Event Filing shall be in substantially the form set forth in Exhibit "A" attached hereto. If an item of information contained in any Filing pursuant to this Disclosure Agreement would be misleading without additional information, the City shall include such additional information as a part of such Filing as may be necessary in order that the Filing will not be misleading in light of the circumstances under which it is made.

(c) Any report, notice or other filing to be made public pursuant to this Disclosure Agreement may consist of a single document or separate documents composing a package and may incorporate by reference other clearly identified documents or specified portions thereof previously filed with the Repository or the SEC; provided that any final official statement incorporated by reference must be available from the Repository.

(d) Notwithstanding any provision herein to the contrary, nothing in this Disclosure Agreement shall be construed to require the City or the Dissemination Agent to interpret or provide an opinion concerning information made public pursuant to this Disclosure Agreement.

(e) Notwithstanding any provision herein to the contrary, the City shall not make public, or direct the Dissemination Agent to make public, information which is not permitted to be publicly disclosed under any applicable data confidentiality or privacy law or other legal requirement.

Section 8. Voluntary Filings.

(a) The City may instruct the Dissemination Agent to file information with the Repository, from time to time (a "Voluntary Filing").

(b) Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information through the Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Filing, Annual Financial Statement, Voluntary Filing or Notice Event Filing, in addition to that required by this Disclosure Agreement. If the City chooses to include any information in any Annual Filing, Annual Financial Statement, Voluntary Filing or Notice Event Filing in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Filing, Annual Financial Statement, Voluntary Filing or Notice Event Filing.

(c) Notwithstanding the foregoing provisions of this Section 8, the City is under no obligation to provide any Voluntary Filing.

(d) The Dissemination Agent shall upon receipt promptly file each Voluntary Filing received with the Repository in an electronic format as prescribed by the MSRB.

Section 9. Defaults; Remedies.

(a) A party shall be in default of its obligations hereunder if it fails or refuses to carry out or perform its obligations hereunder for a period of five Business Days following notice of default given in writing to such party by any other party hereto or by any Third Party Beneficiary hereof, unless such default is cured within such five Business Day notice period. An extension

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of such five Business Day cure period may be granted for good cause (in the reasonable judgment of the party granting the extension) by written notice from the party who gave the default notice.

(b) If a default occurs and continues beyond the cure period specified above, any nondefaulting party or any Third-Party Beneficiary may seek specific performance of the defaulting party's obligations hereunder as the sole and exclusive remedy available upon any such default, excepting, however, that the party seeking such specific performance may recover from the defaulting party any reasonable attorneys' fees and expenses incurred in the course of enforcing this Disclosure Agreement as a consequence of such default. Each of the parties hereby acknowledges that monetary damages will not be an adequate remedy at law for any default hereunder, and therefore agrees that the exclusive remedy of specific performance shall be available in proceedings to enforce this Disclosure Agreement.

(c) Notwithstanding any provision of this Disclosure Agreement, the Bond Resolution or the Intergovernmental Lease Agreement to the contrary, no default under this Disclosure Agreement shall constitute a default or event of default under the Bond Resolution or the Intergovernmental Lease Agreement.

Section 10. Amendment or Modification.

(a) This Disclosure Agreement shall not be amended or modified except as provided in this Section. No modification, amendment, alteration or termination of all or any part of this Disclosure Agreement shall be construed to be, or operate as, altering or amending in any way the provisions of the Bond Resolution or the Intergovernmental Lease Agreement.

(b) Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if: (i) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the obligor on the Series 2017 Bonds, or type of business conducted by such obligor; (ii) such amendment or waiver does not materially impair the interests of the Beneficial Owners of the Series 2017 Bonds, as determined either by an unqualified opinion of counsel expert in federal securities laws retained by the City or by the approving vote a majority of the Beneficial Owners of the Series 2017 Bonds outstanding at the time of such amendment or waiver; and (iii) such amendment or waiver is supported by an opinion of counsel expert in federal securities laws retained by the City, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule, as well as any change in circumstances.

(c) If any provision of Section 6 hereof is amended or waived, the first Annual Filing containing any amended, or omitting any waived, operating data or financial information shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided.

