CHICAGO PARK DISTRICT $8,000,000* Generalobligation B

THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION AND AMENDMENT IN A FINAL OFFICIAL STATEMENT. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of the securities offered hereby, 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. * Preliminary, subjecttochange. Dated: October___, 2016 B on orabout______,2016. and fortheUnderwritersbytheirCounsel, DelGaldoLawGroup,LLC,Berwyn,Illinois.DeliveryoftheBonds throughthefacilitiesofDTCisexpected be passedonfortheDistrictbyTimothy M.King,GeneralCounsel,andbyHardwickLawFirm,LLC,Chicago, Illinois,asIssuer’sandDisclosureCounsel, & Cervantes,Chicago,Illinois,Co-Bond Counsel,insubstantiallytheformsattachedtothisOfficialStatement asAppendixE.Certainlegalmatterswill Bonds andtheplanoffinance. of issuancetheBondsandrefundingRefundedBonds.See “PLANOFFINANCE”hereinforadescriptionofthepurposeseachseries in thisOfficialStatementasthe“Refunded District’s CapitalImprovementProgram;(ii)refundalloraportionof certainmaturitiesoftheDistrict’soutstandinggeneralobligationbonds(defined of drawsonexistingbondanticipationnotes,whichmaybeoutstanding inamaximumprincipalamountof$40,000,000issuedtofundportionthe the District’sCapitalImprovementPlan(asdefinedherein),including thereimbursementofcostsalreadyincurredbyDistrictandrepayment mandatory sinkingfundredemptionpriortomaturityasdescribedherein. See“THEBONDS–RedemptionofBonds.” FOR THEBONDS.” payable fromamountspaidtotheDistrictSpecialRecreation ActivityTaxasmorefullydescribedintheOfficialStatement.See“SECURITY Tax BondswillbepayablefromthePersonalPropertyReplacement FundoftheStateIllinoisandSeries2016EUnlimitedTaxBondswillbe Unlimited TaxBondsiswithoutlimitationastorateoramount.Inaddition tosuchtaxlevy,theDistricthasprovidedthatSeries2016DUnlimited tax islimitedbytheprovisionsofPropertyTaxExtensionLimitationLaw,asamended.Thedirectannualleviedwithrespectto Series2016 Bonds, nolimitexistsontherateofsuchtaxthatmaybeextendedinalevyyeartopaySeries2016LimitedTaxbutdollaramount ofsuch amount equaltotheprincipalofandinterest to becomedueontheBondsduring each annuallevyperiod. WithrespecttotheSeries2016LimitedTax the punctualpaymentofprincipalandinterestonBonds.TheDistrictisauthorizedtolevycollect,haslevied,adirectannual taxinan thereof tothebeneficialownersofBondsasdescribedundercaption“THEBONDS–BondOwnerPayments.” thereafter, oneachNovember15andMay15.InterestpaymentstheBondswillbepayabletoDTCforremittanceDTC’sparticipants delivery January 1andJuly1.InterestpaymentsontheSeries2016EUnlimitedTaxBondswillcommenceMay15,2017,bepayablesemiannually Interest paymentsontheSeries2016LimitedTaxBondsand2016DUnlimitedwillbepayablesemiannuallythereafter, oneach and interest payments on the Series 2016B and Series 2016C Limited Tax Bonds and Series 2016D Unlimited Tax Bonds will commence on January 1, 2017. of Chicago,Illinois,asbondregistrarandpayingagent.InterestpaymentsontheSeries2016ALimitedTaxBondswillcommence July1,2017 herein. Purchaserswill not receive physical delivery of Bond certificates. Principalof and interest onthe Bonds willbe payableby Amalgamated Bank any integralmultiplethereofunderabook-entryonlysystemoperatedbyTheDepositoryTrustCompany,NewYork,York(“DTC”),asdescribed and collectivelywiththeSeries2016LimitedTaxBonds,“ (the “Series2016EUnlimitedTax B Unlimited TaxRefundingBonds,Series2016D(PersonalPropertyReplacementAlternateRevenueSource)(the“ Series 2016ALimitedTaxBondsandthe2016BBonds,“2016 $17,000,000* of itsGeneralObligationLimited Tax Refunding Bonds, Series 2016C(the “Series 2016C Limited Tax Limited Tax Dated: DateofIssuance alternative minimumtax.InterestontheBondsisnotexemptfromIllinoisincometaxes.See“TAXMATTERS”herein. profits andthereforemustbetakenintoaccountwhencomputingcorporatealternative minimumtaxableincomeforpurposesofthecorporate individual orcorporate “alternative minimum taxable income.”However, interest on theBondsisincludable in corporate earnings and for federalincometaxpurposes.InterestontheBondsisnotrequiredtobeincludedasanitemofpreferencepurposescomputing compliance withapplicablerequirementsoftheInternalRevenueCode1986,interestonBondswillnotbeincludableingrossincome NEW ISSUES–FULL onds”) and$15,000,000*ofitsGeneral Obligation UnlimitedTax Refunding Bonds, Series 2016E (Special RecreationActivity Alternate Revenue Source) laylock The Bondsareofferedwhen,asand ifissued,subjecttotheapprovinglegalopinionsofKattenMuchinRosenman LLP,Chicago,Illinois,andTristan Proceeds oftheBondswillbeusedto(i)financeaportioncost ofbuilding,maintainingandimprovingparkswithintheDistrict,aspart The Bondswillmatureonthedatesandinamountsbearinterest asshownontheinsidecoverpages.TheBondsaresubjecttooptionaland Each seriesoftheBondsisadirectandgeneralobligationDistrictfullfaithcredithasbeenirrevocablypledged to The ChicagoParkDistrict(the“”)isissuing$75,000,000*ofitsGeneralObligationLimitedTaxBonds,Series2016A 2016A In theopinionofKattenMuchinRosenmanLLPandTristan&Cervantes,Co-BondCounsel,underexistinglaw,ifthereiscontinuing CA B B B eal Van,LLC onds”); $8,000,000*ofitsGeneralObligationLimitedTaxRefundingBonds,Series2016B(the“2016 RERA CAPITALMARKETS, LLC

B OOK-ENTRY PRELIMINARY OFFICIAL STATEMENT DATED O (Personal PropertyReplacementTaxAlternateRevenueSource)

B (Special RecreationActivityAlternateRevenueSource) onds” and,togetherwiththeSeries2016DUnlimitedTaxBonds,“2016

B Unlimited TaxRefunding Unlimited TaxRefunding onds”); (iii)financecapitalizedinterestontheSeries2016ALimitedTaxBonds; and(iv)payforthecosts Limited TaxRefunding Limited TaxRefunding Limited TaxPark J.J. $15,000,000* GeneralObligation $17,000,000* GeneralObligation $75,000,000* GeneralObligation $4,000,000*GeneralObligation CHICAGO PARK DISTRICT $8,000,000* GeneralObligation B . Hilliard,W.L. Lyons,LLC B onds”). TheBondswillbeissuedinfullyregisteredformdenominationsof$5,000or

$119,000,000* B onds, Series2016A B B B B onds, Series2016C onds, Series2016 onds, Series2016D onds, Series2016E Due: January1andNovember15,asshownoninsidecoverpages PNC CAPITALMARKETS LLC cto

b B er B onds”), $4,000,000*ofitsGeneralObligation 20, 2016 North South CapitalLLC B onds” and, collectively with the (See “RATINGS”herein) Fitch: AA-/stableoutlook S&P: AA+/stableoutlook Kroll: AA/stableoutlook B LimitedTax B B onds”), onds,”

MATURITIES, AMOUNTS, INTEREST RATES, YIELDS, PRICES AND CUSIP NUMBERS† $119,000,000* CHICAGO PARK DISTRICT $75,000,000* General Obligation Limited Tax Park Bonds, Series 2016A Maturity Principal Interest (January 1) Amount Rate Yield Price CUSIP† $ % %

$__,___,000 ____% Term Bonds due January 1, 20__, Yield: ___%, Price: __, CUISP† ______

$8,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016B Maturity Principal Interest (January 1) Amount Rate Yield Price CUSIP† $ % %

$17,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016C

Maturity Principal Interest (January 1) Amount Rate Yield Price CUSIP† $ % %

*Preliminary, subject to change.

† Copyright 2016, American Bankers Association. CUSIP data herein are provided by S&P Global Ratings, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed are being provided solely for the convenience of the bondholders only at the time of issuance of the Bonds and the District does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

$4,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) Maturity Principal Interest (January 1) Amount Rate Yield Price CUSIP† $ % %

$15,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) Maturity (November Principal Interest 15) Amount Rate Yield Price CUSIP† $ % %

*Preliminary, subject to change.

† Copyright 2016, American Bankers Association. CUSIP data herein are provided by S&P Global Ratings, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed are being provided solely for the convenience of the bondholders only at the time of issuance of the Bonds and the District does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and if given or made, such other information or representations may not be relied upon as statements of the District. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. The information set forth herein has been obtained from sources believed to be reliable but is not guaranteed by the District or the Underwriters as to accuracy or completeness. Unless otherwise indicated, the District is the source of all tables and statistical, financial and other information pertaining to the District contained in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and opinions expressed herein are provided as of the date of this Official Statement and are subject to change without notice, and neither the delivery of this Official Statement nor any sale made under this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the District since the date of this Official Statement. Neither this Official Statement nor any disclosure that may have been made verbally or in writing is to be construed as a contract with the registered or beneficial owners of the Bonds. This Official Statement should be considered in its entirety and no one factor considered more or less important than any other by reason of its position in this Official Statement. Where statutes, reports or other documents are referred to herein, reference should be made to such statutes, reports or other documents in their entirety for more complete information regarding the rights and obligations of parties thereto, facts and opinions contained therein and the subject matter thereof. Any statements made in this Official Statement, including the Appendices, involving matters of opinion or estimates, 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 such estimates will be realized. This Official Statement contains certain forward-looking statements and information that are based on the beliefs of the District as well as assumptions made by and currently available to the District. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. References to web site addresses presented in this Official Statement are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement. All expressions of opinion, whether or not expressly so stated, are intended merely as such and not as representations of fact. Certain factors that may affect investment decisions concerning the Bonds are described throughout this Official Statement, which should be read in its entirety. Copies of statutes, ordinances, reports or other documents referred to herein are available, upon request, from the Treasurer of the District. The offices of the District are located at 541 North Fairbanks Court, Chicago, Illinois 60611, and the telephone number of the Treasurer of the District is (312) 742-5384. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE. THE PRICES AND OTHER TERMS RESPECTING THE OFFERING AND SALE OF THE BONDS MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS AFTER THE BONDS ARE RELEASED FOR SALE, AND THE BONDS MAY BE OFFERED AND SOLD AT PRICES OTHER THAN THE INITIAL OFFERING PRICES, INCLUDING SALES TO DEALERS WHO MAY SELL THE BONDS INTO INVESTMENT ACCOUNTS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE DISTRICT AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE, MUNICIPAL OR OTHER GOVERNMENTAL ENTITY, OTHER THAN THE DISTRICT, SHALL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

CHICAGO PARK DISTRICT

BOARD OF COMMISSIONERS JESSE H. RUIZ President

ERIKA R. ALLEN DONALD J. EDWARDS TIM KING MARTIN LAIRD KOLDYKE AVIS LAVELLE JUAN SALGADO

OFFICERS AND ADMINISTRATORS MICHAEL P. KELLY General Superintendent & CEO

CYNTHIA EVANGELISTI Treasurer

KANTRICE OGLETREE Secretary

TIMOTHY M. KING General Counsel

STEVE LUX Chief Financial Officer

KATTEN MUCHIN ROSENMAN LLP

TRISTAN & CERVANTES Co-Bond Counsel

HARDWICK LAW FIRM, LLC Issuer’s and Disclosure Counsel

TABLE OF CONTENTS OFFICIAL STATEMENT SUMMARY iii CONCERNING THE DISTRICT 24 Financial Highlights 25 INTRODUCTION 1 Debt Management 30 Series 2016 Limited Tax Bonds Financial Policies 31 As Limited Tax Bonds 2 Real Property Asset Management 31 Series 2016 Unlimited Tax Bonds as Unlimited Tax EMPLOYER RETIREMENT SYSTEM 31 Alternate Bonds 2 Constitutional and Statutory Framework 31 PLAN OF FINANCE 3 Article 1 Amendments 32 Purpose 3 Litigation 33 The Project 4 Pension Reform Act of 2010 36 Description of the Refunding 4 Fund Governance 36 CAPITAL IMPROVEMENT PLAN 5 Source of Information 37 SOURCES AND USES OF FUNDS 6 Revenues and Investments 37 Determination of Employer THE BONDS 7 Contributions 38 General Description 7 Actuarial Assumptions 44 Record Dates 7 Funded Status of the District Redemption of Bonds 7 Retirement Fund 44 Notice of Redemption 9 Projection of Funded Status 50 Bond Owner Payments 9 Postemployment Healthcare Plan 53 Payment Provisions in the Event of Discontinuation of the OTHER CHICAGO AREA Book-Entry System 9 GOVERNMENTAL BODIES 53 Transfer and Exchange of Bonds Overlapping Taxing Bodies 53 Persons Treated as Interrelationships of Overlapping Registered Owners 10 Taxing Bodies 54 Other Public Bodies 55 SECURITY FOR THE BONDS 10 Security for the Series 2016 RATINGS 55 Limited Tax Bonds 10 INVESTMENT CONSIDERATIONS 56 Deposits to Series 2016A, Series Recent Ratings Actions 56 2016B, Series 2016C and Unfunded Pensions 57 Series 2016D Deb Service Local Economy 57 Funds 13 Financial Condition of Security for the Series 2016 Overlapping Taxing Bodies Unlimited Tax Bonds 13 and the State 57 Deposits to Series 2016E and Series 2016 Pledged Taxes and Series 2016F Debt Service Overlapping Taxing Bodies 58 Funds 17 Cap on Property Taxes 58 Additional General Obligation Collection of Property Taxes 59 Debt 18 Adverse Change in Laws 59 CHICAGO PARK DISTRICT 19 Bankruptcy 59 The District 19 Uncertain Enforcement Governance of the District 19 Remedies 59 Commissioners 20 Forward-Looking Statements 60 Officers and Senior Administrators 23 Regions 23 Private Institutions 24 TAX MATTERS 60 CHICAGO PARKS FOUNDATION 24 DEFEASANCE AND PAYMENT OF BONDS 62 FINANCIAL INFORMATION i

FINANCIAL STATEMENTS 63

FINANCIAL ADVISORS 63

CERTAIN VERIFICATIONS 63 CERTAIN LEGAL MATTERS 63

LITIGATION 64 UNDERWRITING 65

CONTINUING DISCLOSURE 65 AUTHORIZATION AND MISCELLANEOUS 66

APPENDIX A – DESCRIPTION OF REAL PROPERTY TAX SYSTEM APPENDIX B – FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION APPENDIX C – AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2015 APPENDIX D – REPORT OF THE CONSULTING ACTUARY ON THE DISTRICT RETIREMENT FUND APPENDIX E – FORMS OF OPINIONS OF CO-BOND COUNSEL RELATED TO THE BONDS APPENDIX F – SCHEDULE OF REFUNDED BONDS APPENDIX G – GLOBAL BOOK-ENTRY FORM OF OWNERSHIP APPENDIX H – FORM OF CONTINUING DISCLOSURE UNDERTAKING

OFFICIAL STATEMENT SUMMARY

This Summary does not constitute a part of the Official Statement for the issuance and sale by the Chicago Park District of the Bonds and does not purport to be complete. This Summary is for informational purposes only and is qualified in its entirety by the detailed information and financial information contained in the Official Statement. Capitalized terms used in this Summary are defined in the Official Statement.

PROSPECTIVE PURCHASERS SHOULD CAREFULLY EXAMINE THE ENTIRE OFFICIAL STATEMENT, INCLUDING APPENDICES HERETO, BEFORE MAKING THEIR INVESTMENT DECISIONS.

THE ISSUER Chicago Park District (the “District”). THE BONDS $119,000,000* Chicago Park District General Obligation Bonds, consisting of $75,000,000* General Obligation Limited Tax Park Bonds, Series 2016A (the “Series 2016A Limited Tax Bonds”); $8,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016B (the “Series 2016B Limited Tax Bonds” $17,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016C (the “Series 2016C Limited Tax Bonds” and, collectively with the Series 2016A Limited Tax Bonds and the Series 2016B Limited Tax Bonds, the “Series 2016 Limited Tax Bonds”); $4,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) (the “Series 2016D Unlimited Tax Bonds”) and $15,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) (the “Series 2016E Unlimited Tax Bonds” and, together with the Series 2016D Unlimited Tax Bonds, the “Series 2016 Unlimited Tax Bonds” and collectively with the Series 2016 Limited Tax Bonds, the “Bonds”). The Bonds of each series will be dated the respective dates of their delivery and mature in the principal amounts and on the dates as set forth on the inside cover pages of this Official Statement. See “THE BONDS.” AUTHORITY FOR ISSUANCE The Bonds will be issued generally pursuant to the Chicago Park District Act, 70 ILCS 1505/0.01 et seq., as amended and the Local Government Debt Reform Act, 30 ILCS 350/1 et seq., as amended and other laws of the State of Illinois. The Series 2016B Limited Tax Bonds and Series 2016C Limited Tax Bonds will also be issued pursuant to the Park District Refunding Bond Act, 70 ILCS 1270/1 et seq., as amended. The Bonds are being issued pursuant to an ordinance adopted by the Board of Commissioners of the District authorizing and providing for their issuance, sale and delivery, as supplemented by a Bond Order. PAYMENT OF INTEREST Interest on the Series 2016 Limited Tax Bonds and the Series 2016D Unlimited Tax Bonds will accrue from the date of issuance and be payable on each January 1 and July 1. Interest payments on the Series 2016A Limited Tax Bonds will commence on July 1, 2017 and interest payments on the Series 2016B and Series 2016C Limited Tax Bonds and the 2016D Unlimited Tax Bonds will commence on January 1, 2017. Interest payments on the Series 2016E Unlimited Tax Bonds will accrue from the date of issuance and be payable on each November 15 and May 15, commencing May 15, 2017. The Bonds will bear interest at the rates per year as set forth on the inside cover pages of this Official Statement. Interest on the Bonds is computed on the basis of a 360-day year consisting of twelve 30-day months. See “THE BONDS – General Description.” ______* Preliminary, subject to change. iii

USE OF PROCEEDS The proceeds from the sale of the Bonds will be used to (i) finance a portion of the cost of building, maintaining and improving parks within the District, as part of the District’s Capital Improvement Plan (as defined in the Official Statement), including the reimbursement of costs already incurred by the District and the repayment of draws on existing bond anticipation notes, which may be outstanding in a maximum principal amount of $40,000,000, (ii) refund the Refunded Bonds (as defined in the Official Statement), (iii) fund certain capitalized interest on the Series 2016A Bonds, and (iv) pay the costs of issuance of the Bonds (including the underwriters’ discount). See “PLAN OF FINANCE” and “SOURCES AND USES OF FUNDS.” SECURITY FOR THE BONDS Each series of the Bonds is a direct and general obligation of the District and the full faith and credit of the District has been irrevocably pledged to the punctual payment of the principal of and interest on the Bonds. The District is authorized to levy and collect, and has levied, a separate direct annual tax on all of the taxable real property within the District, each such annual tax related to either the Series 2016 Limited or Unlimited Tax Bonds, in each year for which any of the Bonds are outstanding, in an amount equal to the principal of and interest to become due on the Bonds during each annual levy period. With respect to the Series 2016 Limited Tax Bonds, no limit exists on the rate of such tax that may be extended in a levy year to pay the Series 2016 Limited Tax Bonds, but the dollar amount of such tax is limited by the provisions of the Property Tax Extension Limitation Law, as amended. Regardless of any decrease or increase in the equalized assessed value of real property within the District, the rate of the District’s direct annual tax is and will at all times be sufficient so that the taxes levied with respect to the Series 2016 Limited Tax Bonds will be in an amount equal to the principal of and interest to become due on such Bonds during each annual levy period. See “SECURITY FOR THE BONDS – Security for the Series 2016 Limited Tax Bonds.” All moneys held in the applicable debt service funds, including the tax receipts described above, are immediately subject to the lien of the District’s pledge without any physical delivery or further act and the lien of such pledge is valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the District irrespective of whether such parties have notice thereof. The direct annual tax levied with respect to the Series 2016 Unlimited Tax Bonds is without limitation as to rate or amount. In addition to such tax levy, the District has provided that the Series 2016D Unlimited Tax Bonds will be payable from the Personal Property Tax Replacement Fund of the State of Illinois and the Series 2016E Unlimited Tax Bonds will be payable from amounts paid to the District from the Special Recreation Activity Tax as more fully described in the Official Statement. Such revenues (defined as “Pledged Revenues” in the Official Statement) have been pledged as security for the payment of the principal of and interest on the Series 2016 Unlimited Tax Bonds in addition to the direct annual tax levied with respect to the Series 2016 Unlimited Tax Bonds. See “SECURITY FOR THE BONDS – Security for the Series 2016 Unlimited Tax Bonds.” The tax receipts derived from the levied taxes as well as monies received from the Personal Property Tax Replacement Fund and from the Special Recreation Activity Tax, all described above, that are deposited into the debt service funds related to each series of the Bonds pursuant to the Bond Ordinance, together with any other iv

moneys deposited or to be deposited in such debt service funds, are pledged as security for the payment of principal of and interest on the related series of Bonds.

REDEMPTION The Series 2016A Limited Tax Bonds maturing on or after Optional Redemption January 1, 20__ are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January 1, 20__, at a redemption price equal to the principal amount of such Bonds being redeemed plus accrued interest to the date fixed for redemption. The Series 2016B Limited Tax Bonds, Series 2016C Limited Tax Bonds, and Series 2016D Unlimited Tax Bonds are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January 1, 20__, at a redemption price equal to the principal amount of such Bonds being redeemed plus accrued interest to the date fixed for redemption. The Series 2016E Unlimited Tax Bonds are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after November 15, 20__, at a redemption price equal to the principal amount of such Bonds being redeemed plus accrued interest to the date fixed for redemption. See “THE BONDS – Redemption of Bonds – Optional Redemption.” Mandatory Sinking Fund The Series 2016A Bonds maturing on January 1 of the years 20__ and Redemption 20__ are Term Bonds and are subject to mandatory sinking fund redemption, in integral multiples of $5,000 selected by lot, at a redemption price of par plus accrued interest to the redemption date, on January 1 of the years and in the principal amounts as shown on the redemption schedules under “THE BONDS – Redemption of Bonds – Mandatory Redemption.” BOND REGISTRAR AND Amalgamated Bank of Chicago, Chicago, Illinois. PAYING AGENT INVESTMENT CONSIDERATIONS There are certain factors associated with owning the Bonds that prospective investors should consider prior to purchasing the Bonds. For a discussion of these factors, See “INVESTMENT CONSIDERATIONS.” TAX MATTERS Subject to compliance by the District with applicable requirements of the Internal Revenue Code of 1986, in the respective opinions of Co- Bond Counsel, under present law, interest on the Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account when computing corporate alternative minimum taxable income for purposes of this corporate alternative minimum tax. Interest on the Bonds is not exempt from present State of Illinois income taxes. See “TAX MATTERS.” CO-BOND COUNSEL Katten Muchin Rosenman LLP, Chicago, Illinois and Tristan & Cervantes, Chicago, Illinois. RATINGS The Bonds are rated “AA+” (stable outlook) by S & P Global Ratings; “AA-” (stable outlook) by Fitch Ratings, Inc.; and “AA” (stable outlook) by Kroll Bond Rating Agency, Inc. based upon each rating agency’s assessment of the creditworthiness of the District. See “RATINGS.”

v [THIS PAGE INTENTIONALLY LEFT BLANK]

OFFICIAL STATEMENT

$119,000,000* Chicago Park District $75,000,000* General Obligation Limited Tax Park Bonds, Series 2016A $8,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016B $17,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016C $4,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016 D (Personal Property Replacement Tax Alternate Revenue Source) $15,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source)

INTRODUCTION

The purpose of this Official Statement, including the cover page, inside cover pages, and the appendices hereto, is to set forth certain information in connection with the offer and sale by the Chicago Park District (the “District”) of its $75,000,000* General Obligation Limited Tax Park Bonds, Series 2016A (the “Series 2016A Limited Tax Bonds”), $8,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016B (the “Series 2016B Limited Tax Bonds”), $17,000,000* General Obligation Limited Tax Refunding Bonds, Series 2016C (the “Series 2016C Limited Tax Bonds”, and, collectively with the Series 2016A Limited Tax Bonds and the Series 2016B Limited Tax Bonds, the “Series 2016 Limited Tax Bonds”), $4,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) (the “Series 2016D Unlimited Tax Bonds”) and $15,000,000* General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) (the “Series 2016E Unlimited Tax Bonds” together with the Series 2016D Unlimited Tax Bonds, the “Series 2016 Unlimited Tax Bonds” and, collectively with the Series 2016 Limited Tax Bonds, the “Bonds” ). The Series 2016B Limited Tax Bonds, the Series 2016C Limited Tax Bonds, the Series 2016D Unlimited Tax Bonds and the Series 2016E Unlimited Tax Bonds are sometimes referred to collectively as the “Refunding Bonds”. The Bonds are direct and general obligations of the District, whose full faith and credit has been pledged for the punctual payment of the principal thereof and interest thereon, as more fully described below.

The Bonds will be issued generally pursuant to the Chicago Park District Act, 70 ILCS 1505/0.01 et seq., as amended (the “Act”), the Local Government Debt Reform Act, 30 ILCS 350/1 et seq., as amended (the “Debt Reform Act”) and other laws of the State of Illinois (the “State”).

The Series 2016B Limited Tax Bonds and Series 2016C Limited Tax Bonds will also be issued pursuant to the Park District Refunding Bond Act, 70 ILCS 1270/1 et seq., as amended (the “Refunding Act”). An ordinance authorizing and providing for the issuance, sale and delivery of the Bonds, as supplemented by a Bond Order (collectively, the “Bond Ordinance”) was adopted on October 19, 2016, by the Board of Commissioners of the District (the “Board”). ______* Preliminary, subject to change.

No recourse shall be had for the payment of the principal of or premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in or authorized or approved by, the Bond Ordinance or any agreement authorized by the Bond Ordinance, against any past, present or future president, commissioner or other officer, director, member, employee, attorney or agent of the District, or any officer, commissioner, director, member, trustee, employee or agent of any successor public corporation or body politic, as such, either directly or through the District or any successor public corporation or body politic, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, commissioners, directors, trustees, members, employees or agents, as such, is hereby expressly waived and released as a condition of and consideration for the issuance of any of the Bonds.

Series 2016 Limited Tax Bonds as Limited Tax Bonds

The Series 2016 Limited Tax Bonds are being issued subject to the provisions of the Property Tax Extension Limitation Law, 30 ILCS 200/18-185, et seq. (the “Limitation Law”) and constitute direct and general obligations of the District payable, as to both principal and interest, from (i) ad valorem taxes levied on all taxable property within the boundaries of the District, without limitation as to rate, but limited as to amount by the provisions of the Limitation Law, and (ii) all monies on deposit in the separate debt service funds, each related to a series of Series 2016 Limited Tax Bonds, established pursuant to the Bond Ordinance. The monies deposited into the separate debt service funds, including the tax receipts derived from the taxes levied pursuant to the Bond Ordinance are pledged as security for the payment of principal and interest on the related series of Series 2016 Limited Tax Bonds pursuant to the Debt Reform Act. See “SECURITY FOR THE BONDS – Security for the Series 2016 Limited Tax Bonds.”

Series 2016 Unlimited Tax Bonds as Unlimited Tax Alternate Bonds

The Series 2016 Unlimited Tax Bonds are direct and general obligations of the District payable, as to both principal and interest, from (i) ad valorem taxes levied without limitation as to rate or amount, upon all taxable property in the District and (ii) all monies on deposit in the related debt service fund established pursuant to the Bond Ordinance. The monies deposited into the related debt service fund, including the tax receipts derived from the taxes levied pursuant to the Bond Ordinance and monies constituting a “Revenue Source” as described in the following paragraph are pledged as security for the payment of principal and interest on the Series 2016 Unlimited Tax Bonds pursuant to the Debt Reform Act. See “SECURITY FOR THE BONDS – Security for the Series 2016 Unlimited Tax Bonds.”

The Series 2016 Unlimited Tax Bonds are also “alternate bonds” issued in accordance with the provisions of Section 15 of the Debt Reform Act. The Series 2016D Unlimited Tax Bonds are direct and general obligations of the District and the payment of principal and interest thereon are payable from Personal Property Replacement Tax (as defined herein) receipts, which constitute a Revenue Source within the meaning of Section 15 of the Debt Reform Act. The Series 2016E Unlimited Tax Bonds are also direct and general obligations of the District and the payment of principal and interest thereon are payable from Special Recreation Activity Taxes (as defined herein) receipts, which constitute a Revenue Source within the meaning of Section 15 of the Debt Reform Act. See “SECURITY FOR THE BONDS – Security for the Series 2016 Unlimited Tax Bonds.”

PLAN OF FINANCE Purpose The proceeds from the sale of the Series 2016A Limited Tax Bonds will be used to (i) finance a portion of the cost of building, maintaining and improving parks within the District, as part of the District’s Capital Improvement Plan defined under “CAPITAL IMPROVEMENT PLAN” (the “Project”), including the reimbursement of costs already incurred by the District and the repayment of draws on existing bond anticipation notes (“BAN”), which may be outstanding in a maximum principal amount of $40,000,000 (the “Series 2016 BAN Notes”) issued to fund a portion of the District’s Capital Improvement Plan and financed through PNC Bank, National Association, an entity affiliated with PNC Capital Markets LLC, one of the underwriters for the Bonds; (ii) finance capitalized interest on the Series 2016A Limited Tax Bonds, and (iii) pay costs of issuance of the Series 2016A Limited Tax Bonds. Series 2016A Limited Tax Bond proceeds in the amount of $______will be used to pay a portion of the interest on the Series 2016A Limited Tax Bonds. See “SOURCES AND USES OF FUNDS” and “SECURITY FOR THE BONDS – Deposits to Series 2016A, Series 2016B, and Series 2016C Debt Service Funds.”

Proceeds from the sale of the Series 2016B Limited Tax Bonds will be used to current refund all or a portion of the principal of and interest on the District’s outstanding General Obligation Limited Tax Park Bonds, Series 2006A (the “Series 2006A Bonds”). Those Series 2006A Bonds being refunded with proceeds from the sale of the Series 2016B Limited Tax Bonds are referred to in this Official Statement as the “Series 2006A Refunded Bonds.” Proceeds from the sale of the Series 2016B Limited Tax Bonds will also be used to pay costs of both the issuance of the Series 2016B Limited Tax Bonds and the refunding of the Series 2006A Refunded Bonds. See “– Description of the Refunding” below, “SOURCES AND USES OF FUNDS” and APPENDIX F– “SCHEDULE OF REFUNDED BONDS.”

Proceeds from the sale of the Series 2016C Limited Tax Bonds may be used to advance refund all or a portion of the principal of and interest on the District’s outstanding General Obligation Limited Tax Park Bonds, Series 2008F (the “Series 2008F Bonds”) and outstanding General Obligation Limited Tax Park Bonds, Series 2008G (the “Series 2008G Bonds”). Those Series 2008F Bonds being refunded with proceeds from the sale of the Series 2016C Limited Tax Bonds are referred to in this Official Statement as the “Series 2008F Refunded Bonds Refunded From Series 2016C.” Those Series 2008G Bonds being refunded with proceeds from the sale of the Series 2016C Limited Tax Bonds are referred to in this Official Statement as the “Series 2008G Refunded Bonds Refunded From Series 2016C.” Proceeds from the sale of the Series 2016C Limited Tax Bonds will also be used to pay costs of both the issuance of the Series 2016C Limited Tax Bonds and the refunding of the Series 2008F Refunded Bonds Refunded From Series 2016C and the Series 2008G Refunded Bonds Refunded From Series 2016C. See “– Description of the Refunding” below, “SOURCES AND USES OF FUNDS” and APPENDIX F – “SCHEDULE OF REFUNDED BONDS.” The Series 2006A Refunded Bonds, Series 2008F Refunded Bonds Refunded From Series 2016C and Series 2008G Refunded Bonds Refunded From Series 2016C are referred to in this Official Statement as the “2006A/2008F/2008G Refunded Bonds.”

Proceeds from the sale of the Series 2016D Unlimited Tax Bonds will be used to advance refund a portion of the principal of and interest on the outstanding General Obligation Unlimited Tax Refunding Bonds, Series 2008A (Personal Property Replacement Tax Alternate Revenue Source) (the “Series 2008A Bonds”). Those Series 2008A Bonds being refunded with proceeds from the sale of the Series 2016D Unlimited Tax Bonds are referred to in this Official Statement as the “Series 2008A Refunded Bonds Refunded From Series 2016D.” Proceeds from the sale of the Series 2016D Unlimited Tax Bonds will also be used to pay costs of both the issuance of the Series 2016D Unlimited Tax Bonds and the refunding of the Series 2008A Refunded Bonds Refunded From Series 2016D. See “– Description of the Refunding” below, “SOURCES AND USES OF FUNDS” and APPENDIX F – “SCHEDULE OF REFUNDED BONDS.”

Proceeds from the sale of the Series 2016E Unlimited Tax Bonds will be used to advance refund a portion of the principal of and interest on the outstanding General Obligation Unlimited Tax Park Bonds, Series 2008E (Special Recreation Facility Alternate Revenue Source) (the “Series 2008E Bonds”). Those Series 2008E Bonds being refunded with proceeds from the sale of the Series 2016E Unlimited Tax Bonds are referred to in this Official Statement as the “Series 2008E Refunded Bonds Refunded From Series 2016E” and, together with the Series 2008A Refunded Bonds Refunded From Series 2016D, the “Series 2008A/2008E Refunded Bonds.”) Proceeds from the sale of the Series 2016E Unlimited Tax Bonds will also be used to pay costs of both the issuance of the Series 2016E Unlimited Tax Bonds and the refunding of the Series 2008E Refunded Bonds Refunded From Series 2016E. See “– Description of the Refunding” below, “SOURCES AND USES OF FUNDS” and APPENDIX F – “SCHEDULE OF REFUNDED BONDS.” The Series 2008A/2008E Refunded Bonds and the 2006A/2008F/2008G Refunded Bonds are referred to in this Official Statement as the “Refunded Bonds.”

As of the date of this Official Statement, the District has collected $______from its 2015 property tax levy (the “2015 Levy”), levied for the purposes of paying debt service on the Series 2006A /2008F/2008G Refunded Bonds, $______from PPRT Revenues (as defined herein) allocated for the purpose of paying debt service on the 2008A Refunded Bonds Refunded From Series 2016D (the “2015 PPRT Allocation”), and $______from Special Recreation Activity (“SRA”) Tax collections (“Special Recreation Activity Taxes” or “SRA Taxes”) for the purpose of paying debt service on the Series 2008E Refunded Bonds; the SRA Taxes together with the 2015 Levy and the 2015 PPRT Allocation are referred to herein as the “District Funds.” A portion of the 2015 Levy will be deposited under the Escrow Agreement (as defined below) and applied to the defeasance and refunding of the Series 2006A/2008F/2008G Refunded Bonds, and a portion will be applied to the payment of the January 1, 2017 interest payment on the Series 2016B and 2016C Bonds. A portion of the 2015 PPRT Allocation will be deposited under the Escrow Agreement and applied to the defeasance and refunding of the 2008A Refunded Bonds Refunded From Series 2016D. A portion of the 2015 SRA Taxes will be deposited under the Escrow Agreement and applied to the defeasance and refunding of the Series 2008E Refunded Bonds. See “SOURCES AND USES OF FUNDS” and “SECURITY FOR THE BONDS – Deposits to Series 2016A, Series 2016B, and Series 2016C Debt Service Funds” and “–Deposits to Series 2016D and Series 2016E Debt Service Funds.” The Project The net proceeds from the sale of the Series 2016A Limited Tax Bonds will be used to pay costs of the Project. The Project generally consists of financing a portion of the District’s Capital Improvement Plan (as defined herein). Pursuant to the Capital Improvement Plan, projects may include the acquisition, development and rehabilitation of facilities and the purchase of vehicles and equipment. Within these categories of projects, both individual projects and Park District-wide projects may be financed. See “CAPITAL IMPROVEMENT PLAN” and “SOURCES AND USES OF FUNDS.” Description of the Refunding The District may currently refund all or a portion of the Series 2006A Limited Tax Bonds and advance refund all or a portion of the 2008A Bonds, 2008E Bonds, Series 2008F Bonds and Series 2008G Bonds. Series 2006A Bonds being redeemed will be redeemed on December ___, 2016. Series 2008A Bonds and Series 2008E Bonds being redeemed will be redeemed respectively on January 1, 2018, and November 15, 2018. Series 2008F Bonds and Series 2008G Bonds being redeemed will be redeemed on January 1, 2019. All Refunded Bonds being redeemed will be redeemed at the redemption price of par plus accrued interest to the redemption date. Proceeds held under the Escrow Agreement (defined below) will be used, together with such moneys in the debt service fund for each series of the Refunded Bonds, to provide for the refunding and for the call, redemption and payment of all of each series of the Refunded Bonds. See APPENDIX F – “SCHEDULE OF REFUNDED BONDS.”

To provide for the redemption, payment and retirement of the Refunded Bonds, certain proceeds of the Series 2016B Limited Tax Bonds, the Series 2016C Limited Tax Bonds, the Series 2016D Unlimited Tax Bonds, and the Series 2016E Unlimited Tax Bonds (collectively, the “Refunding Bonds”), together with certain funds of the District, will be held as cash or used to purchase securities constituting direct obligations of the United States of America (collectively, the “Government Obligations”). The principal of and interest on the Government Obligations, together with available cash deposits, will be sufficient (i) to pay when due the interest on the Refunded Bonds to their respective redemption dates and (ii) to redeem the Refunded Bonds on their respective redemption dates at the redemption price of par.

Any Government Obligations purchased with the proceeds of the Refunding Bonds, together with available cash deposits, will be held in an escrow account pursuant to the 2016 Escrow Deposit Agreement (the “Escrow Agreement”) between the District and Amalgamated Bank of Chicago, Chicago, Illinois (the “Escrow Agent”). Neither the cash on deposit, the maturing principal of the Government Obligations nor the interest to be earned thereon will serve as security or be available for the payment of the principal of or interest on the Bonds.

The mathematical computation of (i) the adequacy of maturing principal of and interest earnings on the Government Obligations, together with the initial cash deposits made under the Escrow Agreement to provide for payments on the Refunded Bonds as described above and (ii) the yield on the Bonds and the Government Obligations will be verified at the time of delivery of the Bonds by Robert Thomas, CPA LLC, independent certified public accountants. See “CERTAIN VERIFICATIONS.”

CAPITAL IMPROVEMENT PLAN

As a part of the District’s annual budget process, the Board approves a capital improvement plan (“Capital Improvement Plan”) that covers five (5) fiscal years. Proceeds of the Series 2016A Limited Tax Bonds will be used to pay for a portion of various projects of the Capital Improvement Plans for fiscal year 2014 and 2015 and a portion of the Capital Improvement Plan for fiscal year 2016, including the reimbursement of costs already incurred by the District and the repayment of draws on the Series 2016 Notes issued to fund the District’s Capital Improvement Program. The various projects, include, but are not limited to, acquisition and development, facility rehabilitation, site improvements, special facilities and the purchase of vehicles and equipment. The 2016-2020 Capital Improvement Plan anticipates the District issuing approximately $162.5 million in bonds, augmented by outside funding sources. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – CHICAGO PARK DISTRICT PROCEDURES – 2014 Capital Budget Resources and Spending Summary;” “– 2015 Capital Budget Resources and Spending Summary;” and “– 2016 Capital Budget Resources and Spending Summary.”

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SOURCES AND USES OF FUNDS

The proceeds from the sale of the Bonds are expected to be applied as follows:

Series 2016A Series 2016B Series 2016C Series 2016D Series 2016E Limited Limited Limited Unlimited Unlimited Tax Bonds Tax Bonds Tax Bonds Tax Bonds Tax Bonds TOTAL SOURCES OF FUNDS

Par Amount of Bonds ...... $ Original Issue Premium ...... Available District Funds

TOTAL SOURCES ...... $ $ $ $ $

USES OF FUNDS

Deposit to Construction Fund/ Retirement of Series 2016 Notes ...... $ – – – $ Capitalized Interest Deposit ...... – $ – District Funds applied for 1/1/17 Interest Payment on Series 2016B, C, and D Bonds 2015 Levy Deposit under Escrow Agreement Costs of Issuance 1 ...... Underwriters’ Discount ......

TOTAL USES ...... $ $ $ $ $

1 Includes rating agency, legal and accounting fees, and other miscellaneous costs of issuance incurred in connection with the issuance of the Bonds.

THE BONDS

General Description

The Bonds will be issued in book-entry only form in denominations of $5,000 or any integral multiple thereof. Purchasers will not receive physical delivery of Bond certificates. Principal and interest on the Bonds will be payable by Amalgamated Bank of Chicago, Chicago, Illinois, as bond registrar and paying agent (the “Bond Registrar”), to The Depository Trust Company, New York, New York (“DTC”), as securities depository. See APPENDIX G hereto for additional information regarding DTC and its book- entry only system.

The Bonds are dated their date of issuance and will mature as shown on the inside cover pages of this Official Statement and will bear interest from their dated date until maturity or earlier redemption at the rates per annum set forth on the inside cover pages of this Official Statement. Interest on the Series 2016 Limited Tax Bonds and the Series 2016D Unlimited Tax Bonds is payable semiannually on January 1 and July 1 of each year, with the first interest payment date of the Series 2016A Bonds being July 1, 2017, and the first interest payment date of the Series 2016B Limited Tax Bonds, the Series 2016C Limited Tax Bonds and the Series 2016D Unlimited Tax Bonds being January 1, 2017. Interest on the Series 2016E Unlimited Tax Bonds is payable semiannually on May 15 and November 15, of each year, with the first interest payment date being May 15, 2017.

Record Dates

The record date for the payment of interest on the Series 2016 Limited Tax Bonds and the Series 2016D Unlimited Tax Bonds is the 15th day of the calendar month next preceding the applicable interest payment date. The record date for the payment of interest on the Series 2016E Unlimited Tax Bonds is the 1st day of the calendar month of the applicable interest payment date.

Redemption of Bonds

Optional Redemption. The Series 2016A Limited Tax Bonds maturing on or after January 1, 20__, are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January 1, 20___, and if in part, in any order of maturity as shall be selected by the District, and if less than an entire maturity, in integral multiples of $5,000, selected by lot, at the redemption price of the principal amount of Series 2016A Limited Tax Bonds being redeemed, plus accrued interest to the date fixed for redemption.

The Series 2016B Limited Tax Bonds maturing on or after January 1, 20__, are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January 1, 20__, and if in part, in any order of maturity as shall be selected by the District, and if less than an entire maturity, in integral multiples of $5,000, selected by lot, at the redemption price of the principal amount of Series 2016B Limited Tax Bonds being redeemed, plus accrued interest to the date fixed for redemption.

The Series 2016C Limited Tax Bonds maturing on or after January 1, 20__, are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January 1, 20__, and if in part, in any order of maturity as shall be selected by the District, and if less than an entire maturity, in integral multiples of $5,000, selected by lot, at the redemption price of the principal amount of Series 2016C Limited Tax Bonds being redeemed, plus accrued interest to the date fixed for redemption.

The Series 2016D Unlimited Tax Bonds maturing on or after January 1, 20__, are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after January

1, 20__, and if in part, in any order of maturity as shall be selected by the District, and if less than an entire maturity, in integral multiples of $5,000, selected by lot, at the redemption price of the principal amount of Series 2016D Unlimited Tax Bonds being redeemed, plus accrued interest to the date fixed for redemption.

The Series 2016E Unlimited Tax Bonds maturing on or after November 15, 20__, are subject to redemption prior to maturity at the option of the District, in whole or in part, on any date on or after November 15, 20__, and if in part, in any order of maturity as shall be selected by the District, and if less than an entire maturity, in integral multiples of $5,000, selected by lot, at the redemption price of the principal amount of Series 2016E Unlimited Tax Bonds being redeemed, plus accrued interest to the date fixed for redemption.

Mandatory Redemption. The Series 2016A Limited Tax Bonds maturing on January 1, 20__ are term bonds (the “Series 2016A Term Bonds”) and are subject to mandatory sinking fund redemption, in integral multiples of $5,000 selected by lot, at a redemption price of par plus accrued interest to the redemption date, on January 1 of the years and in the principal amounts as shown on the following redemption schedule:

Series 2016A Term Bonds Due January 1, 20__ Bond Sinking Fund Redemption Date (January 1) Amount 20__ $ 20__ 20__ 20__ 20__† ______† Final Maturity

Whenever Series 2016A Term Bonds subject to mandatory sinking fund redemption are redeemed at the option of the District, the principal amount thereof so redeemed shall be credited against the unsatisfied balance of future sinking fund installments or final maturity amount established with respect to such Series 2016A Term Bonds, in such amounts and against such installments or final maturity amount as shall be determined by the District in the proceedings authorizing such optional redemption or, in the absence of such determination, shall be credited pro-rata against the unsatisfied balance of the applicable sinking fund installments and final maturity amount.

On or prior to the 60th day preceding any sinking fund installment date, the District may purchase Series 2016A Term Bonds, which are subject to mandatory redemption on such sinking fund installment date, at such prices (not exceeding par plus accrued interest) as the District shall determine. Any Series 2016A Term Bonds so purchased shall be cancelled and the principal amount thereof so purchased shall be credited against the unsatisfied balance of the next ensuing sinking fund installment of the Series 2016A Term Bonds of the same maturity as the Series 2016A Term Bonds so purchased.

Partial Redemption of Bonds. In the event of the redemption of less than all the Bonds of like series, maturity and interest rate, the aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof and the Bond Registrar will assign to each Bond of such series, maturity and interest rate a distinctive number for each $5,000 principal amount of such Bond and will select by lot from the numbers so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned

numbers so selected; provided that only so much of the principal amount of each Bond shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.

Notice of Redemption

Notice of the redemption of Bonds shall be mailed not less than 30 days or more than 60 days prior to the date fixed for such redemption to the registered owners of Bonds to be redeemed, at their addresses appearing on said registration books. The Bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the Bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such Bonds or portions thereof shall cease to accrue and become payable. If there shall be drawn for redemption less than all of a Bond, the District shall execute and the Bond Registrar shall authenticate and deliver, upon surrender of such Bond, without charge to the owner thereof, in exchange for the unredeemed balance of the Bond so surrendered, Bonds of like maturity and of the denomination of $5,000 or any integral multiple thereof.

The Bond Registrar shall not be required to transfer or exchange any Bond after notice of the redemption of all or a portion thereof has been mailed. The Bond Registrar shall not be required to transfer or exchange any Bond during a period of 15 days next preceding the mailing of a notice of redemption that could designate for redemption all or a portion of such Bond. Notwithstanding the foregoing, when Bonds are held in the Global Book-Entry form of ownership, transfers of beneficial ownership for those Bonds will be made pursuant to rules and procedures established by DTC. See APPENDIX G – “GLOBAL BOOK-ENTRY FORM OF OWNERSHIP.”

Bond Owner Payments

Principal and interest payments on the Bonds will be made to DTC, as registered owner of the Bonds. Upon receipt of moneys, DTC’s current practice is to credit immediately the accounts of the Direct Participants in accordance with their respective holdings shown on the records of DTC. Payments by Direct Participants and Indirect Participants (each as defined in APPENDIX G – “GLOBAL BOOK-ENTRY FORM OF OWNERSHIP”) to Beneficial Owners will be governed by standing instructions and customary practices, as is now the case with municipal securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Direct Participant or Indirect Participant and not of DTC, the Bond Registrar or the District, subject to any statutory and regulatory requirements as may be in effect from time to time. For more information concerning DTC and its practices, see APPENDIX G – “GLOBAL BOOK-ENTRY FORM OF OWNERSHIP.”

Payment Provisions in the Event of Discontinuation of the Book-Entry System

If the system of book-entry only transfers for the Bonds is discontinued, then the District will issue and the Bond Registrar will authenticate, register and deliver to the beneficial owners of the Bonds, bond certificates in replacement of such beneficial owners’ beneficial interests in the Bonds, all as shown in the records maintained by the discontinued securities depository. In such circumstances, the principal of the Bonds will be payable in lawful money of the United States of America upon presentation and surrender thereof at the principal corporate trust office of the Bond Registrar. Interest on the Bonds will be payable on each interest payment date to the registered owners of record thereof appearing on the registration books maintained by the District for such purpose at the principal corporate trust office of the Bond Registrar, as of the close of business on the 15th day of the calendar month next preceding the applicable interest payment

date. Interest on the Bonds shall be paid by check or draft mailed to such registered owners at their addresses appearing on the registration books or by wire transfer pursuant to an agreement by and between the District and the registered owner.

Transfer and Exchange of Bonds; Persons Treated as Registered Owners

Each Bond shall be transferable only upon the registration books maintained by the District for that purpose at the principal corporate trust office of the Bond Registrar, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for transfer of any such Bond, the District shall execute and the Bond Registrar shall authenticate and deliver a new Bond or Bonds registered in the name of the transferee, of the same aggregate principal amount, series, maturity and interest rate as the surrendered Bond. Bonds, upon surrender thereof at the principal corporate trust office of the Bond Registrar, with a written instrument satisfactory to the Bond Registrar, duly executed by the registered owner or his attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of Bonds of the same series, maturity and interest rate and of the denominations of $5,000 or any integral multiple thereof.

For every such exchange or registration of transfer of Bonds, the District or the Bond Registrar may make a charge sufficient for the reimbursement of any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange.

The District and the Bond Registrar may deem and treat the person in whose name any Bond shall be registered upon the registration books as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, or interest thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the District nor the Bond Registrar shall be affected by any notice to the contrary.

SECURITY FOR THE BONDS

Security for the Series 2016 Limited Tax Bonds

The Series 2016A Limited Tax Bonds, the Series 2016B Limited Tax Bonds and the Series 2016C Limited Tax Bonds are being issued as “limited bonds” as defined in the Debt Reform Act and are referred to as the “Series 2016 Limited Tax Bonds” in this Official Statement. Pursuant to the Bond Ordinance the full faith and credit of the District has been irrevocably pledged to the punctual payment of the principal of and interest on the Series 2016 Limited Tax Bonds. The Series 2016 Limited Tax Bonds are direct and general obligations of the District and the District is obligated to levy ad valorem taxes upon all the taxable property in the District for the payment of the Series 2016 Limited Tax Bonds and the interest thereon, without limitation as to rate, but limited as to amount by provisions of the Limitation Law, as described more fully below (as so levied, the “Series 2016ABC Pledged Direct Taxes”).

Pursuant to the Bond Ordinance, for each series of Series 2016 Limited Tax Bonds the District has levied a direct annual tax on all of the taxable real property within the District, in each year for which any of such Series 2016 Limited Tax Bonds are outstanding, in amounts sufficient for the punctual payment of the principal of and interest on the related series of Series 2016 Limited Tax Bonds as the same shall become

due and payable. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – TAXATION OF REAL PROPERTY – STATISTICAL INFORMATION – District Tax Levies and Collections.” Regardless of any decrease or increase in the equalized assessed value (“EAV”) of real property within the District, the rate of the District’s direct annual tax is and will at all times be sufficient so that the levy will be in an amount equal to the principal of and interest to become due on the Series 2016 Limited Tax Bonds during each annual levy period.

The tax receipts derived from the taxes so levied that are deposited into the debt service funds related to each series of Series 2016 Limited Tax Bonds pursuant to the Bond Ordinance, together with any other moneys deposited or to be deposited in such debt service funds, are pledged as security for the payment of principal of and interest on the related series of Series 2016 Limited Tax Bonds. Such pledge is made pursuant to the Debt Reform Act and is valid and binding from the date of issuance of the Series 2016 Limited Tax Bonds. All moneys held in the applicable debt service fund, including the tax receipts described above, are immediately subject to the lien of the District’s pledge without any physical delivery or further act and the lien of such pledge is valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the District irrespective of whether such parties have notice thereof.

After the issuance of the Series 2016 Limited Tax Bonds, the Bond Ordinance prohibits the District from abating the taxes levied pursuant to the Bond Ordinance or taking any action to restrict the extension and collection of such taxes except that the District may abate any such taxes levied for any tax levy year to the extent that, at the time of such abatement, moneys then held in the related debt service fund established by the Bond Ordinance, or otherwise held in trust for the payment of debt service on the Series 2016 Limited Tax Bonds, together with the amount to be extended for collection taking into account the proposed abatement, will be sufficient to provide for the punctual payment of the principal of and interest on the Series 2016 Limited Tax Bonds.

The amount of the ad valorem taxes that may be extended specifically to pay the Series 2016 Limited Tax Bonds is limited as to amount by the Limitation Law. The Series 2016 Limited Tax Bonds are payable from the “debt service extension base” of the District (the “Base”), as provided for in the Debt Reform Act. The Base is defined in the Limitation Law as an amount equal to that portion of the District’s extension for the 1994 levy year for payment of principal of and interest on bonds issued by the District without referendum, but not including (i) any alternate bonds issued under the Debt Reform Act; (ii) certain aquarium and museum bonds; and (iii) refunding bonds issued to refund bonds initially issued pursuant to referendum. The amount of the Base for levy years 2015 and 2016 has been determined to be $47,128,125 and $47,458,022, respectively, each of which is calculated from an original Base of $42,142,942 as increased annually by CPI as described in the following paragraph. The amount of the Base in any year can only be increased in future years through the formula stated below or by referendum. Pursuant to the Bond Ordinance, the District has covenanted that it will not issue any bonds, notes or other obligations if the issuance thereof would cause the anticipated tax extension for any tax levy year for limited bonds of the District to exceed the Base of the District.

The Limitation Law limits the annual growth in the Base to the lesser of 5% or the percentage increase in the Consumer Price Index for All Urban Consumers (“CPI”) during the calendar year preceding the relevant levy year.

As of the date hereof and excluding the Series 2016 Limited Tax Bonds, there are fifteen (15) series of limited bonds of the District that are payable from the Base. Payments on the Series 2016 Limited Tax Bonds from the Base will be made on a parity with the payments on the District’s outstanding limited tax bonds as noted in the following chart. The District anticipates issuing additional non-referendum limited

tax park bonds in the future which may utilize all of, or a substantial portion of, the District’s debt service extension base.

The following chart shows the Base of the District, the debt service payable on the outstanding non-referendum bonds of the District and the Series 2016 Limited Tax Bonds, and the available Base after the issuance of the Series 2016 Limited Tax Bonds. See also “THE DISTRICT’S OUTSTANDING GENERAL OBLIGATION BONDS AND OTHER LONG TERM DEBT OBLIGATIONS” in APPENDIX B.

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DEBT SERVICE EXTENSION BASE AVAILABILITY AFTER ISSUANCE OF THE SERIES 2016 LIMITED TAX BONDS TOTAL DEBT PLUS: LESS: DEBT SERVICE ON DEBT SERVICE DEBT SERVICE SERVICE ON THE NON- DEBT UNUSED DEBT ON OUTSTANDING ON THE SERIES REFUNDED REFERENDUM SERVICE SERVICE LEVY NON-REFERENDUM 2016 LIMITED BONDS THAT ARE LIMITED TAX EXTENSION EXTENSION YEAR LIMITED TAX BONDS TAX BONDS (1) LIMITED BONDS BONDS(1) BASE(2) BASE 2015 $45,381,773 $51,767,373 $47,128,125 $1,746,353 2016 45,382,798 49,579,398 47,458,022 2,075,225 2017 42,759,435 46,955,835 47,458,022 4,698,587 2018 38,862,185 38,862,185 47,458,022 8,595,837 2019 38,752,735 38,752,735 47,458,022 8,705,287 2020 38,784,185 38,784,185 47,458,022 8,673,837 2021 38,783,235 38,783,235 47,458,022 8,674,787 2022 38,133,635 38,133,635 47,458,022 9,324,387 2023 37,775,700 37,775,700 47,458,022 9,682,322 2024 37,833,970 37,833,970 47,458,022 9,624,052 2025 37,159,140 37,159,140 47,458,022 10,298,882 2026 35,995,390 35,995,390 47,458,022 11,462,632 2027 34,391,390 34,391,390 47,458,022 13,066,632 2028 32,854,140 32,854,140 47,458,022 14,603,882 2029 30,477,880 30,477,880 47,458,022 16,980,142 2030 28,764,500 28,764,500 47,458,022 18,693,522 2031 26,609,638 26,609,638 47,458,022 20,848,385 2032 24,820,988 24,820,988 47,458,022 22,637,035 2033 23,091,738 23,091,738 47,458,022 24,366,285 2034 21,430,738 21,430,738 47,458,022 26,027,285 2035 19,828,738 19,828,738 47,458,022 27,629,285 2036 18,187,738 18,187,738 47,458,022 29,270,285 2037 16,813,500 16,813,500 47,458,022 30,644,522 2038 15,498,000 15,498,000 47,458,022 31,960,022 Total $ ______(1) As of the date of closing, the District has collected $______from its 2015 Levy for purposes of paying debt service on the Refunded Bonds. These collections will be deposited into the Escrow Account and applied to the defeasance of the Refunded Bonds. See also “PLAN OF FINANCE” and “SOURCES AND USES OF FUNDS.’ (2) The Base of the District for the Series 2016 Limited Tax Bonds includes the most recent allowable increase (0.7% January 2016), which affects the 2016 levy applicable to non-referendum debt service through bond year ending January 1, 2018.

Deposits to Series 2016A, Series 2016B, and Series 2016C Debt Service Funds

On the date of issuance of the Series 2016A Limited Tax Bonds, the District will deposit into the applicable debt service fund moneys derived from the proceeds of the Series 2016A Limited Tax Bonds sufficient to provide for the punctual payment of interest on the Series 2016A Limited Tax Bonds due in 2017 and in 2018.

Security for the Series 2016 Unlimited Tax Bonds

The Series 2016 Unlimited Tax Bonds are being issued as “alternate bonds” pursuant to the Debt Reform Act. Pursuant to the Bond Ordinance, the full faith and credit of the District has been irrevocably pledged to the punctual payment of the principal of and interest on the Series 2016 Unlimited Tax Bonds. The Series 2016 Unlimited Tax Bonds are direct and general obligations of the District, and the District is

obligated to levy ad valorem taxes upon all the taxable property in the District for the payment of the Series 2016 Unlimited Tax Bonds and the interest thereon on all taxable property within the District, without limitation as to rate or amount (as so levied, the “Series 2016D Pledged Direct Taxes and 2016E Pledged Direct Taxes” and, collectively with the Series 2016ABC Pledged Direct Taxes, the “Series 2016 Pledged Taxes”).

Pursuant to the Bond Ordinance and in accordance with the Debt Reform Act in addition to the Series 2016D Pledged Direct Taxes, the Series 2016D Unlimited Tax Bonds will be payable from District receipts from the Personal Property Replacement Tax Fund of the State (the “PPRT Fund”) pursuant to Section 12 of the State Revenue Sharing Act, 30 ILCS 115, as amended (the “Revenue Sharing Act”), after deduction of Statutory Claims (as defined below). Certain statewide taxes imposed in accordance with the requirements of Article IX, Section 5 of the Illinois Constitution of 1970 are required to be deposited into the PPRT Fund pursuant to the Revenue Sharing Act. The Revenue Sharing Act provides that moneys on deposit in the PPRT Fund, together with earnings thereon, are available exclusively for distributions to taxing districts, including the District, refunds for overpayments and payment of certain administrative and other authorized expenses.

As used herein, the term “Statutory Claims” means those claims, currently for pension or retirement obligations previously levied and collected from extensions of taxes against personal property, that are required to be paid from revenues (“PPRT Revenues”) of the Personal Property Replacement Tax (as defined below), prior to any other application or use pursuant to Section 12 of the Revenue Sharing Act. The PPRT Revenues, after deduction of the Statutory Claims and Aquarium and Museum Fund allocations, are referred to herein as the “PPRT Pledged Revenues” and constitute a “Revenue Source” within the meaning of Section 15 of the Debt Reform Act. The PPRT Pledged Revenues have been pledged as security for the payment of the principal of and interest on the Series 2016D Unlimited Tax Bonds in addition to the Series 2016D Pledged Direct Taxes.

The pledge of the PPRT Pledged Revenues as security for the payment of the Series 2016D Unlimited Tax Bonds is on a parity with the prior pledge of the PPRT Pledged Revenues as security for the payment of the District’s Series 2008A Refunded Bonds Refunded From Series 2016D maturing January 1, 20_; General Obligation Unlimited Tax Refunding Bonds, Series 2008I (Personal Property Replacement Tax Alternate Revenue Source), General Obligation Unlimited Tax Refunding Bonds, Series 2010B (Personal Property Replacement Tax Alternate Revenue Source), General Obligation Unlimited Tax Refunding Bonds, Series 2011C (Personal Property Replacement Tax Alternate Revenue Source) and General Obligation Unlimited Tax Refunding Bonds, Series 2015D (Personal Property Replacement Tax Alternate Revenue Source) (collectively, the “PPRT Parity Bonds”). See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER DISTRICT INFORMATION – Tax Supported Bonded Debt.” Upon the application of proceeds of the Series 2016D Unlimited Tax Bonds, together with other lawfully available monies, to defease and refund the Series 2008A Refunded Bonds Refunded From Series 2016D, such refunded Bonds will no longer be PPRT Parity Bonds.

Pursuant to the Bond Ordinance and in accordance with the Debt Reform Act in addition to the Series 2016E Pledged Direct Taxes, the Series 2016E Unlimited Tax Bonds will be payable from the District receipts from collections of the SRA Tax (“SRA Pledged Revenues”). The SRA Pledged Revenues have been pledged as security for the payment of the principal of and interest on the Series 2016E Unlimited Tax Bonds in addition to the Series 2016E Pledged Direct Taxes. The SRA Pledged Revenues and PPRT Pledged Revenues are referred to as “Pledged Revenues.”

The pledge of the SRA Pledged Revenues as security for the payment of the Series 2016E Unlimited Tax Bonds is on a parity with the prior pledge of the SRA Pledged Revenues as security for the payment of the District’s Series 2008E Refunded Bonds Refunded From Series 2016E maturing January 1,

20_ (the “SRA Parity Bonds”). Upon the application of proceeds of the Series 2016E Unlimited Tax Bonds, together with other lawfully available monies, to defease and refund the Series 2008E Refunded Bonds Refunded From Series 2016E, such refunded Series 2008E Bonds will no longer be SRA Parity Bonds.

In its prior pledge of PPRT Pledged Revenues and of SRA Pledged Revenues to the payment of the PPRT Parity Bonds and the SRA Parity Bonds, respectively, the District covenanted to provide for, collect and apply PPRT Pledged Revenues and SRA Pledged Revenues to the payment of such respective Parity Bonds and the provision of not less than an additional .25 times the annual debt service on such Parity Bonds. In accordance with the Debt Reform Act, the District has covenanted in the Bond Ordinance to provide for, collect and apply PPRT Pledged Revenues to the payment of the Series 2016E Unlimited Tax Bonds and the provision of not less than an additional .25 times the annual debt service on such Bonds, and apply SRA Pledged Revenues to the payment of the Series 2016F Unlimited Tax Bonds and the provision of not less than an additional .25 times the annual debt service on such Bonds.

Pursuant to the Bond Ordinance, the District has levied the Series 2016D Pledged Direct Taxes and the Series 2016E Pledged Direct Taxes on all of the taxable real property within the District, in each year for which any of the Series 2016D Unlimited Tax Bonds or any of the Series 2016E Unlimited Tax Bonds (as the case may be) are outstanding, in amounts sufficient for the punctual payment of the principal of and interest on each such Series of Unlimited Tax Bonds as the same shall become due and payable and in each year for which any of the Series 2016D Unlimited Tax Bonds are outstanding, in amounts sufficient for the punctual payment of the principal of and interest on the Series 2016E Unlimited Tax Bonds as the same shall become due and payable. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – TAXATION OF REAL PROPERTY – STATISTICAL INFORMATION – District Tax Levies and Collections.” Pursuant to the Bond Ordinance, the District may abate any such levied taxes for any tax levy year to the extent that, at the time of such abatement, moneys then held in the related debt service fund established by the Bond Ordinance, or otherwise held in trust for the payment of debt service on the Series 2016D Unlimited Tax Bonds or on the Series 2016E Unlimited Tax Bonds, as the case may be, together with the amount to be extended for collection taking into account the proposed abatement, will be sufficient to provide for the punctual payment of the principal of and interest on the Series 2016D Unlimited Tax Bonds or the Series 2016E Unlimited Tax Bonds, as the case may be, or otherwise payable from the levied taxes for such tax levy year.

The District anticipates that PPRT Pledged Revenues and the SRA Pledged Revenues will be sufficient to provide for the punctual payment of the principal of and interest on the Series 2016D Unlimited Tax Bonds and the Series 2016E Unlimited Tax Bonds, respectively, and that the Series 2016D Pledged Direct Taxes and the Series 2016E Pledged Direct Taxes provided by the Bond Ordinance will each be abated annually.

Pursuant to the Bond Ordinance, PPRT Pledged Revenues, the tax receipts derived from the Series 2016D Pledged Direct Taxes, and any other moneys deposited or to be deposited in the debt service fund related to the Series 2016D Unlimited Tax Bonds are pledged as security for the payment of principal of and interest on the Series 2016D Unlimited Tax Bonds. Pursuant to the Bond Ordinance, SRA Pledged Revenues, the tax receipts derived from the Series 2016E Pledged Direct Taxes, and any other moneys deposited or to be deposited in the debt service fund related to the Series 2016E Unlimited Tax Bonds are pledged as security for the payment of principal of and interest on the Series 2016E Unlimited Tax Bonds. Each such pledge is made pursuant to the Debt Reform Act and is valid and binding from the date of issuance of the Series 2016D Unlimited Tax Bonds and the Series 2016E Unlimited Tax Bonds. All moneys held in such debt service fund, including the Pledged Revenues, Series 2016D Pledged Direct Taxes and Series 2016E Pledged Direct Taxes, are immediately subject to the lien of the District’s pledge without any physical delivery or further act and the lien of such pledge is valid and binding as against all parties having

claims of any kind in tort, contract or otherwise against the District irrespective of whether such parties have notice thereof.

The District reserves the right to issue additional alternate bonds pursuant to Section 15 of the Debt Reform Act, which alternate bonds may be secured by a pledge of the PPRT Pledged Revenues on a parity with the Series 2016D Unlimited Tax Bonds and the PPRT Parity Bonds. The District also reserves the right to issue additional alternate bonds pursuant to Section 15 of the Debt Reform Act, which alternate bonds may be secured by a pledge of the SRA Pledged Revenues on a parity with the Series 2016E Unlimited Tax Bonds and the SRA Parity Bonds.

Personal Property Replacement Tax. All ad valorem taxes on personal property in the State were abolished as of January 1, 1979. A personal property replacement tax (the “Personal Property Replacement Tax” or “PPRT”) was enacted, effective July 1, 1979. The Personal Property Replacement Tax represents an additional income tax for corporations (including certain utilities) and trusts, an income tax for partnerships and Subchapter S corporations, and a tax on invested capital for public utilities providing gas, communications, electric and water services.

The Illinois Department of Revenue (“IDOR”) collects the Personal Property Replacement Tax and deposits it in a special fund in the State Treasury known as the “Personal Property Replacement Tax Fund”. Monies therefrom are distributed annually by IDOR in eight (8) payments to certain taxing districts, including the District, throughout the State. Personal Property Replacement Tax monies received by the District are allocated according to a statutory formula by the District to the District’s Annuity & Benefit Fund (the “Annuity & Benefit Fund”), the District’s Aquarium and Museum Fund (the “Aquarium and Museum Fund”), Debt Service Fund and the Corporate Fund. See “– Security for the Series 2016 Unlimited Tax Bonds” above.

The following is the schedule of the Pledged Revenues received by the District during the past ten (10) years. The District has pledged the Pledged Revenues for the payment of and as security for the PPRT Parity Bonds and for the Series 2016D Unlimited Tax Bonds.

TEN YEAR HISTORICAL PERSONAL PROPERTY REPLACEMENT TAX REVENUES

Year of Personal Property Tax Statutory Claims(1)(3) Aquarium and Net Personal Property Receipt Gross Revenues(1)(2) Museums(1)(3) Replacement Tax Revenues(1) 2016 $34,815,000 (4)(6) $19,290 (5) $3,662,654 (5) $31,133,056 (4) 2015 42,602,000(6) 18,255 3,466,017 39,117,728 2014 44,601,000 18,082 3,431,429 41,151,489 2013 45,716,000 17,566 3,333,498 42,364,936 2012 40,052,000 15,845 3,006,977 37,029,178 2011 41,340,000 15,816 3,001,462 38,322,722 2010 44,349,000 17,948 3,406,069 40,924,983 2009 42,150,000 16,646 3,161,567 38,971,787 2008 47,991,000 19,731 3,744,465 44,226,803 2007 51,591,000 20,030 3,801,138 47,769,832

(1) Figures reflect rounding. (2) Source for years 2007-2015: Chicago Park District Audited Financial Statements FY2007 – FY2015. (3) Source: Chicago Park District’s financial records. On or before March 31 of each year, the District transfers PPRT Revenues to the applicable paying agent to pay debt service on the District’s outstanding PPRT unlimited

tax bonds, and disburses PPRT Revenues to pay the annual Statutory Claims and the applicable portion of the aquarium and museum subsidy due for the first quarter. If, after transferring PPRT Revenues to the applicable paying agent to pay such debt service and disbursing PPRT Revenues to pay Statutory Claims, there are insufficient PPRT Revenues collected in March to pay such portion of the aquarium and museum subsidy, the District pays the subsidy from other available funds. (4) The 2016 gross and net revenues are unaudited and reflect PPRT revenues for the period from January 1, 2016 through July 31, 2016. (5) The Statutory Claims for 2016 is a projection based on the statutory funding requirements. (6) The reduced PPRT Revenues reflects the State of Illinois Department of Revenue (“IDOR”) notice of an allocation error that caused an overpayment of PPRT taxes of an estimated $168 million to the taxing districts between March 2014 and January 2016, which was caused by a tax system upgrade IDOR identified in April 2016. The estimated overpayment to the Chicago Park District was reported as $5.5M. The State corrected the allocation formula in fiscal year 2016 and in June 2016 detailed a plan for recoupment of the overpayment in their budget impasse bills (Public Act 099-0523 & 524).

The highest annual principal and interest payments projected on the PPRT Parity Bonds (excluding the Series 2008A Refunded Bonds Refunded From Series 2016D) is approximately $______. Based on the PPRT Revenues collected in 2015, net of Statutory Claims and the applicable portion of the aquarium and museum subsidy due for the first quarter, and allocated to the Corporate Fund and debt service funds of applicable bonds, the projected maximum annual debt service of PPRT Parity Bonds (excluding the Series 2008A Refunded Bonds Refunded From Series 2016D) and Series 2016D Unlimited Tax Bonds now proposed, taken collectively, would have had a debt service coverage ratio of _____x.

Deposits to Series 2016E Debt Service Fund

Special Recreation Activity Tax. The Special Recreation Activity Tax is levied and collected by the District annually pursuant to Section 7.06 of the Act, for the purpose, among others, of establishing, maintaining, and managing recreational programs for people with disabilities, including both mental and physical disabilities, or such successor or replacement act as may be enacted in the future, as supplemented and amended, or substitute taxes therefor as provided by law in the future. The current maximum tax rate for the Special Recreation Activity Tax is .04% of the equalized assessed value of all taxable property in the District. The tax rate applied to the 2015 SRA Tax was .008%.

The District is subject to the provisions of the Limitation Law, which limits annual increases in the amount of property taxes that can be extended for the District. However, the Special Recreation Activity Tax is specifically excluded from the tax limitation provisions of the Limitation Law and can be extended at its maximum authorized rate.

The District first levied the Special Recreation Activity Tax in 2005 (collected in 2006). The table on the following page shows amounts of the Special Recreation Activity Tax levied and collected since the 2005 SRA Tax levy.

SPECIAL RECREATION ACTIVITY TAX REVENUES Year of Special Recreation Year of Levy Collection Activity Tax Revenues (1)(2) 2016 2017 $6,743(4) 2015 2016 5,798(3) 2014 2015 5,823 2013 2014 5,989 2012 2013 5,506 2011 2012 6,059 2010 2011 6,598 2009 2010 5,501 2008 2009 6,493 2007 2008 6,320 2006 2007 5,990 2005 2006 5,511

(1) Source: Chicago Park District audited financial statements. (2) Special Recreation Activity Tax Revenue amounts are in the thousands of dollars (000’s). (3) The 2016 revenue number is unaudited and reflects Special Recreation Activity Tax Revenue collections through September 30, 2016. (4) The 2017 revenue number is unaudited and is based on District’s 2016 Annual Appropriation Ordinance adopted by the Board of Commissioners on December 9, 2015.

Additional General Obligation Debt

The District may issue from time to time notes and bonds and other obligations that are general obligations of the District, some of which may be secured by the full faith and credit of the District and which may or may not be subject to the provisions of the Limitation Law.

CHICAGO PARK DISTRICT

The District

The District was established on April 20, 1934, pursuant to a referendum under the Act which combined 22 separate park districts in the City of Chicago (the “City”) into one park district. The District is an independent government and taxing body that is coterminous with the City.

The District operates one of the largest municipal park systems in the world, maintaining over 8,700 acres of park land, 597 parks and 26 miles of public lakefront. In addition, the District operates a large number of recreational and cultural facilities, including Northerly Island, Theater on the Lake, Lincoln Park and Garfield Park Conservatories, Buckingham Fountain and South Shore Cultural Center. Other properties of the District, which are privately managed, include Soldier Field, McFetridge Sports Center, Lincoln Park Zoological Gardens, the District’s system of six golf courses and three golf driving ranges and ten harbors with a capacity of over 6,000 boat slips and moorings.

The District, along with its partners, provides a diverse array of organized activities to residents with a particular focus on youth. In 2015, over 2,260,000 participants took advantage of District facilities with over 350,000 enrolled in nearly 29,000 programs comprising an estimated 870,000 hours of programming including sports, aquatics, camps, concerts, theater and other activities. Among the programming venues, McFetridge Sports Complex features ice skating and tennis with over 10,500 registrants in 2015 and the Peterson Park Gymnastics Center provided gymnastics lessons to 5,700 registrants. The District operates summer day camps throughout the City with registrations of nearly 46,000 in 2015 while providing swimming-lesson registrants through its Learn to Swim program of nearly 20,000. The District’s current fall session enrollment is approximately 83,000 with over 7,000 registrants on the waiting list versus 70,000 enrollees last year.

On October 14, 2014, the District was awarded the 2014 National Gold Medal for Excellence in Park and Recreation Management, presented by the American Academy for Park and Recreation Administration in partnership with the National Recreation and Park Association (NRPA). Founded in 1965, the Gold Medal Awards program honors communities in the U.S. that demonstrate excellence in parks and recreation through long-range planning, resource management, volunteerism, environmental stewardship, program development, professional development and agency recognition. The District has received this national recognition as a result of NRPA’s determination that the District embodies the core values of the NRPA, including conservation, social equity, health and wellness.

Governance of the District

The District is a special district governed by the Act and other applicable State statutes. While the District is a separate, independent unit of government, the transfers of substantially all of its assets and any changes to its powers or functions can only be accomplished through the passage of new legislation by the Illinois General Assembly. While the Act provides that the District is governed by a board of non-salaried Commissioners (the “Commissioners”) appointed by the Mayor of the City (the “Mayor”), with the approval of the City Council of the City (the “City Council”), neither the Mayor nor the City Council has the authority or power to remove any Commissioner. Further under the Code of the Chicago Park District, as amended (the “Code of the District”), and State law, the Commissioners have a fiduciary duty to act, vote on all matters (including the votes on the levy of property taxes), and govern the District in the best interest of the District.

Commissioners

The Act provides that the Commissioners, all of whom must be residents of the City, serve for five-year terms or portions thereof. Commissioners whose terms have expired continue to serve until their respective successors are appointed and qualified. Pursuant to the Act, in the absence of a President, the Vice President assumes the power and duties of the office of the President. There are currently seven Commissioners appointed to the Board.

The following are the current Commissioners of the District.

JESSE H. RUIZ was appointed a Commissioner of the Chicago Park District on November 20, 2015, by Mayor Rahm Emanuel and approved by City Council on January 13, 2016. He was also elected as President of the Board on January 13, 2016, and re-elected as President on May 11, 2016. His term as Commissioner expires on April 25, 2020. Jesse H. Ruiz is a partner at the law firm of Drinker Biddle & Reath where he focuses his practice on business transactions, including mergers and acquisitions, venture capital and private equity investments, equity and debt offerings, financings, the purchase and sale of assets from bankruptcy estates, and a variety of commercial transactions.

Since 2006, Jesse has also served as a member of the board of directors of Commonwealth Edison, an Exelon Company.

In May 2011, Chicago Mayor Rahm Emanuel appointed Jesse the Vice President of the Chicago Board of Education, where he served until January 2016. From April to July of 2015, Jesse also served as the Interim CEO of the Chicago Public Schools. Jesse also serves on the Public Building Commission. Secretary of Education Arne Duncan appointed Jesse to serve on the U.S. Department of Education Equity and Excellence Commission from February 2011 to February 2013. Prior to serving on the Chicago Board of Education, Jesse served as chairman of the Illinois State Board of Education from September 2004 to May 2011. He had also previously served on the Chicago Public Schools Desegregation Monitoring Commission.

Jesse is past president of the Hispanic Lawyers Association of Illinois and Past Chairman of the Hispanic Lawyers Scholarship Fund of Illinois. He is also Past Chairman of the Chicago Committee on Minorities in Large Law Firms. He currently serves on the boards of the Chicago Legal Clinic, the Chicago Bar Association, the Metropolitan Planning Council and several other charitable boards.

At the Hispanic National Bar Association's annual convention in September 2014, the HNBA named Jesse the Latino Lawyer of the year. In April 2012, Jesse, along with his wife, received the Barristers Philanthropic Award from Lawyers Lend-A-Hand to Youth for his work in education advocacy and youth mentoring. In 2011, the Walmart Legal Department awarded Jesse its inaugural Walmart Legal Spark Award for “outstanding client and community service and dedication to diversity in the legal profession.”

Prior to beginning his law practice, Jesse was a management consultant with Booz Allen & Hamilton (n/k/a Strategy&), where he was a member of the Operations Management Group. Prior to attending law school, he was also a member of the sales departments of Inland Steel Company and Ryerson Coil Processing Company.

Jesse received his J.D. from The University of Chicago Law School, where he served as an editor of the University of Chicago Law School Roundtable, and studied under then-professors Barack Obama and Elena

Kagan. He received his Bachelor of Arts degree in economics from the University of Illinois at Urbana- Champaign.

ERIKA R. ALLEN was appointed a Commissioner of the Chicago Park District on July 25, 2012. Her term expires on April 25, 2017. Ms. Allen is Chicago and National Projects Director for Growing Power and is headquartered in Chicago, Illinois. As the daughter of Will Allen, she has a small farm agricultural background and experience. She spent her formative years involved in all aspects of farm management from transplanting seedlings to managing farm stands and farmer’s markets. Ms. Allen received her BFA from the School of the Art Institute of Chicago and recently received her MA in art therapy from the University of Illinois at Chicago. Years of experience working in urban communities with art education and social service have brought her full circle back to her farming roots. Integrating the creative and therapeutic techniques with food security and community development have enabled Ms. Allen to establish nine urban agriculture and food system projects in Chicago, Illinois. Her specialties include project planning, community food systems design and direct marketing training. Ms. Allen has provided technical assistance and planning support for thousands of new and limited resource farmers and local food pioneers to strengthen farm businesses. She actively works to create healthy and diverse food options in inner-urban city and rural communities. Ms. Allen was an awardee for the Chicago Tribune’s Good Eating Award in 2006 and was honored by Family Focus in 2007 for her work in community food systems. In 2009, Women’s Environmental Institute (WEI) honored Ms. Allen as a Mother of the Environment for Minneapolis/St. Paul. She is also a Post Carbon Institute Fellow. Ms. Allen served on the Illinois Food, Farms and Jobs Act Council appointed by Illinois Governor Quinn and most recently served on Chicago Mayor Rahm Emmanuel’s transition team – Energy, Environment and Public Space Committee.

DONALD J. EDWARDS was appointed as a Commissioner of the District on July 24, 2013, with a current term that expires on June 30, 2018. Mr. Edwards is the Managing Principal of Flexpoint Ford, LLC, a private equity investment firm with $1.0 billion under management focused on healthcare and financial services. Prior to founding Flexpoint, Mr. Edwards was a Principal at GTCR, a Chicago-based private equity firm with more than $6.0 billion under management. During his eight-year tenure at GTCR, Mr. Edwards served as head of the firm’s healthcare investment effort. Prior to joining GTCR, Mr. Edwards was an investment banker at Lazard Ltd. where he focused on mergers and acquisitions.

Mr. Edwards earned a BS degree in finance with highest honors from the University of Illinois and an MBA from Harvard Business School where he was a Baker Scholar.

Mr. Edwards is a Director of World Business Chicago, a Trustee of the Museum of Contemporary Art and a Director of the Ann and Robert H. Lurie Children’s Hospital of Chicago. Mr. and Mrs. Edwards have established endowed scholarships at the University of Illinois and at Harvard University.

TIM KING was appointed as a Commissioner of the District on February 4, 2014 with a current term that expires on April 24, 2019. Mr. King is the founder, President and CEO of Urban Prep Academies, a nonprofit organization operating a network of public college-prep boys’ schools in Chicago (including the nation’s first all-male charter high school) and related programs aimed at promoting college success. 100% of Urban Prep graduates—all African-American males and mostly from low-income families—have been admitted to four-year colleges/universities.

Tim also serves as an Adjunct Lecturer at Northwestern University and has published in the Journal of Negro Education, Chronicle of Higher Education, Chicago Tribune, Chicago Sun Times, and Huffington Post. King has been named ABC World News “Person of the Week,” Chicago Magazine’s “Chicagoan of the Year,” People Magazine’s “Hero of the Year” and to Ebony Magazine’s “Power 100” list; featured on Good Morning America, The Oprah Winfrey Show, and The Moth/USA Networks’ Characters Unite series; and recognized by Presidents Barack Obama and Bill Clinton for his work with youth.

Tim has completed post graduate work in Kenya and Italy; holds the Doctorate Honoris Causa from the Adler School; and has received the Bachelor of Science in Foreign Service and Juris Doctor Degrees from Georgetown University.

MARTIN LAIRD KOLDYKE was first appointed as a Commissioner of the Chicago Park District on September 14, 2005, with a current term that expires April 25, 2016. Mr. Koldyke is a co-founder and Managing Partner of Winona Capital Management, LLC, a Chicago based private investment firm. Prior to Winona Capital, Mr. Koldyke spent 14 years at Frontenac Company, a Chicago based private equity firm. Mr. Koldyke became a partner at Frontenac in 1993, serving on the investment committee of the firm. Mr. Koldyke focuses on acquisitions and growth financings of consumer-based businesses. Prior to Frontenac, Mr. Koldyke was with the IBM Corporation in the National Marketing Division in Los Angeles, California and Chicago.

Mr. Koldyke currently serves on the boards of Top Driver, LLC and Laird Norton Company, LLC. Mr. Koldyke is a graduate of Northwestern University (BA 1983) and The Kellogg Graduate School of Management (MM 1989).

AVIS LAVELLE was appointed as a Commissioner of the District on July 28, 2011, and re-elected as Vice President of the Board on May 11, 2016, with a current term as Commissioner that expires April 25, 2018. Ms. LaVelle is President of A. LaVelle Consulting Services LLC. and is widely recognized for her strategic expertise and skills as a coalition-builder. She has extensive crisis management, communications, government relations and community relations experience in the private and non-profit sectors.

Since founding A. LaVelle Consulting Services in 2003, Ms. LaVelle has provided clients with the benefit of her extensive experience. She has more than a dozen years’ experience as a senior political reporter in Chicago, one of the nation’s largest media markets. Ms. LaVelle also was the Press Secretary for Chicago Mayor Richard M. Daley and the 1992 Clinton-Gore Presidential Campaign as well as served as an Assistant Secretary of Public Affairs at the U.S. Department of Health and Human Services under Secretary Donna E. Shalala.

As a senior level executive in the private sector, Ms. LaVelle was responsible for communications, community and media relations and advocacy for major marketing initiatives, health care funding advocacy, and community relations.

Ms. LaVelle is an active participant in various community and civic organizations. Currently she is the League President for Hyde Park-Kenwood Legends Baseball as well as a member of the board for After School Matters Foundation and the Resource Committee for the Metropolitan Planning Council. Ms. LaVelle served six years on the Chicago Cable Television Commission. She also served seven years on the Chicago Schools Reform Board of Trustees, five as Vice President, providing strategic communications consulting to guide CPS through major policy shifts on such potentially controversial issues as busing, school closings, and the end to social promotion.

Ms. LaVelle holds a Master’s degree in Business Administration from the Keller School of Management and Bachelor’s degree in Communications from the University of Illinois at Urbana- Champaign.