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(d) If the provisions of this Disclosure Agreement specifying the accounting principles to be followed in preparing the City's financial statements are amended or waived, the Annual Filing for the year in which the change is made shall present 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 the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to the Beneficial Owners of the Series 2017 Bonds to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall also be quantitative. The City will file a notice of the change in the accounting principles with the Repository on or before the effective date of any such amendment or waiver.

(e) Notwithstanding the foregoing, the Dissemination Agent shall not be obligated to agree to any amendment expanding its duties or obligations hereunder without its consent thereto.

(f) The City shall prepare or cause to be prepared a notice of any such amendment or modification and shall direct the Dissemination Agent to make such notice public in accordance with Section 8 hereof.

Section 11. Agency Relationship.

(a) The Dissemination Agent agrees to perform such duties, but only such duties, as are specifically set forth in this Disclosure Agreement, and no implied duties or obligations of any kind shall be read into this Disclosure Agreement with respect to the Dissemination Agent. The Dissemination Agent may conclusively rely, as to the truth, accuracy and completeness of the statements set forth therein, upon all notices, reports, certificates or other materials furnished to the Dissemination Agent pursuant to this Disclosure Agreement, and in the case of notices and reports required to be furnished to the Dissemination Agent pursuant to this Disclosure Agreement, the Dissemination Agent shall have no duty whatsoever to examine the same to determine whether they conform to the requirements of this Disclosure Agreement.

(b) The Dissemination Agent shall not be liable for any error of judgment made in good faith by a responsible officer or officers of the Dissemination Agent unless it shall be proven that the Dissemination Agent engaged in negligent conduct or willful misconduct in ascertaining the pertinent facts related thereto.

(c) The Dissemination Agent shall perform its rights and duties under this Disclosure Agreement using the same standard of care as a prudent person would exercise under the circumstances, and the Dissemination Agent shall not be liable for any action taken or failure to act in good faith under this Disclosure Agreement unless it shall be proven that the Dissemination Agent was negligent or engaged in willful misconduct.

(d) The Dissemination Agent may perform any of its duties hereunder by or through attorneys or agents selected by it with reasonable care, and shall be entitled to the advice of counsel concerning all matters arising hereunder, and may in all cases pay such reasonable

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compensation as it may deem proper to all such attorneys and agents. The Dissemination Agent shall be responsible for the acts or negligence of any such attorneys, agents or counsel.

(e) None of the provisions of this Disclosure Agreement or any notice or other document delivered in connection herewith shall require the Dissemination Agent to advance, expend or risk its own funds or otherwise incur financial liability in the performance of any of the Dissemination Agent's duties or rights under this Disclosure Agreement.

(f) Except as expressly provided herein, the Dissemination Agent shall not be required to monitor the compliance of the City with the provisions of this Disclosure Agreement or to exercise any remedy, institute a suit or take any action of any kind without indemnification satisfactory to the Dissemination Agent.

(g) The Dissemination Agent may resign at any time by giving at least ninety (90) days prior written notice thereof to the City. The Dissemination Agent may be removed for good cause at any time by written notice to the Dissemination Agent from the City, provided that such removal shall not become effective until a successor dissemination agent has been appointed by the City under this Disclosure Agreement.

(i) In the event the Dissemination Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Dissemination Agent for any reason, the City shall promptly appoint a successor. Notwithstanding any provision to the contrary in this Disclosure Agreement or elsewhere, the City may appoint itself to serve as Dissemination Agent hereunder.

(j) Any company or other legal entity into which the Dissemination Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which the Dissemination Agent may be a party or any company to whom the Dissemination Agent may sell or transfer all or substantially all of its agency business shall be the successor dissemination agent hereunder without the execution or filing of any paper or the performance of any further act and shall be authorized to perform all rights and duties imposed upon the Dissemination Agent by this Disclosure Agreement, anything herein to the contrary notwithstanding.

Section 12. Miscellaneous.