JUAN SALGADO, M.U.P., was appointed as a Commissioner of the District on July 28, 2011, with a current term that expires June 30, 2017. Mr. Salgado has been the President and CEO of Instituto del Progreso Latino since 2001. Over the past ten years, he has led Instituto through a period of national award winning recognition and historic organizational growth spurred by a focus on creating partnerships,

enhancing core competencies, leading innovation, providing quality services, and participating in targeted advocacy. Under his direction, Instituto has established national best-practice educational and workforce models and in 2009 Instituto was selected as the National Council of La Raza’s Affiliate of the Year. Most recently, Instituto has founded the Instituto Health Sciences Career Academy, a new charter high school aimed at inspiring and preparing Chicago’s youth for success in the growing healthcare fields. His qualities have earned him a 2005 fellowship in the distinguished Leadership Greater Chicago program for emerging leaders of business, government and nonprofit corporations; a 2007 Aspen Institute Ideas Festival fellowship; a three-year term as an advisor to the President of Mexico through the Institute for Mexicans Abroad; and a 2010 Mexican American Legal Defense and Education Fund’s Excellence in Community Service Award. Currently, he serves as a member of the Chicago Manufacturing Renaissance Council Executive Board, the Illinois Coalition for Immigrant and Refugee Rights and Leadership Greater Chicago Board of Directors, and the Adler School of Professional Psychology Board of Trustees. He holds a Master’s degree in Urban Planning from the University of Illinois at Urbana-Champaign and a Bachelor’s degree in Economics from Illinois Wesleyan University.

Officers and Senior Administrators

MICHAEL P. KELLY was appointed as General Superintendent and Chief Executive Officer of the District on November 9, 2011. Prior to this appointment, he served as the Chief Operating Officer, First Deputy General Counsel and Director of Intergovernmental Affairs for the District. Prior to his arrival at the District, Mr. Kelly served as Assistant to the Mayor for the City of Chicago. Mr. Kelly supported the coordination of the City’s infrastructure and operations services for several departments including Streets and Sanitation, Water, Human Services, Health and Chicago Housing Authority. He also assisted in the implementation of the City’s $1.9 billion capital improvement plan. As Assistant Commissioner for the Department of General Services, Mr. Kelly oversaw operations for more than 425 public facilities and managed the grant application process for state and federal funding. Mr. Kelly earned his Juris Doctorate from DePaul University’s College of Law in Chicago, Illinois and a Bachelor of Arts in Political Science from John Carroll University in Cleveland, Ohio.

Other officers and senior administrators of the District include: Raffi Sarrafian, Chief Administrative Officer Alonzo Williams, Chief Program Officer Timothy M. King, General Counsel Patrick J. Levar, Chief Operating Officer Steve Lux, Chief Financial Officer Juliet Azimi, Director of Budget and Management Cynthia Evangelisti, Treasurer Kantrice Ogletree, Secretary Cecilia Prado, C.P.A., Comptroller Regions

The District is organized into three regions, each with a region manager and supporting staff. Below is a list of the regions and each current region manager.

Region Region Manager Central Region Art Richardson South Region Maya Solis North Region Daphne Johnson

Private Institutions

Eleven private cultural institutions operate facilities on property owned by the District. These cultural institutions are:

Adler Planetarium and Astronomy Museum The Art Institute of Chicago The Notebaert Nature Museum Chicago History Museum DuSable Museum of African American History The Field Museum John G. Shedd Aquarium The National Museum of Puerto Rican Arts and Culture National Museum of Mexican Art Museum of Contemporary Art Museum of Science and Industry

CHICAGO PARKS FOUNDATION

The Chicago Parks Foundation (the “Foundation”) was created specifically to help maintain long- term stability and increase park use for all Chicago community members of the District at all socioeconomic levels. Founded in 2012, the Foundation provides financial and program support for Chicago parks and park programs of the District. In the six months ended June 30, 2016, the Foundation has provided approximately $500,000 of support to the District. The Foundation offers several donation programs, including the donor bench program; bequests, beneficiary designations, charitable gift annuities and charitable remainder trusts; and Team ChiParks as a charity runner in the Bank of America Chicago Marathon. The funds of the Foundation are separate and apart from any obligations of the District. No Bondholder shall have any claim on any Foundation funds.

FINANCIAL INFORMATION CONCERNING THE DISTRICT

Presentation of Financial Information The inclusion of the below budgetary and financial information and additional information presented in APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION” in and of itself is not intended to demonstrate the fiscal condition of the District. Reference is made to APPENDIX C – “AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2015” for additional information concerning the District’s revenue and cost saving performance for fiscal year ending December 31, 2015.

The District’s Comprehensive Annual Financial Report (included for fiscal year 2015 in Appendix C) consists of Management’s Discussion and Analysis and a series of financial statements and accompanying notes. The series of financial statements consist of (1) the government-wide statements, which are the Statement of Net Position and Statement of Activities (the “Government-Wide Financial Statements”), and (2) the fund financial statements, which are the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental Funds (the “Fund Financial Statements”). In APPENDIX C, the Fund Financial Statements are immediately following the Government-Wide Financial Statements.

The Government-Wide Financial Statements are designed to provide a broad overview of the District’s finances, using accounting methods similar to those used by private sector companies. Government-Wide Financial Statements include all assets and liabilities of the District, including capital assets and long-term debt, and use the flow of economic resources measurement focus and the accrual basis

of accounting. Fund Financial Statements are focused on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the District’s fiscal year. Fund Financial Statements use the modified accrual basis of accounting and therefore capital assets and long-term debt are not included within these statements.

Financial Highlights

2017 Budget

The District is currently in the process of crafting the fiscal year 2017 budget. Key dates are listed below, which show that the District is at the point in the budget planning process where management is finalizing decisions on revenue enhancements and cost cutting measures that will serve to balance the budget as required under the Act. Although amounts may shift before the appropriation ordinance is filed with the Secretary of the Board, management currently estimates a budget deficiency of approximately $22 million. This conservative estimate of a budget deficiency assumes an increase in the employer pension contribution as required by the pension Article 12 Amendments, increases in salary and wages per the collective bargaining agreement with Service Employees International Union (“SEIU”), increases in utility expenses due to the City’s multi-year rate increase and recently passed water/sewer tax, privatized contractor expenses per executed agreements, increases from growth in acreage/facilities, a continuation of property tax value capture, declining PPRT receipts from the state and decreased reliance on prior year fund balance.

Fiscal Year 2017 Key Dates

8/26/16 Budget department requests due

8/31/16 – 9/13/16 Department Budget Meetings

9/21/16 Public Budget Forum at Fosco Park

10/31/16 Appropriation Ordinance Filed

11/14/16 (week of) Budget Documents Released

12/7/16 Final Public Hearing on Budget

Fiscal Year 2016 (Year to Date)

On December 9, 2015, the Board approved the District’s 2016 annual appropriation ordinance and budget recommendations for the fiscal year ending December 31, 2016. Fiscal year 2016 year-to-date operating results indicate that overall the District is remaining within budget and meeting the revenue projections and operational efficiencies in the 2016 budget (“2016 Operating Budget”).

With respect to year-to-date revenue, property tax distributions have been timely and the District has collected $258.7 million or 95.5 percent of the budgeted amount. Program fees are meeting budgeted projections as the District continues to exceed record level registrations. Program enrollments for the 2016 summer session, which totaled 82,236 registrations represented a 4% increase over summer session 2015. Soldier Field had another strong event calendar and is projected to have net income of $3.9 million versus a budget of $2.3 million. TIF surplus was budgeted at $6.7 million and year-to-date revenues are $7.1 million.

In April 2016 the IDOR disclosed that a tax system upgrade identified a 2014 PPRT tax allocation error that resulted in overpayment of an estimated $168 million to the various taxing districts in the State between March 2014 and January 2016. The estimated overpayment to the District was reported as $5.5M and, as a result, 2016 PPRT distributions to the District are below budgeted projections by nearly $3.4 million. The State corrected the allocation formula in fiscal year 2016 and in June 2016 detailed a plan for recoupment of the overpayment in their budget impasse bills (Public Act 099-0523 & 524). In addition, permit revenue is expected to increase as a result of an additional day added to the Lollapalooza Music Festival. Harbor occupancy was 79% as of October as compared to 77% in 2015, although the number of boats was consistent with the previous year.

Budget Revenue highlights in fiscal 2016 include:

• Parking fee increases projected to equal $0.6 million.

• Program expansion and increased fees of $0.8 million.

• Levy for new property - $1.5 million.

• Reduced reliance on prior years’ fund balance by $1.4 million.

With respect to year-to-date expenditures, the District is currently below budget as a result of favorable labor savings, utilities, and unemployment obligations. Specific examples of the foregoing include:

• Year-to-date through July, personnel services are $3.1 million below budget. Although healthcare is slightly over budget, savings have been achieved in salary and wages, payroll taxes and unemployment obligations.

• The activation of water conservation efforts, extension of favorable natural gas rates and mild weather have all resulted in savings of over $3 in the utility accounts.

• The District has maintained as budgeted the reserves established in prior years

• $96 million Long-Term Income Reserve

• $25.8 million Economic Stabilization Reserve

• $5 million PPRT Stabilization Reserve

• Long-Term Liability Reserve after payments of $12.5 million made in 2015 and in 2016 as supplemental contributions to the pension fund, the balance in the reserve is $22.5 million.

See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – CHICAGO PARK DISTRICT PROCEDURES – 2015 Operating Budget Revenues and Spending Summary.”

Fiscal Year 2015

On December 10, 2014, the Board approved the District’s 2015 annual appropriation ordinance and budget recommendations for the fiscal year ending December 31, 2015. The 2015 budget (the “2015

Operating Budget”) was balanced at $448.6 million, an increase of 5.4% or approximately $23 million compared to the 2014 budget, $19.3 million of which represented increased and supplemental contributions to the Retirement Fund (defined herein) as required by the amendments to Article 12 of the Pension Code (defined herein), a critical measure to ensuring retirement security for the District’s current employees and retirees. In addition to increased pension expenses, the District was faced with increased salary expenses as a result of union negotiations and rising costs related to healthcare, utilities, and facility and park space growth. In total, the District worked to close a budget deficit of $18 million. The District identified various efficiencies and revenue increases to close the budget gap.

Key financial highlights of the 2015 Operating Budget included:

• Restricting personnel increases ($1.4 million in savings)

• Mandatory 5% non-personnel reduction ($1.0 million in savings)

• Water conservation efforts ($1.1 million in savings)

• Changes to healthcare & prescription drug plans ($1.0 million in savings)

• Taking certain activities in-house ($0.6 million in savings)

• Favorable long-term contract terms ($0.6 million in savings)

• HR efficiencies ($0.3 million in savings)

• Credit card process changes ($0.3 million in combined savings and revenue)

• Administrative building occupancy consolidation ($0.2 million in savings)

• In-kind sponsorship (e.g. lifeguard uniforms) ($0.2 million in savings)

• Property tax value capture from new property and expired and terminated TIFs ($1.9 million in revenue)

• Growth from investments and agreements ($1.9 million in revenue)

• TIF Disbursement growth ($0.6 million in revenue)

• Park program fee rate increases ($0.6 million in revenue)

• Parking fee rate increase ($0.6 million in revenue)

• Permit fee rate increase ($0.1 million in revenue)

• Bond refinancing that took place during 2014 and the District’s downward sloping debt profile resulted in $9 million less in debt service payments due in 2015

• Reduced reliance on prior years’ fund balance

• Maintenance of the reserves established in previous years

o $96 million Long-Term Income Reserve

o $20 million Economic Stabilization Reserve

o $5 million PPRT Stabilization Reserve

o $25 million Long-Term Liability Reserve – $12.5 million was used in 2015 and to be used in 2016 as supplemental contributions to the pension fund as planned

The District’s General Fund for the year ended December 31, 2015, had revenues of $300.3 million and expenditures of $301.4 million for a reduction in fund balance of $1.1 million. Privatized contractor revenues were hampered by unfavorable spring and summer weather, but revenue generated by events at Soldier Field, including the recent historic Grateful Dead concerts, provided a favorable revenue variance compared to the budget of $10.7 million. With respect to Solider Field, the District and the Illinois Sports Facilities Authority (“ISFA”) are parties to an Operation Assistance Agreement, which provides for an annual operating subsidy and capital improvement subsidy to be paid by ISFA to the District from the ISFA hotel tax receipts distributed to ISFA by the State. The District received its operating subsidy of $4.99 million in 2015. Tax increment surplus was $1.8 million above budget. As noted previously, PPRT was $2.3 million below budget as a result of the District recording the over allocation by the State.

With respect to 2015 expenditures, the District met budget expectations on the personnel side as tight controls on hiring and benefits management remain in place. The activation of water conservation efforts, extension of favorable natural gas rates and mild summer weather contributed to general fund expenditures being below budget by $4.18 million.

In 2015, the District was informed of cuts and suspensions in committed grant funding from the State to numerous capital improvement projects. In August 2016, the State informed the District funding would be released to certain projects.

See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – CHICAGO PARK DISTRICT PROCEDURES – 2015 Operating Budget Revenues and Spending Summary.”

Fiscal Year 2014

On December 11, 2013, the Board approved the District’s 2014 annual appropriation ordinance and budget recommendations for the fiscal year ending December 31, 2014. The 2014 budget (the “2014 Operating Budget”) was balanced at $425.6 million, an increase of 3.6%, or $14.6 million, compared to the 2013 budget and included anticipated salary increases as a result of completed and ongoing union negotiations, rising costs related to additional facilities and park space, water/sewer rate increases, safety- related expenses, statutory pension contribution and debt service. The 2014 Operating Budget reflected the District’s overall plan to create operational efficiencies and revenue enhancements that aided the District in funding its future pension contributions.

Key financial highlights of the 2014 Operating Budget include:

• Property tax increase (+$3.6 million in revenue)

• Increase in the property tax levy as a result of the expiration and termination of TIF districts (+$4.25 million in revenue)

• Nominal increases in parking fee rates (+$0.5 million in revenue)

• Implementing affordable outdoor ice rink admission fees (+$0.1 million in revenue)

• Enhanced enforcement for violations on park properties

• Savings through strategic changes in healthcare ($1.4 million in savings)

• Savings through locking in favorable electricity and natural gas rates ($1.8 million in savings)

• Reduced reliance on prior years’ fund balance

• Maintenance of the reserves established in previous years

o $96 million Long-Term Income Reserve

o $20 million Economic Stabilization Reserve

o $5 million PPRT Stabilization Reserve

o $25 million Long-Term Liability Reserve (designated for pension reform)

Regarding the property tax increase, for eight consecutive years prior to fiscal year 2014, the Park District balanced its budget without a property tax increase. During that same time period, the Park District expanded to better serve park patrons. As costs have risen, resources have remained constrained. The Board approved a property tax increase, which amounted to an additional $2.71 annually based on a residence valued at $200,000, because it believed it was necessary to the financial health and stability of the District’s parks.

The General Fund, the primary operating fund of the District, reported an ending fund balance of $204.6 million for the fiscal year ending December 31, 2014. The fund balance increased by $18.6 million mainly due to property tax collection timing, PPRT ended the year below budget, TIF disbursement revenue ended the year $1.2 million above budget and $11.4 million net inter-fund transfers. As for privatized contractor revenues, Soldier Field revenues in particular were strong resulting in $4.7 million over budget which helped to offset the negative budget variance in harbor revenues ($0.5 million) and golf revenues ($0.8 million). The General Fund balance included a $96.0 million balance from the Long-Term Income Reserve fund that was merged into the General Fund as required by GASB 54.

On the expenditure side, savings were achieved in salary and wages ($2 million) due to tight controls that included a fourth quarter hiring freeze and favorable labor contract settlement terms with the largest union contract locked in through 2018. Savings were also achieved in unemployment obligations. Privatized contractor expenses exceeded budgeted expectations particularly at Soldier Field ($3M), but associated revenues at this venue ($4.7 million) exceeded projections as well. Overall, privatized contractor revenue ended the year net positive.

The Long-Term Income Reserve fund is a component of the General Fund that, by District policy, must maintain a minimum balance of $85 million. The $96 million is approximately 23% of the 2014 Operating Budget.

Debt Management

Upon the issuance of the Bonds and the refunding of the Refunded Bonds, the District will have $______outstanding in Park Improvement and New Aquarium and Museum Bonds, and $______outstanding in Alternate Revenue Source bonds payable from amounts paid to the District from the PPRT, harbor revenues and Special Recreation Activity Tax. (See the tables in APPENDIX B on pages B-9, B- 10 and B-11 describing the District’s debt obligations and related Debt Service schedules).

Pursuant to the Debt Reform Act, the District issued all Limited Tax General Obligation bonds (“LTGO bonds”) under a maximum annual debt service limit of $42,142,942 until 2014. Beginning with the 2009 levy year, the Limitation Law introduced a CPI increase factor which provides for annually increasing Base capacity for non-referendum bonds. Since levy year 2009, the District has accumulated additional annual capacity to levy taxes subject to DSEB in the amount of $7,060,408, or a maximum annual levy of $47,458,022 effective as of levy year 2016. See “SECURITY FOR THE BONDS” for description of related debt law matters and a table of unused Base capacity.

The Limitation Law further limits the amount of property tax levy that can be extended for operating purposes (the “Operating Levy,” which excludes any direct tax levy for limited tax and unlimited tax general obligation bonds, as well as the special recreation activity tax). The Operating Levy cannot exceed the previous year’s Operating Levy, multiplied by the lesser of 5% or the previous 12-months CPI plus added equalized assessed valuation reflecting new construction within the taxing district. See “SECURITY FOR THE BONDS.”

Recent amendments to Articles 1 and 12 of the Illinois Pension Code provide for various changes to the District’s pension system, including increasing the annual Statutory Employer Contributions (as defined herein) to the District’s Retirement Fund (as defined herein) and permitting the District to make its increased Statutory Employer Contributions from not only its annual pension levy but also from any other revenues. For a complete description of the Amendments to the Pension Code, see “EMPLOYEE RETIREMENT SYSTEM – Article 12 Amendments.” The District plans to make the Statutory Employer Contributions required by the Article 12 Amendments (as defined herein) from the Operating Levy and with PPRT revenues, including those that became available after certain prior refundings of PPRT Alternate Revenue bonds. In addition, the District believes, but cannot guarantee, it’s currently estimated $294 million 5-year capital program (which is funded in part with the proceeds of the Series 2016A Limited Tax Bonds), can be funded in a manner that maintains downward sloping debt. The District expects to use PPRT revenues to meet a portion of employer pension contributions.

By using the additional PPRT revenues, a moderate property tax increases revenue enhancements from programmatic and recreational fees and managing use of its available Base, the District expects to be able to substantially fund its increased Required Employer Contributions while budgeting an Operating Levy within the annual increase limits established by the Limitation Law.

Financial Policies

Fund Balance Reserve Policy. The District continues to maintain its Fund Balance Reserve Policy for its Long-Term Income Reserve Fund, which was adopted by resolution by the Board in January 2009. The policy incorporates the following criteria: (i) establishes a target reserve floor ($85 million); (ii) specifies the circumstances for drawing down reserves and directing the replenishment of such reserves and (iii) accounts for a long-term reserve fund for the purpose of future appropriations.

On December 9, 2015, the Board approved the District’s 2016 Annual Appropriation Ordinance and Budget Recommendations. Included in the Ordinance was a fund balance assignment of $12.5 million for Long-Term Liability Reserve Fund effective January 1, 2016. This assignment was used for supplemental employer contributions required in 2016.

See Note 13 to the 2015 Audited Financial Statements attached hereto as APPENDIX C for a discussion of these reserves.

Investment Policy. The Board has adopted an investment policy that provides a statement of objectives as to the management and investment of District funds other than the Retirement Fund, which is governed by a separate board of trustees. The investment policy is subject to an annual review by the Chief Financial Officer and Treasurer of the District. The primary objectives of the investment policy are safety of principal, diversification, liquidity and maximization of rate of return, all consistent with prudent investment principles. Investments must at all times comply with all applicable laws and statutes, the Code of the District and ordinances and resolutions of the District. Private fund managers and other entities approved by the Board are hired to invest a portion of the District’s funds (other than the Retirement Fund), in accordance with the existing investment policy. Investment of the Retirement Fund is governed by the Retirement System. See “EMPLOYEE RETIREMENT SYSTEM – Revenues and Investments.”

Real Property Asset Management

In March of 2014, the District sold its 110,000 square feet headquarters and received approximately $22.5 million for the sale and will lease the 110,000 square feet office space from the buyer at no cost until 2018. As a condition of the sale, the District turned over the fourth floor to the buyer. The District is currently negotiating to enter into a long-term rental agreement for office space for its administration offices.

EMPLOYEE RETIREMENT SYSTEM

Constitutional and Statutory Framework

The District’s employees’ retirement system consists of the Park Employees’ & Retirement Board Employees’ Annuity and Benefit Fund of Chicago (the “District Retirement Fund,” “Retirement Fund” or the “Fund”). The District Retirement Fund is established by and administered in accordance with Chapter 40 of the Illinois Compiled Statutes, Act 5, Articles 1 (General Provisions) and 12 (Park Employees’ & Retirement Board Employees’ Annuity and Benefit Fund – Cities Over 500,000) of the Illinois Pension Code (the “Pension Code”). The pension requirements specific to the District Retirement Fund (including the defined benefits and the employer and employee contribution levels) are set forth in Article 12 of the Pension Code, which benefits may be changed only by amendment of Article 12 of the Pension Code.

Section 5 of Article XIII of the Illinois Constitution provides that “[m]embership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The benefits available under the District Retirement Fund accrue throughout the time a member is employed by the District or by the District Retirement Fund. Although benefits accrue during employment, certain age and service requirements must be achieved for an employee to receive a retirement or survivor’s defined benefit payment upon retirement or termination from the District.

Article 12, which governs the District Retirement Fund, is a separate and distinct statutory directive from those portions of the Pension Code that set forth the pension obligations of the State and its agencies, the City of Chicago, the Chicago Public Schools, other units of government in the City, The County of Cook, and other non-park units of government and park districts in cities with populations under 500,000. Neither the District nor the District Retirement Board is subject to the pension requirements of the State, the City or any of the other foregoing units of government. Article 12 Amendments On January 7, 2014, the Governor signed into law Public Act (PA) 98-0622, which includes amendments to Article 12 of the Pension Code (the “Article 12 Amendments”) that became effective January 1, 2015. The purpose of the Article 12 Amendments is to provide the sustainable funding needed to secure the long-term health of the District Retirement Fund. The Article 12 Amendments affect all stakeholders; the District, its employees and retirees and is phased in over a five-year period. Following is a summary of the key structural changes of the Article 12 Amendments:

• Funding 1. Employer Contributions: Employer contributions’ multiplier increased from 1.1 times the amount of employee contributions two years earlier to 1.7 times in 2015, 2.3 times in 2017 and 2.9 times in 2019 and thereafter until the Fund is 90% funded; after the Fund is 90% funded the employer obligation is the lesser of the 2.9 multiplier or the amount necessary to maintain the Fund at 90% funding 2. Supplemental employer contributions: $12.5 million in 2015, $12.5 million in 2016 and $50 million in 2019 3. Employee contributions from salary (the aggregate of the employee service annuity and spousal benefit and cost of living increase): Increased from 9.0% to 10.0% in 2015, 11.0% in 2017 and 12.0% in 2019 and thereafter until the Fund is 90% funded; after the Fund is 90% funded employee contribution drops to 10.5% as long as the Fund remains funded at or above 90% • Retirement Age 1. Tier 1 employees – minimum retirement age increases from 50 to 58 for those employees younger than 45 on January 1, 2015 2. Tier 2 employees – age for normal retirement decreases from 67 to 65; age for early retirement decreases from 62 to 60 • Automatic Annual Increase 1. Automatic annual increase adjusted to the lesser of ½ of CPI-U or 3% simple 2. Payment of annual increase suspended in years 2015, 2017 and 2019 3. Both provisions apply to current annuitants (spousal increase remains the same)

• Duty Disability 1. Decrease to 74% in 2015, 73% in 2017 and 72% in 2019

• New Benefits 1. No new pension benefit to be granted unless a method for funding the benefit is included in the statute creating or extending the new benefit

• Miscellaneous Provisions 1. Expands funding sources for employer contributions solely from real property tax levy for pensions to include PPRT, charges, fees and other revenues generated by the District. 2. Funding Guarantee: If the District fails to make any of its required annual contributions, the Fund may seek judicial relief mandating payment.

Fiscal Response

The District has developed a comprehensive strategic plan to generate funds for the increased employer pension contributions. The plan includes debt service savings from refundings, accessing PPRT revenues through the conversion of bonds secured by PPRT to Limited Tax Bonds, a moderate property tax increase and revenue enhancements from programmatic and recreational fees. Specifically, for example, the District established a $25 million Long-Term Liability Reserve Fund to cover the mandatory supplemental payments of $12.5 million in 2015 and $12.5 million in 2016, which amounts have been paid. The District currently has a balance remaining of $22.5 million in the Long-Term Liability Reserve Fund.

The funding requirements of the Article 12 Amendments set forth increased employer contributions to the pension system beginning in Levy Year 2015. Under existing Illinois law, in general, property tax levy extension amounts for operating expenditures (of which increased pension funding would be one such) cannot increase by an amount greater than the annual CPI percentage multiplied by the previous year’s operating levy. As the District has maintained its levy for non-referendum bonds below its allowable Base pursuant to the Limitation Law, the limited tax debt service bonding capacity allowed the refunding of the District’s prior General Obligation Unlimited Tax Refunding Bonds, Series 2004C (Personal Property Replacement Tax Alternate Revenue Source) (the “Series 2004C Bonds”) to make available for operating purposes certain PPRT receipts previously pledged to the refunded Series 2004C Bonds and Series 2006 D Bonds. In this manner, the District was able to address a significant portion of the accelerated employer contribution amounts required in the Article 12 Amendments, while simultaneously extending subsequent operating levy amounts in a manner compliant with the Limitation Law.

Litigation

On May 8, 2015, the Illinois Supreme Court affirmed the decision of the Sangamon County Circuit Court that Public Act 98-0599 (the “State Pension Reform Act”) is unconstitutional. The State Pension Reform Act would have provided for certain cost-saving and other reforms to the State’s four largest pension plans. The State Pension Reform Act was challenged on behalf of various classes of annuitants, current and former workers, and labor organizations alleging, among other things, that the legislation violates Section 5 of Article XIII of the Illinois Constitution.

In December 2014, shortly before the City’s Pension Reform Act, PA 98-641, was to take effect, two lawsuits were filed in the Circuit Court of Cook County, Illinois (the “Circuit Court”) challenging the constitutionality of PA 98-641. Oral arguments were heard by the Circuit Court on July 9, 2015. On July 24, 2015, the Circuit Court ruled that the City’s Pension Reform Act is unconstitutional. On March 24, 2016, the Illinois Supreme Court affirmed the decision of the Circuit Court that the City of Chicago’s Pension Reform Act, Public Act 98-0641 is unconstitutional.

Neither the District nor the Retirement Fund was named as a party to either the State or City lawsuits. Therefore, neither the District nor the Retirement Fund is subject to these decisions.

On October 8, 2015, a District annuitant, a District employee and the Service Employees International Union, Local 73 (collectively, the “Plaintiffs”) filed a lawsuit in the Circuit Court (Biedron, et al. v. Park Employees’ and Retirement Board Employees Annuity and Benefit Fund, et al., No. 2015 CH 14869) challenging the constitutionality of the Article 12 Amendments (Public Act 98-622) to the District’s Pension Code. The District was not named as a party to this lawsuit; however, on December 2, 2015, the District filed a Petition to Intervene (“Petition”) as a defendant in the litigation and on December 16, 2015, the Circuit Court granted the Petition. At the June 9, 2016 status hearing, respective counsel for the Plaintiffs, the District and the District’s Retirement Fund advised the Circuit Court that in light of the Supreme Court’s decision in the City pension litigation and the similarities between Public Acts 98-622 and 98-641, the parties want the opportunity to explore the possibility of negotiating a modified approach to pension relief. The Circuit Court encouraged the parties to do so and offered to assist in serving as a mediator. Subsequent to the June 9, 2016 status hearing, representatives of SEIU, Local 73 and the District have had several meetings to explore the possibility of reaching an agreement on a modified approach to pension relief. As of this date, no agreement has been reached and the District can give no assurance that an agreement will be reached or, in the event one is reached, it will be enacted into law. However, the parties are continuing to meet. At the September 14, 2016 status hearing the parties advised the court of these facts, and the court scheduled the next status hearing for October 14, 2016. The court repeated its offer to assist in mediation. The parties advised the court that they anticipate presenting the court with an agreed order pursuant to which those annuitants who had their cost of living increases suspended and thereafter subject to a revised formulation pursuant to Public Act 98-622, will have the original cost of living formulation reinstated and effective retroactive to January 1, 2015, while retaining the other components of Public Act 98-622 in place while the parties continue their discussions over a modified approach to pension relief. On October 19, 2016, the court issued an Agreed Order approving the following agreement of the parties: On October 19, 2016, the court issued an order (“Agreed Order”) approving the following agreement of the parties: • Effective December 1, 2016, the Retirement Fund shall prospectively reinstate the three percent (3%) annual increase in basic retirement annuity ("AAI") for all annuitants pursuant to 40 ILCS 12-133.l(b). • Effective November 1, 2016, the Retirement Fund shall make a lump sum retroactive payment, less applicable federal income tax withholding, in an amount equal to the AAI for the time period January 1, 2015, through November 30, 2016, as if such AAI payments had been made pursuant to 40 ILCS 12-133.l(b). The Retirement Fund shall make such lump sum retroactive payment to each annuitant who would have been entitled to receive an AAI pursuant to 40 ILCS 12-133.l(b) during the time period January 1, 2015, through October 31,2016. • Pending further order of the court, the increased tax levy to be paid by the District in an amount equal to 2.30 times the amount of employee contributions pursuant to 40 ILCS 12-149(a) for the year 2017 shall be temporarily suspended. Instead, the tax levy to be paid by the District shall continue to be an amount equal to 1.7 times the amount of employee contributions, pending further order of the court.

• Pending further order of the court, the increase in the amount of employee contributions for service annuity to 9% of salary pursuant to 40 ILCS 12-150 for the year 2017 shall be temporarily suspended. Instead, the amount of employee contributions for service annuity shall continue to be 8% of salary (plus 2% for spousal and COLA), pending further order of the court.

The court scheduled the next status hearing for December 21, 2016.

In light of the recent Illinois Supreme Court and Cook County Circuit Court decisions respectively ruling that the State pension reform act and the City pension reform act are unconstitutional, the District can give no assurance that the Circuit Court will not reach a decision in the Biedron, et al. lawsuit, prior to or after the issuance of the Bonds, that the Article 12 Amendments are unconstitutional.

The provisions of the Article 12 Amendments to the District’s Pension Code (Public Act 98-622) remain in effect while the Biedron litigation is pending, but it is the District’s expectation that in the absence of a negotiated resolution, the Circuit Court will follow the Supreme Court’s decision in the City pension litigation and will find Public Act 98-622 unconstitutional and enjoin its enforcement.

If Public Act 98-0622 is ruled unconstitutional (either in whole or in part), the projected employer and employee contributions could decrease, and the District’s net pension liability impact will be significant. The impact to the pension liability would be an increase of approximately $111.2 million.

Pension Reform Act of 2010

On April 14, 2010, Public Act 96-0889 (the “Pension Reform Act”) became law. The Pension Reform Act only impacts persons that first became members or participants on or after the Act’s effective date of January 1, 2011. The Pension Reform Act amended the Pension Code and, among other things:

• Increased the average salary computation to the highest 96 consecutive months over the last 10 years of service from the highest 48; • Increased the minimum age at which an active employee may retire with unreduced benefits to age 67 from age 60 or younger based on a formula combining the age of the employee and the number of years of service; • Increased the minimum age at which an active employee may retire with reduced benefits to age 62 from age 50; • Reduced the cost of living adjustment to the lower of 3% or 50% of the change in the consumer price index for all urban consumers; and • Capped the salary on which a pension may be calculated at $111,572 in 2015, and $111,572 in 2016 (subject to certain adjustments for inflation).

Taken independently of any other legislative or market effects, the reduced benefits afforded new hires by the Pension Reform Act is expected to reduce the growth in the Actuarial Accrued Liability, the UAAL and the Actuarially Determined Contribution (formally known as Annual Required Contributions) (as defined herein). In calculating the Actuarial Accrued Liability, the actuaries make assumptions about future benefit levels. As the value of future benefits decreases, as will occur when a greater percentage of the District’s workforce is covered by the Pension Reform Act, the Actuarial Accrued Liability is expected to decrease. Consequently, the UAAL is expected to decrease and the Funded Ratio to improve. As the growth in the UAAL slows, the Actuarially Determined Contribution is expected to be reduced as the amount of UAAL to be amortized decreases. However, no assurance can be given that these expectations will be the actual experience of the District Retirement Fund going forward.

On August 16, 2012, Public Act 97-0973 was signed by Governor Quinn which changed the District Retirement Fund’s fiscal year end from June 30th to December 31st thereby resulting in two financial statements issued in 2012 (year ended June 30, 2012 and for six months ended December 31, 2012).

Fund Governance

The Retirement Fund is governed by the Board of Trustees (the “Pension Board”) and consists of three members appointed by the District’s Board and four other members elected by active employees of the District. The Pension Board has, among other duties, responsibility for the management of the Retirement Fund and for insuring that audits of the Retirement Fund are conducted on a timely basis. As of December 31, 2015, the end of the District Retirement Fund’s fiscal year, the District Retirement Fund had a total membership of 3,063 active employee members, with 2,876 retirees and beneficiaries currently receiving benefits.

The Pension Board or custodian of the fund supervises all contributions from the Park District due to the District Retirement Fund, invests the District Retirement Fund’s monies, oversees an annual audit, appoints employees, authorizes or suspends payment of any benefit and has exclusive jurisdiction in all matters relating to or affecting the Retirement Fund. The Pension Board prepares and approves its own budget and is required to submit annually to the District’s Board a detailed report of the financial affairs and status of the financial position of the District Retirement Fund.

The District Retirement Fund is a single-employer defined benefit pension fund established by the Pension Code. “Single-employer” refers to the fact that there is a single plan sponsor, in this case, the District. “Defined benefit” refers to the fact that the District Retirement Fund pays a periodic benefit to retired employees and survivors in a fixed amount determined at the time of retirement. The amount of the periodic benefit is generally determined pursuant to a statutory formula on the basis of the employee’s service credits and salary. Eligible employees receive the defined benefit on a periodic basis for life, along with certain benefits to spouses and children that survive the death of the employee.

Source of Information

The information contained herein relies on information provided by the Retirement Fund, its independent accountants and its independent actuaries (the “Source Information”). The information presented herein is presented on the basis of the Source Information and the District makes no representations nor expresses any opinion as to the accuracy of the Source Information.

The Comprehensive Annual Financial Report of the Retirement Fund for the year ended December 31, 2015; and the Actuarial Valuations of the Retirement Fund for the year ended December 31, 2015, may be obtained from the Retirement Fund’s website www.chicagoparkpension.org; provided however, that the content of these reports and such website is not incorporated by reference herein. See also Note 10 of the District’s Audited Financial Statements and in the Required Supplementary Information section of the Audited Financial Statements of the District.

Revenues and Investments

To fund the benefits to be paid by the District Retirement Fund, both employees and the District make contributions. Until January 1, 2015 (the effective date of the Article 12 Amendments), District employees were required to contribute a fixed percentage (9%) of their annual salary, and the District contributes an amount determined annually in accordance with a formula set forth in the Pension Code. Commencing January 1, 2015, District employees are required to contribute 10.0% of their annual salary, 11.0% in 2017 and 12.0% in 2019 and thereafter until the Fund is 90% funded. Once the Fund is 90% funded, the employee contribution drops to 10.5% as long as the Fund remains at or above 90%. Tier II employees (hired after January 1, 2011 without previously contributing to the Fund or any reciprocal fund in Illinois) represent approximately 33.1% of the current contributing participants. See “Determination of Employer Contributions” which follows.

District contributions are established by the Pension Code and are funded by the District with the proceeds of a direct property tax levy. The tax levy is determined by multiplying the annual employee contributions two years prior to the levy year, by a factor of 1.1 through December 31, 2014. On each January 1, commencing in 2015, the factor increases to 1.7 times, 2.3 times in 2017 and 2.9 times in 2019 and thereafter until the Fund is 90% funded. Once the Fund is 90% funded, the employer contribution is the lesser of the 2.9 multiplier or the amount necessary to maintain 90% funding. See Table 4 “Financial Condition of the Park Employees’ Annuity and Benefit Fund.”

The Pension Board manages the investments of the District Retirement Fund. The District Retirement Fund’s investment authority is established by and subject to the provisions of State law, including the Pension Code. The Pension Board invests the District Retirement Fund’s assets in accordance with the “prudent investor” rule and the District Retirement Fund’s formal investment policy, which requires members of the Pension Board, who are fiduciaries of the District Retirement Fund, to discharge their duties with the care, prudence and diligence that an institutional investor acting in a like capacity and familiar with such matters would use in a similar situation. In carrying out this duty, the Pension Board, acting upon the advice of one or more investment consultants who has acknowledged a fiduciary status,

appoints and monitors investment managers, acting as fiduciaries, to manage the investment assets of the District Retirement Fund. Such investment managers are granted discretionary authority to manage the District Retirement Fund’s assets in accordance with approved guidelines and the prudent investor rule. Additional information regarding the District Retirement Fund’s investments and investment management may be found on the District Retirement Fund’s website at www.chicagoparkpension.org. The content of such website is not incorporated into this disclosure statement by reference and the link to such website is being provided only for the convenience of those reading this Official Statement. See also separately attached “APPENDIX E – REPORT OF THE CONSULTING ACTUARY ON THE DISTRICT RETIREMENT FUND” (the “Actuary’s Report”). Table 1 – “Investment Rates of Return (FY 2006 to 2015)” provides information on the investment returns experienced by the District Retirement Fund for the years ended June 30, 2006 through June 30, 2012, for the six months ended December 31, 2012, and for the years ended December 31, 2013 through December 31, 2015.

Table 1: Investment Rates of Return (FY 2006 to 2015)

INVESTMENT FISCAL YEAR(1) RETURN(2)

2006 7.4% 2007 16.2% 2008 -3.0% 2009 -18.6% 2010 11.3% 2011 21.0% 2012(3) 1.4% 2012(4) 6.2% 2013 16.9% 2014 6.9% 2015 1.9% 3-YR. RETURN(5) 8.8% 5-YR RETURN(5) 7.9% 10-YR. RETURN(5) 5.8% ______Source: The District Retirement Fund’s Comprehensive Annual Financial Report. (1) For all fiscal years 2006 through June 30, 2012, the District Retirement Fund has assumed, for actuarial purposes, an investment rate of return of 8.00%. For the six months ended December 31, 2012 and thereafter, the District Retirement Fund has assumed, for actuarial purposes, an investment rate of return of 7.50%. See “Actuarial Assumptions” herein. (2) Investment returns are reported net of investment fees. (3) Reflects returns for the year ended June 30, 2012. (4) Reflects returns for the six months ended December 31, 2012. (5) Source: Pension Fund Investment Advisors; Annualized and reflects Returns as of December 31, 2015.

Investment income is comprised of actual earnings (i.e. dividends, interests, realized gains and losses) and unrealized gains and losses. During the year ended December 31, 2015, the investment income for the District Retirement Fund was $11,047,803 before investment expenses and the amount after the expenses was $8,823,613.

Determination of Employer Contributions

Actuaries and the Actuarial Process

Under the Pension Code, the District’s Statutory Employer Contributions to fund the District Retirement Fund are determined on an annual basis pursuant to the formula established by the Pension Code. In addition, the Pension Board engages an independent actuary to perform the calculation of the

actuarial requirements of the District Retirement Fund. The actuarial requirements which are set forth in the District Retirement Fund’s Comprehensive Annual Financial Report generally do not equal the Statutory Employer Contribution. Accordingly, the amount of the Statutory Employer Contribution in a given year may not meet the actuary’s calculation of the annual actuarial requirements of the District Retirement Fund. In each year that the Statutory Employer Contribution has been required, the District fulfilled its Statutory Employer Contribution to the District Retirement Fund.

General

With respect to the District’s Retirement Fund, the Actuarial Valuation (as defined below) measures the financial position of a Retirement Fund, determines the amount to be contributed by the District to such Retirement Fund pursuant to the statutory requirements described above, and produces certain information mandated by the financial reporting standards issued by the Governmental Accounting Standards Board (“GASB”), as described below.

In producing the Actuarial Valuation, the District Retirement Fund’s actuaries use demographic data (including employee age, salary and service credits), economic assumptions (including estimated future salary and interest rates), and decrement assumptions (including employee turnover, mortality and retirement rates) to produce the information required by the prior GASB standards or the new GASB standards, each as hereinafter defined. The District Retirement Fund’s Actuarial Valuations are publicly available and may be obtained from the Retirement Fund. See “– Source Information” above. A description of the statistics generated by the District Retirement Fund’s actuaries in the Actuarial Valuations follows in the next few paragraphs. This information was derived from the Source Information.

GASB, which is part of a private non-profit corporation known as the Financial Accounting Foundation, promulgates standards regarding accounting and financial reporting for governmental entities. These principles have no legal effect and do not impose any legal liability on the District. The references to GASB principles in this Official Statement do not suggest and should not be construed to suggest otherwise.

Prior GASB Standards

For the fiscal years discussed in this Official Statement prior to and including December 31, 2013, the applicable GASB financial reporting standards were GASB Statement No. 25 (“GASB 25”) and GASB Statement No. 27 (“GASB 27” and, together with GASB 25, the “prior GASB standards”). The prior GASB standards required the determination of the Actuarially Required Contribution and the calculation of pension funding statistics such as the UAAL and the Funded Ratio in the Actuarial Valuation. In addition, the prior GASB standards allowed pension plans to prepare financial reports pursuant to a variety of approved actuarial methods, certain of which are described in “– Actuarial Methods” below.

GASB 25 required disclosure of an “Actuarially Required Contribution,” which was such pronouncement’s method for calculating the annual amounts, though the Actuarially Required Contribution was a financial reporting requirement and not a funding requirement. The Actuarially Required Contribution as defined in GASB 25, consisted of two components: (1) that portion of the present value of pension plan benefits which is allocated to the valuation year by the actuarial cost method (as described in “– Actuarial Methods – Actuarial Accrued Liability” below), termed the “Normal Cost;” and (2) an amortized portion of any UAAL (defined below).

The Actuarial Accrued Liability was an estimate of the present value of the benefits the District Retirement Fund must pay to members as a result of past employment with the District and participation in the Retirement Fund. The Actuarial Accrued Liability was calculated by use of a variety of demographic

and other data (such as employee age, salary and service credits) and various assumptions (such as estimated salary increases, interest rates, employee turnover, retirement date, age, mortality and disability rates). The Actuarial Value of Assets reflected the value of the investments and other assets held by the Retirement Fund. The prior GASB standards permitted the use of any acceptable asset smoothing method for calculating the Actuarial Value of Assets and the Actuarial Accrued Liability. For a discussion of the methods and assumptions used to calculate the Retirement Funds’ Actuarial Accrued Liability and Actuarial Value of Assets under GASB 25, see “– Actuarial Accrued Liability” and “– Actuarial Assumptions” below.

Any difference between the Actuarial Value of Assets and the Actuarial Accrued Liability was referred to as the “Unfunded Actuarial Accrued Liability” or “UAAL.” The UAAL represented the present value of benefits attributed to past service that are in excess of plan assets. In addition, the actuary computed the “Funded Ratio,” which was the Actuarial Value of Assets divided by the Actuarial Accrued Liability, expressed as a percentage. The Funded Ratio and the UAAL provide one way of measuring the financial health of a pension plan.

New GASB Standards

Beginning with the fiscal year ended December 31, 2014, GASB 25 was replaced with GASB Statement No. 67 (“GASB 67”), and GASB 27 was replaced with GASB Statement No. 68 beginning with the fiscal year ending December 31, 2015 (“GASB 68” and, together with GASB 67, the “new GASB standards”). The new GASB standards provide standards solely for financial reporting and accounting related to pension plans. The new GASB standards require calculation and disclosure of a “Net Pension Liability,” which is the difference between the actuarial present value of projected benefit payments that is attributed to past periods of employee service calculated pursuant to the methods and assumptions set forth in the new GASB standards (referred to in such statements as the “Total Pension Liability”) and the fair market value of the pension plan’s assets (referred to as the “Fiduciary Net Position”). This concept is similar to the UAAL, which was calculated under the prior GASB standards, but most likely will differ from the UAAL on any calculation date because the Fiduciary Net Position is calculated at fair market value and because of the potential differences in the manner of calculating the Total Pension Liability as compared to the Actuarial Accrued Liability under the prior GASB standards.

Furthermore, the new GASB standards employ a rate, referred to in such statements as the “Discount Rate,” which is used to discount projected benefit payments to their actuarial present values. The Discount Rate may be a blended rate comprised of (1) a long-term expected rate of return on a retirement fund’s investments (to the extent that such assets are projected to be sufficient to pay benefits), and (2) a tax-exempt municipal bond rate meeting certain specifications set forth in the new GASB standards. Therefore, in certain cases in which the assets of the District’s Retirement Fund are not expected to be sufficient to pay the projected benefits of the Retirement Fund, the Discount Rate calculated pursuant to the new GASB standards may differ from the assumed investment rate of return used in reporting pursuant to the prior GASB standards.

Finally, the new GASB standards require that the Net Pension Liability be disclosed in the notes to the financial statements of the pension system and that a proportionate share of the Net Pension Liability be recognized on the Statement of Net Position of the employer. In addition, GASB 68 requires an expense (the “Pension Expense”) to be recognized on the Statement of Activities of the District for fiscal year ending December 31, 2015. The recognition of the Net Pension Liability and the Pension Expense do not measure the manner in which the District’s Retirement Fund is funded and therefore do not conflict with the various manners of funding the Retirement Fund described in this Official Statement.

As stated above, GASB 67 was first applied with respect to the Actuarial Valuation for the fiscal year ended December 31, 2014. The District recorded the impact of at the new GASB standards in its the

financial statements ending December 31, 2015; however, because the District contributes to the Retirement Fund pursuant to the methods established in the Article 12 Amendments to the Pension Code, the new GASB standards will not materially impact the contributions made by the District without legislative action.

District’s Contributions Not Related to GASB Standards

The District’s contributions to the Retirement Fund are not based on the contribution calculations promulgated by GASB for reporting purposes. Instead, the District’s contributions are calculated pursuant to the formulas established in the Article 12 Amendments to the Pension Code. See “–Calculation of District Contributions to the District Retirement Fund Under the Pension Code” below.

The methods for contributing to the District Retirement Fund set forth in the Pension Code do not conform to the manner of funding referenced by the prior GASB standards which funding was based on the Actuarially Determined Contribution (previously known as Actuarially Required Contribution). The difference between the District’s actual contributions and the Actuarially Determined Contribution (as calculated by the District Retirement Fund’s actuary) for fiscal years 2006-2015 is shown in “Table 3 – History of Contributions” below. The District Retirement Fund’s Actuarially Determined Contribution is equal to its Normal Cost plus an amortization of the Retirement Funds’ UAAL on a level percent of payroll basis. This method of calculating the Actuarially Determined Contribution was acceptable under the prior GASB standards. The new GASB standards do not require calculation of an Actuarially Determined Contribution.

Furthermore, in fiscal years 2015 and 2016, the District contributed supplemental contributions, in addition to the statutory annual employer contribution required by the Pension Code. Assuming various assumptions are realized, the Retirement Fund’s actuary projects that the District’s statutory annual employer contribution coupled with the District’s supplemental contributions will be sufficient for the Retirement Fund to reach a Funded Ratio of 90 percent in 2048. See Table 8 – “Projection of Future Funding Status.”

Determination of Employer Contributions

Actuaries use demographic data (such as employee age, salary and service credits), economic assumptions (such as estimated salary and interest rates), and decrement assumptions (such as employee turnover, mortality and retirement rates) to determine the amount that an employer is required to contribute in a given year to provide sufficient funds to a pension plan to pay benefits when due. The actuary then produces a report, called the “Actuarial Valuation,” in which the actuary reports on such pension plan’s assets, liabilities and the following fiscal year’s Actuarially Determined Contribution (as defined below) (formally known as Actuarially Required Contribution). The District Retirement Fund’s Actuarial Valuations are publicly available and may be obtained from their website, www.chicagoparkpension.org. While certain of these Actuarial Valuations are available on the District Retirement Fund’s website, the content of these reports and such website are not incorporated herein by reference and the link to such website is being provided only for the convenience of those reading this Official Statement.

The Actuarial Valuation

The primary purpose of the Actuarial Valuation is to determine the recommended amount the District should contribute to the District Retirement Fund in a given fiscal year (the “Actuarially Determined Contribution”) to satisfy its current and future obligations to pay benefits to eligible members of the District Retirement Fund. The Actuarially Determined Contribution consists of two components: (1) the portion of the present value of retirement benefits that are allocable to active members’ current fiscal

year of service, termed the “Normal Cost” and (2) an amortized portion of any UAAL (as hereinafter defined) sufficient to eliminate the UAAL over a period of time.

To determine the Actuarially Determined Contribution, the actuary calculates both the “Actuarial Accrued Liability” and the “Actuarial Value of Assets.” The Actuarial Accrued Liability is an estimate of the present value of the benefits the District Retirement Fund must pay to current and retired employees as a result of their employment with the District and participation in the District Retirement Fund. See “− Calculation of District Contributions to the District Retirement Fund Under the Pension Code” below. The Actuarial Accrued Liability is calculated by use of a variety of demographic and other data (such as employee age, salary and service credits) and various assumptions (such as estimated salary increases, interest rates, employee turnover, mortality and disability rates). The Actuarial Value of Assets reflects the value of the investments and other assets held by the District Retirement Fund. Various methods exist for calculating the Actuarial Value of Assets and the Actuarial Accrued Liability. For a discussion of the methods and assumptions used to calculate the District Retirement Fund’s Actuarial Accrued Liability and Actuarial Value of Assets, see “− Actuarial Methods” and “− Actuarial Assumptions” below and the District Retirement Fund’s most recent Actuary’s Report in APPENDIX D.

Any shortfall between the Actuarial Value of Assets and the Actuarial Accrued Liability is referred to as the “Unfunded Actuarial Accrued Liability” or “UAAL.” The UAAL represents the present value of benefits earned to date that are not covered by plan assets. In addition, the actuary will compute the “Funded Ratio,” which is equal to the ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability, expressed as a percentage. The Funded Ratio and the UAAL are used to measure the financial health of a pension plan. An increasing UAAL or a decreasing Funded Ratio from year to year signals a deterioration in the financial health of a pension plan because it indicates the incurrence of additional liability without a corresponding increase in assets necessary to pay those additional liabilities. Conversely, a decreasing UAAL or an increasing Funded Ratio indicates an improvement in the financial health of a pension plan because such a change reflects the closing of the gap between the liabilities accrued by the pension plan and the assets necessary to pay those liabilities when they become due.

Calculation of District Contributions to the District Retirement Fund Under the Pension Code

The actuary uses the Actuarial Accrued Liability, the Actuarial Value of Assets, the UAAL and the Normal Cost to compute the Actuarially Determined Contribution. However, with respect to the District Retirement Fund, the District’s ability to contribute the Actuarially Determined Contribution in any given fiscal year is governed by Illinois law. Until the January 1, 2015 effective date of the Article 12 Amendments, the Pension Code provides that District contributions to the District Retirement Fund are to be made from the proceeds of an annual levy of real property taxes (the “Pension Levy”) by the District for such purpose. Commencing January 1, 2015, the Pension Code will permit District contributions to the District Retirement Fund to be made from the Pension Levy and any other revenues of the District. The Pension Levy is levied solely for the purpose of contributing to the District Retirement Fund, and such levy is separate and distinct from all other taxes levied by the District. The amount of the Pension Levy may not exceed a factor of 1.10 times the amount contributed by the District’s employees two years prior to the year in which the tax is levied (the “Contribution Limitation”) for the period ending December 31, 2014 and commencing January 1, 2015, 1.7 times, 2.3 times in 2017 and 2.9 times in 2019 and thereafter until the Fund is 90% funded when the factor becomes the lesser of 2.9 or the amount necessary to maintain 90% funding (each of the foregoing factors referred to herein as the “Multiplier”).

The District Retirement Fund’s Annual Determined Contribution is equal to its Normal Cost plus amortization of the UAAL over the period ending 30 years from December 31, 2012, as a level percentage of payroll. This method of calculating the Annual Determined Contribution is currently acceptable under

the standards promulgated by the GASB. However, the amount of contribution generated through application of the Contribution Limitation may prevent the District from contributing Normal Cost plus an amount necessary to amortize the UAAL. See Table 3 – “History of Contributions.”

The asset values used for the valuation were based on the asset information contained in the statements of fiduciary net position as December 31, 2015, prepared by the District Retirement Fund. The actuarial value of assets was determined by smoothing unexpected gains or losses over a period of five years. The resulting actuarial value of the District Retirement Fund’s net assets as of December 31, 2015, was $395,652,106 and December 31, 2014, it was $393,762,692. Table 2 – “Smoothed Value of Assets vs. Fair Value of Net Assets” provides a comparison of the District Retirement Fund’s assets on a fair value basis and after application of the Asset Smoothing Method. In comparison, the market value of the District Retirement Fund’s net assets as of December 31, 2015, was $393,155,338.

Table 2 - Smoothed Value of Assets vs. Fair Value of Net Assets (1)

ACTUARIAL ACTUARIAL VALUE AS A FISCAL VALUE OF NET FAIRVALUE OF PERCENTAGE OF YEAR ASSETS NET ASSETS FAIR VALUE 2006 572,659 573,388 99.87 2007 583,296 621,626 93.83 2008 586,676 562,270 104.34 2009 553,755 414,320 133.65 2010 518,583 412,373 125.76 2011 489,371 452,810 108.07 2012(2) 440,692 410,798 107.28 2012(3) 421,448 412,389 102.20 2013 404,292 435,769 92.78 2014 393,763 413,422 95.24 2015 395,652 393,155 100.64 ______Source: The District Retirement Fund’s Comprehensive Annual Financial Report. (1) In thousands of dollars and rounded. (2) Reflects year ended June 30, 2012. (3) Reflects six months ended December 31, 2012.

Actuarial Accrued Liability

As the final step in the Actuarial Valuation, the actuary applies a cost method assigning portions of the total value of benefits to past, present and future periods of employee service. This allocation is accomplished by the development of normal cost and the Actuarial Accrued Liability. The District Retirement Fund currently uses the entry age normal actuarial cost method (the “Entry Age Normal Cost Method”) with costs allocated on the basis of earnings. The Entry Age Normal Cost Method is a GASB- approved actuarial method.

Under the Entry Age Normal Cost Method, the present value of the projected pension of each member is assumed to be funded by annual installments, equal to a level percent of the member’s earnings for each year between entry age and assumed exit age. The Normal Cost for the member for the current fiscal year is equal to the portion of the value so determined, assigned to the current fiscal year. Therefore, the “Normal Cost” for the plan for the year is the sum of the normal costs of all active members.

The Actuarial Accrued Liability is the portion of the present value of benefits assigned by the cost method to years of service up to the valuation date or, in other words, for past service. This value changes

as the member’s salary and years of service change, and as some members leave and are replaced by new members. Future normal cost is the portion of the present value of benefits assigned to future years of service and is assumed to be funded annually.

Actuarial Assumptions

The District Retirement Fund’s actuary uses a variety of assumptions to calculate the Actuarial Accrued Liability and the Actuarial Value of Assets. These assumptions generally fall into two categories: (i) economic assumptions, such as estimated salary increases and interest rates; and (ii) decrement assumptions, such as employee turnover, mortality and retirement rates. The assumptions used by the District Retirement Fund are based on the experience of the District Retirement Fund and are formally adopted by the Pension Board upon recommendation by the District Retirement Fund’s actuary. No assurance can be given that any of the assumptions underlying the Actuarial Valuations will reflect the actual results experienced by the District Retirement Fund. Variances between the assumptions and actual results may cause an increase or decrease in the Actuarial Value of Assets, the Actuarial Accrued Liability, the UAAL, the Funded Ratio or the Actuarially Determined Contribution.

Additional information on the District Retirement Fund’s actuarial assumptions is available in the District Retirement Fund’s Actuary’s Report attached separately as APPENDIX D. Certain of the District Retirement Fund’s actuarial assumptions in the current fiscal year’s Actuarial Valuation approved by the Pension Board, are effective as follows:

• The RP-2000 Combined Healthy Mortality Table, set forward 1 year for female participants with generational projection from 2003 using Scale AA; • Salary scales from 15% to 2.75% based on service; • The investment rate of return of 7.50%; • The inflation rate of 2.75%; • The payroll growth rate of 2.75%; • The actuarial cost method of Entry Age Normal; • The amortization method of a 30-year closed period, level percentage of pay.

Funded Status of the District Retirement Fund

The Pension Code requires until January 1, 2015, that the District fund the District Retirement Fund only through the Pension Levy. On January 1, 2015, under the Articles 12 Amendments the District can use any revenues to fund the Retirement Fund. The District contributes to the District Retirement Fund a percentage of the Pension Levy equal to the percentage actually collected by the District from its separate total annual levy. For fiscal years prior to 2010, the District Retirement Fund’s contributions were reduced by taxpayer refunds. These reductions in contribution to the Retirement Fund had the effect of increasing the Retirement Fund’s UAAL and decreasing its Funded Ratio. For fiscal years 2011 through fiscal year 2015 and for the 2016 fiscal year, the District no longer reduces its contribution to the District Retirement Fund by refunds to taxpayers and therefore, the Pension Fund did not experience a reduction in its contributions. However, there can be no assurance that this practice will continue for future fiscal years.

In each year, the District has contributed to the District Retirement Fund as required by the Pension Code. Despite the District making the maximum contribution allowed by the Pension Code, the District Retirement Fund’s UAAL has continued to rise and the District Retirement Fund’s Funded Ratio has continued to decline. The District has experienced these changes in the UAAL and the Funded Ratio in

large part due to the Contribution Limitation, which limits the Pension Levy to an amount insufficient to fully fund the District Retirement Fund to the amount of the Actuarially Determined Contribution. The increase in the District’s employer contribution and the other structural changes of the Article 12 Amendments to the Pension Code (including the expansion of sources of District revenues to make employer contributions) coupled with the District’s operational and debt management plan are intended to increase the Funded Ratio of the District Retirement Fund and decrease the District Retirement Fund’s UAAL.

Table 3 – “History of Contributions” provides information on the Actuarially Determined Contribution, the District’s actual contributions in accordance with the Pension Code, the percentage of the Actuarially Determined Contribution made in each year and the Multiplier that would have been necessary in each year to allow the District to contribute the Actuarially Determined Contribution for each year 2006 through 2015.

Table 3 – History of Contributions(1) Percentage of Estimated Multiplier Actuarially Necessary to Match Actuarially Determined Actuarially Required Determined Actual Employer Contribution Contribution Fiscal Year Contribution (4) Contribution Contributed 2006 16,437 5,174 31% 3.49 2007 14,572 9,595 66% 1.67 2008 16,073 8,999 56% 1.96 2009 18,285 9,668 53% 2.08 2010 22,400 10,829 48% 2.28 2011 25,319 10,981 43% 2.54 2012(2) 28,052 10,868 39% 2.84 2012(3) 16,787 5,268 31% 3.50 2013 41,835 15,707 38% 2.93 2014 35,307 11,225 32% 3.46 2015 36,274 30,589(5) 84% 3.41 ______Sources: The District Retirement Fund’s Comprehensive Annual Financial Report. (1) In thousands of dollars and rounded. (2) Reflects year ended June 30, 2012. (3) Reflects six months ended December 31, 2012. (4) For fiscal years 2006 through 2014 this contribution was known as Actuarially Required Contribution. (5) Includes $12.5 million supplemental employer contribution.

As of the end of year 2015 (December 31, 2015), the Actuarial Valuation and Review reported the District Retirement Fund’s total actuarial liability was $910,260,360; the District Retirement Fund’s actuarial value assets were $395,652,106 and the unfunded actuarial liability was $514,608,254. The District Retirement Fund’s ratio of the actuarial value of assets to the actuarial liability, or funded ratio, was 43.45%.

The increase in the District Retirement Fund’s UAAL and the decrease in its Funded Ratio beginning in fiscal year 2008 correlates directly to the severe global economic downturn. The downturn had a significant impact on the value of the District Retirement Fund’s investments and, as such, the value of the assets available to the District Retirement Fund. The impact of the economic downturn on the District and the District Retirement Fund was similar to the experience of other governmental entities during the same period of time.

The following tables summarize the current financial condition and the funding progress of the District Retirement Fund: Table 4- Financial Condition of the Park Employees’ Annuity and Benefit Fund

FINANCIAL CONDITION OF THE PARK EMPLOYEES' ANNUITY AND BENFIT FUND FISCAL YEARS 2006-2015

2006 2007 2008 2009 2010 2011 2012 2012* 2013 2014 2015

Beginning Net Assets (Fair Value) $ 577,728,818 $ 573,387,500 $ 621,625,700 $ 562,269,564 $ 414,319,847 $ 412,373,355 $ 452,810,488 $ 410,797,588 $ 412,389,017 $ 435,768,679 $ 413,421,716 Income Employee contributions 9,117,032 9,719,082 10,264,805 10,141,146 9,829,998 9,791,650 10,404,827 5,371,084 10,732,730 10,831,434 12,368,636 Employer contributions 10,173,860 9,594,593 8,998,687 9,677,765 10,829,339 10,981,419 10,868,361 5,268,363 15,804,452 11,225,438 30,588,976 Statutory reduction of employer contributions (5,000,000) ------Investment income (loss)(1) 40,891,213 88,693,223 (17,605,661) (103,408,860) 41,249,971 84,805,838 3,795,942 24,908,774 66,557,662 27,490,520 8,823,613 Miscellaneous income (loss)(2) 79,475 48,172 214,067 (79,515) 170,004 62,021 65,231 48,022 84,866 100,518 88,113 Total $ 55,261,580 $ 108,055,070 $ 1,871,898 $ (83,669,464) $ 62,079,312 $ 105,640,928 $ 25,134,361 $ 35,596,243 $ 93,179,710 $ 49,647,910 $ 51,869,338

Expenditures Benefits 56,303,466 56,810,057 57,973,617 60,264,714 61,191,339 62,042,532 63,514,505 32,303,100 66,219,804 67,806,651 68,553,841 Refunds of contributions 2,067,947 1,768,914 1,964,838 2,680,359 1,368,903 1,662,358 1,988,153 977,912 2,116,163 2,729,391 2,048,175 Administrative and general expenses 1,231,485 1,237,899 1,289,579 1,335,180 1,465,562 1,498,905 1,644,603 723,802 1,464,081 1,458,831 1,533,700 Total $ 59,602,898 $ 59,816,870 $ 61,228,034 $ 64,280,253 $ 64,025,804 $ 65,203,795 $ 67,147,261 $ 34,004,814 $ 69,800,048 $ 71,994,873 $ 72,135,716

Ending Net Assets (Fair Value) $ 573,387,500 $ 621,625,700 $ 562,269,564 $ 414,319,847 $ 412,373,355 $ 452,810,488 $ 410,797,588 $ 412,389,017 $ 435,768,679 $ 413,421,716 $ 393,155,338

Actuarial Value of Assets $ 572,659,129 $ 583,295,949 $ 586,676,032 $ 553,754,517 $ 518,582,601 $ 489,370,505 $ 440,692,006 $ 421,448,001 $ 404,292,435 $ 393,762,692 $ 395,652,106 Actuarial Accrued Liabilities $ 745,244,239 $ 767,930,632 $ 795,379,129 $ 823,896,936 $ 833,025,948 $ 843,943,240 $ 866,370,565 $ 971,807,222 $ 888,023,364 $ 900,840,617 $ 910,260,360 UAAL (Fair Value) $ 171,856,739 $ 146,304,932 $ 233,109,565 $ 409,577,089 $ 420,652,593 $ 391,132,752 $ 455,572,977 $ 559,418,205 $ 452,254,685 $ 487,418,901 $ 517,105,022 UAAL (Actuarial Value) $ 172,585,110 $ 184,634,683 $ 208,703,097 $ 270,142,419 $ 314,443,347 $ 354,572,735 $ 425,678,559 $ 550,359,221 $ 483,730,929 $ 507,077,925 $ 514,608,254 Funded Ratio (Fair Value) 76.94% 80.95% 70.69% 50.29% 49.50% 53.65% 47.42% 42.44% 49.07% 45.89% 43.19% Funded Ratio (Actuarial Value) 76.84% 75.96% 73.76% 67.21% 62.25% 57.99% 50.87% 43.37% 45.53% 43.71% 43.47%

Source: The District Retirement Fund's Comprehensive Annual Financial Report. (1) Investment income is shown net of fees. (2) Includes income from the Fund's securities lending program. * For the six months ended December 31, 2012.

Table 5 - Schedule of Funding Progress (Dollar amounts in thousands) Actuarial Accrued Actuarial Actuarial Liability Unfunded UAAL as of Valuation Value of (AAL) (AAL) Funded Covered percentage of Date Assets (1) Entry Age (UAAL) (2) Ratio Payroll Covered Payroll (a) (b) (b-a) (a/b) (c) ((b-a)/c)

2006 572,659 745,244 172,585 76.8 101,058 170.8 2007 583,296 767,931 184,635 76.0 106,602 173.2 2008 586,676 795,379 208,703 73.8 111,698 186.9 2009 553,755 823,897 270,142 67.2 108,883 248.1 2010 518,583 833,026 314,443 62.3 107,361 292.9 2011 489,371 843,943 354,573 58.0 107,687 329.3 2012 440,692 866,371 425,679 50.9 114,224 372.7 2012(3) 421,448 971,807 550,359 43.4 58,232 472.6 2013 404,292 888,023 483,731 45.5 117,782 410.7 2014 393,763 900,841 507,078 43.8 118,988 426.2 2015 395,652 910,260 514,608 43.4 122,383 420.5 ______Source: The District’s Retirement Fund’s Comprehensive Annual Financial Report. (1) The actuarial value is determined by application of the Asset Smoothing Method as discussed in “Actuarial Methods— Actuarial Value of Assets” above. (2) For purposes of this column, “Actuarial” refers to the fact that the calculation was made using the Actuarial Value of Assets; adjusted for annualized covered payroll. (3) The District’s Retirement Fund changed its fiscal year end from June 30th to December 31st effective July 1, 2012 resulting in a six-month actuarial valuation ended December 31, 2012. The cumulative value of the annual differences between the District’s contribution to the Retirement Fund and the Actuarially Determined Contribution is referred to as its “Net Pension Obligation” or its “Net Pension Asset.” If the cumulative difference between the District’s Retirement Fund contribution and the Actuarially Determined Contribution is positive, the District would have a Net Pension Asset. Conversely, if the cumulative difference is negative, the District would have a Net Pension Obligation. A variety of factors impact the Retirement Fund’s UAAL and Funded Ratio such as, increases in member salary and benefits, a lower return on investment than that assumed by the Retirement Fund, and insufficient contributions when compared to the Normal Cost plus interest will all cause an increase in the UAAL and a decrease in the Funded Ratio. Conversely, decreases in member salary and benefits, a higher return on investment than assumed, and employer contributions in excess of Normal Cost plus interest will decrease the UAAL and increase the funded ratio. In addition, changes in actuarial assumptions and certain other factors will have an impact on the UAAL and the Funded Ratio. The UAAL increased between June 30, 2012 and December 31, 2012 primarily as a result of changes to the actuarial assumptions by $92.4 million. During 2013, the UAAL decreased primarily because of benefit changes in Public Act 98-0622.

In any year that the District fulfills its obligation to contribute to the Retirement Fund under the Pension Code, the District will have a Net Pension Obligation for such year equal to the shortfall resulting from the difference between the amount contributed pursuant to the Pension Levy and the Actuarially Determined Contribution. The Pension Levy and the Actuarially Determined Contribution differ in any given year because of the Contribution Limitation, as discussed in “Calculation of District Contributions to the Retirement Fund Under the Pension Code” previously. Table 6 – “Net Pension Obligation” provides a

schedule of the total Net Pension Obligation or Net Pension Asset at the end of each of the last ten fiscal years.

Table 6 - Net Pension Obligation (1) (2)

NET PENSION FISCAL YEAR ASSET/(OBLIGATION) 2006 7,369 2007 (603) 2008 (10,839) 2009 (16,337) 2010 (31,156) 2011 (48,854) 2012 (69,646) 2013 (106,074) 2014 (131,152) 2015 (137,918) ______Sources: The District’s Retirement Fund’s Comprehensive Annual Financial Report. (1) In thousands of dollars. Prior to 2013, reflects year ended June 30. (2) During the fiscal year 2015, the District adopted GASB Statement No. 68 (the “Statement”) Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27. The Statement replaces GASB Statement No. 27, and its primary objective is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. Accordingly, the District’s 2015 CAFR reports the Net Pension Liability and not the Net Pension Obligation. Therefore, the District will no longer report the Net Pension Obligation. Further, the Statement requires covered governments to select either a beginning of fiscal year measurement date or an end of fiscal year measurement date. The District selected a beginning of fiscal year measurement date.

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Table 7 - Components of Change in Unfunded Liability (1)

EMPLOYER CONTRIBUTIONS SALARY INVESTMENT RETURNS (HIGHER)/LOWER THAN CHANGES IN TOTAL CHANGE IN FISCAL INCREASES/ (HIGHER)/LOWER NORMAL COST PLUS BENEFIT ACTUARIAL OTHER UNFUNDED YEAR (DECREASES) THAN ASSUMED INTEREST(2) CHANGES ASSUMPTIONS FACTORS LIABILITY 2006 1,182 15,047 10,061 - - (292) 25,998 2007 1,401 (6,916) 7,934 - - 9,630 12,049 2008 2,264 (327) 10,238 - 337 11,556 24,068 2009 (1,495) 33,560 12,184 - - 17,100 61,349 2010 (8,928) 34,405 16,199 - - 2,625 44,301 2011 (6,320) 24,525 19,726 - - (2,199) 35,732 2012 (3) (1,666) 40,119 24,169 - - 8,484 71,106 2012 (4) (225) 13,039 15,020 - 92,444 4,403 124,681 2013 (807) 3,879 32,113 (109,414) - 7,601 (66,628) 2014 4,596 (10,929) 28,967 - - 713 23,347 2015 766 (2,629) 9,687 (294) 7,530 ______Source: The District Retirement Fund’s Comprehensive Annual Financial Report. (1) In thousands of dollars. (2) To determine whether employer contributions represented an increase or decrease in UAAL, such contributions are measured against contributions based on the Normal Cost plus interest. If employer contributions exceed Normal Cost plus interest, the UAAL will decrease. If employer contributions are less than Normal Cost plus interest, the UAAL will increase. (3) Reflects the year ended June 30, 2012. (4) Reflects the six months ended December 31, 2012.

Projection of Funded Status

The funding level for the Retirement Fund has decreased most notably in recent years due to a combination of factors, including the following: adverse market conditions and investment returns because of the financial downturn experienced in 2008; and District contributions that are lower than the Actuarially Determined Contribution due to the Contribution Limitation. The declining Funded Ratios that the Retirement Fund has experienced in recent years are similar to the funding challenges faced by other large governmental pension funds in the United States. The District recognizes its responsibility to the employees’ retirement program and therefore worked to pass the Article 12 Amendments.

Table 8 – “Projection of Future Funding Status” provides a projection of the Actuarial Value of Assets, the Actuarial Accrued Liability, the UAAL and the Funded Ratio until 2053. The following projection is based on the December 31, 2015 actuarial valuation. The projection makes the following assumptions: (1) Member contributions increase to 10% for Fiscal Years 2015 and 2016, 11% for Fiscal Years 2017 and 2018, and 12% thereafter; (2) Member contributions decrease to 10.5% when funded ratio is at least 90%; revert back to 12% if funded ratio falls below 90%; (3) tax levy multiplier increased from 1.1 to 1.7 for Fiscal Years 2015 and 2016, 2.3 for Fiscal Years 2017 and 2018, and 2.9 thereafter; (4) once the Fund attains a 90% funded ratio, employer contributions are the lesser of the tax levy multiplier and the amount necessary to maintain a 90% funded ratio; and (5) supplemental contributions of $12.5 million have been made in Fiscal Years 2015 and 2016 and $50 million will be made in Fiscal Year 2019.

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Table 8 - Projection of Future Funding Status(1) Park Employees’ Annuity and Benefit Fund of Chicago Projection of Contributions, Liabilities, and Assets Based on the December 31, 2015 actuarial valuation (All dollar amounts are in thousands. Actuarial Liability and asset figures as of end of year.)

Total Actuarial Unfunded Fiscal Employee Employer Supplemental Benefit Estimated Actuarial Value of Actuarial Funded Year Contributions Contributions Contributions Payroll Normal Cost Payouts Expenses Liability Assets Liability Ratio 2015 910,260.4 395,652.1 514,608.3 43.5% 2016 13,255.3 17,735.7 12,500.0 131,229.5 13,763.8 72,910.3 1,610.4 917,681.5 394,558.6 523,122.9 43.0% 2017 14,274.8 27,619.3 0.0 128,567.8 13,609.5 73,373.1 1,690.9 925,013.2 393,665.6 531,347.6 42.6% 2018 14,056.2 29,599.1 0.0 126,580.5 13,529.7 73,303.0 1,775.4 932,881.9 386,281.9 546,600.0 41.4% 2019 15,130.3 40,191.1 50,000.0 124,983.2 13,437.3 73,762.8 1,864.2 940,764.1 441,861.4 498,902.8 47.0% 2020 14,993.7 39,575.6 0.0 123,844.6 13,402.9 73,772.0 1,957.4 949,191.2 452,740.8 496,450.3 47.7% 2021 14,882.8 42,599.9 0.0 122,920.4 13,358.0 74,183.6 2,055.3 957,774.9 466,959.1 490,815.8 48.8% 2022 14,810.8 42,215.2 0.0 122,320.2 13,338.2 74,507.0 2,158.1 966,645.6 481,384.5 485,261.1 49.8% 2023 14,758.8 41,902.9 0.0 121,887.6 13,321.2 74,902.0 2,266.0 975,753.5 496,115.1 479,638.3 50.8% 2024 14,712.6 41,700.2 0.0 121,502.3 13,275.4 75,333.4 2,379.3 985,047.6 511,196.4 473,851.2 51.9% 2025 14,676.4 41,554.0 0.0 121,201.1 13,233.6 75,799.6 2,498.2 994,510.3 526,624.3 467,886.0 53.0% 2026 14,641.9 41,423.8 0.0 120,913.5 13,163.1 76,315.6 2,623.1 1,004,071.5 542,381.9 461,689.6 54.0% 2027 14,605.4 41,322.0 0.0 120,608.7 13,072.7 76,761.2 2,754.3 1,013,790.3 558,584.3 455,206.0 55.1% 2028 14,601.1 41,224.9 0.0 120,573.5 13,026.1 77,118.3 2,892.0 1,023,817.4 575,385.4 448,432.1 56.2% 2029 14,616.8 41,121.9 0.0 120,703.9 12,987.2 77,913.6 3,036.6 1,033,729.7 592,381.5 441,348.1 57.3% 2030 14,638.3 41,110.0 0.0 120,882.9 12,954.8 78,688.8 3,188.5 1,043,546.2 609,701.0 433,845.2 58.4% 2031 14,666.9 41,154.1 0.0 121,121.8 12,930.6 79,523.9 3,347.9 1,053,206.5 627,363.3 425,843.3 59.6% 2032 14,700.6 41,214.5 0.0 121,402.1 12,900.2 80,274.6 3,515.3 1,062,779.8 645,495.3 417,284.5 60.7% 2033 14,750.0 41,295.2 0.0 121,814.3 12,879.0 80,866.9 3,691.0 1,072,433.8 664,325.5 408,108.3 61.9% 2034 14,818.1 41,390.0 0.0 122,381.6 12,873.8 81,431.9 3,875.6 1,082,220.1 683,959.3 398,260.8 63.2% 2035 14,891.1 41,529.2 0.0 122,990.1 12,860.8 82,024.9 4,069.4 1,092,111.2 704,469.6 387,641.6 64.5% 2036 14,973.1 41,720.9 0.0 123,673.2 12,856.2 80,508.2 4,272.8 1,104,312.6 728,164.5 376,148.1 65.9% 2037 15,055.1 41,926.5 0.0 124,356.7 12,847.0 81,042.3 4,486.5 1,116,865.2 753,159.2 363,706.0 67.4% ______Source: Segal Consulting, Chicago, Illinois. Segal Consulting serves as consulting actuary to the Retirement Fund. (1) Based on the data, assumptions, methods, and plan provisions in the December 31, 2015 Actuarial Valuation. Actuarial Liability and asset figures as of end of year. These projections are based on the legislative structure in place as of the date of this disclosure filing and assume no changes to such legislative structure.

Table 8 - Projection of Future Funding Status(1)

Park Employees’ Annuity and Benefit Fund of Chicago Projection of Contributions, Liabilities, and Assets Based on the December 31, 2015 actuarial valuation (All dollar amounts are in thousands. Actuarial Liability and asset figures as of end of year.)

Total Actuarial Unfunded Fiscal Employee Employer Supplemental Benefit Estimated Actuarial Value of Actuarial Funded Year Contributions Contributions Contributions Payroll Normal Cost Payouts Expenses Liability Assets Liability Ratio 2038 15,149.1 42,157.3 0.0 125,140.0 12,846.1 81,358.1 4,710.8 1,130,030.6 779,805.1 350,225.5 69.0% 2039 15,271.1 42,388.2 0.0 126,156.4 12,877.2 81,779.9 4,946.3 1,143,779.3 808,133.5 335,645.8 70.7% 2040 15,396.6 42,652.9 0.0 127,202.0 12,905.1 82,057.6 5,193.7 1,158,300.9 838,446.6 319,854.3 72.4% 2041 15,532.8 42,996.3 0.0 128,337.0 12,940.1 82,359.8 5,453.3 1,173,635.8 870,947.9 302,687.9 74.2% 2042 15,692.5 43,349.5 0.0 129,668.4 12,991.6 82,553.7 5,726.0 1,189,975.0 905,934.9 284,040.0 76.1% 2043 15,867.5 43,733.0 0.0 131,126.8 13,060.1 82,346.5 6,012.3 1,207,828.2 944,043.4 263,784.8 78.2% 2044 16,068.1 44,182.9 0.0 132,797.9 13,146.5 82,165.9 6,312.9 1,227,300.6 985,560.2 241,740.4 80.3% 2045 16,286.7 44,675.6 0.0 134,619.7 13,249.1 81,838.8 6,628.6 1,248,683.2 1,030,940.7 217,742.5 82.6% 2046 16,518.6 45,240.2 0.0 136,552.4 13,354.9 81,388.3 6,960.0 1,272,250.7 1,080,674.7 191,576.0 84.9% 2047 16,778.0 45,855.7 0.0 138,714.4 13,492.2 80,848.1 7,308.0 1,298,293.8 1,135,245.9 163,047.8 87.4% 2048 17,051.9 46,508.7 0.0 140,996.1 13,644.2 80,149.5 7,673.4 1,327,178.2 1,195,217.2 131,961.0 90.1% 2049 15,196.9 13,107.1 0.0 143,472.2 13,812.8 79,479.7 8,057.1 1,359,105.1 1,223,404.6 135,700.5 90.0% 2050 15,472.6 13,687.5 0.0 146,097.8 13,987.7 78,737.7 8,459.9 1,394,384.4 1,254,946.0 139,438.4 90.0% 2051 15,770.0 14,141.2 0.0 148,930.6 14,184.8 78,005.5 8,882.9 1,433,281.1 1,289,953.0 143,328.1 90.0% 2052 16,085.7 14,413.0 0.0 151,936.9 14,398.1 77,449.7 9,327.1 1,475,901.1 1,328,311.0 147,590.1 90.0% 2053 16,416.6 14,691.3 0.0 155,088.2 14,627.0 76,743.4 9,793.4 1,522,696.4 1,370,426.8 152,269.6 90.0% 2054 16,772.3 15,002.4 0.0 158,476.1 14,886.1 76,098.9 10,283.1 1,573,948.6 1,416,553.7 157,394.9 90.0% ______Source: Segal Consulting, Chicago, Illinois. Segal Consulting serves as consulting actuary to the Retirement Fund. (2) Based on the data, assumptions, methods, and plan provisions in the December 31, 2015 Actuarial Valuation. Actuarial Liability and asset figures as of end of year. These projections are based on the legislative structure in place as of the date of this disclosure filing and assume no changes to such legislative structure.

The projections in Table 8 – “Projection of Future Funding Status” are based upon numerous variables that are subject to change, and are forward-looking statements regarding future events based on the Retirement Fund’s actuarial assumptions and assumptions made regarding such future events, including that there are no changes to the current legislative structure. No assurance can be given that these assumptions will be realized or that actual events will not cause material changes to the data presented. As shown in Table 8 – “Projection of Future Funding Status”, based on the current legislative structure, including the Pension Reform Act, the Retirement Fund’s actuary projects that the Retirement Fund will be greater than 50% Funded Ratio by the end of fiscal year 2023.

Postemployment Healthcare Plan

The District’s Retired Employees Healthcare Plan (the “Healthcare Plan”) is a single employer defined benefit healthcare plan administered by the District. The Healthcare Plan provides medical and prescription drug insurance benefits to eligible retirees, spouses, and dependents. Eligible retirees are former District employees who have retired at the age of 50 with a minimum of 10 years of creditable service or at the age of 60 with a minimum of 4 years of creditable service. District employees that qualify for Medicare eligibility at the age of 65, generally those hired after April 1984 are not covered by the Healthcare Plan. The Healthcare Plan is unfunded and pays benefits on a pay-as-you-go-basis, and therefore, does not issue a publicly available financial report.

The contribution requirements of Healthcare Plan members and the District are established and may be amended by the District. The required contribution is based on pay-as-you-go financing.

For fiscal year 2015, the District contributed $2.1 million to the Healthcare Plan. Healthcare Plan members receiving benefits contributed $1.9 million, or approximately 48.5% of the total premiums.

As of January 1, 2015, the most recent actuarial valuation date, the funded status of the Plan was as follows (amounts are in thousands):

Actuarial accrued liability (AAL) $49,840 Actuarial value of plan assets $0 Unfunded actuarial liability (UAAL) $49,840 Funded ratio (actuarial value of plan assets/AAL) 0.0% Covered payroll (annual payroll of active employees covered by the plan) $118,987 UAAL as a percentage of covered payroll 41.9%

Additional supplemental information is contained in the Required Supplementary Information section of the Audited Financial Statements of the District included as APPENDIX C. The District’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the Plan, and the net OPEB obligation is disclosed in Note 11 of the “Notes to Financial Statements.”

OTHER CHICAGO AREA GOVERNMENTAL BODIES

Overlapping Taxing Bodies

In addition to the District, there are six major Chicago-area units of local government, which share, in varying degrees, a common tax base with the District. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – TAX SUPPORTED BONDED DEBT – District and Overlapping Long-Term Debt.” Each of these governmental units: (i) is separately

incorporated and derives its power and authority under the laws of the State; (ii) has an independent tax levy; (iii) maintains its own financial records and accounts; and (iv) is authorized to issue debt obligations. These units of local government (the “Overlapping Taxing Bodies”) are identified below. These Overlapping Taxing Bodies may have additional significant liabilities, such as unfunded pension obligations and other post-employment benefits. See “INVESTMENT CONSIDERATIONS – Financial Condition of Overlapping Taxing Bodies and the State” and “– Series 2016 Pledged Taxes and Overlapping Taxing Bodies.”

The City of Chicago was incorporated in 1837 and exercises broad governmental powers as a home-rule unit of government under the Constitution of the State. The City is governed by the Mayor, elected at large for a four-year term, and the City Council. The City Council consists of 50 members, each representing one of the City’s 50 wards. City Council members are elected for four-year terms.

The Chicago Board of Education (the “Board of Education”) governs the City’s public school system. The School Board consists of seven members, one of whom is designated as the President, appointed by the Mayor without the consent of the City Council. The Mayor also appoints a chief executive officer of the public school system.

The Community College District No. 508 (the “Community College District”) maintains a system of community colleges within the City. The Community College District is governed by seven trustees appointed by the Mayor with the approval of the City Council.

The County of Cook (the “County”) includes virtually all of the City, as well as a number of surrounding suburbs and unincorporated areas. The County, a home-rule unit of government under the Constitution of the State, is governed by a board of 17 commissioners, elected by single-member districts for four-year terms. The County performs general governmental fu7nctions, including property assessment and property tax collection, court services, jails and sheriff services, and health care services. The County also maintains certain highways and administers certain elections.

The Forest Preserve District of Cook County (the “Forest Preserve District”) is coterminous with the County. The Forest Preserve District is governed by a board composed of the members of the Cook County Board of Commissioners. The Forest Preserve District creates, maintains and operates forest preserves within the County. The Forest Preserve District also maintains and operates the Chicago Botanic Garden and the Brookfield Zoo.

The Metropolitan Water Reclamation District of Greater Chicago (the “Water Reclamation District”), formerly known as the Metropolitan Sanitary District of Greater Chicago, includes most of the County. The Water Reclamation District constructs, maintains and operates sewage treatment plants and necessary sanitary sewers. In addition, the Water Reclamation District constructs and maintains drainage outlets. The Water Reclamation District’s governing body is a nine-member board, elected at-large by the voters of the Water Reclamation District.

Interrelationships of Overlapping Taxing Bodies

The Overlapping Taxing Bodies described above share, in varying degrees, a common property tax base with the District. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION – TAX SUPPORTED BONDED DEBT – District and Overlapping Long- Term Debt.” Each such public body is a distinct governmental unit having no direct legal or financial relationship with the District. The financial condition of any such body does not imply the same condition for the District. See “INVESTMENT CONSIDERATIONS – Financial Condition of Overlapping Taxing Bodies and the State” and “– Series 2016 Pledged Taxes and Overlapping Taxing Bodies.”