(a) Each of the parties hereto represents and warrants to each other party that it has (i) duly authorized the execution and delivery of this Disclosure Agreement by the officers of such party whose signatures appear on the execution pages hereto, (ii) that it has all requisite power and authority to execute, deliver and perform this Disclosure Agreement under applicable law and any resolutions, ordinances, or other actions of such party now in effect, (iii) that the execution and delivery of this Disclosure Agreement, and performance of the terms hereof, does not and will not violate any law, regulation, ruling, decision, order, indenture, decree, agreement or instrument by which such party or its property or assets is bound, and (iv) such party is not aware of any litigation or proceeding pending, or, to the best of such party's knowledge, threatened, contesting or questioning its existence, or its power and authority to enter into this

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Disclosure Agreement, or its due authorization, execution and delivery of this Disclosure Agreement, or otherwise contesting or questioning the issuance of the Series 2017 Bonds.

(b) This Disclosure Agreement shall be governed by and interpreted in accordance with the laws of the State of Georgia and applicable federal law.

(c) This Disclosure Agreement may be executed in one or more counterparts, each and all of which shall constitute one and the same instrument.

Section 13. Identifying Information. All documents provided to the Repository pursuant to this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB.

Section 14. Severability. In case any part of this Disclosure Agreement is held to be illegal or invalid, such illegality or invalidity shall not affect the remainder or any other section of this Disclosure Agreement. This Disclosure Agreement shall be construed or enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application of this Disclosure Agreement affect any legal and valid application.

[SIGNATURE PAGES TO FOLLOW]

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SIGNATURE PAGE TO CONTINUING DISCLOSURE AGREEMENT CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING DECK PROJECT), SERIES 2017

IN WITNESS WHEREOF, the City and the Dissemination Agent have each caused this Disclosure Agreement to be executed, on the date first written above, by their respective duly authorized officers.

CITY OF ATLANTA, a municipal corporation duly organized and existing under the laws of the State of Georgia

By: Kasim Reed, Mayor

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

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SIGNATURE PAGE TO CONTINUING DISCLOSURE AGREEMENT CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING DECK PROJECT), SERIES 2017

IN WITNESS WHEREOF, the City and the Dissemination Agent have each caused this Disclosure Agreement to be executed, on the date first written above, by their respective duly authorized officers.

DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Dissemination Agent

By: Name: Title:

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EXHIBIT A

NOTICE TO REPOSITORY OF THE OCCURRENCE OF [INSERT THE NOTICE EVENT]

Relating to

$______CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017

Originally Issued on ______, 2017 [**CUSIP NUMBERS**)]

Notice is hereby given by the City of Atlanta (the "City"), as obligated person with respect to the above-referenced Series 2017 Bonds issued by the City of Atlanta and Fulton County Recreation Authority (the "Issuer"), under the Securities and Exchange Commission's Rule 15c2-12, that [**INSERT THE NOTICE EVENT**] has occurred. [**DESCRIBE NOTICE EVENT AND MATERIAL CIRCUMSTANCES RELATED THERETO**].

This Notice is based on the best information available to the City at the time of dissemination hereof and is not guaranteed by the City or the Issuer as to the accuracy or completeness of such information. The City will disseminate additional information concerning [**NOTICE EVENT**], as and when such information becomes available to the City, to the extent that the dissemination of such information would be consistent with the requirements of Rule 15c2-12 and the City's obligation under that certain Continuing Disclosure Agreement dated as of ______, 2017. [**Any questions regarding this notice should be directed in writing only to the City. However, the City will not provide additional information or answer questions concerning [**NOTICE EVENT**] except in future written notices, if any, disseminated by the City in the same manner and to the same recipients as this Notice**].

DISCLAIMER: All information contained in this Notice has been obtained by the City from sources believed to be reliable as of the date hereof. Due to the possibility of human or mechanical error as well as other factors, however, such information is not guaranteed as to the accuracy, timeliness or completeness. Under no circumstances shall the City have any liability to any person or entity for (a) any loss, damage, cost, liability or expense in whole or in part caused by, resulting from or relating to this Notice, including, without limitation, any error (negligent or otherwise) or other circumstances involved in procuring, collecting, compiling, interpreting, analyzing, editing, transcribing, transmitting, communicating or delivering any information contained in this Notice, or (b) any direct, indirect, special, consequential or incidental damages whatsoever related thereto.

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Dated: ______

CITY OF ATLANTA

By: Name: Title:

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CITY OF ATLANTA AND FULTON COUNTY RECREATION AUTHORITY • REVENUE BONDS (ZOO ATLANTA PARKING FACILITY PROJECT), SERIES 2017