Other Public Bodies

A variety of other special-purpose authorities have been created under State law to facilitate the financing of educational facilities, health facilities, highways, housing, industrial development, sports facilities, airports, port facilities and other activities. These authorities are not authorized to levy property taxes. Information about some of these authorities is set forth below.

The Public Building Commission of Chicago (the “Public Building Commission” or “PBC”) issues bonds to finance the acquisition, construction and improvement of public buildings and leases its facilities to certain other governmental units.

The Regional Transportation Authority (the “RTA”) provides planning, funding, coordination and fiscal oversight to three separately governed operating entities that provide public mass transportation services in a six-county area of northeastern Illinois: the Chicago Transit Authority, the suburban rail division (“METRA”) and the suburban bus division (“PACE”). The RTA is primarily funded from sales taxes imposed by the RTA on sales in the six county area and a portion of sales taxes imposed by the State. The RTA is authorized to impose, but does not presently impose, taxes on automobile rentals, motor fuel and off-street parking facilities. By law, motor fuel and off-street parking taxes may not be imposed concurrently with sales taxes.

The Chicago Transit Authority owns and operates a bus and rail transportation system in the metropolitan area of Cook County.

The Chicago Housing Authority owns and operates certain affordable and low-income housing facilities in the City of Chicago.

The Metropolitan Pier and Exposition Authority (the “MPEA”) owns the McCormick Place convention and exposition facilities, MPEA also owns Navy Pier. Since 2011, MPEA has leased Navy Pier to Navy Pier, Inc., a not-for-profit corporation established to separately govern and manage Navy Pier. The MPEA receives revenue from the imposition of sales and other consumption-related taxes by the State. The MPEA also receives revenues from the imposition of airport departure taxes, occupation taxes on retailers, hotel occupation taxes and taxes on car rentals specifically for the purpose of debt service on certain expansion project bonds.

The Illinois Sports Facilities Authority (the “ISFA”) is responsible for the operation of Guaranteed Rate Field (f/k/a U.S. Cellular Field) and provides subsidies for Soldier Field. The ISFA is primarily funded from a hotel tax and lease revenues for the use of U.S. Cellular Field.

RATINGS

S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”) and Kroll Bond Rating Agency, Inc. (“Kroll”) have assigned their long-term ratings of “AA+ (stable outlook),” “AA- (stable outlook)” and “AA (stable outlook),” respectively to the Bonds.

A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from the respective rating agencies at the following addresses: S&P Global Ratings, 55 Water Street, New York, New York 10041; Fitch, One State Street Plaza, New York, New York 10004; or Kroll, 845 Third Avenue, New York, New York 10022. The District has furnished to the rating agencies certain information and materials relating to the Bonds and the District, including certain information and materials that have not been included in this Official Statement. Generally, rating agencies base their ratings on such information and materials and investigations, studies

and assumptions by the respective rating agency. There is no assurance that any rating of the Bonds will continue for any given period of time, or that any rating of the Bonds will not be revised downward or withdrawn entirely by any such rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of any such rating may have an adverse effect on the market price of the Bonds.

As was the case with the District’s general obligation bonds issued in 2015 and 2014, the District has elected not to engage Moody’s Investors Service (“Moody’s”) to provide a credit rating for the Bonds.

See “INVESTMENT CONSIDERATIONS – Recent Ratings Actions” for a discussion of past rating agency actions and the possible effect of potential future rating agency actions.

INVESTMENT CONSIDERATIONS

The following discussion of investment considerations should be reviewed by prospective investors prior to purchasing the Bonds. Any one or more of the investment considerations discussed herein could lead to a decrease in the market value and the liquidity of the Bonds or, ultimately, a payment default on the Bonds. There can be no assurance that other factors not discussed herein will not become material in the future.

Recent Ratings Actions

A rating reflects only the views of the rating agency assigning such rating. Following are recent rating views of Kroll, S&P, Fitch and Moody’s, with respect to the District’s general obligation bonds. An explanation of the significance of such rating views may be obtained from the respective rating agencies as set forth above.

On October 19, 2016, Kroll affirmed its long-term rating of AA with a stable outlook to the District’s general obligation bonds.

On October 19, 2016, S&P affirmed its rating of AA+ (stable outlook) on the District’s outstanding long term fixed rate general obligation bonds.

On October 20, 2016, Fitch affirmed its rating on the District’s general obligation bonds of AA- with a stable outlook.

On March 5, 2015, Moody’s downgraded to Baa1 from A3 its rating on the District’s general obligation bonds and placed the rating on negative outlook. On May 13, 2015, Moody’s downgraded to Ba1 from Baa1 its rating on the District’s general obligation bonds and placed the rating on negative outlook.

The interest rate the District pays on new issuances of general obligation debt is highly dependent on the District’s credit ratings, and downward changes in the District’s ratings could result in significantly higher interest rates payable by the District on future bond issuances and other borrowings, thereby placing pressure on its financial operations.

Unfunded Pensions

The Retirement Fund has significant unfunded liabilities and low funding ratios. While the District has and plans to continue to increase its contribution to the Pension Fund and implement the reform initiatives to decrease the unfunded liabilities and increase the funding ratios, there can be no assurance or guarantee that the District’s actions will accomplish the decrease in the unfunded liabilities and low funding ratios. For a discussion of the current status of the Retirement Fund and the District’s future plans with respect to scheduled contributions, see “EMPLOYEE RETIREMENT SYSTEM,” APPENDIX C – “AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2015 – Note 10. Employee Retirement System” and APPENDIX D – “REPORT OF THE CONSULTING ACTUARY ON THE DISTRICT RETIREMENT FUND.”

Local Economy

The financial health of the District is dependent in part on the strength of the local economy. Many factors affect the local economy, including rates of employment and economic growth and the level of residential and commercial development. It is not possible to predict to what extent any changes in economic conditions, demographic characteristics, population or commercial and industrial activity will occur and what impact such changes would have on the finances of the District. See APPENDIX B – “FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION.”

Financial Condition of Overlapping Taxing Bodies and the State

A number of Overlapping Taxing Bodies, whose jurisdictional limits overlap with the District, derive funds for their operations, debt service and pension obligations from tax levies on all or a portion of the tax base on which the District levies taxes. See “OTHER CHICAGO AREA GOVERNMENTAL BODIES – Overlapping Taxing Bodies” and “– Interrelationships of Overlapping Taxing Bodies.” Several of these Overlapping Taxing Bodies, including the City, the Board of Education and the County, have recently reported budget deficits, ratings downgrades or significant unfunded liabilities and low funding ratios in their pension systems. Each of the Overlapping Taxing Bodies is a separate governmental entity and the District does not control the amount or timing of any taxes they may levy in order to address their respective financial conditions. Further financial information regarding the Overlapping Taxing Bodies may be obtained from their respective websites. None of the information on such websites is incorporated by reference into this Official Statement and neither the District nor the Underwriters take responsibility for the information contained therein nor have they attempted to verify the accuracy of such information.

The State is also experiencing significant shortfalls between the State’s general fund revenues and spending demands. In addition, the current funded status of the State’s pension systems continues to contribute to the State’s poor financial health. As of the date of this Official Statement, the State has not yet adopted a budget for the State’s current fiscal year which began on July 1. Further financial information regarding the State may be obtained from its website. None of the information on such website is incorporated by reference into this Official Statement and neither the District nor the Underwriters take responsibility for the information contained therein nor have they attempted to verify the accuracy of such information.

While the financial condition of any of the Overlapping Taxing Bodies does not directly affect the financial operations of the District, one or more of them may seek increases in taxes or implement cutbacks in services or some combination thereof to meet their operational, debt and pension obligations. If Overlapping Taxing Bodies were to raise taxes substantially or reduce and/or eliminate essential services, residents or businesses may choose to relocate to states or municipalities with a lower tax burden or better services. A drop in population or business activity could have an adverse impact on the economy of the

statistical metropolitan area (“MSA”) of the Overlapping Taxing Bodies and the District, and/or make it more difficult for the District (as well as other governmental bodies in the MSA) to increase property taxes, which is a significant source to pay for operations, debt service and unfunded pensions.

Series 2016 Pledged Taxes and Overlapping Taxing Bodies

The availability of the Series 2016 Pledged Taxes in amounts sufficient to pay the Bonds is dependent on the tax base of real property within the District and the ability of this tax base to support the tax burden imposed in any year by the District and Overlapping Taxing Bodies for operations, debt service and other payment obligations, including pensions and other post-employment retirement benefits. In addition to the District’s property tax levy for payment of debt service on the Bonds, the District has property tax levies for other District debt and an annual property tax levy for its operations. Overlapping Taxing Bodies have property tax levies on the tax base of real property within the District for general operations, debt service levies for payment of their general obligation debt and may be dependent on property taxes to pay their pension obligations. Any substantial increases in such taxes levied on the tax base of real property within the District may make it more difficult for the District to increase property taxes to pay for its own operations, debt service and unfunded pensions. See also “– Financial Condition of Overlapping Taxing Bodies and the State” above.

The availability of the Series 2016 Pledged Taxes in amounts sufficient to pay the Bonds is also dependent on the administration of the assessment, levy and tax collection procedures of the County Collectors. See APPENDIX A – “DESCRIPTION OF REAL PROPERTY TAX SYSTEM.”

Cap on Property Taxes

Statutory limitations on the District’s ability to levy property taxes are discussed throughout this Official Statement. See “SECURITY FOR THE BONDS – Security for the Series 2016 Limited Tax Bonds” and “– Security for the Series 2016 Unlimited Tax Bonds.” In addition, changes could be made to the statutes under which the District levies taxes that impose further limitations on the rates or amounts of property taxes which it is authorized to levy. Such limitations and changes to existing limitations could, depending on the circumstances, materially adversely affect the District’s ability to levy taxes sufficient to meet its obligations for operations, debt service and pension funding. See “– Adverse Change in Laws” below.

The District is also statutorily limited in the amount of taxes it may levy for its operations. While the District’s bonds are not subject to generalized caps such as the State Tax Cap established under the Illinois Property Tax Code for non-home rule units of local government, this limitation could serve to limit the amount of tax revenue that the District can rely upon for its operations and debt service. This limitation may adversely impact the District’s ability to levy taxes to provide sufficient operational funds as an additional source for its pension contributions. To the extent that operational funds are heavily relied on by the District as one of the sources to pay for its pension contributions, the foregoing limitation could impede its ability to decrease the unfunded liabilities and increase the funding ratios of its Pension Fund. See “FINANCIAL INFORMATION CONCERNING THE DISTRICT – Debt Management.”

In connection with discussions between the State General Assembly and the Governor concerning the State’s fiscal 2016 budget, proposals for a temporary freeze on the amount of property taxes levied by governmental units within the State have been made by various parties. The State House of Representatives has passed legislation (HB 0696) that would impose a temporary freeze on the amount of property taxes levied by governmental units within the State. With respect to the District and other taxing districts that are subject to the Limitation Law, HB 0696 provides a property tax extension of 0 percent or the rate of increase approved by the voters beginning with the levy years 2015. HB 0696 has been assigned to

committee in the Senate and no hearings are currently scheduled. The current General Assembly ends upon the convening of the new General Assembly on January 11, 2017, after which any prior pending legislation must be reintroduced in the new General Assembly. The District cannot assess the likelihood of HB 0696 or any similar legislation being passed by the General Assembly and signed into law by the Governor.

Collection of Property Taxes

Although the rate of the District’s direct annual tax levy is and will at all times be sufficient so that the levy will be in an amount equal to the principal of and interest to become due on the Bonds during each annual levy period, there can be no assurance that taxes extended for collection for each annual levy period will be collected in an amount equal to the principal of and interest to become due on the Bonds. See APPENDIX B – “District Tax Levies And Collections – Ten Year History.

Adverse Change in Laws

There are a variety of State and federal laws, regulations and constitutional provisions that apply to the District’s ability to raise taxes or to fund its pension obligations. There is no assurance that there will not be any change in, interpretation of, or addition to such applicable laws, regulations and provisions. Any such change, interpretation or addition may have a material adverse effect, either directly or indirectly, on the District or the taxing authority of the District, which could materially adversely affect the District’s operations, financial condition or ability to service its debt.

Bankruptcy

Units of local government, such as the District, cannot file for protection under the U.S. Bankruptcy Code unless specifically authorized to be a debtor by state law or by a governmental officer or organization empowered by state law to authorize such entity to be a debtor in a bankruptcy proceeding. State law does not currently permit the District to do so. Legislation has been introduced in the General Assembly of the State (HB 4500) which, if enacted, would permit Illinois units of local government to file for bankruptcy under the U.S. Bankruptcy Code if either (1) a “neutral evaluation” process provided for in the legislation has been initiated and has ended or (2) the unit of local government declares a “fiscal emergency” as defined in the legislation. HB 4500 has been assigned to committee in the House and no hearings are currently scheduled. The current General Assembly ends upon the convening of the new General Assembly on January 11, 2017, after which any prior pending legislation must be reintroduced in the new General Assembly. The District cannot assess the likelihood of HB 4500 or any similar legislation being passed by the General Assembly and signed into law by the Governor.

Uncertain Enforcement Remedies

Although the Bond Ordinance constitutes a contract between the District and bondholders and pursuant to the Debt Reform Act all moneys held in the debt service funds related to the Bonds, including Pledged Taxes and Pledged Revenues that have been collected and deposited in such funds, are immediately subject to the lien of the District’s pledge and the lien of such pledge is valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the District irrespective of whether such parties have notice thereof, the opinion of Co-Bond Counsel will provide that the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore or hereafter enacted.

Forward-Looking Statements

This Official Statement contains certain statements relating to future results that are forward- looking statements. When used in this Official Statement, the words “estimate,” “intend,” “expect” and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty and risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, bondholders and potential investors should be aware that there are likely to be differences between forward- looking statements and actual results; those differences could be material. The District does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

TAX MATTERS

Summary of Co-Bond Counsel Opinion. Katten Muchin Rosenman LLP and Tristan & Cervantes, Co-Bond Counsel, are of the opinion that under existing law, interest on the Bonds is not includable in the gross income of the owners thereof for federal income tax purposes. If there is continuing compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), Co-Bond Counsel are of the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for federal income tax purposes. In addition, interest on the Bonds is not an item of tax preference for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds is includable in corporate earnings and profits and therefore must be taken into account when computing alternative minimum taxable income for purposes of the corporate alternative minimum tax. Interest on the Bonds is not exempt from Illinois income taxes.

Exclusion from Gross Income: Requirements. The Code contains certain requirements that must be satisfied from and after the date of issuance of the Bonds in order to preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The District covenants in the Bond Ordinances to comply with these requirements. Among these specific requirements are the following:

(a) Investment Restrictions. Except during certain “temporary periods,” proceeds of the Bonds and investment earnings thereon (other than amounts held in a reasonably required reserve or replacement fund, if any, or as part of a “minor portion”) may generally not be invested in investments having a yield that is materially higher than the yield on the Bonds.

(b) Rebate of Permissible Arbitrage Earnings. Earnings from the investment of the “gross proceeds” of the Bonds in excess of the earnings that would have been realized if such investments had been made at a yield equal to the yield on the Bonds are required to be paid to the United States at periodic intervals. For this purpose, the term “gross proceeds” includes the original proceeds of the Bonds, amounts received as a result of investing such proceeds and amounts to be used to pay debt service on the Bonds.

(c) Restrictions on Ownership and Use. The Code includes restrictions on the ownership and use of the facilities financed with the proceeds of the Bonds. Such provisions may restrict future changes in the use of any property financed with the proceeds of the Bonds.

Covenants to Comply. The District covenants in the Bond Ordinances to comply with the requirements of the Code relating to the exclusion from gross income for federal income tax purposes of interest on the Bonds.

Risk of Non-Compliance. In the event that the District fails to comply with the requirements of the Code, interest on the Bonds may become includable in the gross income of the owners thereof for federal income tax purposes retroactively to the date of issue. In such event, the Bond Ordinances do not require acceleration of payment of principal of or interest on the Bonds or payment of any additional interest or penalties to the owners of the Bonds.

Federal Income Tax Consequences. Pursuant to Section 103 of the Code, interest on the Bonds is not includible in the gross income of the owners thereof for federal income tax purposes. However, the Code contains a number of other provisions relating to the treatment of interest on the Bonds that may affect the taxation of certain types of owners, depending on their particular tax situations. Some of the potentially applicable federal income tax provisions are described in general terms below. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE PARTICULAR FEDERAL INCOME TAX CONSEQUENCES OF THEIR OWNERSHIP OF THE BONDS.

(a) Cost of Carry. Owners of the Bonds will generally be denied a deduction for otherwise deductible interest on any debt that is treated for federal income tax purposes as incurred or continued to purchase or carry the Bonds. Financial institutions are denied a deduction for their otherwise allowable interest expense in an amount determined by reference to their adjusted basis in the Bonds.

(b) Corporate Owners. Interest on the Bonds is generally taken into account in computing earnings and profits and adjusted current earnings of a corporation and consequently may be subject to federal income taxes based thereon. Thus, for example, interest on the Bonds is taken into account in computing the alternative minimum tax for corporations, but also the branch profits tax imposed on certain foreign corporations, the passive investment income tax imposed on certain S corporations, and the accumulated earnings tax.

(c) Individual Owners. Receipt of interest on the Bonds may increase the amount of social security and railroad retirement benefits included in the gross income of the recipients thereof for federal income tax purposes.

(d) Certain Blue Cross or Blue Shield Organizations. Receipt of interest on the Bonds may reduce a special deduction otherwise available to certain Blue Cross or Blue Shield organizations.

(e) Property or Casualty Insurance Companies. Receipt of interest on the Bonds may reduce otherwise deductible underwriting losses of a property or casualty insurance company.

(f) Foreign Personal Holding Company Income. A United States shareholder of a foreign personal holding company may realize taxable income to the extent that interest on the Bonds held by such a company is properly allocable to the shareholder.

Bonds Purchased at a Premium or Discount. The difference (if any) between the initial price at which a substantial amount of each maturity of each series of the Bonds is sold to the public (the “Offering Price”) and the principal amount payable at maturity of such Bonds is given special treatment for federal income tax purposes. If the Offering Price is higher than the maturity value of a Bond, the difference between the two is known as “bond premium;” if the Offering Price is lower than the maturity value of a Bond, the difference between the two is known as “original issue discount.”

Bond premium and original issue discount are amortized over the term of a Bond on the basis of the owner’s yield from the date of purchase to the date of maturity, compounded at the end of each accrual period of one year or less with straight-line interpolation between compounding dates, as provided more specifically in the Income Tax Regulations. The amount of bond premium accruing during each period is treated as an offset against interest paid on the Bonds and is subtracted from the owner’s tax basis in the Bond. The amount of original issue discount accruing during each period is treated as interest that is excludable from the gross income of the owner of such Bond for federal income tax purposes, to the same extent and with the same limitations as current interest, and is added to the owner's tax basis in the Bond. A Bond’s adjusted tax basis is used to determine whether, and to what extent, the owner realizes taxable gain or loss upon the disposition of the Bond (whether by reason of sale, acceleration, redemption prior to maturity or payment at maturity of the Bond).

Owners who purchase Bonds at a price other than the Offering Price, after the termination of the initial public offering or at a market discount should consult their tax advisors with respect to the tax consequences of their ownership of the Bonds. In addition, owners of Bonds should consult their tax advisors with respect to the state and local tax consequences of owning the Bonds; under the applicable provisions of state or local income tax law, bond premium and original issue discount may give rise to taxable income at different times and in different amounts than they do for federal income tax purposes.

Change of Law. The opinions of Co-Bond Counsel and the descriptions of the tax law contained in this Official Statement are based on statutes, judicial decisions, regulations, rulings, and other official interpretations of law in existence on the date the Bonds were issued. There can be no assurance that such law or the interpretation thereof will not be changed or that new provisions of law will not be enacted or promulgated at any time while the Bonds are outstanding in a manner that would adversely affect the value or the tax treatment of ownership of the Bonds.

Prospective purchasers of the Bonds should consult their own tax advisors concerning the particular federal, state, local, and foreign tax consequences of their ownership of Bonds.

DEFEASANCE AND PAYMENT OF BONDS

If the District shall pay or cause to be paid to the registered owners of a series of the Bonds, the principal, premium, if any, and interest due or to become due thereon, at the times and in the manner provided for in such Bonds, then the pledge of tax receipts, Pledged Revenues, securities and funds pledged as security for the payment of that series of the Bonds and the covenants, agreements and other obligations of the District to the registered owners and the beneficial owners of that series of the Bonds shall be discharged and satisfied. Any Bonds or interest thereon, whether at or prior to the maturity or redemption date of such Bonds, shall be deemed to have been paid within the meaning of the preceding sentence upon deposit in trust with a bank, trust company or national banking association acting as fiduciary for such purpose either (i) moneys in an amount which shall be sufficient, or (ii) “Federal Obligations” as defined herein, the principal of and the interest on which when due will provide moneys which, together with any moneys on deposit with such fiduciary at the same time, shall be sufficient, to pay when due the principal of, redemption premium, if any, and interest due and to become due on, said Bonds on and prior to the applicable maturity date or redemption date thereof. As used herein, “Federal Obligations” means (i) non- callable, direct obligations of the United States of America, (ii) non-callable and non-prepayable, direct obligations of any agency of the United States of America, which are unconditionally guaranteed by the United States of America as to full and timely payment of principal and interest, (iii) non-callable, non- prepayable coupons or interest installments from the securities described in clause (i) or clause (ii) of this sentence, which are stripped pursuant to programs of the Department of the Treasury of the United States of America, or (iv) coupons or interest installments stripped from bonds of the Resolution Funding Corporation.

FINANCIAL STATEMENTS

The audited basic financial statements of the District for the fiscal year ended December 31, 2015 contained in APPENDIX C (the “Audit”), have been prepared by the District and are accompanied by the independent auditor’s report prepared by McGladrey LLP, Chicago, Illinois (the “Auditor”). The District has not requested the Auditor to update information contained in the Audit; nor has the District requested that the Auditor consent to the use of the Audit in this Official Statement. Other than as expressly set forth in this Official Statement, the financial information contained in the Audit has not been updated since the date of the Audit. The inclusion of the Audit in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the District since the date of the Audit. If you have a specific question or inquiry relating to the financial information of the District since the date of the Audit, you should contact the Treasurer of the District.

The information contained in APPENDIX C for the fiscal year ended December 31, 2015, is audited financial information of the District. The Auditor has not been requested to perform any procedures related to such information.

FINANCIAL ADVISORS

Sycamore Advisors, LLC, Chicago, Illinois has been retained by the District to serve as Lead Financial Advisor and Speer Financial, Inc., Chicago, Illinois to serve as Co-Financial Advisor (the “Financial Advisors”) with respect to the Bonds. Under the terms of their respective engagements, neither of the Financial Advisors is obligated to undertake, and has not undertaken to make, an independent verification of or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. Each of the Financial Advisors’ fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds.

The District has retained Speer Financial, Inc. as its independent registered municipal advisor (the “IRMA”) pursuant to Rule 15Ba1-1-(d)(3)(vi) of the Securities Exchange Commission to evaluate financing proposals and recommendations in connection with the District’s various bond issuance programs and other financing ideas being considered by the District; however, the IRMA will not advise on the investment of District funds held by the Office of the Treasurer. The IRMA’s compensation is not dependent on the issuance of the Bonds.

CERTAIN VERIFICATIONS

Robert Thomas, CPA LLC, independent certified public accountants, upon the delivery of the Bonds, will deliver a report stating that the firm, at the request of the District and the Underwriters, has verified (i) the mathematical accuracy of certain computations based on certain assumptions relating to the sufficiency of the principal and interest received from the Government Obligations, together with an initial cash deposit, to meet the timely payment of principal of, redemption premium, if any, and interest on the Refunded Bonds and (ii) the yield on the Bonds and the Governmental Obligations. Robert Thomas, CPA LLC expresses no opinion on the attainability of any assumptions or the tax-exempt status of the Bonds.

CERTAIN LEGAL MATTERS

Certain legal matters incident to the authorization, issuance and sale of the Bonds are subject to the respective approving legal opinions of Katten Muchin Rosenman LLP, Chicago, Illinois and Tristan & Cervantes (“Co-Bond Counsel”) which firms have been retained by, and act as, Co-Bond Counsel to the

District. Co-Bond Counsel have not been retained or consulted on disclosure matters and have not undertaken to review or verify the accuracy, completeness or sufficiency of this Official Statement or other offering material relating to the Bonds and assume no responsibility for the statements or information contained in or incorporated by reference in this Official Statement, except that in the capacity as Co-Bond Counsel, Co-Bond Counsel have, at the request of the District, reviewed only the sections of the Official Statement describing the Bonds, the security for the Bonds (excluding forecasts, projections, estimates or other financial or economic information in connection therewith), and the federal tax exemption of interest on the Bonds. This review was undertaken solely at the request and for the benefit of the District and did not include any obligation to establish or confirm factual matters set forth herein. Certain legal matters will be passed on for the District by Timothy M. King, General Counsel and by its Issuer’s and Disclosure counsel, Hardwick Law Firm, LLC, Chicago, Illinois, and for the Underwriters by their Counsel, Del Galdo Law Group, Berwyn, Illinois. The law firm representing the Underwriters was selected by the Underwriters.

LITIGATION

General. At the time of delivery of the Bonds, the District shall furnish a certificate, in form and substance satisfactory to Co-Bond Counsel, to the effect that, among other things, there is no litigation pending in any court to restrain or enjoin the issuance, sale or delivery of the Bonds, or in any way contesting the validity or enforceability of the Bonds or the pledge of the District’s full faith, credit and taxing power for their payment.

The District is involved in various litigation matters relating principally to claims arising from contract, personal injury, wrongful death and property damage and other matters in the ordinary course of business. An adverse result in any of these matters is not expected to have a material adverse effect on the overall financial condition of the District. As part of the budgetary process, the District annually makes what it believes is adequate provision for estimated amounts of probable loss with respect to potential claims, judgments and settlements.

Specific Matters. On December 15, 2011, Millennium Park Joint Venture (“MPJV”) and Millennium Park Management Venture, LLC (“MPMV”) filed a crossclaim against the District alleging claims that arise out of a concession permit agreement entered into by the District and MPJW in 2003. The crossclaim against the District alleged breach of contract, tortious interference, promissory estoppel and reformation, and MPJV and MPMV collectively sought damages of approximately $12.8 million plus their attorneys’ fees of an unknown amount. On September 24, 2016, the Cook County Circuit Court ruled in favor of the District in this matter.

On December 16, 2016, the District intervened as a defendant in a lawsuit filed by a District employee and the Service Employees International Union, Local 73 in Circuit Court challenging the constitutionality of the Article 12 Amendments (Public Act 98-622) to the District’s Pension Code. The parties want the opportunity to explore the possibility of negotiating a modified approach to pension relief. The Circuit Court encouraged the parties to do so and offered to assist in serving as a mediator. The Circuit Court stayed any further proceedings until the next status hearing on October 14, 2016. In light of the recent Illinois Supreme Court and Cook County Circuit Court decisions respectively ruling that the State pension reform act and the City pension reform act are unconstitutional, the District can give no assurance that the Circuit Court will not reach a decision in the Biedron, et al. lawsuit, prior to or after the issuance of the Bonds, that the Article 12 Amendments are unconstitutional. See “EMPLOYEE RETIREMENT SYSTEM” –“Litigation.”

UNDERWRITING

The Bonds are being purchased for reoffering by the underwriters identified on the cover page of this Official Statement (the “Underwriters”), for whom is acting as representative (the “Representative”). The Underwriters have agreed to purchase the Bonds at an aggregate purchase price of $______(representing the original principal amount of the Bonds, [plus an original issue premium of $______and less an Underwriters’ discount of $______) (see “SOURCES AND USES OF FUNDS’ for a breakdown of premium and Underwriters’ discount by Series). The Bonds will be offered to the public initially at the offering prices or yields set forth on the inside cover pages of this Official Statement. The obligation of the Underwriters to purchase the Bonds is subject to certain terms and conditions set forth in a bond purchase agreement, including, among others, the delivery of specified opinions of counsel and a certificate of the District that there has been no material adverse change in its condition (financial or otherwise) from that set forth in this Official Statement.

The Underwriters may offer and sell the Bonds to certain dealers, including dealer banks and dealers depositing Bonds into investment trusts and others, at prices lower or yields higher than the public offering prices or yields stated on the inside cover pages of this Official Statement. Such initial public offering prices or yields may be changed from time to time by the Underwriters.

PNC Bank, National Association currently has, and from time to time in the future may have, banking or other credit relationships with the District. PNC Capital Markets LLC is acting as an Underwriter of the Bonds. PNC Capital Markets LLC and PNC Bank, National Association are both wholly owned subsidiaries of The PNC Financial Services Group, Inc.

CONTINUING DISCLOSURE

The District will enter into a Continuing Disclosure Undertaking (the “Agreement”) for the benefit of the beneficial owners of the Bonds to send certain information annually and to provide notice of certain events to the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic Municipal Market Access system (“EMMA”) pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the “Rule”) adopted by the Securities and Exchange Commission (the “Commission”) under the Securities Exchange Act of 1934, as amended. The form of the Agreement is set forth in its entirety as APPENDIX H.

The District shall give notice in a timely manner to EMMA of any failure to provide Annual Financial Information Disclosure (as defined in the Agreement) when the same is due hereunder. A failure by the District to comply with the Undertaking will not constitute a default under the Bonds or the Bond Ordinance and beneficial owners of the Bonds are limited to the remedies described in the Undertaking. A failure by the District to comply with the Undertaking must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price.

The District believes it has materially complied with its continuing disclosure undertakings during the past five years.

AUTHORIZATION AND MISCELLANEOUS

The Board of the District has authorized the use and distribution of this Official Statement.

At the time of delivery of the Bonds, the District will furnish a certificate stating that to the best of its knowledge, after reasonable investigation, this Official Statement did not (as of its date) and does not (as of the date of delivery of the Bonds) contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

This Official Statement has been duly executed and delivered by the following officer on behalf of the District.

CHICAGO PARK DISTRICT

By: General Superintendent & CEO

APPENDIX A DESCRIPTION OF REAL PROPERTY TAX SYSTEM

TABLE OF CONTENTS Page REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES ...... A-1 General ...... A-1 Assessment ...... A-1 Equalization ...... A-2 Exemptions ...... A-3 Tax Levy ...... A-4 Collection ...... A-4 Property Tax Extension Limitation Law ...... A-5 Illinois Truth in Taxation Law ...... A-6

DESCRIPTION OF REAL PROPERTY TAX SYSTEM Real Property Assessment, Tax Levy and Collection Procedures

General. Information under this caption describes the current procedures for real property assessment, tax levy and tax collection in Cook County (the “County”). The following is not an exhaustive discussion nor can there be any assurance that the procedures described under this caption will not be changed. Illinois laws relating to real property taxation are contained in the Illinois Property Tax Code, 35 ILCS 200/1-1, et seq., as amended (the “Property Tax Code”).

Substantially all (approximately 99.99%) of the “Equalized Assessed Valuation” (described below) of taxable property in the District is located in the County. The remainder is located in DuPage County. Accordingly, unless otherwise indicated, the information set forth under this caption and elsewhere in this Official Statement with respect to taxable property and overlapping taxing bodies in the District does not reflect the portion situated in DuPage County.

Assessment. The Cook County Assessor (the “Assessor”) is responsible for the assessment of all taxable real property within the County, except for certain railroad property and pollution control equipment assessed directly by the State. One-third of the real property in the County is reassessed each year on a repeating triennial schedule established by the Assessor. The City of Chicago (the “City”) was reassessed in 2015. The suburbs in the western and southern portions of the County were reassessed in 2014. The suburbs in the northern and northwestern portions of the County were reassessed in 2013.

Real property in the County is separated into various classifications for assessment purposes. After the Assessor establishes the fair cash value of a parcel of land, that value is multiplied by one of the classification percentages to arrive at the assessed valuation (the “Assessed Valuation”) for the parcel. Beginning with the 2009 tax year, the classification percentages range from 10 to 25 percent depending on the type of property (e.g., residential, industrial, commercial) and whether it qualifies for certain incentives for reduced rates. For prior years, the classification percentages ranged from 16 to 38 percent.

The Cook County Board of Commissioners has adopted various amendments to the County’s Real Property Assessment Classification Ordinance (the “Classification Ordinance”), pursuant to which the Assessed Valuation of real property is established. Among other things, these amendments have reduced certain property classification percentages, lengthened certain renewal periods of classifications and created new property classifications.

The Assessor has established procedures enabling taxpayers to contest their tentative Assessed Valuations. These procedures do not, however, enable a taxpayer to forgo payment of taxes due. Once the Assessor certifies final Assessed Valuations, a taxpayer can seek review of its assessment by filing a complaint with the Cook County Board of Review (the “Board of Review”). The Board of Review consists of three commissioners, each elected by an election district in the County. The Board of Review is empowered to review and adjust Assessed Valuations set by the Assessor.

Owners of property are able to appeal decisions of the Board of Review to the Illinois Property Tax Appeal Board (the “PTAB”), a statewide administrative body. The PTAB has the power to determine the Assessed Valuation of real property based on equity and the weight of the evidence. Depending on the amount of the proposed change in Assessed Valuation, taxpayers may appeal decisions of the PTAB to either the Circuit Court of Cook County or the Illinois Appellate Court under the Illinois Administrative Review Law.

In a series of PTAB decisions, the PTAB reduced the assessed valuations of certain commercial and industrial property in the County based upon the application of median levels of assessment derived

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from Illinois Department of Revenue sales-ratio studies instead of utilizing the assessment percentages provided in the Classification Ordinance. On appeal, the Illinois Appellate Court determined that it was improper for the PTAB, on its own initiative, to use the sales-ratio studies when such studies were not even raised as an issue by the taxpayer before the Board of Review or in its appeal to the PTAB. The Appellate Court decisions do not preclude a taxpayer in a properly presented case from introducing into evidence sales-ratio studies for the purpose of obtaining an assessment below that which would result from application of the Classification Ordinance. No prediction can be made whether any currently pending or future case would be successful. The District believes that the impact of any such case on the District would be minimal, as the District’s ability to levy or collect real property taxes would be unaffected. As an alternative to seeking review of Assessed Valuations by the PTAB, taxpayers who have first exhausted their remedies before the Board of Review and have fully and timely paid their taxes may file an objection in the Circuit Court of Cook County. In addition, in cases where the Assessor agrees that an assessment error has been made after tax bills have been issued, the Assessor can correct the Assessed Value, and thus reduce the amount of taxes due, by issuing a Certificate of Error. All reviews of assessments, whether before the Board of Review, the PTAB or the courts are decided on a case-by-case basis. Equalization. After the Assessed Valuation for each parcel of real estate in a county has been determined for a given year (including any revisions made by the Board of Review), the Illinois Department of Revenue reviews the assessments and determines an equalization factor (the “Equalization Factor”), commonly called the “multiplier,” for each county. The purpose of equalization is to bring the aggregate assessed value of all real estate in each county, except certain farmland, wind turbines with a nameplate capacity of at least 0.5 megawatts and undeveloped coal, in each county to the statutory requirement of 33-1/3% of estimated fair cash value. Adjustments in Assessed Valuation made by the PTAB or the courts are not reflected in the Equalization Factor. The Assessed Valuation of each parcel of real estate in the County is multiplied by the County’s Equalization Factor to determine the parcel’s equalized assessed valuation (the “Equalized Assessed Valuation”). The following table sets forth the Equalization Factors for the tax years 2006 through 2015: Equalization Tax Year Factor 2015 2.6685 2014 2.7253 2013 2.6621 2012 2.8056 2011 2.9706 2010 3.3000 2009 3.3701 2008 2.9786 2007 2.8439 2006 2.7076 The Equalized Assessed Valuation for each parcel is the final property valuation used for determination of tax liability. The aggregate Equalized Assessed Valuation for all parcels in any taxing body’s jurisdiction, after reduction for all applicable exemptions, plus the valuation of property assessed directly by the State, constitutes the total real estate tax base for the taxing body and is the figure used to calculate tax rates (the “Assessment Base”). The Equalization Factor for a given year is used in computing the taxes extended for collection in the following year. See “ – Exemptions” below.

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The Equalized Assessed Valuation used to determine any applicable tax limits is the one for the immediately preceding year and not the current fiscal year. See “− Property Tax Extension Limitation Law” below.

Exemptions.

The Illinois Constitution allows homestead exemptions for residential property. Pursuant to the Illinois Property Tax Code, property must be occupied by the owner as a principal residence on January 1 of the tax year for which the exemption will be claimed. There are seven basic exemptions: the homeowner exemption, the senior citizen exemption, the senior freeze exemption, the home improvement exemption, the returning veterans’ exemption, the disabled veterans’ homeowners’ exemption and the disabled persons’ exemption. The annual general homestead exemption provides for the reduction of the Equalized Assessed Valuation of certain property owned and used exclusively for residential purposes by the amount of any increase over the 1977 Equalized Assessed Valuation, up to a maximum reduction of $7,000 in Cook County and $6,000 in all other counties. Additional exemptions exist for (i) senior citizens (individuals at least 65 years of age), with the Assessor authorized to reduce the Equalized Assessed Valuation on a senior citizen’s home by $5,000, and (ii) disabled veterans for specially adapted housing, with the Assessor authorized annually to exempt up to $70,000 of the Assessed Valuation of certain property owned and used exclusively by such veterans or their spouses for residential purposes. In addition, veterans returning from active duty in armed conflict are eligible to receive a $5,000 reduction in the equalized assessed value of their property only for each taxable year in which they return. A homestead improvement exemption allows homeowners to exempt up to $75,000 of the increase in the fair cash value of their residence due to certain home improvements to an existing structure without increasing the Assessed Valuation of their property for at least four years. The Senior Citizens Tax Freeze Homestead Exemption freezes property tax assessments for homeowners who are 65 and older and have annual incomes of $55,000 or less. In general, the exemption limits the annual real property tax bill of such property by granting to qualifying senior citizens an exemption as to a portion of the valuation of their property. The disabled persons’ exemption provides disabled persons with an annual $2,000 reduction in the equalized assessed value of the property. Certain property is also exempt from taxation on the basis of ownership and/or use.

Additionally, counties have been authorized to create special property tax exemptions in long- established residential areas or in areas of deteriorated, vacant or abandoned homes and properties. Under such an exemption, longtime, residential owner-occupants in eligible areas would be entitled to a deferral or exemption from that portion of property taxes resulting from an increase in market value because of refurbishment or renovation of other residences or construction of new residences in the area. The County’s Longtime Homeowner Exemption Ordinance provides property tax relief from dramatic rises in property taxes directly or indirectly attributable to gentrification in the form of an exemption of certain homeowners who (i) have resided in their homes for 10 consecutive years (or five consecutive years for homeowners who have received assistance in the acquisition of the property as part of a government or nonprofit housing program), (ii) whose annual household income for the year of assessment does not exceed 115% of the Chicago Primary Metropolitan Statistical Area median income as defined by United States Department of Housing and Urban Development, (iii) whose property has increased in assessed value to a level exceeding 150 percent of the current average assessed value for properties in the assessment district where the property is located, (iv) whose property has a market value for assessment purposes of $300,000 or less in the current reassessment year, and (v) who, for any triennial assessment cycle, did not cause a substantial improvement which resulted in an increase in the property’s fair cash value in excess of the $45,000 allowance set forth in the Property Tax Code.

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Tax Levy.

There are over 800 units of local government (the “Units”) located in whole or in part in the County that have taxing power. The major Units having taxing power over property within the County include the Board, the City, the District, the Community College District, the Water Reclamation District, the County and the Forest Preserve District.

As part of the annual budgetary process of the Units, each year in which the determination is made to levy real estate taxes, proceedings are adopted by the governing body of each Unit. The tax levy proceedings impose the Units’ respective real estate taxes in terms of a dollar amount. Each Unit certifies its real estate tax levy, as established by the proceedings, to the County Clerk’s Office. The remaining administration and collection of the real estate taxes is statutorily assigned to the County Clerk and the County Treasurer, who is also the County Collector.

After the Units file their annual tax levies, the County Clerk computes the annual tax rate for each Unit by dividing the levy of each Unit by the Assessment Base of the respective Unit. If any tax rate thus calculated or any component of such a tax rate (such as a levy for a particular fund) exceeds any applicable statutory rate limit, the County Clerk disregards the excessive rate and applies the maximum rate permitted by law.

The County Clerk then computes the total tax rate applicable to each parcel of real property by aggregating the tax rates of all the Units having jurisdiction over the particular parcel. The County Clerk enters in the books prepared for the County Collector (the “Warrant Books”) the tax (determined by multiplying that total tax rate by the Equalized Assessed Valuation of that parcel), along with the tax rates, the Assessed Valuation and the Equalized Assessed Valuation. The Warrant Books are the County Collector’s authority for the collection of taxes and are used by the County Collector as the basis for issuing tax bills to all property owners.

Collection.

Property taxes are collected by the County Collector, who remits to each Unit its share of the collections. Taxes levied in one year become payable during the following year in two installments, the first always due on March 1 (however, the first due date for Tax Year 2010 was April 1, 2011) and the second due on the later of August 1 or 30 days after the mailing of the tax bills. The first installment is now an estimated bill equal to 55% of the prior year’s tax bill. The second installment is for the balance of the current year’s tax bill, and is based on the current levy, assessed value and Equalization Factor and applicable tax rates, and reflects any changes from the prior year in those factors. Taxes on railroad real property used for transportation purposes are payable in one lump sum on the same date as the second installment.

The following table sets forth the second installment penalty date for the last ten years; the first installment penalty date has been March 1 for all years (with the exemption being Tax Year 2010, which first installment penalty date was April 1, 2011).

Second Installment Tax Year Penalty Date 2015 August 2, 2016 2014 August 3, 2015 2013 August 1, 2014 2012 August 1, 2013 2011 August 1, 2012

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Second Installment Tax Year Penalty Date 2010 November 1, 2011 2009 December 13, 2010 2008 December 1, 2009 2007 November 3, 2008 2006 December 3, 2007

The County may provide for tax bills to be payable in four installments instead of two. The County has not determined to require payment of tax bills in four installments. During the periods of peak collections, tax receipts are forwarded to each Unit including the District on a weekly basis. Upon receipt of taxes from the County Collector, the District’s Treasurer promptly credits the taxes received to the funds from which they were levied.

At the end of each collection year, the County Collector presents the Warrant Books to the Circuit Court and applies for a judgment for all unpaid taxes. The court order resulting from the application for judgment provides for an annual sale of all unpaid taxes shown on the year’s Warrant Books (the “Annual Tax Sale”). The Annual Tax Sale is a public sale, at which time successful tax buyers pay the unpaid taxes plus penalties. Unpaid taxes accrue penalties at the rate of 1.5% per month from their due date until the date of sale. Taxpayers can redeem their property by paying the amount paid at the sale, plus a maximum of 18% for each six-month period after the sale. If no redemption is made within the applicable redemption period (ranging from six months to two and one-half years depending on the type and occupancy of the property) and the tax buyer files a petition in Circuit Court, notifying the necessary parties in accordance with applicable law, the tax buyer receives a deed to the property. In addition, there are miscellaneous statutory provisions for foreclosure of tax liens.

If there is no sale of the tax lien on a parcel of property at the Annual Tax Sale, the taxes are forfeited to the State and are eligible to be purchased “over the counter” at any time thereafter at an amount equal to all delinquent taxes, interest and certain other costs to the date of purchase. Redemption periods and procedures are the same as applicable to the Annual Tax Sale, except that a different penalty rate may apply depending on the length of the redemption period.

A scavenger sale (the “Scavenger Sale”), like the Annual Tax Sale, is a sale of unpaid taxes. A Scavenger Sale is scheduled to be held by Cook County every two years on all property in which taxes are delinquent for two or more years. The sale price of the unpaid taxes is the amount bid at the Scavenger Sale, which may be substantially less than the amount of the delinquent taxes. Redemption periods vary from six months to two and one-half years depending upon the type and occupancy of the property.

The annual appropriation ordinance of the District has a provision for an allowance for uncollected taxes. The District reviews this provision annually and makes adjustments accordingly. For tax year 2015, collectable in 2016, the allowance for uncollectible taxes is 3.67 percent of the gross tax levy. For financial reporting purposes, uncollectible taxes are written off by the District after four years, but are fully reserved after two years.

Property Tax Extension Limitation Law.

The Illinois Property Tax Extension Limitation Law (the “Limitation Law”) limits the growth in the amount of property taxes that can be extended for a non-home rule taxing body in the County and imposes direct referendum requirements upon the issuance of certain types of general obligation bonds by such non-home rule taxing bodies, such as the District.

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The Limitation Law specifically limits the annual growth in property tax extensions for the District to the lesser of 5% or the percentage increase in the Consumer Price Index for All Urban Consumers during the calendar year preceding the relevant tax levy year. Generally, extensions can be increased beyond this limitation only due to increases in the Equalized Assessed Valuation attributable to new construction and referendum approval of tax or limitation rate increases.

The Limitation Law requires the Cook County Clerk, in extending taxes for taxing districts in Cook County, including the District, to use the Equalized Assessed Valuation of all property within the taxing district for the levy year prior to the levy year for which taxes are then being extended. Any limitation applied to the aggregate extension of the District by the Cook County Clerk pursuant to the Limitation Law shall not apply to the levy of the Special Recreation Activity Tax.

In addition, the District can now only issue its general obligation bonds secured by an unlimited tax levy after first receiving referendum approval unless such bonds are issued as “alternate bonds” pursuant to Section 15 of the Debt Reform Act or for certain refunding or aquarium or museum purposes. The limitations on the extensions of property taxes contained in the Limitation Law do not apply to the taxes levied by the District to pay the principal of and interest on its currently outstanding unlimited tax general obligation bonds.

The Limitation Law permits the issuance, without referendum, of limited tax bonds payable from the Base and excludes from the Limitation Law debt service on certain “alternate bonds” issued pursuant to Section 15 of the Debt Reform Act. Pursuant to the Limitation Law, beginning with the 2009 levy year, the Base of the District can be increased by the lesser of 5% or the percentage increase in the Consumer Price Index during the calendar year preceding the levy year. The District can also increase its Base by referendum.

Illinois Truth in Taxation Law.

The Illinois Truth in Taxation Law imposes procedural limitations on a taxing district’s real estate taxing powers and requires that notice in the prescribed form must be published if the aggregate annual levy is estimated to exceed 105% of the levy of the preceding year, exclusive of levies for debt service, election cost and payments due under public building commission leases. A public hearing must also be held, which may not be in conjunction with the budget hearing of the taxing district on the adoption of the taxing district’s annual levy. No amount in excess of 105% of the preceding year’s levy may be used as the basis for issuing tax bills to property owners unless the levy is accompanied by a certification of compliance with the foregoing procedures. This law does not impose any limitations on the rate or the amount of the levy to pay principal of and interest on the taking district’s general obligation bonds and notes.

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APPENDIX B FINANCIAL, BUDGETARY AND OTHER PARK DISTRICT INFORMATION

TABLE OF CONTENTS Page TAXATION OF REAL PROPERTY – STATISTICAL INFORMATION ...... B-1 District Real Property Tax Base ...... B-1 Comparative Tax Rates of Major Local Governmental Units ...... B-1 District Tax Rates by Fund ...... B-2 District Statutory Tax Rate Limitation by Fund ...... B-2 District Tax Levies and Collections ...... B-3 TAX SUPPORTED BONDED DEBT ...... B-6 District and Overlapping Long-Term Debt ...... B-7 Selected Debt Statistics and Ratios ...... B-8 Bonded Debt Limit ...... B-8 Chicago Park District General Obligation Bonded Debt Schedule ...... B-9 THE DISTRICT’S OUTSTANDING GENERAL OBLIGATION BONDS AND OTHER LONG TERM DEBT OBLIGATIONS ...... B-10 Annual Debt Service and Amount Subject to the Debt Service Extension Base (Base) ...... B-10 General Obligation Bonds – Alternate Revenue Source - Personal Property Replacement Tax Annual Debt Service and Coverage ...... B-11 Other Long Term Debt Obligations of the District ...... B-12 CASH MANAGEMENT ...... B-14 Corporate Fund ...... B-14 Bond Anticipation Notes ...... B-14 Corporate Warrants ...... B-14 CHICAGO PARK DISTRICT PROCEDURES ...... B-15 Statement of Accounting Practices ...... B-15 Government-wide and Fund Financial Statements ...... B-15 Measurement Focus, Basis of Accounting, and Financial Statement Presentation ...... B-15 Corporate Fund Revenues, Expenditures and Changes in Fund Balance ...... B-16 Budgetary Procedures ...... B-17 2016 Operating Budget Revenues and Spending Summary ...... B-18 2014 Capital Budget Resources and Spending Summary ...... B-19 2015 Capital Budget Resources and Spending Summary ...... B-21 Investment Policy ...... B-22

APPENDIX B FINANCIAL, BUDGETARY AND OTHER DISTRICT INFORMATION TAXATION OF REAL PROPERTY – STATISTICAL INFORMATION

District Real Property Tax Base (000’s Omitted)

Equalized Estimated Assessed Fair Market Tax Year(1) Valuation(2) (5) Value(3) (4) (5) 2015 $70,963,289 N/A 2014 64,913,774 N/A 2013 62,370,205 $236,695,475 2012 65,257,093 206,915,723 2011 75,127,913 222,856,064 2010 84,592,286 231,986,396 2009 82,092,476 280,288,730 2008 80,983,239 310,888,609 2007 73,651,158 320,503,503 2006 69,517,264 329,770,733 ______(1) Taxes levied in one year become payable in the following year. For example, taxes levied in tax year 2014 are payable in 2015. (2) Source: The figures include both Cook County and the relevant portion of DuPage County. (3) Source: The Civic Federation, Chicago, Illinois, Cook County Assessor’s Office and Illinois Department of Revenue. The Estimated Fair Market Value for 2013 excludes railroad property, pollution control, or that part of O’Hare International Airport in DuPage County. (4) The Estimated Fair Market Value for Tax Years 2014 and 2015 is not available as of this date. (5) Figures may reflect rounding. Comparative Tax Rates of Major Local Governmental Units (1) (Per $100 of Equalized Assessed Valuation) City of Chicago School Community Water Tax Park School Bldg & School Finance College Reclamation Forest Year District City(3) Improvement Fund Board Authority District 508 District Preserve County Total 2015 $0.382 $1.672 $0.134 $3.455 $ - $0.177 $0.426 $0.069 $0.552 $6.867 2014 0.415 1.327 0.146 3.660 - 0.193 0.430 0.069 0.568 6.808 2013 0.420 1.344 0.152 3.671 - 0.199 0.417 0.069 0.560(4) 6.832 2012 0.395 1.279 0.146 3.422 - 0.190 0.370 0.063 0.531 6.396 2011 0.346 1.110 0.119 2.875 - 0.165 0.320 0.058 0.462(4) 5.455 2010 0.319 1.016 0.116 2.581 - 0.151 0.274 0.051 0.423 4.931 2009 0.309 0.986 0.112 2.366 - 0.150 0.261 0.049 0.394(4) 4.627 2008 0.323 1.030 0.117 2.472 - 0.156 0.252 0.051 0.415 4.816 2007 0.355 1.044 - 2.583 0.091 0.159 0.263 0.053 0.446(4) 4.994 2006 0.379 1.062 - 2.697 0.118 0.205 0.284 0.057 0.500 5.302 ______(1) Source: Office of the Clerk of Cook County and the District. (2) Includes Aquarium and Museum Debt Service. (3) Reflects a combined total consisting of: City of Chicago and City Library Fund. (4) In addition, a tax of $0.034 for 2015, a tax of $0.031 for 2013, $0.025 for 2011, $0.021 for 2009, and $0.012 for 2007 was extended against all real property in Cook County outside of the City of Chicago for election costs.

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District Tax Rates by Fund (1)

(Per $100 of Equalized Assessed Valuation)

Fund 2015 2014 2013 2012 2011 Corporate ...... $.217 $.244 $.247 $.227 $.189 Debt Service ...... 067 .071 .068 .060 .056 Aquarium and Museum ...... 039 .043 .044 .043 .037 Pension ...... 025 .017 .017 .016 .014 Public Building Commission ...... 000 .000 .000 .008 .013 Special Revenue ...... 024 .026 .026 .024 .022 Aquarium/Museum Debt Service ...... 010 .014 .018 .017 .015 Total ...... $.382 $.415 $.420 $.395 $.346 ______(1) Source: Office of the Clerk of Cook County and the District. Totals may not reconcile due to rounding.

District Statutory Tax Rate Limitation by Fund (Per $100 of Equalized Assessed Valuation)

Fund Limit Corporate $.660(1)

Debt Service Unlimited(2)

Aquarium and Museum $.150

Annuity & Benefit Unlimited, levy calculated on basis of 110% of employee contributions for the year two years prior to the applicable year, but subject to the Limitation Law. (3)

Special Revenue Unlimited, except Worker’s Compensation Claims Reserve Fund, which is limited to $.005, but subject to the Limitation Law. ______(1) Exclusive of .04% that may be levied for Special Recreation Programs. (2) See “DESCRIPTION OF REAL PROPERTY TAX SYSTEM — Property Tax Extension Limitation Law” in APPENDIX A and “TAX SUPPORTED BONDED DEBT” in APPENDIX B. (3) The 110% is as of May 1, 2014. The District anticipates the percentage will change in future years. See “EMPLOYEE RETIREMENT SYSTEM.”

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District Tax Levies and Collections(1) Ten-Year History As of September 30, 2016 In Thousands (000)

Allowance First Year Total Final for Net Collection Total Collection Collection Levy Collection Collection Gross Uncollectible Levy Of Gross Levy Of Gross Levy Net Levy Year(2) Year Due Date Levy Taxes(3) Dollars Percent Dollars Percent Percent 2015 2016 08/01/16 $271,080 $9,949 $261,131 $258,686 95.43% $258,686 95.43% 99.06% 2014 2015 08/03/15 269,368 10,505 258,863 260,209 96.60 266,652 98.99 103.01 2013 2014 08/01/14 261,928 10,215 251,713 252,504 96.40 251,947 96.19 100.09 2012 2013 08/01/13 257,739 10,052 247,687 248,826 96.54 254,442 98.72 102.73 2011 2012 08/01/12 259,925 10,137 249,788 249,349 95.93 252,567 97.17 101.11 2010 2011 11/01/11 261,858 10,082 251,776 248,085 94.74 253,724 96.89 100.77 2009 2010 12/13/10 261,373 9,409 251,964 219,566 84.00 251,340 96.16 99.75 2008 2009 12/02/09 257,901 9,027 248,874 243,555 94.44 253,033 98.11 101.67 2007 2008 11/03/08 258,271 9,039 249,232 248,778 96.32 252,104 97.61 101.15 2006 2007 12/03/07 260,266 9,109 251,157 232,526 89.34 253,816 97.52 101.06

(1) Source: Annual Tax Levy Ordinances adopted by the Board of the District for levy years 2006 through 2008 and for the levy years 2009 to 2015, the Property Tax Extension by Cook County for District. (2) Loss in Collections Rate: In levy year 2005 the rate was 3.5% and remained the same rate through and including levy year 2008; in levy year 2009, the rate changed and was increased to 3.6% and in levy year 2010, the rate changed and was increased to 3.85%, and in levy year 2011, the rate changed and was increased to 3.90% and remained the same rate through and including levy year 2014. In levy year 2015, the rate changed and was decreased to 3.67%. (3) Totals may not reconcile due to rounding.

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Economic and Demographic Information

Set forth below is certain economic, demographic and supplemental information regarding the City of Chicago. Sources of information are indicated immediately following each table or section. With respect to non-District sources, the District considers these sources to be reliable but has made no independent verification of the information provided and does not warrant its accuracy.

The population of the City of Chicago, per capita income for Cook County and the unemployment rate for the City of Chicago for the past ten years and the first year of each of the five previous decades is set forth below.

Number of Per City County Households Personal capita personal Unemployment Year Population (1) Median Age (2) (2) Income Income (2) Rate (3) 2015 2,270,546 (5) N/A(4) N/A(4) N/A(4) 5.9% 2014 2,695,598 N/A(4) N/A(4) N/A(4) N/A(4) 5.7% 2013 2,695,598 33.5 1,062,029 132,275,689,458 N/A(4) 9.1 2012 2,695,598 33.2 1,054,488 123,935,508,246 45,977 9.3 2011 2,695,598 33.2 1,048,222 119,533,597,712 44,344 10.1 2010 2,695,598 34.8 1,045,666 126,634,091,632 43,727 10.0 2009 2,896,016 34.5 1,037,069 131,270,613,248 45,328 6.4 2008 2,896,016 34.1 1,032,746 126,596,443,424 43,714 5.7 2007 2,896,016 33.7 1,033,327 121,305,422,192 41,887 5.2 2006 2,896,016 33.5 1,040,000 111,319,959,024 38,439 7.0 2005 2,896,016 33.0 1,045,282 107,642,018,704 37,169 7.2 2000 2,896,016 33.6 1,974,181 184,427,704,000 34,322 4.3 1990 2,783,726 N/A(4) 2,021,833 113,569,598,000 22,227 6.3 1980 3,005,072 N/A(4) 1,994,211 61,764,648,000 11,767 N/A(4) 1970 3,366,957 N/A(4) 1,855,373 27,539,848,000 5,010 N/A(4) 1960 3,550,404 N/A(4) 1,676,412 N/A(4) N/A(4) N/A(4) ______Source: U.S. Census Bureau (City of Chicago) U.S. Department of Commerce, Bureau of Economic Analysis – (Cook County) U.S. Department of Labor, Bureau of Labor Statistics N/A means data not available (5) Estimated

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Principal Employers (Non-Government)

The companies employing the greatest number of workers in the City of Chicago as of the end of 2015 are set forth below.

2015(1) Percentage of total district Employer Employees Rank population(1) Advocate Health Care 18,308 1 1.44% University of Chicago 16,197 2 1.27 Northwestern Memorial 15,317 3 1.20 Healthcare J. P. Morgan Chase Bank (2) 14,158 4 1.11 United Continental Holdings, 14,000 5 1.10 Inc. Health Care Service Corp. 13,006 6 1.02 Walgreen Co. 13,006 6 1.02 Presence Health 10,500 7 0.82 Abbott Laboratories 10,000 8 0.79 Northwestern University 9,708 9 0.79 Jewel Food Stores, Inc. (3) 9,660 10 0.76 143,860 11.32% ______Data source: Chicago Park District Comprehensive Annual Financial Report for the year ended December 31, 2015. Notes: (1) 2015 City of Chicago population. (2) J.P. Morgan Chase formerly known as Banc One. (3) Jewel-Osco formerly known as Jewel Food Stores, Inc.

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Principal Property Tax Payers

The taxpayers set forth below are believed to be the largest taxpayers in the City. Many of the taxpayers contain multiple parcels, and it is possible that some parcels and their valuations have been overlooked.

Top Ten Property Tax Payers 2014(1) ($ in thousands) % of 2014 EAV Total Rank Property ($ in thousands) EAV 1 Willis Tower $364,454 0.29% 2 AON Building 241,083 0.19 3 Merchandise Mart 236,632 0.19 4 Citadel Center 233,798 0.19 5 Hyatt Center 223,714 0.18 6 CME Center 220,757 0.18 7 One N. Wacker Drive 215,718 0.17 8 Blue Cross Blue Shield Tower 206,782 0.16 9 Water TowerPlace 195,486 0.16 10 Chase Tower 194,963 0.16 Total $2,333,387 1.87%

Data Source: City of Chicago Department of Finance Notes: Many of the taxpayers contain multiple parcels, and it is possible that some parcels and their valuations have been overlooked.

(1) 2015 information not available at time of publication.

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TAX SUPPORTED BONDED DEBT

District and Overlapping Long-Term Debt

The following table sets forth the direct and overlapping long-term debt applicable to the District as of September 30, 2016.

Direct Debt(1) Amount Outstanding General Obligation Bonds ...... $494,930,000 Outstanding General Obligation Bonds (PPRT Alternate Revenue)(2) .... 124,355,000 Outstanding General Obligation Bonds (Harbor Alternate Revenue)(2) .. 159,310,000 Outstanding General Obligation Bonds (SRA Alternate Revenue)(2) ..... 19,450,000 Total Direct Debt ...... $798,045,000

Less: Outstanding General Obligation Bonds (PPRT Alternate Revenue)(2) ...... (124,355,000) Less: Outstanding General Obligation Bonds (Harbor Alternate Revenue)(2) ...... (159,310,000) Less: Outstanding General Obligation Bonds (SRA Alternate Revenue)(2) ...... (19,450,000) Net Direct Bonded Debt ...... $494,930,000

Percent Amount Estimated Overlapping Bonded Debt Amount(3) Applicable(8) Applicable City of Chicago(4) ...... $9,069,940,364 100.00% $9,069,940,364 Chicago Board of Education(5) ...... 6,816,411,000 100.00 6,816,411,000 Community College District ...... 245,995,000 100.00 245,995,000 Cook County(6) ...... 3,313,286,750 51.98 1,722,246,453 Forest Preserve District of Cook County ...... 168,620,000 53.47 90,161,114 Water Reclamation District(7) ...... 2,802,575,327 54.46 1,526,282,523 Total Estimated Overlapping Bonded Debt (as of 9/30/16)(1)(9) ...... $19,471,036,454

Total Net Direct and Estimated Overlapping Bonded Debt (1)(2)(4)(9) $19,965,966,454

______(1) Source: Chicago Park District. The District does not include its short-term 2016 Bond Anticipation Notes (BANs) in an amount not to exceed $40 million, since the BANs are not tax-supported bonded debt. (2) Under the Debt Reform Act, alternate general obligation bonds are not treated as debt for purposes of statutory debt limitation calculations unless the tax levy supporting them is in fact extended for collection. The alternate revenue sources utilized are the Personal Property Replacement Tax, Harbor Facilities and SRA Revenues. (3) Source: Each of the respective taxing districts. For further information on these types of borrowings and/or debt, please refer to the respective governmental units’ financial statements and/or Official Statements. (4) The City’s debt portfolio includes long-term general obligation debt. (5) Includes responsibility for the proportionate share of the principal amount of Public Building Commission Bonds by the Chicago Board of Education; the Board's debt portfolio includes long-term obligation debt, alternate revenue bonds and excludes short-term capital lines of credit and Tax Anticipation Warrants. (6) The County's debt portfolio includes long-term obligation debt and excludes sales tax bonds and short-term lines of credit. (7) The Water Reclamation debt portfolio includes long-term general obligation debt, alternate revenue bonds and State Revolving Fund loan obligations. (8) Based on 2015 Equalization Assessed Valuation. Assessed value data used to estimate applicable percentage provided by the Office of the Cook County Clerk. (9) Figures may include rounding.

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Selected Debt Statistics and Ratios

Population of Chicago (2010)(1) ...... 2,695,598 Equalized Assessed Valuation (2015)(2) ...... $70,963,288,968 Estimated Fair Market Value (2013)(3)...... $236,695,475,114

% of Estimated Fair Per Capita Market Value Net Direct Bonded Debt ...... $ 143 0.21% Net Direct and Estimated Overlapping Bonded Debt ...... $3,644 8.23% ______(1) Source: 2010 Census of Population, Bureau of the Census, United States Department of Commerce. (2) Source: Cook County Clerk’s Office. Total Equalized Assessed Value is net of exemptions and includes assessment of pollution control facilities and the DuPage County valuation. (3) Source: The Civic Federation, Chicago, Illinois, Illinois Department of Revenue and the Cook County Assessor’s Office. The Estimated Fair Market Value for 2013 excludes railroad property, pollution control, or that part of O’Hare International Airport in DuPage County.

Bonded Debt Limit

The District’s statutory general obligation bonded debt limit is 2.3% of the latest known Equalized Assessed Valuation. The District is subject to a separate statutory debt limit of 1% of the latest known Equalized Assessed Valuation for certain general obligation bonds issued without a referendum. The District has $1,137,225,646 of unexercised general obligation bonded debt limit, and has $228,397,890 of unexercised non-referendum bonded debt limit. Other types of District debt are subject to further limitations. Bonds issued to finance projects for the aquarium and museums (the “Aquarium and Museum Bonds”) are issued pursuant to specific statutory authorization. The Public Building Commission leases are not subject to a statutory limit. The table on the following page depicts the District’s bonded debt limitations.

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Chicago Park District(1) General Obligation Bonded Debt Schedule

Equalized Assessed Valuation (2015)(2) $70,963,288,968

Total GO Bonds Total GO Bonds Outstanding as of Issuance of Refunding of Outstanding as of (5) September 30, 2016 Bonds Refunded Bonds Date of Issuance General Obligation Bonds Outstanding $481,235,000 $ $ $ Park Improvement Bonds New Aquarium and Museum Bonds (1994 and thereafter)(3) 13,695,000 ______Subtotal $494,930,000 $ $ $

$124,355,000 $ $ $ General Obligation (PPRT Alternate Revenue)(4) General Obligation (Harbor Alternate Revenue)(4) 159,310,000 General Obligation (SRA Alternate Revenue)(4) 19,450,000 ______$303,115,000 $ $ $ Subtotal

Total General Obligation and Alternate General Obligation Bonds $798,045,000 $ $ $

Bonded Debt Limit 2.30% of Equalized Assessed Valuation $1,632,155,646 $ General Obligation Bonds Outstanding(5) (494,930,000) () Unexercised Bonded Debt Limit $1,137,225,646 $

Non-Referendum Bonded Debt Limit 1.00% of Equalized Assessed Valuation $ 709,632,890 $ Park Improvement Bonds Outstanding (481,2350,000) () Unexercised Non-Referendum Bonding $ 228,297,890 $ Authority

Tax Supported Direct Debt(5) General Obligation Bonds Outstanding(5) $494,930,000 $

Total Direct Debt $494,930.000 $

(1) Source: Office of the Cook County Clerk and the Chicago Park District. The District does not include its short-term Bond Anticipation Notes (BANs) in the amount not to exceed $40 million since the BANs are not tax-supported bonded debt. (2) The Equalized Assessed Valuation figure includes both Cook County Clerk and the relevant portion of DuPage County. (3) Aquarium and Museum Bonds issued before 1994 are not subject to the limits of the Debt Service Extension Base, but are chargeable against the Debt Service Extension Base. Aquarium and Museum Bonds issued in 1994 and thereafter are neither subject to the limits of nor chargeable against the Debt Service Extension Base. (4) Under applicable law, alternate bonds are not treated as debt for purposes of statutory debt limitation calculations unless the tax levy supporting them is in fact extended for collection. The alternate revenue sources utilized are Personal Property Replacement Tax, Harbor and Special Recreation Tax Revenues (5) Not including alternate bonds.

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THE DISTRICT’S OUTSTANDING GENERAL OBLIGATION BONDS AND OTHER LONG-TERM DEBT OBLIGATIONS

General Obligation Bonds Annual Debt Service and Amount Subject to the Debt Service Extension Base (Base)

Outstanding General Obligations [1] The Bonds[2,3] Debt Service Extension Base Limitation Total Bond Year Levy Year General Debt Service Debt Service Issuance Ending Ending Obligation Subject to Extension Capacity Under (January 1) (January 1) Principal Interest Total Principal Interest[3] Total Debt Service DSEB [4] Base Limit[5] The Limit

2017 2015 29,815,000 21,952,373 51,767,373 $ 51,767,373 45,381,773 47,128,125 1,746,353 2018 2016 26,645,000 22,934,398 49,579,398 49,579,398 45,382,798 47,458,022 1,745,328 2019 2017 25,090,000 21,865,835 46,955,835 46,955,835 42,759,435 47,458,022 4,368,690 2020 2018 18,045,000 20,817,185 38,862,185 38,862,185 38,862,185 47,458,022 8,265,940 2021 2019 18,755,000 19,997,735 38,752,735 38,752,735 38,752,735 47,458,022 8,375,390 2022 2020 19,705,000 19,079,185 38,784,185 38,784,185 38,784,185 47,458,022 8,343,940 2023 2021 20,715,000 18,068,235 38,783,235 38,783,235 38,783,235 47,458,022 8,344,890 2024 2022 21,095,000 17,038,635 38,133,635 38,133,635 38,133,635 47,458,022 8,994,490 2025 2023 21,765,000 16,010,700 37,775,700 37,775,700 37,775,700 47,458,022 9,352,425 2026 2024 22,910,000 14,923,970 37,833,970 37,833,970 37,833,970 47,458,022 9,294,155 2027 2025 23,375,000 13,784,140 37,159,140 37,159,140 37,159,140 47,458,022 9,968,985 2028 2026 23,380,000 12,615,390 35,995,390 35,995,390 35,995,390 47,458,022 11,132,735 2029 2027 22,945,000 11,446,390 34,391,390 34,391,390 34,391,390 47,458,022 12,736,735 2030 2028 22,560,000 10,294,140 32,854,140 32,854,140 32,854,140 47,458,022 14,273,985 2031 2029 21,320,000 9,157,880 30,477,880 30,477,880 30,477,880 47,458,022 16,650,245 2032 2030 20,665,000 8,099,500 28,764,500 28,764,500 28,764,500 47,458,022 18,363,625 2033 2031 19,570,000 7,039,638 26,609,638 26,609,638 26,609,638 47,458,022 20,518,488 2034 2032 18,790,000 6,030,988 24,820,988 24,820,988 24,820,988 47,458,022 22,307,138 2035 2033 18,025,000 5,066,738 23,091,738 23,091,738 23,091,738 47,458,022 24,036,388 2036 2034 17,290,000 4,140,738 21,430,738 21,430,738 21,430,738 47,458,022 25,697,388 2037 2035 16,575,000 3,253,738 19,828,738 19,828,738 19,828,738 47,458,022 27,299,388 2038 2036 15,825,000 2,362,738 18,187,738 18,187,738 18,187,738 47,458,022 28,940,388 2039 2037 15,310,000 1,503,500 16,813,500 16,813,500 16,813,500 47,458,022 30,314,625 2040 2038 - 14,760,000 - 738,000 - 15,498,000 15,498,000 15,498,000 47,458,022 31,630,125

Total $494,930,000 $288,221,765 $783,151,765 $ $ $ $783,151,765 $768,373,165

Note [1] Excludes General Obligation Bonds issued as Alternate Revenue Bonds or other Pledged Revenue supported bonds. Net of debt service on the Refunded Bonds including $______of Series 2006A. Note [2] The Bonds include the Series 2016A Limited Tax Bonds; the Series 2016B Limited Tax Bonds (proceeds of which will be used to current refund certain Series 2006A Bonds); and the Series 2016C Limited Tax Bonds (proceeds of which will be used to advance refund certain Series 2008F and 2008G Bonds). Note [3] Interest on the Series 2016A Limited Tax Bonds, Series 2016B Limited Tax Bonds, and Series 2016C Limited Tax Bonds through January 1, 2017 is $______. Note [4] General Obligation Bonds subject to the Debt Service Extension Base (Base) include Limited Tax Bonds and Unlimited Tax Bonds as described in Note 1, however exclude $21,285,000 in bonds outstanding of certain Aquarium and Museum purposes consisting of $6,155,000 of Series 2008H and $15,130,000 of Series 2011D. Note [5] The Debt Service Extension Base of the District for the Limited Tax Bonds includes the most recent allowable increase (0.8% January 2015), which affects the 2015 levy applicable to non-referendum debt service through bond year ending January 1, 2017.

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General Obligation Bonds – Alternate Revenue Source - Personal Property Replacement Tax Annual Debt Service and Coverage

Prior Unlimited Tax Bonds [1] [2] Outstanding [1,2] Unlimited Tax Refunding Bonds Unlimited Tax Bonds Outstanding Debt Service Coverage

Bond Year Gross Alternate Ending Revenue [3] [3] [4] (January 1) Principal Interest Total Principal Interest Total Principal Interest Total Sources Coverage

2017 7,015,000 5,848,944 12,863,944 7,015,000 5,848,944 12,863,944 34,815,000 2.706 2018 7,305,000 5,552,394 12,857,394 7,305,000 5,552,394 12,857,394 34,815,000 2.708 2019 3,855,000 5,246,444 9,101,444 3,855,000 5,246,444 9,101,444 34,815,000 3.825 2020 4,035,000 5,076,206 9,111,206 4,035,000 5,076,206 9,111,206 34,815,000 3.821 2021 3,330,000 4,895,806 8,225,806 3,330,000 4,895,806 8,225,806 34,815,000 4.232 2022 7,135,000 4,777,606 11,912,606 7,135,000 4,777,606 11,912,606 34,815,000 2.923 2023 9,115,000 4,456,956 13,571,956 9,115,000 4,456,956 13,571,956 34,815,000 2.565 2024 13,515,000 4,032,756 17,547,756 13,515,000 4,032,756 17,547,756 34,815,000 1.984 2025 13,920,000 3,393,575 17,313,575 13,920,000 3,393,575 17,313,575 34,815,000 2.011 2026 14,435,000 2,712,550 17,147,550 14,435,000 2,712,550 17,147,550 34,815,000 2.030 2027 12,985,000 2,034,750 15,019,750 12,985,000 2,034,750 15,019,750 34,815,000 2.318 2028 13,520,000 1,385,500 14,905,500 13,520,000 1,385,500 14,905,500 34,815,000 2.336 2029 14,190,000 709,500 14,899,500 14,190,000 709,500 14,899,500 34,815,000 2.337

Total $124,355,000 $50,122,987 $149,440,806 $124,355,000 $50,122,987 $149,440,806 $452,595,000

Note [1] The Series 2008A PPRT Bonds are being refunded in the amount of $______by the Series 2016D Unlimited Tax Bonds.

Note [2] Remaining Outstanding General Obligation Alternate Revenue Source Bonds include $______.

Note [3] Interest on the Series 2016D Unlimited Tax Bonds through January 1, 2017 is $______.

Note [4] Gross Alternate Revenue Sources reflects Personal Property Replacement Tax Receipts collections from 2/16 through 10/16 and includes rounding.

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Other Long-Term Debt Obligations of the District

Special Recreation Activity [1] General Obligation Alternate Revenue Bonds Bond Year Ending (January 1) [2] Principal Interest Total

2016 1,000,000 1,022,500 2,022,500 2017 1,000,000 972,500 1,972,500 2018 1,045,000 922,500 1,967,500 2019 1,095,000 870,250 1,965,250 2020 1,150,000 815,500 1,965,500 2021 1,205,000 758,000 1,963,000 2022 1,265,000 697,750 1,962,750 2023 1,330,000 634,500 1,964,500 2024 1,395,000 568,000 1,963,000 2025 1,465,000 498,250 1,963,250 2026 1,540,000 425,000 1,965,000 2027 1,615,000 348,000 1,963,000 2028 1,695,000 267,250 1,962,250 2029 1,780,000 182,500 1,962,500 2030 1,870,000 93,500 1,963,500

$19,450,000 $9,067,000 $29,526,000

Note [1] Debt Service on the Series 2008E Bonds issued as Alternate Revenue Bonds, and secured by a Special Recreation Activity property tax levy of the District. Note [2] Debt Service reflects a Bond year ending January 1 of such year, or November 15 of the immediately preceding year. Debt Service obligations of the Bond Year ending January 1, 2016 include certain payments within the bond year including May 15 as of the date of this Official Statement.

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General Obligation Bonds - Alternate Revenue Source - Harbor Revenues Alternate Revenue Bond Debt Service (Harbor Facilities Revenues)[1]

Alternate Revenue Bond Debt Service Debt Service Coverage

Bond Year Ending Available Harbor (January 1) Principal Interest Total Revenue (2) Coverage

2017 $4,705,000 $8,100,813 $12,805,813 $23,998,646 1.874 2018 5,160,000 7,897,313 13,057,313 23,998,646 1.838 2019 5,620,000 7,672,313 13,292,313 23,998,646 1.805 2020 6,155,000 7,391,313 13,546,313 23,998,646 1.772 2021 6,710,000 7,083,563 13,793,563 23,998,646 1.740 2022 7,130,000 6,748,063 13,878,063 23,998,646 1.729 2023 7,575,000 6,391,563 13,966,563 23,998,646 1.718 2024 8,045,000 6,012,813 14,057,813 23,998,646 1.707 2025 3,930,000 5,610,563 9,540,563 23,998,646 2.515 2026 4,215,000 5,414,063 9,629,063 23,998,646 2.492 2027 4,515,000 5,203,313 9,718,313 23,998,646 2.469 2028 4,835,000 4,977,563 9,812,563 23,998,646 2.446 2029 5,170,000 4,735,813 9,905,813 23,998,646 2.423 2030 5,520,000 4,477,313 9,997,313 23,998,646 2.401 2031 5,890,000 4,201,313 10,091,313 23,998,646 2.378 2032 6,295,000 3,892,088 10,187,088 23,998,646 2.356 2033 6,720,000 3,561,600 10,281,600 23,998,646 2.334 2034 7,170,000 3,208,800 10,378,800 23,998,646 2.312 2035 7,645,000 2,832,375 10,477,375 23,998,646 2.291 2036 8,145,000 2,431,013 10,576,013 23,998,646 2.269 2037 8,675,000 2,003,400 10,678,400 23,998,646 2.247 2038 9,230,000 1,547,963 10,777,963 23,998,646 2.227 2039 9,820,000 1,063,388 10,883,388 23,998,646 2.205 2040 10,435,000 547,838 10,982,838 23,998,646 2.185

Total $163,500,000 $121,280,363 $284,780,363 $575,967,504

Note [1] Debt Service on Harbor Facilities Revenue Bonds Series 2010C and Series 2013D issued as Alternate Revenue Bonds. Note [2] Harbor Revenue collections from 1/16 through 8/16 and includes rounding .

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CASH MANAGEMENT

Corporate Fund

Property tax revenues for Corporate Fund operations are received by the District in the year following the fiscal year during which the taxes are levied.

Bond Anticipation Notes

On March 3, 2015, the District issued Bond Anticipation Notes (“BANs”) in an amount not to exceed $40,000,000 (including capitalized interest) under a line of credit provided by PNC Bank, National Association. Proceeds of the BANs are being used to pay and reimburse a part of the cost of building, maintaining, and improving parks as part of the District’s Capital Improvement Plan. The BANs are a general obligation of the District and no provision has been made for a direct annual tax upon taxable property for the payment of principal or interest on the BANs. The total outstanding amount of the BANs will be retired from funds derived from the sale of the Series 2016A Limited Tax Bonds.

In order to adequately manage its cash requirements and meet all obligations, the District has authority to issue Corporate Fund tax anticipation warrants before the collection of the second installment of property taxes. The District has not issued any tax anticipation warrants since calendar year 2006. Instead the District has elected to exercise its authority to borrow funds from the working cash reserve, which fund borrowings are repaid from the next collection of property taxes available after payment of principal and interest on outstanding general obligation limited and unlimited bonds.

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CHICAGO PARK DISTRICT PROCEDURES

Statement of Accounting Practices

Description of Accounting Policies. The accounting policies of the District are based upon U.S. generally accepted accounting principles (GAAP), as prescribed by the Governmental Accounting Standards Board (GASB). To facilitate the understanding of data included in the basic financial statements, summarized below are the more significant accounting policies.

Government-wide and Fund Financial Statements

Government-wide Statements. The government-wide statement of net position and statement of activities report the overall financial activity of the District, excluding fiduciary activities. Eliminations have been made to minimize the double counting of internal activities of the District. Governmental activities generally are financed through taxes, contributions, and other non-exchange transactions.

The statement of activities demonstrates the degree to which direct expense of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (a) charges to customers or patrons who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

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

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide 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 at the time liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, personal property replacement taxes, grants, and contributions. On an accrual basis, revenues from property taxes is recognized in the period for which the levy is intended to finance, which is the same year in which the taxes are levied. For example, the 2015 levy is recognized as revenue for the year ended December 31, 2015. Revenue from grants, contributions, entitlements, personal property replacement taxes (shared revenue received from the State), and similar items are recognized in the fiscal year in which all eligibility requirements imposed by the provider have been met. Eligibility requirements include timing requirements, which specify the year when resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis.

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absences 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.

Significant revenue sources, which are susceptible to accrual, include property taxes, personal property replacement taxes, rentals, concession fees, charges for services, grants, and interest. All other revenue sources, including permits, golf course fees, and parking fees, are considered to be measurable and available only when cash is received.

Major Governmental Funds. A description of the major governmental funds of the District is detailed in APPENDIX C — “AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2014 — NOTES TO FINANCIAL STATEMENTS — NOTE 1.”

Investment Management. Currently, the District’s accounting system maintains a separate cash and investment account for each Park District fund. However, the District may elect to commingle monies from the various funds, in order to obtain higher investment returns or to achieve investment management efficiencies. Funds held in the Escrow Fund will not be commingled with other District funds. See “CHICAGO PARK DISTRICT PROCEDURES – Investment Policy” herein.

Comparative Financial Statements. The financial statements of the District have been presented in accordance with the format recommended in the Codification of Governmental Accounting and Financial Reporting Standards, as promulgated by GASB, except as described in APPENDIX C — “AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2015 — NOTES TO FINANCIAL STATEMENTS — NOTE 1.”

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Budgetary Procedures

The Code of the District provides that the Budget Director prepare and submit the proposed annual budget to the General Superintendent. The budget includes estimated revenues, estimated expenditures and proposed appropriations.

The formal budget process begins on or before August 1 of each year, with each department and division head submitting an estimate of the ensuing year’s expenses to the Budget Director. The required information includes the current appropriations, estimated expenditures for the balance of the year, proposed appropriations for the coming year, and explanation of any increases or decreases. The Budget Director then reviews and compiles the requests on or before September 15 of each year and submits a proposed budget and an estimate of the funds necessary to the General Superintendent. The General Superintendent then reviews the proposed budget, confers with department and division heads, and submits the proposed budget to the Secretary on or before October 31 of each year. On or before November 1 in each year, the General Counsel prepares a draft of the annual appropriation ordinance in accordance with the budget report and the Secretary prepares and submits to the President the budget report together with the budget message and recommendation of the General Superintendent.

After receipt of the proposed budget, the Board reviews and revises items and estimates as it deems necessary. The tentative budget appropriation ordinance is then made available for public inspection for at least ten days. The Commissioners set a date, not later than December 28, for at least one public hearing. After the hearing, any revisions or amendments deemed necessary by the Board are then made and final passage of the annual appropriation ordinance is required by statute on or prior to December 31. The ordinance must be published in a newspaper in the City and is effective ten days after publication.

Throughout the year, the Budget Director monitors and analyzes the adopted budget to assure compliance with all current appropriation ordinances and to recommend adjustments as necessary. The Comptroller has the duty of establishing a budgetary control accounting system and is responsible for submitting reports to the General Superintendent and Chief Financial Officer showing the status of the accounts.

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Set forth below are summaries of the District’s 2016 Operating Budget and the District’s 2014, 2015, and 2016 Capital Budgets. These summaries are for informational purposes. 2016 Operating Budget Revenues and Spending Summary (1)

DEBT SERVICE GENERAL FUND SPECIAL REVENUE FUNDS CAPITAL FUNDS FUNDS Liability, Worker’s Long-Term Special Capital TOTAL Park Bond Operating Northerly Aquarium & Corporate Comp, Income Pension Recreation Project OPERATING Redemption Grants Island Fund Museum OP Unemployme Reserve Tax Management nt Fund

Revenues Gross Tax Levy $158,061,859 $10,811,086 $51,468,284 $17,264,938 $7,000,000 $27,664,491 272,270,657 Loss in Tax Collection (6,434,493) (396,767) (1,888,886) (256,900) (1,015,287) (9,992,333) Personal Property Replacement Tax 31,075,662 12,857,394 1,019,290 3,662,654 48,615,000 Use of Prior Year Fund Balance 3,000,000 1,200,000 4,200,000

Transfer In/Out 1,100,000 1,967,500 (1,967,500) 1,100,000

Permits, Fees and Concessions 97,927,555 13,057,313 110,984,877

Other Income 22,119,497 $5,000,000 3,770,747 30,890,244 Total Revenues $306,850,089 $10,414,319 $77,461,604 $5,000,000 $18,284,228 $5,975,600 $30,311,858 3,770,747 458,068,445

Spending TOTAL SPENDING $306,850,089 $10,414,319 $77,461,604 $5,000,000 $18,284,228 $5,975,600 $30,311,858 3,770,747 458,068,445

(1)Source: Chicago Park District 2015 Budget Ordinance adopted by the Board on December 9, 2015.

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2014 Capital Budget Resources and Spending Summary (1) Special Reserve for Reserve for Aquarium & Recreation Capital Park Park Museum Harbor SRA Activity RESOURCES Improvement* Improvements Replacement Improvement Capital Capital Tax* Capital Grants Northerly Island TOTAL CAPITAL Fund Balance (01/01/14) $10,456,248 - $26,445,543 $17,115,681 $1,860,522 $2,073,349 - $1,660,080 $59,611,423 Interest Income - New Appropriation 35,000,000 - - 30,000,000 - 65,000,000 Transfer Out to Operating Fund (1,100,000) (1,100,000) TOTAL RESOURCES $44,356,248 - $26,445,543 $17,115,681 $1,860,522 $2,073,349 $30,000,000 $1,660,080 $123,511,423

SPENDING

2014 Appropriations $14,356,248 - $26,445,543 $17,115,681 $1,860,522 $2,073,349 $5,000,000 $1,660,080 $68,511,423

TOTAL 2014 SPENDING $14,356,248 - $26,445,543 $17,115,681 $1,860,522 $2,073,349 $5,000,000 $1,660,080 $68,511,423

ESTIMATED FUND BALANCE 12/31/14 $30,000,000 $ - $ - $ - $ - $ - $ - $25,000,000 $ - $55,000,000 * Note: The amounts shown here reflect amounts more capital in nature.

(1) Source: Chicago Park District 2014 Budget Ordinance adopted by the Board of Commissioners on December 11, 2013.

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2015 Capital Budget Resources and Spending Summary (1)

Special Reserve for Reserve for Recreation Capital Park Park Harbor SRA Activity RESOURCES Improvement* Improvements Replacement Capital Capital Tax* Capital Grants Northerly Island TOTAL CAPITAL Fund Balance (01/01/15) $12,172,130 $ - $ - $4,285,739 $707,573 $2,180,263 $ - $1,010,376 $20,356,081 Interest Income - New Appropriation - 40,000,000 - - - 30,000,000 - 70,000,000 Transfer Out to Operating Fund - (1,100,000) (1,100,000) TOTAL RESOURCES $12,172,130 $38,900,000 $ - $4,285,739 $707,573 $2,180,263 $30,000,000 $1,010,376 $89,256,081

SPENDING

2015 Appropriations $12,172,130 $38,900,000 $ - $4,285,739 $707,573 $2,180,263 $30,000,000 $1,010,376 $89,256,081

TOTAL 2015 SPENDING $12,172,130 $38,900,000 $ - $4,285,739 $707,573 $2,180,263 $30,000,000 $1,010,376 $89,256,081

ESTIMATED FUND BALANCE 12/31/15 $ - $ - $ - $ - $ - $ - $ - $ - $ -

* Note: The amounts shown here reflect amounts more capital in nature.

(1) Source: Chicago Park District 2015 Budget Ordinance adopted by the Board on December 10, 2014.

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2016 Capital Budget Resources and Spending Summary (1)

Special Reserve for Reserve for Recreation Capital Park Park Harbor SRA Activity RESOURCES Improvement* Improvements Replacement Capital Capital Tax* Capital Grants Northerly Island TOTAL CAPITAL Fund Balance (01/01/15) $6,142,997 $ - $ - $ 3,591,120 $678,802 $3,623,164 $ - $ $14,036,083 Interest Income - New Appropriation - 37,500,000 - - - 30,000,000 - 67,500,000 Transfer Out to Operating Fund - (1,100,000) (1,100,000) TOTAL RESOURCES $6,142,997 $36,400,000 $ - $ 3,591,120 $ 678,802 $ 3,623,164 $ 30,000,000 $ - $ 80,436,083

SPENDING

2016 Appropriations $6,142,997 $ 36,400,000 $ - $ 3,591,120 $ 678,802 $ 3,623,164 $ 30,000,000 $ - $ 80,436,083

TOTAL 2016 SPENDING $6,142,997 $ 36,400,000 $ - $ 3,591,120 $ 678,802 $ 3,623,164 $ 30,000,000 $ - $ 80,436,083

ESTIMATED FUND BALANCE 12/31/15 $ - $ - $ - $ - $ - $ - $ - $ - $ -

* Note: The amounts shown here reflect amounts more capital in nature.

(1) Source: Chicago Park District 2015 Budget Ordinance adopted by the Board on December 9, 2015.

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Investment Policy

The Board has adopted an investment policy that provides a statement of objectives as to the management and investment of District funds other than the Pension Fund, which is governed by a separate board of trustees. The investment policy is subject to an annual review by the Chief Financial Officer and Treasurer of the District. The primary objectives of the investment policy are safety of principal, diversification, liquidity and maximization of rate of return, all consistent with prudent investment principles. Investments must at all times comply with all applicable laws and statutes, the Code of the District and ordinances and resolutions of the District. Private fund managers and other entities approved by the Board are hired to invest a portion of the District’s funds (other than the Retirement Fund), in accordance with the existing investment policy. A copy of the District’s investment policy is available from the District upon request to the Treasurer at (312) 742-5384.

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APPENDIX C AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2015

[THIS PAGE INTENTIONALLY LEFT BLANK] CHICAGO PARK DISTRICT

CHICAGO, ILLINOIS

Financial Statements

For the year ended December 31, 2015

Prepared by the Chief Financial Officer and the Office of the Comptroller

Rahm Emanuel, Mayor, City of Chicago Jesse Ruiz, President of the Board of Commissioners Michael P. Kelly, General Superintendent and Chief Executive Officer Steve Lux, Chief Financial Officer Cecilia Prado, CPA, Comptroller

CHICAGO PARK DISTRICT 2015 COMPRHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS

Independent Auditors’ Report ...... 1

Management’s Discussion and Analysis (Unaudited) ...... 3

Basic Financial Statements Government-wide Financial Statements: Statement of Net Position ...... 19 Statement of Activities ...... 20 Fund Financial Statements: Balance Sheet – Governmental Funds ...... 22 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 24 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds ...... 26 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities ...... 28 Fiduciary (Pension) Fund Financial Statements: Statement of Fiduciary Net Position ...... 29 Statement of Changes in Fiduciary Net Position ...... 30 Notes to Basic Financial Statements ...... 31 Required Supplementary Information (Unaudited) Schedules of Revenues and Expenditures – Budget and Actual: General Operating Fund ...... 71 Federal, State, and Local Grants Fund ...... 72 Notes to Budgetary Comparison Schedules ...... 73 Schedule of Changes in net Pension Liability and Related Ratios ...... 74 Schedules of Funding Progress: Schedule of Employer Contributions ...... 75 Schedule of Funding in Progress - Healthcare Plan ...... 76

IndependentAuditor'sReport

The Honorable Jesse Ruiz, Board President Members of the Board of Commissioners Chicago Park District

ReportontheFinancialStatements

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Chicago Park District (the District), as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund (Retirement Fund), which represents 88 percent, and 52 percent, respectively, of the assets, and revenues/additions of the aggregate remaining fund information. Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Retirement Fund, is based solely on the report of the 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 of material misstatement. The financial statements of the Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund (Retirement Fund) were not audited in accordance with GovernmentAuditingStandards.

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

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

Opinions

In our opinion, based on our audit and the report of the other auditor, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Chicago Park District, as of December 31, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in the Notes to the Basic Financial Statements, Note 16, during the year ended December 31, 2015 the District adopted the provisions of GASB Statement No. 68, AccountingandFinancialReporting forPensions,anAmendmentofGASBStatementNo.27 and GASB Statement No. 71,PensionTransition forContributionsMadeSubsequenttotheMeasurementDate – AnamendmentofGASBStatementNo. 68. The implementation of GASB Statement Nos. 68 and 71 resulted in a restatement of December 31, 2014 net position as described in Note 16. Our opinion is not modified with respect to this matter.

Other Matters

RequiredSupplementaryInformation

Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, certain budgetary comparison information, schedule of changes in net pension liability, schedule of employer contributions and notes to the schedule, and schedule of funding progress on pages 3 – 18 and 71 – 76 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.

OtherReportingRequiredbyGovernment Auditing Standards

In accordance with GovernmentAuditingStandards, we have also issued our report dated June 29, 2016 on our consideration of the District’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 GovernmentAuditingStandards in considering the District’s internal control over financial reporting and compliance.

Chicago, Illinois June 29, 2016

CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

INTRODUCTION As management of the Chicago Park District, Chicago, Illinois (the District), we offer readers of this Comprehensive Annual Financial Report (CAFR) a narrative overview and analysis of the financial activities of the District for the fiscal year ended December 31, 2015. We encourage readers to consider the information presented here, in conjunction with the information that we have furnished in our letter of transmittal, financial statements, and notes to the basic financial statements contained within this report.

FINANCIAL HIGHLIGHTS At December 31, 2015, the District’s total net position was $983 million. Of this amount, $1.19 billion is net investment in capital assets. The District’s total net position decreased by approximately $255 million from 2014, primarily as a result of the decrease in unrestricted net position of $348 million of which a significant portion is attributable to implementation of a new accounting standard related to pension liability reporting. Capital assets including land, buildings and equipment ended the year with a balance of $2.05 billion, net of accumulated depreciation. This is an increase of $72 million over 2014. Total capital outlay for 2015 was $89.1 million in comparison to the $144.5 million spent on capital projects in 2014.

At December 31, 2015, the District’s governmental funds reported combined fund balances of $285.1 million, a decrease of $6.5 million in comparison with the prior year. At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the general fund was $202 million, or approximately 67.0% of total general fund expenditures. Of this amount, $96 million relate to working cash reserves.

OVERVIEW OF THE FINANCIAL STATEMENTS This Comprehensive Annual Financial Report (CAFR) consists of Management’s Discussion and Analysis and a series of financial statements and accompanying notes, that when presented in conjunction presents the operations and financial condition of the District as a whole. This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements.

This report also contains other supplementary information intended to furnish additional detail to support the basic financial statements themselves.

FINANCIAL SECTION Page 3

CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, using accounting methods similar to those used by private sector companies. The statement of net position and the statement of activities provide information about the activities of the District as a whole, presenting both an aggregate and long-term view of the finances. These statements include all assets, deferred outflows of resources, liabilities and deferred inflows of resources using the flow of economic resources measurement focus and the accrual basis of accounting. This basis of accounting includes all of the current year’s revenues and expenses regardless of when cash is received or paid. The government- wide financial statements include two statements: The statement of net position presents financial information on all of the District’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference 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 District is improving or deteriorating. To assess the overall health of the District, the reader should consider additional nonfinancial factors such as changes in the District’s property tax base and the condition of the District’s parks.

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

Both of the government-wide financial statements distinguish functions of the District that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the District include park operations and maintenance, recreation programs, special services, general and administrative, and interest on long-term debt. The District does not account for any business-type activities.

The government-wide financial statements present information about the District as a primary government. The government-wide financial statements can be found immediately following this management’s discussion and analysis.

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 District, like other local and district governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into two categories: governmental funds and fiduciary funds.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the District’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 District’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 District maintains nine (9) individual governmental funds of which five are major. Information on major funds is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. The five major governmental funds are: the General Fund, the Bond Debt Service Fund, the Park Improvements Fund, the Garage Revenue Capital Improvements Fund, and the Federal, State and Local Grants Fund. Data from the other four governmental funds are combined into a single aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The basic governmental fund financial statements can be found immediately following the government-wide statements.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reported in the government-wide financial statements because the resources of those funds are not available to support the District’s own programs. Fiduciary funds are accounted for on the accrual basis. The District maintains one fiduciary fund, the Pension Trust Retirement Fund, which is used to report resources held in trust for retirees.

The fiduciary fund financial statements can be found immediately following the governmental fund financial statements.

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

Required Supplementary Information. The District adopts an annual appropriated budget for its general and special revenue funds on a non-Generally Accepted Accounting Principles (GAAP) budgetary basis. A budgetary comparison schedule has been provided to demonstrate compliance with this budget. Generally, expenditures from the capital project funds are made for projects approved in the Capital Improvement Program. The general and special revenue major funds’ financial schedules can be found immediately following the notes to the basic financial statements.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Immediately following the budgetary information, this report presents required supplementary information concerning changes in the District’s net pension liability, actuarially determined contributions to the pension plan compared to actual contributions and the District’s progress in funding its obligation to provide OPEB benefits to its employees and beneficiaries covered by the Park Employees’ and Retirement Board Employ- ees’ Annuity and Benefit Fund.

Combining Fund Statements and Other Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also presents the combining statements and budgetary comparison schedules referred to earlier in connection with nonmajor governmental funds, which can be found immediately following the required supplementary information. GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS The following is a summary of assets, deferred outflow of resources, liabilities, and net position (amounts are in millions) as of December 31, 2015 and 2014: Percentage Increase Increase 2015 2014 (Decrease) (Decrease) Assets: Current and other assets $ 595 623 (28) (4.5) % Capital assets 2,050 1,978 72 3.6 Total assets 2,645 2,601 44 1.7

Deferred Outflows of Resources: Deferred amount on refunding 8 8 0 0.0 Deferred pension outflows 37 0 37 -- Total deferred outflows 45 8 37 462.5

Liabilities: Long-term obligations 1,446 1,090 356 32.7 Other liabilities 261 281 (20) (7.1) Total liabilities 1,707 1,371 336 24.5

Net position: Net investment in capital assets 1,185 1,127 58 5.1 Restricted 164 132 32 24.2 Unrestricted (366) (21) (345) 1642.9 Total net position $ 983 1,238 (255) (20.6) %

Capital assets increased 3.6% or $72 million, as a result of the increase in capital projects completed or under construction in 2015. Capital projects completed during 2015 include the Kerry Wood Baseball Sta- dium in Clark Park, 77 playgrounds under the Chicago Plays program, Bloomingdale Trail, Maggie Daley Park, Morgan Park Sports Center, Steelworkers Park, and West Ridge Nature Center.

Deferred outflows of resources increased by 462.5% or $37 million. This was primarily due to implementation of a new accounting standard related to pensions. This standard requires the deferral of pension contributions made after the measurement date and other actuarially determined deferrals.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Long-term obligations increased 32.7%, or $356 million, mostly as a result of an increase in net pension obligation of approximately $310 million, resulting from the implementation of a new accounting standard (GASB 68).

Net position. Net position over time may serve as a useful indicator of a government’s financial position. In the case of the District, assets and deferred outflows of resources exceeded liabilities by $983 million at De- cember 31, 2015.

The greatest portion of the District’s net position (120.6% or $1,185 million), reflects its investment in capital assets, less any related outstanding debt (net of deferred outflows of resources) that was used to acquire those assets. The District uses these capital assets to provide a variety of services, and accordingly these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources used 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 District’s net position (16.7% or $164 million) represents resources that are subject to external restrictions on how they may be used.

The remaining balance is an unrestricted deficit of $366 million.

Governmental Activities. Revenues from all governmental activities in 2015 were $524 million. This reflects an increase of $11 million from 2014. This increase is due to the following:

Charges for Services increased by $12 million as a result of increased events/revenue at Soldier Field ($6.4 million); participation in new activities such as Maggie Daley climbing wall and Morgan Park Sports Center gymnastics and ice rink ($2.8 million); and increase from permits issued ($1.8 million). Tax Increment Financing increased by $1 million These revenue increases were offset by a decrease in personal property replacement tax of $2 million.

Expenses for governmental activities in 2015 were $469 million. This reflects an increase of $14 million from 2014. This change is due to the following:

Personnel Costs increased by $4 million, primarily due to increases in programming during the year. Contractual Services increased by $8 million, primarily due to an increase in Soldier Field events and the expenses associated with increased programs (Night Out in the Parks).

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

The following is a summary of changes in net position (amounts are in millions) for the years ended December 31, 2015 and 2014:

Percentage Increase Increase 2015 2014 (Decrease) (Decrease) Revenues: Program revenues: Charges for services $ 124 112 12 10.7 % Operating grants and contributions 4 4 — — Capital grants and contributions 82 77 5 6.5 Total program revenues 210 193 17 8.8 General revenues: Property tax 263 262 1 0.4 Tax increment financing 5 4 1 25.0 Personal property replacement tax 43 45 (2) (4.4) Contributions not restricted — 1 (1) (100.0) Miscellaneous income 3 5 (2) (40.0) Gain on sale of assets — 3 (3) — Total general revenues 314 320 (6) (1.9) Total revenues 524 513 11 2.1 Expenses: Park operations and maintenance 162 156 6 3.8 Recreation programs 117 124 (7) (5.6) Special services 111 97 14 14.4 General and administrative 44 44 — — Interest on bonds and issuance costs 35 34 1 2.9 Total expenses 469 455 14 3.1

Change in net position 55 58 (3) (5.2)

Net position, beginning of year (restated - see Note 16) 928 1,180 (252) (21.4) Net position, end of year $ 983 1,238 (255) (20.6) %

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

The various functions and certain program revenue and expenses are depicted in two different charts. The first chart below illustrates program revenues (charges for services) and expenses. It does not include general revenues, or operating/capital grants and contributions. General revenues for the District amount to 59.9% of total governmental revenues as depicted in the second chart.

Expense and Program Revenue (Charges for Services) ― Governmental Activities (Amounts are in thousands of dollars)

$180,000 Revenue Park 162,329 $160,000 Expenses operatio Interest $140,000 ns General on and Recreatio and long- 116,927 $120,000 maintena n administr term 111,238 nce Programs Special se ative103,899 debt $100,000 6,368 13,601 103,899 - - 162,329 116,927 111,238 44,355 34,947 $80,000

$60,000 44,355 Revenue $40,000 34,947 Expenses $20,000 13,601 6,368 -- $- Park operations Recreation Special services General and Interest on and Programs administrative long-term debt maintenance

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Revenues by Source ― Governmental Activities Operating grants and contributions, Capital grants and 0.8% Operatincontributions, Capital ChargesTax for Personal g grants15.7% grant services,incremen 23.6%property Miscellan Charges and contribut t replacem eous for contribut ions Property t financing ent tax income services ions 14.5% 50.1% 1.0% 8.2% 1.9% 23.6% 0.8% 100.0% 76 263 5 43 10 124 4 525 Miscellaneous income, 0.6%

Personal property replacement tax, 8.1%

Tax increment Property taxes, financing, 50.2% 1.0%

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

FINANCIAL ANALYSIS OF GOVERNMENTAL FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements.

Governmental Funds. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of the fund balance which has not yet been limited to use for a particular purpose by either an external party, the District itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the District’s Board of Commissioners.

The District’s governmental funds reported combined ending fund balances of $285.1 million, a decrease of $6.5 million from the prior year amount of $291.6 million. Approximately (0.6)% of this amount ($1.8 million) constitutes unassigned fund deficit. The remainder of the balance is not in a spendable form ($1.5 million nonspendable), restricted for particular purposes ($75.4 million restricted), committed for particular purposes ($126.8 million committed), or assigned for particular purposes ($83.2 million assigned).

The General Fund is the primary operating fund of the District and reported an ending fund balance of $203.5 million. This includes a $96.0 million balance from working cash balances. A fund balance reserve policy was established on January 28, 2009, to require a minimum balance in the amount of $85 million.

The General Fund unassigned fund balance was $27.0 million at December 31, 2015. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures. Unassigned fund balance represents approximately 9.0% of total general fund expenditures, while total fund balance represents approximately 67.5% of that same amount.

The fund balance of the District’s general fund decreased by $1.1 million during the current fiscal year. The decrease is primarily due to a reduction of personal property replacement tax (PPRT) revenues. In April 2016 the State of Illinois announced it had made excess PPRT distributions in 2014 and 2015. PPRT revenue was reduced by the excess amount of $5.2 million. As a result PPRT revenue was $2.3 million less than budgeted and decreased the fund balance.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

General Fund: Components of Fund Balance

NonspendCommitteAssigned Unssigned 2014 Unssigned 2015 1.5 126.8 48.2 27 203.5 2015 2014 1.5 128 47.5 27.6 204.6

Assigned

Committed

Nonspendable

0 20 40 60 80 100 120 140

The Federal, State, and Local Grants Fund is used for the purpose of accounting for programs and projects with revenues received from the federal government, state government, and City of Chicago, as well as private donors. Expenditures in this fund may be operational or capital in nature. They are differen- tiated by separate funds in the District’s general ledger. The fund has a deficit balance of $14.3 million for 2015, with a decrease in fund balance from 2014 of $3.7 million. The fund balance deficiency may be ex- plained by the reimbursable nature of the Chicago Park District’s grant program. In many cases, capital expenditures are incurred before reimbursements are received from the respective agencies.

The Bond Debt Service Fund has a total balance of $61.7 million, an increase of $3.2 million, all of which is restricted for the payment of debt service. There was no significant change in the fund balance. The chart below illustrates the bond debt service expenditures incurred by the District from 2011 through 2015.

Bond Debt Service Expenditures: Last Five Years 87 88 88 88 $88 $86 81 $84 Millions 2011 87 $82 2012 88 $80 2013 88 $78 2014 88 $76 2015 81 2011 2012 2013 2014 2015

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

The Park Improvements Fund has a total fund deficit of $14.5 million. It is the nature of capital project funds that revenues and/or bond proceeds do not necessarily appear in the same period as expenditures. Construction is often a multi-year process once the funding is appropriated and received. Generally, funding comes in the form of bond issuances, grants, donations, etc. In 2015, the fund received $40.0 million in general obligation bond project-related money. The capital outlay total for 2015 is made up of expenditures in the Park Improvement Fund; Federal, State, and Local Grants Fund; the Garage Revenue Capital Improvements Fund; Reserve for Park Replacement Fund and the Special Recreation Activity Fund.

The Garage Revenue Capital Improvement Fund is a capital projects fund created at the end of 2006 with a transfer-in from the proceeds of the sale of Garages. It has a fund balance of $34.8 million, a decrease of $1.6 million from last year. The decrease relates to increased capital outlay experienced within the fund in 2015.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

CAPITAL ASSETS

Capital Assets - The District’s investment in capital assets includes land and land improvements, works of art and historical collections, construction in process, infrastructure, site improvements, harbor and harbor improvements, stadium and stadium improvements, buildings and building improvements, and equipment. This investment in capital assets as of December 31, 2015 was $2,050 million (net of accumulated depreciation), up $72 million over last year.

Construction in progress - Currently under construction, the QUAD Communities Arts, Recreation and Health Center is a new 32,500 square foot facility including a full sized gymnasium, indoor pool, art and education club rooms, a fitness center, and performance spaces. Located in Ellis Park, the $17.5 Mil- lion construction is funded by the Chicago Housing Authority, City Tax Increment Financing, and New Market Tax Credits.

Steelworkers Park is a 16.5 acre park which was previously part of the US Steel Complex known as South Works. The site was recently transformed into an attractive landscape with natural areas, trees, walking paths and exquisite views of Lake Michigan. A statue to steelworkers and their families was dedi- cated in May and the Chicago Shakespeare Theater’s 2015 season kicked off at this location in July.

Kerry Wood Field in Clark Park is a baseball stadium that includes seating for 1,250 spectators and fans, and is the first diamond on the north side of Chicago to meet Illinois High School Association standards. The field will be used by Chicago public high schools citywide throughout the high school baseball season during and after school hours. The Park District will use the field for recreational leagues and use by the general public. The Chicago Cubs, Chicago Cubs Charities, Wood Family Foundation, City of Chi- cago, Chicago Park District, Chicago Public Schools and Turner Construction all contributed to make the $5 million stadium project possible. The stadium opened in September 2015.

Save America’s Treasures includes restorations to historic Park District buildings including field hous- es and cultural centers. Restoration work may include new roofs, masonry, HVAC (heating, ventilation, and air conditioning), windows, doors, drainage, and interior rehabilitation. In 2015, the 1889 Union Park Field House was beautifully restored through $2 million in City Tax Increment Financing (TIF) funds. Also in 2015, over $2.6 million was invested in the Calumet Field House in drainage , building roof, and enve- lope improvements to ensure this building will remain an anchor for community programs in the area.

Chicago Plays! Equipment Program is an effort to renovate 300 Chicago playgrounds over five years. Each project includes new playground equipment and site restoration as needed. In 2015 (during the 3rd year of the district-wide program), 77 new “Chicago Plays” sites were completed. By the end of this program, every neighborhood in Chicago will have a new playground.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

A comparative schedule of capital assets and accumulated depreciation (amounts are in millions) is as follows:

Percentage Increase Increase 2015 2014 (Decrease) (Decrease)

Land $ 282 267 15 5.6 % Works of art and historical collections 10 10 - 0.0 Construction in process 117 230 (113) -49.1 Infrastructure 418 418 - 0.0 Site Improvements 486 356 130 36.5 Harbor and Improvements 241 236 5 2.1 Stadium and Improvements 678 643 35 5.4 Building and Improvements 594 533 61 11.4 Equipment 25 26 (1) -3.8 Golf and Golf Course Improvements 11 11 - 0.0 Intangible Property 11 11 - 0.0 Accumulated Depreciation (823) (763) (60) 7.9 $ 2,050 1,978 72 3.6 %

Additional information on capital assets can be found in note 6.

GENERAL FUND BUDGETARY HIGHLIGHTS The Board passed the annual appropriation ordinance for 2015 at the December 10, 2014 board meeting. The budget appropriations for the General Fund are included in the annual appropriation ordinance. The ordinance also addresses funding from other sources as well as detailing how each fund should be expended.

The District’s 2015 General Fund original budget appropriation was approximately $305.7 million. This was an increase of approximately $25.1 million from the prior year. During the year, a budget transfer ordinance, passed by the Board, authorized the transfer of $3.0 million from the Corporate Fund “Personnel Services” expenditure account class to the Corporate Fund “Contractual Services” expenditure account class, and a transfer of $.5 million from the Liability Fund “Other” expenditure account class to the Liability Fund “Contractual Services” account class.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

The following is an explanation for the significant variances in the final budget to actual for the General Fund. Revenues Property tax revenue was more than budgeted by $4.8 million. This is attributed to a timing difference of the collection of the second installment of prior years’ property taxes during the first 60 days subsequent to year-end.

Soldier Field revenue was $10.7 million greater than budgeted. This was a result of continued growth in activity including the Hockey City Classic, Grateful Dead reunion concerts and Manchester United-Paris St. Germaine soccer match. The increase in revenues also resulted in an increase in event-related expenditures.

Other user charges actual was $4.6 million. When the budget was created this category was not used. Revenues reported in this category were originally budgeted under Concession Revenue and under Rentals which combined were $5.3 million under budget.

Expenditures Expenditures were $4.5 million less than appropriations in the final budget. Savings were predominately achieved in personnel services due to tight compensation controls in place, including a hiring freeze in the fourth quarter.

DEBT ADMINISTRATION

There are various State of Illinois (State) laws that govern how the District can issue bonds as well as how much debt it can have outstanding. The District’s general obligation debt limit is 2.3% of the latest known Equalized Assessed Valuation (EAV). The District was $966 million or 65% below the $1,493 million state imposed limit. Certain general obligation bonds issued without a referendum are further limited to 1% of the EAV. The District has in excess of $144 million in capacity under this limit. At the end of 2015, the District had a total of $840 million in outstanding long-term debt, which is $4 million lower than the year prior. The District’s general obligation bond rating was AA+ by Standard & Poor’s, AA- by Fitch Ratings, AA by Kroll Bond Rating Agency, Inc. and Ba1 by Investors Service (Moody’s). The District did not elect to engage Moody’s to provide a credit rating for the issuance of bonds in 2014 nor in 2015.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

Long-Term Debt - Current debt service principal paid during 2015 was approximately $38.9 million. A comparative schedule of long-term debt (amounts are in millions) is as follows:

Percentage Increase Increase 2015 2014 (Decrease) (Decrease) General Obligation bonds $ 840 844 (4) (0.5) % Contractor LT Financing 2 2 - - Contractor LT Notes 2 - 2 - $ 844 846 (2) (0.2) %

Additional information on debt administration can be found in notes 7 and 8 to basic financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES

On December 9, 2015, the Board approved the District’s 2016 annual appropriation ordinance and budget recommendations for the fiscal year ending December 31, 2016. The summary of budgeted operating revenues and expenditures for 2016 totals $458.1 million; an increase of approximately $9.5 million or 2.1% from 2015.

The District’s 2016 budget features a responsible, balanced budget that expands programming at neighborhood parks across the city. The budget includes nominal increases in parking fees, permit fees and park program fees necessary to maintain quality in the services we provide.

The following economic factors affect the District and were considered in developing the 2016 budget:

The U.S. Department of Labor Statistics reported national unemployment rates at 5.3 percent in 2015 compared to 6.2 percent in 2014.

The City and State also showed improvement in reducing unemployment from 6.4 percent and 5.9 percent, respectively in 2015 compared to 7.8 percent and 7.1 percent, respectively in 2014.

The Chicago metropolitan area has a large, diversified economy with a gross domestic product of over $561 billion.

No major economic sector is greater than 20 percent of the overall Chicago economy. The City is a significant convention and tourism destination with over 50 million visitors.

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CHICAGO PARK DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2015

REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the District’s finances to interested parties and to demonstrate the District’s accountability over the resources it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the:

Office of the Comptroller Chicago Park District 541 North Fairbanks, 6th Floor Chicago, Illinois 60611 (312) 742-4341

Or visit the Chicago Park District Web site at: http://www.chicagoparkdistrict.com for a complete copy of this report and other financial information.

FINANCIAL SECTION Page 18

CHICAGO PARK DISTRICT Statement of Net Position December 31, 2015 (Amounts are in thousands of dollars)

Governmental activities Assets: Cash and cash equivalents (note 3) $ 37,735 Investments (note 3) 242,602 Receivables: Property taxes, net 261,940 Personal property replacement tax 6,292 Accounts and grants 34,868 Prepaid items 1,584 Due from other organizations 421 Other current assets 304 Receivable-noncurrent 9,616 Capital assets (note 6): Not being depreciated 409,025 Being depreciated, net 1,640,629 Total assets 2,645,016

Deferred outflows of resources: Deferred amount on refunding 7,761 Deferred pension outflows 37,137 Total deferred outflows of resources 44,898

Liabilities: Accounts payable and accrued expenses 54,967 Accrued payroll 5,060 Accrued interest 18,327 Due to other organizations 6,061 Retainage payable 4,492 Deposits 644 Unearned revenue: Grants 4,506 Program fees 1,583 Soldier Field contributions (note 1) 165,014 Long-term obligations (note 7): Due within one year 66,147 Due in more than one year 1,380,134 Total liabilities 1,706,935

Net position: Net investment in capital assets 1,185,185 Restricted for: Debt service 90,821 Special recreation activities 16,216 Contributions for other organizations 56,594 Unrestiricted (365,837) Total net position $ 982,979

See accompanying notes to basic financial statements.

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CHICAGO PARK DISTRICT Statement of Activities Year Ended December 31, 2015 (Amounts are in thousands of dollars)

Net (expense) revenue and Program revenues changes in Charges Operating Capital net position for grants and grants and Governmental Functions/programs Expenses services contributions contributions activities Governmental activities: Park operations and maintenance $ 162,329 6,368 — 82,431 (73,530) Recreation programs 116,927 13,601 — — (103,326) Special services 111,238 103,899 4,100 — (3,239) General and administrative 44,355 — — — (44,355) Interest on bonds and issuance costs 34,947 — — — (34,947) Total governmental activities $ 469,796 123,868 4,100 82,431 (259,397)

General revenues: Property taxes 263,123 Tax increment financing 5,086 Personal property replacement tax 42,602 Unrestricted investment income 522 Miscellaneous income 2,554 Total general revenues 313,887

Change in net position 54,490 Net position ― beginning of year (as restated - see note 16) 928,489 Net position ― end of year $ 982,979

See accompanying notes to basic financial statements.

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Page 21

CHICAGO PARK DISTRICT Balance Sheet Governmental Funds December 31, 2015 (Amounts are in thousands of dollars)

Federal, state, Bond debt Assets: General and local grants service Cash and cash equivalents (note 3) $ 4,282 6,691 26,762 Investments (note 3) 139,260 22,243 27,224 Receivables: Property taxes, net 159,452 - 53,287 Personal property replacement tax 5,816 - - Accounts and grants 3,460 30,930 - Due from other funds (note 4) 67,488 948 - Due from other organizations - - - Prepaid items 1,512 - - Other assets 287 - - Receivable-noncurrent 2,741 - 1,875 Total assets $ 384,298 60,812 109,148 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued expenses $ 18,855 5,408 - Accrued payroll 4,805 30 - Due to other funds (note 4) 10,486 45,702 - Due to other organizations 5,585 - - Retainage payable - 1,956 - Deposits 644 - - Unearned revenue: Program fees 1,583 - - Grants - 4,506 - Total liabilities 41,958 57,602 -

Deferred Inflows of Resources: Property taxes 135,951 - 45,597 Grants - 17,545 - Other 2,907 - 1,875 Total deferred inflows of resources 138,858 17,545 47,472

Fund balances: Nonspendable: Prepaid assets 1,512 - - Restricted for: Special recreation activities - - - Contributions for other organizations - - - Debt service - - 61,676 Committed to: Working capital 95,976 - - Economic stabilization 25,800 - - PPRT stabilization 5,000 - - Assigned to: Park operations and maintenance and budget stabilization 12,000 - - Park construction and renovations - - - Northerly Island 689 - - Legal judgments exceeding appropriations 500 - - Long-term liability 35,000 - - Unassigned 27,005 (14,335) - Total fund balances 203,482 (14,335) 61,676 Total liabilities, deferred inflows of resources and fund balances $ 384,298 60,812 109,148

See accompanying notes to basic financial statements.

FINANCIAL SECTION Page 22 Garage revenue Nonmajor Total Park capital governmental governmental improvements improvements funds funds - - - 37,735 19,979 30,234 3,662 242,602

- - 49,201 261,940 - - 476 6,292 - 478 - 34,868 175 5,235 4,128 77,974 - - 421 421 - - - 1,512 17 - - 304 - 5,000 - 9,616 20,171 40,947 57,888 673,264

10,809 1,091 847 37,010 93 - 132 5,060 21,233 - 553 77,974 - - 476 6,061 2,488 48 - 4,492 - - - 644

- - - 1,583 - - - 4,506 34,623 1,139 2,008 137,330

- - 41,947 223,495 - - - 17,545 - 5,000 - 9,782 - 5,000 41,947 250,822

- - - 1,512

- - 6,881 6,881 - - 6,888 6,888 - - - 61,676

- - - 95,976 - - - 25,800 - - - 5,000

- - - 12,000 - 34,808 164 34,972 - - - 689 - - - 500 - - - 35,000 (14,452) - - (1,782) (14,452) 34,808 13,933 285,112

20,171 40,947 57,888 673,264

Page 23

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Page 24 CHICAGO PARK DISTRICT Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position December 31, 2015 (Amounts are in thousands of dollars)

Total fund balances ― governmental funds $ 285,112

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 2,049,654

Capital payments received for Soldier Field are not earned and, therefore, are unearned in the government-wide statement of net position. (165,014)

Revenues in the Statement of Activities that do not provide current financial resources are deferred inflows of resources in the governmental funds: Property taxes 223,495 Grants 17,545 Parking fees 2,741 Scoreboard revenue 6,875 Other 166

Deferred amounts on refunding are not due and payable in the current period, and therefore, are not reported in the funds. In addition, bond issuance insurance costs are reported as prepaid items and are being amortized in the Statement of Net Position. 7,833

Deferred outflows of resources related to pensions are not reported in govenmental funds because they do not provide current financial resources. 37,137

Long-term liabilities applicable to the District's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities. All liabilities ― both current and long-term ― are reported in the statement of net position (note 7). (1,446,281)

Pension contribution liability is not due and payable from expendable available resources, and therefore is not reported in governmental funds. (17,957)

Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. (18,327)

Net position of governmental activities $ 982,979

See accompanying notes to basic financial statements. FINANCIAL SECTION Page 25 CHICAGO PARK DISTRICT Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2015 (Amounts are in thousands of dollars)

Federal, state, and local Revenues: General grants Property taxes $ 163,095 ― Tax increment financing 5,086 ― Personal property replacement tax 26,381 ― Investment income 293 76 Parking fees 4,768 ― Harbor fees 11,387 ― Concessions 3,726 ― Rental of Soldier Field 42,418 ― Rental of other property 1,060 ― Golf course fees 5,308 ― Recreational activities (net of $2,779 in discounts) 13,588 13 Permits 14,173 ― Other user charges 4,586 ― Donations and grant income 1,674 41,841 Northerly Island 1,211 ― Miscellaneous 1,571 24 Total revenues 300,325 41,954

Expenditures: Current: Park operations and maintenance 110,542 436 Recreation programs 93,793 3,800 Special services 58,160 ― General and administrative 38,818 ― Capital outlay ― 43,381 Debt service: Principal 154 ― Debt Issuance costs ― ― Interest ―― Total expenditures 301,467 47,617 Excess (deficiency) of revenues over expenditures (1,142) (5,663)

Other financing sources (uses): Issuance of refunding bonds ― ― Insurance recovery ― 1,719 Issuance of debt ―― Contractor financing issuance ― 250 Premium on issuance of debt ― ― Payment to refunded bonds escrow agent ― ― Transfers in (note 5) ― ― Transfers out (note 5) ― ― Total other financing sources and (uses) ― 1,969 Net change in fund balances (1,142) (3,694) Fund balances ― beginning of year 204,624 (10,641) Fund balances ― end of year $ 203,482 (14,335) See accompanying notes to basic financial statements. FINANCIAL SECTION Page 26

Garage revenue Bond debt Park capital Nonmajor Total governmental service improvements improvements governmental funds funds 53,378 ― ― 44,673 261,146 ― ― ― ― 5,086 12,992 ― ― 3,229 42,602 3 40 106 4 522 ― ― ― ― 4,768 12,463 ― ― ― 23,850 ― ― ― ― 3,726 ― ― ― ― 42,418 ― ― ― ― 1,060 ― ― ― ― 5,308 ― ― ― ― 13,601 ― ― ― ― 14,173 ― ― ― ― 4,586 ― ― ― ― 43,515 ― ― ― ― 1,211 2 ― ― 1,597 78,836 42 106 47,906 469,169

― ― ― 3,779 114,757 ― ― ― 10,212 107,805 ― ― ― 30,139 88,299 ― ― ― 1,810 40,628 ― 41,703 3,611 426 89,121

38,770 ― ― ― 38,924 211 1,111 ― ― 1,322 41,951 ― ― ― 41,951 80,932 42,814 3,611 46,366 522,807

(2,096) (42,772) (3,505) 1,540 (53,638)

100,599 ― ― ― 100,599 ― ― ― ― 1,719 896 40,045 ― ― 40,941 ― ― 1,875 ― 2,125 9,622 ― ― ― 9,622 (107,830) ― ― ― (107,830) 2,023 ― ― ― 2,023 ― ― ― (2,023) (2,023)

5,310 40,045 1,875 (2,023) 47,176 3,214 (2,727) (1,630) (483) (6,462) 58,462 (11,725) 36,438 14,416 291,574 61,676 (14,452) 34,808 13,933 285,112

Page 27 CHICAGO PARK DISTRICT Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities Year Ended December 31, 2015 (Amounts are in thousands of dollars)

Net change in fund balances ― total governmental funds $ (6,462)

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

Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets. This is the amount by which capital outlays, exceeding the capitalization threshold ($85,305), exceeded depreciation ($62,854). 22,451

The net effect of various miscellaneous transactions involving capital assets (i.e., retirements) is to increase net position. 76

The proceeds derived from the contractor long-term financing agreement and note are other financing sources in the governmental funds, but in the statement of net position, the amounts are reported as a long-term liability. (2,125)

Debt proceeds provide current financial resources to governmental funds, but increase long-term liabilities in the statement of net position. Proceeds from bond refundings and park improvement bond issuance. (141,540)

Repayment of debt principal and bond issuance insurance costs are expenditures (or "other financing uses" in the case of refunding) in the governmental funds, but the repayment reduces long-term liabilities and capital leases in the statement of net position. Bond issuance insurance costs are reported as prepaid items and are being amortized in the statement of net position. Debt service principal repayment 38,924 Payment to refunded bond escrow agent 109,356 Amortization of bond issuance insurance costs (4)

Premium associated with refunding and park improvement bonds issued during the year is shown as an other financing source in the governmental funds but in the statement of net position, it is capitalized and amortized over the life of the bonds. (9,622)

Some of the District's revenues are collected after year-end, but are not available soon enough to pay for the current period's expenditures and, therefore, are reported as deferred inflows of resources in the governmental funds. Property taxes 1,977 Grants (12,754) Scoreboard revenue 6,875 Miscellaneous revenue (762)

Unearned contributions (revenue) associated with Soldier Field's new facility are not reported in the governmental funds, but in the statement of net position, they are unearned and amortized over the life of the stadium. 9,167

Deferred inflows and outflows related to pensions do not provide or use current financial resources and are not reported in the governmental fund financial statements. 25,911

Revenues (capital contributions) in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. 48,895

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 including: Net decrease in accrued interest 1,783 Amortization of bond premiums 7,450 Amortization of deferred loss on refunding (2,429) Increase in property tax claim payable (1,426) Decrease in compensated absences 53 Decrease in claims and judgments 1,264 Increase in net pension liability (35,164) Increase in pension contribution liability (6,829) Increase in net OPEB obligation (1,102) Increase in health insurance obligation (284) Decrease in workers' compensation 811 Change in net position of governmental activities $ 54,490

See acconmpanying notes to basic financial statements.

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CHICAGO PARK DISTRICT Statement of Fiduciary Net Position December 31, 2015 (Amounts are in thousands of dollars)

Pension Trust Retirement Fund Assets: Receivables: Employer contributions $ 17,957 Employee contributions 498 Workers' compensation offset of duty disability benefits 91 Due from broker 1,357 Accrued investment income 452 Miscellaneous receivables 65 Total receivables 20,420

Investments, at fair value: Fixed income 62,726 Hedged equity 23,566 Common and preferred stock 53,062 Common stock - foreign 13,621 Collective investment funds 93,043 Mutual funds 16,018 Real estate 41,728 Private equity 39,901 Infrastructure 20,826 Short-term investments 4,819 Total investments 369,310

Invested securities lending collateral 45,712 Property and equipment, net 65 Prepaid annuity benefits 4,308 Other prepaid expenses 65 Total assets 439,880

Liabilities: Accounts payable 396 Accrued benefits payable 406 Accrued payroll liabilities 15 Unamortized rent abatements 79 Securities lending collateral 45,712 Due to broker 117 Total liabilities 46,725

Net position restricted for pension benefits $ 393,155

See accompanying notes to basic financial statements.

FINANCIAL SECTION Page 29 CHICAGO PARK DISTRICT Statement of Changes in Fiduciary Net Position Year Ended December 31, 2015 (Amounts in thousands of dollars)

Pension Trust Retirement Fund Additions: Contributions: Employer contributions $ 30,589 Employee contributions 12,369 Total contributions 42,958

Investment income: Net appreciation in fair value of investments 5,476 Interest 2,253 Dividends 1,529 Partnership and real estate income 1,790 Total investment income 11,048

Less investment expense 2,224

Net income from investing activities 8,824

Securities lending activities: Securities lending income 148 Borrower rebates 20 Bank fees (80) Net income from security lending activities 88

Total additions 51,870

Deductions: Benefits: Annuity payments 67,936 Disability and death benefits 619 Total benefits 68,555

Refund of contributions 2,048

Administrative and general expense 1,534 Total deductions 72,137 Net decrease in net position (20,267)

Net position restricted for pension benefits ― beginning of year 413,422 Net position restricted for pension benefits ― end of year $ 393,155

See accompanying notes to basic financial statements.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (SSAP)

The Chicago Park District (District) was created by an act of the General Assembly of the State of Illinois (State) May 1, 1934 for the purpose of developing, maintaining, and operating parks within the legal boundaries of the City of Chicago (City), Illinois as prescribed by law. The City has a Mayor-Council form of government. The Mayor is the Chief Executive Officer of the City and is elected by general election. The members of the City Council are elected through popular vote by ward. The Mayor, with approval of City Council, appoints the seven commissioners of the District for a four-year term. From among the Board of Commissioners (Board), a President is selected for a one-year term. The Board also selects the General Superintendent.

The accounting policies of the District are based upon U.S. generally accepted accounting principles (GAAP), as prescribed by the Governmental Accounting Standards Board (GASB).

During fiscal year 2015, the District adopted the following GASB Statements:

GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities.

GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an Amendment to GASB Statement No. 68. This Statement amends paragraph 137 of Statement 68 to require that, at transition, a government recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning net pension liability. Statement 68 as amended continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts.

Other accounting standards that the District is currently reviewing for applicability include:

GASB Statement No. 72, Fair Value Measurement and Application, will be effective for the District with its year ended December 31, 2016. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. The requirements of this Statement will enhance compa- rability of financial statements among governments by requiring measurements of certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and accepted valuation techniques.

GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68, will be effective for the District with its year ended December 31, 2016. This statement establishes requirements for defined benefit pensions that are not within the scope of Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets accumulated for purposes of providing those pensions.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, will be effective for the District with its year ended December 31, 2017. The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability. This Statement also includes requirements to address financial reporting for assets accumulated for purposes of providing defined benefit OPEB through OPEB plans that are not administered through trusts that meet the specified criteria. GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, will be effective for the District with its year ended December 31, 2018. The objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions. This Statement also establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/ expenditures. For defined benefit OPEB, this Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service.

GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Lo- cal Governments, will be effective for the District with its year ended December 31, 2016. The objective of this Statement is to identify—in the context of the current governmental financial reporting environment—the hierarchy of generally accepted accounting principles (GAAP).

GASB Statement No. 77, Tax Abatement Disclosures, will be effective for the District with its year ended December 31, 2016. The objective of this Statement is to provide financial statement users with essential information about the nature and magnitude of the reduction in tax revenues through tax abatement programs in order to better assess (a) whether current-year revenues were sufficient to pay for current- year services, (b) compliance with finance-related legal or contractual requirements, (c) where a government’s financial resources come from and how it uses them, and (d) financial position and economic condition and how they have changed over time.

FINANCIAL SECTION Page 32

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pen- sion Plans, will be effective for the District with its year ended December 31, 2016. The objective of this Statement is to address a practice issue regarding the scope and applicability of Statement No. 68, Ac- counting and Financial Reporting for Pensions. This issue is associated with pensions provided through certain multiple-employer defined benefit pension plans and to state or local governmental employers whose employees are provided with such pensions.

GASB Statement No. 79, Certain External Investment Pools and Pool Participants, will be effective for the District with its year ended December 31, 2016. This Statement establishes accounting and financial reporting standards for certain external investment pools and pool participants. Specifically, it establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost for financial reporting purposes.

GASB Statement No. 80, Blending Requirements for Certain Component Units, will be effective for the District with its year ended December 31, 2017. The objective of this Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statement amends the blending requirements established in paragraph 53 of Statement No. 14 The Financial Reporting Entity, as amended.

GASB Statement No. 81, Irrevocable Split-Interest Agreements, will be effective for the District with its year ended December 31, 2017. The objective of 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.

GASB Statement No. 82, Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73, will be effective for the District with its year ended December 31, 2018. The objective of this State- ment is to improve consistency in the application of pension accounting and financial reporting requirements by addressing certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Ac- counting 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. The requirements of this Statement will improve financial reporting by enhancing consistency in the application of financial reporting requirements to certain pension issues.

GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, is expected to have a material impact on net position. Management has not determined the total impact the other Statements may have on its financial statements.

To facilitate the understanding of data included in the basic financial statements, summarized below are the more significant accounting policies.

FINANCIAL SECTION Page 33

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Reporting Entity The financial reporting entity of the District includes the legally separate Park Employees’ & Retirement Board Employees’ Annuity and Benefit Fund, which is a fiduciary-type component unit.

Although City of Chicago officials are responsible for appointing a voting majority of the members of the boards of other organizations, the City’s accountability for these organizations does not extend beyond making appointments and no fiscal dependency exists between the District and the City.

Additionally, the Aquarium and Museums, as defined below, are affiliated organizations, but are not considered to be component units because the District does not appoint a voting majority of their boards, and they are fiscally independent. The Aquarium and Museums consist of the following organizations:

Museum of Science and Industry The Peggy Notebaert Nature Museum The Field Museum of Natural History Adler Planetarium and Astronomy Museum The Art Institute of Chicago DuSable Museum of African American History John G. Shedd Aquarium National Museum of Mexican Art Chicago History Museum Museum of Contemporary Art Institute of Puerto Rican Arts and Culture

The State has empowered the District to levy taxes for operations and maintenance purposes of the Aquarium and Museums. The State also requires the District to allocate a share of its personal property replacement taxes to the Aquarium and Museums. All such applicable taxes collected by the District are remitted to the Aquarium and Museums. The State also empowers the District to issue bonds and levy taxes for bonds for a 50% share of certain Aquarium and Museums capital improvements. The District has exercised all current authority to issue bonds for the Aquarium and Museums as of December 31, 2003. The Aquarium and Museums each pass their own budgets without the District’s approval, and are able to incur indebtedness without the District’s approval. As provided by State statutes, the District has administerial responsibilities for approving admission fees to the Aquarium and Museums.

In addition, although certain officers of the District are members of the Aquarium and Museums’ boards of directors, the Aquarium and Museums have large boards of directors, and the District’s officers are not able to exercise undue influence.

Description of Government-Wide and Fund Financial Statements

Government-wide Financial Statements. The government-wide statement of net position and statement of activities report the overall financial activity of the District, excluding fiduciary activities. Eliminations have been made to minimize the double counting of internal activities of the District. Governmental activities generally are financed through taxes, program and activity fees, rentals, contributions, and other non-exchange transactions.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The statement of activities demonstrates the degree to which direct expense(s) of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Indirect expenses of other functions are not allocated to those functions but are reported separately in the statement of activities. Program revenues include (a) charges to customers or patrons who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

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

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide 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 at the time liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, personal property replacement taxes, grants, and contributions. On an accrual basis, revenues from property taxes are recognized in the period for which the levy is intended to finance, which is the same year in which the taxes are levied. For example, the 2015 levy is recognized as revenue for the year ended December 31, 2015. Revenue from grants, contributions, entitlements, personal property replacement taxes (shared revenue received from the State), and similar items is recognized in the fiscal year in which all eligibility requirements imposed by the provider have been met. Eligibility requirements include timing requirements, which specify the year when resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis.

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 District considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are recorded when the liability is incurred, as under accrual accounting. However, principal and interest on general long-term debt, claims and judgments, pensions, other post-employment benefits (OPEB), property tax claims and compensated absences 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.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Significant revenue sources, which are susceptible to accrual, include property taxes, personal property replacement taxes, rentals, concession fees, charges for services, grants, and interest. All other revenue sources, including permits, golf course fees, and parking fees, are reported as revenue when collected, which coincides with the date the service is provided.

The following funds are reported as major governmental funds:

General – This is the District’s primary operating fund. It accounts for all financial resources of the District not accounted for in another fund. The services, which are administered by the District and accounted for in the General Fund, include recreational, parking, harbor, Soldier Field, and golf among others. It also accounts for the expenditures associated with liability insurance, workers’ compensation, and unemployment claims.

Federal, State, and Local Grants - This fund accounts for programs and projects with revenues received from the federal government, state government, the City of Chicago, as well as private donors.

Bond Debt Service – This fund accounts for the resources accumulated and payments made for principal and interest on general obligation long-term debt of the governmental funds.

Park Improvements – This fund accounts for proceeds of debt used to acquire property and finance construction and supporting services for various redevelopment projects in the parks.

Garage Revenue Capital Improvements – This fund accounts for proceeds of the sale of the Garages used to acquire property and finance construction and supporting services for various redevelopment projects in the parks.

Additionally, the District reports the following fiduciary fund type:

Pension Trust – This fund accounts for the activities of the Park Employees’ and Retirement Board Employee’s Annuity and Benefit Fund of Chicago (Retirement Fund), which accumulates resources for pension benefit payments to qualified District employees. Separate financial information of the Retirement Fund can be obtained at 55 East Monroe Street, Suite 2720, Chicago, Illinois 60603.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash, Cash Equivalents, and Investments Cash equivalents include certificates of deposit and other investments with maturities of three months or less when purchased. State statute and the District’s investment policy, adopted by the Board, authorize the District to invest in the following types of securities:

Bonds, notes, certificates of indebtedness, treasury bills, or other securities, which are guaranteed by the full faith and credit of the United States of America (U.S.) as to principal and interest. Domestic interest-bearing savings accounts, domestic interest-bearing certificates of deposit, or domestic interest-bearing time deposits or any other investments that are direct obligations of any bank. Shares or other securities legally issued by state or federal savings and loan associations, which are insured by the Federal Deposit Insurance Corporation (FDIC). Short-term obligations (commercial paper) of only U.S. corporations with assets over $500 million provided that: (1) these obligations are rated in the three highest classifications established by at least two standard rating services and mature no later than 180 days from the purchase date and (2) these purchases do not exceed 33% of the District’s outstanding investments. Short-term discount obligations of the U.S. government agencies. Insured dividend-bearing share accounts. Share certificate accounts or class of share accounts of a credit union chartered under the U.S. or State law whose principal office is located in Illinois. Money market mutual funds registered under the amended Investment Company Act of 1940. Money market mutual funds with portfolios of securities issued or guaranteed by the U.S. government or agreements to repurchase these same types of obligations. Repurchase agreements of government securities, which meet instrument transaction requirements of State law.

The Retirement Fund is also permitted to invest in bonds, notes, and other obligations of the U.S. government; corporate debentures and obligations; insured mortgage notes and loans; common and preferred stocks; stock options; real estate; and other investment vehicles, as set forth in the Illinois Pension Code, 40 ILCS 5.

Investments are reported at fair value based on quoted market prices. Short-term investments are reported at cost, which approximates fair value. The Retirement Fund includes investments for which market quotations are not readily available. These are valued at their fair values as determined by the bank administrator under the direction of the Board of Trustees, with assistance of a valuation service.

The Illinois Funds is an external investment pool administered by the State Treasurer. The fair value of the District’s investment in the fund is the same as the value of the pool shares (reported at amortized cost). Although not subject to direct regulatory oversight, the fund is administered in accordance with the provisions of the Illinois Public Investment Act, 30 ILCS 235. Illinois Funds operates as a 2a7-like pool.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Prepaid Items Prepaid items at the fund and government-wide levels represent certain payments made to vendors applicable to future accounting periods. The cost of prepaid items is recorded as expenditures/ expenses when consumed rather than when purchased.

Interfund Transactions The District has the following types of interfund transactions:

Loans – amounts provided with a requirement for repayment. Interfund loans are reported as interfund receivables (due from other funds) in lender funds and interfund payables (due to other funds) in borrower funds.

Reimbursements – repayments from the funds responsible for particular expenditures to the funds that initially paid for them. Reimbursements are reported as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed fund.

Transfers – flows of assets (such as cash or goods) without equivalent flows of assets in return and without a requirement for repayment. In governmental funds, transfers are reported as other financing uses in the funds making transfers and as other financing sources in the funds receiving transfers.

Capital Assets In the government-wide financial statements, purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. The District depreciates capital assets, using the straight-line method, over the estimated useful life.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Capitalization thresholds and the estimated useful lives are as follows:

Capitalization Estimated threshold useful life Capital asset category (not rounded) (in years) Infrastructure: Public $ 50,000 15-50 System 50,000 20 Site improvements 100,000 3-50 Buildings 100,000 10-60 Buildings improvements 100,000 3-50 Equipment and machinery 25,000 4-8 Seawalls 100,000 60 Harbor and harbor improvements 50,000 40-60 Stadium and stadium improvements 100,000 50 Golf course and golf course improvements 50,000 40-60 Intangible property 50,000 10-50

Due to Other Organizations These are amounts collected on behalf of, but not yet paid to, the Retirement Fund and Aquarium and Museums. The balance also includes amount due to the State of Illinois for excess personal property replacement tax that was recorded in current and prior years (see note 18). Soldier Field Unearned Revenue Monies contributed to the District for the benefit of the stadium renovations is recognized over the life of the stadium lease.

Bond Premiums, Discounts, Issuance Costs, and Deferred Amount on Refunding In the government-wide financial statements, bond premiums and discounts, and losses on refunding’s are deferred and amortized over the life of the bonds using the sum of the bonds outstanding method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs, except insurance costs, are recognized as an expense in the period incurred. Insurance costs are reported as prepaid items and are being amortized using the straight line method over the duration of the related debt.

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

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred Outflows of Resources and Deferred Inflows of Resources

Deferred outflows of resources are a consumption of net assets by the government that are applicable to a future reporting period. Deferred inflows of resources are an acquisition of net assets by the government that is applicable to a future reporting period. Fund Balances Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The District itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance).

Within the financial statements, fund balance is reported as follows:

Nonspendable – This classification consists of resources not in spendable form or that are legally or contractually required to remain intact.

Restricted – This classification consists of resources that can be spent only for the specific purpose stipulated by external parties (i.e. grantors, creditors, or other governments) or enabling legislation.

Committed – This classification includes amounts that can be used only for the specific purpose determined by a formal action of the District’s highest level of decision-making authority. The Board of Commissioners is the highest level of decision-making authority for the District that can, by adoption of an appropriation ordinance prior to the beginning of the ensuing fiscal year, commit fund balance. Per chapter XII, Section C of the District’s Code, the Board of Commissioners has sole authority to approve all contracts greater than $100,000 and therefore, all of these funds will be considered committed. Funds used for the expenditure of Intergovernmental Agreements (IGAs) are also included in this category. Once approved, the limitation is in place until a similar action is taken to remove or revise the limitation.

Assigned - This classification includes amounts that are intended to be used by the District for specific purposes but do not meet the criteria to be classified as committed. The Board, by ordinance, has authorized the General Superintendent (CEO) to assign resources. Assignments are generally in line with the approved budget. Unlike commitments, assignments generally only exist temporarily. An additional action does not normally have to be taken to remove an assignment.

Unassigned – This classification consists of residual fund balances that do not meet the criteria of nonspendable, restricted, committed, or assigned within the General Fund, and deficit fund balances of other governmental funds.

In the governmental funds, it is the District’s policy to consider restricted resources to have been spent first when an expenditure is incurred for which both restricted and unrestricted (i.e. committed, assigned or unassigned) resources are available, followed by committed and then assigned fund balances. Unassigned amounts are used only after the other resources have been used.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net Position In the government-wide financial statements, net position is displayed in three components as follows:

Net Investment in Capital Assets – This consists of capital assets, net of accumulated depreciation, less the outstanding balances of any bonds, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets and increased (decreased) by deferred outflows (inflows) of resources attributable to the related debt.

Restricted – This consists of the net position that is legally restricted by outside parties or by law through constitutional provisions or enabling legislation. When both restricted and unrestricted resources are available for use, generally it is the District’s policy to use restricted resources first, and then unrestricted resources when they are needed.

Unrestricted – This consists of the net position that does not meet the definition of “restricted” or “net investment in capital assets.”

Property Taxes The District’s property tax becomes a lien on real property on January 1 of the year levied. Cook and DuPage County Assessors (Assessor) are responsible for the assessment of all taxable real property within Cook and DuPage counties. The District’s property taxes are levied each calendar year on all taxable real property located in the District’s boundaries based on assessments as of January 1. The District must file its tax levy ordinance by the second Tuesday in December of each year. Taxes levied in one year become due and payable in two installments in the following year. The first installment is due on March 1 and the second installment is due on the latter of August 1 or 30 days after the mailing of the tax bills. The second installment is based on the current levy, assessment, equalization, and any changes from the prior year.

In the government-wide financial statements that are reported on the accrual basis, the District has included as revenue the entire amount of property taxes levied for 2015, less a provision for uncollectible amounts. In the governmental fund financial statements that are reported on the modified accrual basis, the District has only included as revenue the amount of property taxes levied for 2015, which were collected within 60 days after fiscal year-end. Property tax revenue in the governmental fund financial statements primarily consists of property taxes collected for the 2014 levy that were not recognized as revenue in fiscal year 2014 (i.e., not collected within 60 days after prior fiscal year-end).

Property tax receivables are recorded net of an allowance for uncollectible amounts of $32.7 million at December 31, 2015.

Property tax claims payable, included within long-term obligations, represents an estimate of potential claims related to property tax assessment appeals and is recorded at the government-wide level.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Pledged Revenues

The District has pledged future personal property replacement taxes (PPRT), harbor revenues and special recreation taxes to repay $131.0 million, $163.5 million and $19.5 million, respectively, in general obligation alternate revenue source (ARS) bonds. Total principal and interest remaining on the bonds is payable through January 1, 2029 (PPRT bonds), January 1, 2040 (Harbor bonds) and November 15, 2029 (Special Recreation Tax bonds). These pledges will remain until all bonds have been retired. The amount of the pledge remaining as of December 31, 2015 and a comparison of the pledged revenues collected to the related principal and interest expenditure for fiscal year 2015 are as follows (amounts in millions):

Estimated % Principal Pledge of Revenue and Interest Debt Type Remaining Pledged Retired PPRT ARS Bond $ 183.9 32 % $ 13.7 Harbor ARS Bond 280.6 50 12.0 Special Recreation Tax ARS Bond 27.5 35 2.0

Employee Benefits Employee benefits are granted for vacation and sick leave, workers’ compensation, and healthcare. It is the District’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the District does not have a policy to pay amounts when employees separate from service with the government. The liability for compensated absences reported in the government-wide statements of net position consists of unpaid, accumulated annual vacation and compensatory time.

The District is subject to the State of Illinois Unemployment Compensation Act and has elected the reimbursing employer option for providing unemployment insurance benefits for eligible former employees. Under this option, the District reimburses the State for claims paid by the State. Expenditures for workers’ compensation are recorded when paid in the governmental funds. A liability for these amounts is recorded in the government-wide financial statements. Claims and Judgments Claims and judgments are included in the government-wide financial statements. Uninsured claim expenses and liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. In the fund financial statements, expenditures for judgments and claims are recorded on the basis of settlements reached or judgments entered into within the current fiscal year.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Annual Appropriation Budgets The District’s annual budget is adopted on a non-GAAP, budgetary basis for all governmental funds except the debt service funds, which, at the time of the issuance of bonds, shall provide for the levy of taxes, sufficient to pay the principal and interest upon said bonds as per State code, and capital project funds, which adopt project-length budgets. The legal level of budgetary control (i.e., the level at which expenditures may not exceed appropriations) is at the fund and account class level. Account classes include: personnel services, materials and supplies, small tools and equipment, contractual services, program expense, and other expense.

The State code requires that the budget recommendations be submitted to the Board before November 1 (prior to the start of the applicable fiscal year). After providing at least seven days’ notice, the Board will hold a public hearing. The Board will consider the budget and make any amendments deemed necessary. The Board must pass a budget no later than December 31.

The appropriated budget is prepared by fund, function, and department. Any transfers necessary to adjust the budget and implement park programs can be made by the District’s department heads, as long as the changes do not require transfers between account classes (common groupings of expenditures), and do not exceed the approved appropriation. Transfers of appropriations between funds or account classes require the approval of the Board. During 2015, a budget transfer ordinance, passed by the Board, authorized the transfer of $3.0 million from the Corporate Fund “Personnel Services” expenditure account class to the Corporate Fund “Contractual Services” expenditure account class, and a transfer of $.5 million from the Liability Fund “Other” expenditure account class to the Liability Fund “Contractual Services” account class. There was no increase in the total amount appropriated.

All annual appropriations lapse at fiscal year-end if they remain unused and unencumbered. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as restricted, committed or assigned fund balance and do not constitute expenditures or liabilities because the commitments will be carried forward and honored during the subsequent year. As a rule, the District presents the annual budget on a modified accrual basis of accounting, with certain exceptions defined below.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (continued) Reconciliation of GAAP Basis to Budgetary Basis The District’s basis of budgeting is the same as GAAP basis except for the following: 1) fund balance is used in the budgetary basis, whereas GAAP reflects actual expenditures and 2) for the budget, the District classifies as revenues both long-term debt proceeds and transfers-in, whereas GAAP classifies these as other financing sources. Within some fund types (i.e. Federal, State & Local Grants), there are some funds without an adopted budget. Excess of Expenditures over Appropriations For the year ended December 31, 2015, there was no excess of expenditures over appropriations at the legal level of budgetary control.

NOTE 3. CASH DEPOSITS AND INVESTMENTS

Governmental Activities Cash and investments are held separately and in pools by several of the District’s funds. The District maintains various cash and investment pools that are available for use by all funds. Income from pooled investments is allocated to the funds based on their proportional share of their investment balance. A summary of cash and investments as of December 31, 2015 is as follows (amounts are in thousands):

Governmental Activities Petty Cash $ 10 Cash 37,725 Illinois Funds (local government investment pool) 82,981 Money Market Funds (2a7 pools) 101,650 Certificates of Deposit 5,046 U.S. Government Agencies 38,686 U.S. Treasury Notes 7,955 Municipal Bonds 6,284 $ 280,337

Investment Policies. The District’s investments are made in accordance with the Public Funds Investment Act 30 ILCS 235/1 (Act) and the District’s investment policy. A summary of authorized investments is included in note 1. A summary of the carrying amounts and maturities for the District’s investments at December 31, 2015 is as follows (amounts in thousands):

Investment maturities (in years) Carrying Investment Type Amount Less than 1 Year Illinois Funds (local government investment pool) $ 82,981 82,981 Money Market Accounts 101,650 101,650 U.S. Government Agencies 38,686 38,686 U.S. Treasury Notes 7,955 7,955 Municipal Bonds 6,284 6,284 Total $ 237,556 237,556

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 3. CASH DEPOSITS AND INVESTMENTS (continued)

Custodial Credit Risk– Investments. Custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investment or collateral securities that are in the possession of a third party. The investment policies for the District require investment securities be held by an authorized custodial bank pursuant to a written custodial agreement. The District (other than the Retire- ment Fund) did not hold any securities subject to custodial credit risk as of year-end.

Custodial Credit Risk – Deposits. Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the District’s deposits may not be returned. The District’s investment policy requires that deposits that exceed the amount insured by FDIC insurance protection be collateralized, at the rate of 105% of such deposits. As of December 31, 2015, the District’s bank balances were not subject to custodial credit risk as they were either insured or collateralized with investments held by the District or its agent, in the District’s name.

Interest Rate Risk. Interest rate risk is the risk that the fair value of investments will decrease as a result of an increase in interest rates. As a means of limiting its exposure to fair value losses arising from rising interest rates, the District's investment policy limits the final maturity on any security owned to a maximum of three years except for reserve funds. Reserve funds may not exceed five years. In addition, the District compares the weighted average maturity of its portfolio to the weighted average maturity of the Merrill Lynch 91 Day T-Bill Index, and relative to the index, may decrease the weighted average maturity of the portfolio during periods of rising interest rates or increase it during periods of declining rates.

Credit Risk. Credit risk is the risk that the District will not recover its investments due to the inability of the counterparty to fulfill its obligation. The District’s general investment policy is to follow the prudent person rule subject to the limitations contained in the Act and the District’s investment policy. Under the prudent person rule, investments shall be made with the judgment and care, under circumstances then prevailing, which persons knowledgeable of investment practices, and persons of prudence, discretion and intelligence exercise in the management of their own affairs.

As of December 31, 2015, the District had the following fixed income investments rated by Moody’s, Fitch and Standard and Poor’s (amounts are in thousands):

Carrying Credit ratings Investment Type Amount S&P Moody's Fitch Illinois Funds $ 82,981 AAAm Aaa AAA Money Market Funds 101,650 AAA Aaa N/A U.S. Government Agencies 38,686 AA+ Aaa AAA Municipal Bonds 6,284 AA/AA- Aa3 AA

Concentration Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of investment in any one single issuer. The District’s investment policy does not formally address concentration of credit risk but it is the policy of the District to diversify its investments by security type and institution. As of December 31, 2015, the District held $23.0 million in Federal Home Loan Bank securities which is greater than five percent of the District’s total investment portfolio.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 3. CASH DEPOSITS AND INVESTMENTS (continued)

Fiduciary Activities – Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago (Retirement Fund) The Retirement Fund’s investments are held by a bank-administered trust fund, except for the collective investment funds, private equity partnerships, real estate, hedged equity and certain fixed income investments. Investments that represent 5.0% or more of the Retirement Fund’s net position (except those issued or guaranteed by the U.S. government) are separately identified.

A summary of cash and investments as of December 31, 2015 is as follows (amounts are in thousands):

Fiduciary activities Investments at fair value as determined by quoted price: Short-term investments $ 4,819 Fixed income 54,001 Common and preferred stock 53,062 Common stock - foreign 13,621 Mutual funds 16,018 141,521 Investments at fair value as determined by bank administrator: Fixed income 8,725 Collective investment fund: NTGI QM Collective Daily US Marketcap Equity 36,515 NTGI QM Collective Daily All Country World Index 20,290 Other 36,238 Private equity 39,901 Real estate 41,728 Infrastructure 20,826 Hedged Equity: Entrust Diversified Select Equity Fund 23,566 $ 369,310

The Retirement Fund shall also apply the prudent investor rule in investing funds under its supervision. The retirement funds must be invested exclusively for the benefit of members and in accordance with the respective Retirement Fund’s investment goals and objectives.

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates of debt securities will adversely affect the fair value of an investment. The price of a debt security typically moves in the opposite direction of the change in interest rate.

The Retirement Fund does not maintain a policy relative to interest rate risk. The Board of Trustees recognized that its investments are subject to short-term volatility. However, their goal is to maximize total return within prudent risk parameters.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 3. CASH DEPOSITS AND INVESTMENTS (continued)

At December 31, 2015, the following table shows the investments in debt securities by investment type and maturity (amounts are in thousands):

Maturity in Years Total Less than 1 1 to 5 6 to 10 More than 10 Security type Commercial mortgage-backed $ 1,211 - - - 1,211 Corporate bonds 16,385 688 8,285 3,880 3,532 Government agencies 1,556 - 1,079 477 - Government bonds 17,875 1,487 8,416 5,468 2,504 Government mortgage-backed 16,839 - 452 885 15,502 Non-government backed CMOs 135 - - - 135 Total $ 54,001 2,175 18,232 10,710 22,884

Some investments are more sensitive to interest rate changes than others. Variable and floating rate collateralized mortgage obligations (CMOs), asset-backed securities (ABS), interest-only and principal-only securities are examples of investments whose fair values may be highly sensitive to interest rate changes.

Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Retirement Fund maintains a highly diversified portfolio of debt securities encompassing a wide range of credit ratings. Each fixed income manager is given a specific set of guidelines to invest within, based on the mandate for which it was hired. The guidelines specify in which range of credit the manager may invest. These ranges include investment grade and high yield categories.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 3. CASH DEPOSITS AND INVESTMENTS (continued)

The following table presents the Retirement Fund’s ratings as of December 31, 2015 (amounts are in thousands):

Comm'l Gov't Non-Gov't S&P credit Fair mortgage- Corporate Gov't Gov't mortgage- backed rating value backed bonds agencies bonds backed CMOs AAA $ 867 577 290 - - - - AA 3,410 361 1,759 1,155 - - 135 A 6,333 273 6,060 - - - - BBB 7,070 - 6,868 202 - - - BB 1,061 - 1,061 - - - - B 263 - 263 - - - - NR * 960 - 84 199 - 677 - US Gov't Agency * 34,037 - - - 17,875 16,162 - $ 54,001 1,211 16,385 1,556 17,875 16,839 135 *not rated

Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the pension fund will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. A review of the Fund’s exposure to custodial credit risks reflects that there is none. The Retirement Fund does not have a custodial credit risk policy.

Securities Lending. Under the provisions of state statutes, the Retirement Fund lends securities (both equity and fixed income) to qualified and Retirement Fund-approved brokerage firms for collateral that will be returned for the same securities in the future. The Retirement Fund’s custodian, the Northern Trust Co., manages the securities lending program, which includes the securities of the Retirement Fund as well as other lenders, and receives cash, U.S. Treasury securities, or letters of credit as collateral. The collateral received cannot be pledged or sold by the Retirement Fund unless the borrower defaults. However, the Retirement Fund does have the right to close the loan at any time. All security loan agreements are initially collateralized at 103.0% of the loaned securities. Whenever adjustments are needed to reflect changes in the fair value of the securities loaned, the collateral is adjusted accordingly. Cash collateral is invested in the lending agent’s short-term investment pool, which at year end has a weighted average maturity of 82 days. As of December 31, 2015, the Retirement Fund had loaned to borrowers, securities with a fair value of $44.4 million. As of December 31, 2015, the fair value of the collateral received by the Retirement Fund was $45.7 million, and the collateral invested by the Retirement Fund was $45.7 million.

At December 31, 2015, the Retirement Fund has no credit risk exposure to the borrowers because the amounts the Retirement Fund owes the borrowers exceed the amounts the borrowers owe the Retirement Fund.

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 4. INTERFUND BALANCES AND ACTIVITY Interfund borrowings are reflected as “Due from/to Other Funds” on the accompanying governmental fund financial statements. The following balances at December 31, 2015 represent amounts due to/from other funds (amounts are in thousands):

Receivable fund Payable fund Amount General Federal, State, and Local Grants $ 45,702 General Park Improvements 21,233 Non-Major Governmental General 4,128 Park Improvements General 175 General Non-Major Governmental 553 Federal, State, and Local Grants General 948 Garage Revenue Capital Improvements General 5,235 $ 77,974

The outstanding balances between funds result mainly from the time lag between the dates the expenditures occur in the “borrowing” fund, and when re-payment is made back to the “disbursing” fund.

NOTE 5. TRANSFERS TO/FROM OTHER FUNDS Interfund transfers for the year ended December 31, 2015 were as follows (amounts are in thousands):

Transfers In Fund Transfers Out Fund Amount Description/Purpose To transfer receipts restricted to debt Bond Debt Service Nonmajor Governmental $ 2,023 service from fund collecting the receipts.

FINANCIAL SECTION Page 49

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 6. CAPITAL ASSETS

Capital asset activity for the year ended December 31, 2015 was as follows (amounts are in thousands):

Balance Balance Governmental Activities January 1 Additions Deletions December 31 Capital assets not being depreciated: Land and land improvements $ 267,042 15,448 - 282,490 Works of art and historical collections 9,660 353 - 10,013 Construction in progress 230,172 38,782 152,432 116,522

Total capital assets not being depreciated 506,874 54,583 152,432 409,025 Capital assets being depreciated: Infrastructure 417,617 51 - 417,668 Site improvements 356,977 129,162 554 485,585 Harbor and harbor improvements 235,987 4,879 - 240,866 Stadium and stadium improvements 642,883 35,215 - 678,098 Buildings and building improvements 532,730 61,444 - 594,174 Equipment 26,027 1,118 2,438 24,707 Golf course and golf course improvements 10,916 431 - 11,347 Intangible property 10,737 193 - 10,930

Total capital assets being depreciated 2,233,874 232,493 2,992 2,463,375 Less accumulated depreciation: Infrastructure 205,228 6,473 - 211,701 Site improvements 114,537 20,394 186 134,745 Harbor and harbor improvements 87,810 8,380 - 96,190 Stadium and stadium improvements 146,666 13,832 - 160,498 Buildings and building improvements 177,259 10,930 - 188,189 Equipment 20,187 1,224 2,438 18,973 Golf course and golf course improvements 6,074 652 - 6,726 Intangible property 4,755 969 - 5,724

Total accumulated depreciation 762,516 62,854 2,624 822,746

Total capital assets being depreciated, net 1,471,358 169,639 368 1,640,629 Governmental activity capital assets, net$ 1,978,232 224,222 152,800 2,049,654

Total depreciation expense for fiscal year 2015 was $62.9 million. Of this amount $39.0 million was charged to Park Operations and Maintenance, $22.9 million was charged to Special Services and $1.0 million was charged to General and Administrative.

FINANCIAL SECTION Page 50

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 7. LONG-TERM OBLIGATIONS

Changes in Long-Term Obligations Changes in long-term obligations for the year ended December 31, 2015 were as follows (amounts are in thousands):

Amounts Balance Balance due within Governmental activities January 1 Additions Deletions December 31 one year General obligation bonds: Capital improvement $ 844,460 141,540 145,540 840,460 43,415 Unamortized premiums 47,082 9,622 7,450 49,254 —

Total general obligation bonds 891,542 151,162 152,990 889,714 43,415

Contractor LT Financing 1,902 250 154 1,998 173 Contractor LT Notes — 1,875 — 1,875 550 Compensated absences 8,693 9,050 9,103 8,640 8,497 Claims and judgments 3,014 1,720 2,984 1,750 — Net pension liability (note 16) 452,255 64,347 29,183 487,419 — Net OPEB obligation 18,411 3,158 2,056 19,513 — Property tax claim payable 16,758 10,427 9,001 18,184 9,059 Health Insurance 474 10,152 9,868 758 758 Workers' compensation 17,241 2,533 3,344 16,430 3,695 Total governmental activities $ 1,410,290 254,674 218,683 1,446,281 66,147

Contractor Long-Term Financing and notes represents vendor provided financing for capital purchases at various Chicago Park District golf courses and Soldier Field. Compensated absences, net pension liability, claims and judgments, health insurance, workers’ compensation, and net other postemployment benefit obligation generally are liquidated from the General Fund.

FINANCIAL SECTION Page 51

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 8. GENERAL OBLIGATION BONDS

Issuance of General Obligation Bonds and Current Refunding of Debt In October 2015, the District issued $141.5 million of General Obligation Bonds, Series 2015 A – D. The bonds have maturity dates ranging from January 1, 2017 through January 1, 2040 and interest rates ranging from 4.0 percent to 5.0 percent. The bonds were issued at a premium. Limited Tax Park Bonds Series 2015A were issued at a par value of $40.0 million and net proceeds of $41.7 million will be used to finance various capital projects such as acquisition and development, facility rehabilitation, site improvements, special facilities, the purchase of vehicles and equipment ($39.2 million) and fund capitalized interest ($2.5 million). The Limited Tax Refunding Bonds, Series 2015B and C and the Unlimited Tax Refunding Bonds, Se- ries 2015D were issued at a par value of $101.5 million. Net proceeds from the Series 2015B-D bonds of $109.1 million and cash on hand of $2.6 million were used to fund capitalized interest of $.3 million and to refund all or certain maturities of the Series 2005A bonds, the Series 2006A-B bonds and the Series 2006D bonds. The refunding of the bonds decreased the District’s total debt service payments by $8.8 million and resulted in an economic gain (difference between the present values of the debt service on the old and new debt) of $6.7 million.

General Obligation Bonds The District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities of the District and also the Aquarium and Museums. General obligation bonds are direct obligations of the District and have pledged the full faith and credit of the District.

Annual debt service requirements to maturity for general obligation bonds are as follows (amounts are in thousands):

Principal Interest Total Year ending December 31: 2016 $ 43,415 38,304 81,719 2017 42,580 38,240 80,820 2018 40,205 36,455 76,660 2019 35,715 34,850 70,565 2020 29,440 33,389 62,829 2021-2025 189,435 141,958 331,393 2026-2030 201,515 90,760 292,275 2031-2035 132,090 49,697 181,787 2036-2040 126,065 16,306 142,371 Total $ 840,460 479,959 1,320,419

FINANCIAL SECTION Page 52

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 8. GENERAL OBLIGATION BONDS (continued)

General Obligation Bonds General obligation long-term debt is comprised of the following issues as of December 31, 2015 (in thousands):

Maturity Ranges Original (January 1) Principal Ranges Principal Outstanding General Obligation Bonds: Limited Tax Park Bonds, Series 2006A - 5.00% 2022-2031 2,585 - 6,500$ 35,000 $ 6,500 Limited Tax Refunding Bonds, Series 2006B - 4.00% to 5.00% 2007-2021 150 - 5,775 30,995 4,425 Limited Tax Refunding Bonds, Series 2008B - 3.00% to 5.00% 2009-2016 65 - 1,930 7,420 1,930 Limited Tax Bonds, Series 2008F - 5.00% to 5.50% 2022-2033 550 - 4,750 16,115 16,115 Limited Tax Refunding Bonds, Series 2008G - 4.25% to 5.50% 2010-2022 900 - 7,285 36,140 5,900 Unlimited Tax Refunding Bonds, Series 2008H - 5.00% 2010-2017 2,050 - 5,800 28,310 6,155 Limited Tax Park Bonds, Series 2010A - 4.50% to 5.00% 2022-2033 1,500 - 8,055 42,445 42,445 Limited Tax Park Bonds, Series 2011A - 3.00% to 5.00% 2013-2036 95 - 10,230 36,055 34,585 Limited Tax Refunding Bonds, Series 2011B 3.00%- 5.00% 2012-2021 420 - 3,380 21,560 12,575 Unlimited Tax Refunding Bonds, Series 2011D -3.00% to 5.00% 2012-2019 1,540 - 4,035 26,370 15,130 Limited Tax Bonds, Series 2013A - 2.00% to 5.45% 2027-2038 1,000 - 9,065 50,000 47,095 Limited Tax Refunding Bonds, Series 2013B - 4.00% to 5.00% 2017-2023 4,165 - 5,480 33,405 33,405 Limited Tax Park Bonds, Series 2014A - 5.00% 2033-2039 2,380 - 13,095 40,405 40,405 Limited Tax Refunding Bonds, Series 2014B - 2.00% to 5.00% 2015-2029 1,395 - 11,020 78,335 74,015 Limited Tax Refunding Bonds, Series 2014C - 5.00% 2017-2033 1,095 - 6,500 45,945 45,945 Limited Tax Refunding Bonds, Series 2014D - 3.00% to 5.00% 2016-2021 2050 - 5640 25,965 25,965 Limited Tax Park Bonds, Series 2015A - 5.00% 2024-2040 1,535 - 20,825 40,000 40,000 Limited Tax Refunding Bonds, Series 2015B - 4.00% to 5.00% 2017-2030 2,485 - 9,870 57,970 57,970 Limited Tax Refunding Bonds, Series 2015C - 4.00% to 5.00% 2018-2024 1,220 - 5,920 15,905 15,905

Personal Property Replacement Tax Alternate Revenue Source Bonds: Unlimited Tax Park Refunding Bonds, Series 2006D - 4.00% to 5.00% 2007-2029 330 - 5,120 62,480 3,990 Unlimited Tax Park Refunding Bonds, Series 2008A - 3.50% to 4.25% 2010-2025 250 - 690 8,330 5,855 Unlimited Tax Park Refunding Bonds, Series 2008I - 3.75% to 5.00% 2010-2020 1,370 - 2,275 19,910 10,145 Unlimited Tax Park Refunding Bonds, Series 2010B - 3.00% to 5.00% 2021-2026 2,410 - 2,930 15,935 15,935 Unlimited Tax Park Refunding Bonds, Series 2011C - 2.00% to 5.00% 2012-2029 300 - 10,570 71,880 67,455 Unlimited Tax Park Refunding Bonds, Series 2015D - 4.00% to 5.00% 2017-2029 815 - 4445 27,665 27,665

Harbor Facilities Revenues Alternate Revenue Source Bonds: Unlimited Tax Bonds, Series 2010C - 4.00% to 5.00% 2013-2040 650 - 10,435 132,250 130,630 Unlimited Tax Refunding Bonds, Series 2013D - 2.00% to 5.00% 2015-2024 2,995 - 4,385 35,865 32,870

Special Recreation Activity Alternate Revenue Source Bonds: Unlimited Tax Park Bonds, Series 2008E - 3.25% to 5.00% 2010-2029* 780 - 1,870 24,725 19,450

$ 1,067,380 $ 840,460 *Maturity is November 15

FINANCIAL SECTION Page 53

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 8. GENERAL OBLIGATION BONDS (continued) Defeased bonds have been removed from the Statement of Net Position because related assets have been placed in irrevocable trusts that, together with interest earned thereon, will provide amounts sufficient for payment of all principal and interest. The defeased bonds will be called on January 1, 2016. Defeased bonds at December 31, 2015 are as follows (amounts are in thousands):

Amount Defeased Outstanding

Limited Tax Park Bonds, Series 2006A $ 28,500 $ 28,500 Limited Tax Refunding Bonds, Series 2006B 26,125 26,125 Unlimited Tax Refunding Bonds, Series 2006D 45,625 45,625 $ 100,250 $ 100,250

NOTE 9. OPERATING LEASES

Lessee-Metropolitan Pier and Exposition Authority The District leases land, with a minimal cost basis, to the Metropolitan Pier and Exposition Authority (MPEA) under the terms of a non-cancelable operating lease agreement that requires the MPEA to make minimum lease payments to the District through 2042. Rental income under the operating lease was $821.8 thousand for the year ended December 31, 2015.

The following is a schedule of future minimum lease payments receivable under the operating lease (amounts are in thousands):

Year Ended December 31, Amount 2016 $ 871 2017 923 2018 979 2019 1,038 2020 1,100 2021-2025 6,571 2026-2030 8,323 2031-2035 10,292 2036-2040 13,246 2041-2042 6,301 Total $ 49,644

FINANCIAL SECTION Page 54

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 9. OPERATING LEASES (continued)

Lessee-Chicago Bears Football Club, Inc. / Chicago Bears Stadium LLC The District also leases Soldier Field Stadium that has a historical cost of $678.1 million and accumulated depreciation of $160.5 million to the Chicago Bears Football Club, Inc. and Chicago Bears Stadium LLC (together, the Club). Depreciation expense for the year ended December 31, 2015 was $13.8 million. Under the terms of a non-cancelable operating lease agreement the Club is required to make minimum lease payments to the District through 2033 which include an annual facility fee and an annual parking allotment fee. Rental income under the operating lease was $6.3 million for the year ended December 31, 2015.

On each fifth (5th) anniversary of January 1, 2008, the amount of the facility fee and the parking allotment fee will be increased in a similar manner by fifty percent (50%) of the cumulative increase in the Consumer Price Index (CPI), if any, occurring from the date of the last increase in the facility fee and the parking allotment fee, respectively.

The following is a schedule of future minimum lease payments receivable under the operating lease (amounts are in thousands):

Year Ended December 31, Amount 2016 $ 6,303 2017 6,303 2018 6,303 2019 6,303 2020 6,303 2021-2025 31,515 2026-2030 31,515 2031-2033 18,909 Total $ 113,454

FINANCIAL SECTION Page 55

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 9. OPERATING LEASES (continued)

Lessee-Lincoln Park Society In 1998, the Chicago Park District, the Chicago Historical Society, and the Lincoln Park Society entered into an agreement to build and operate a parking facility at 1740 North Stockton Drive. The parking facility has a historical cost and accumulated depreciation of $7.8 million and $4.3 million, respectively. Depreciation expense for the year ended December 31, 2015 was $.3 million. Under the Agreement, the Park District would receive an annual permit payment used to replace income from parking meters replaced by the new parking facility. The following is a schedule of projected lease payments receivable under the operating lease (amounts are in thousands):

Year Ended December 31, Amount 2016 $ 50 2017 50 2018 382 2019 420 2020 420 2021-2025 2,300 2026-2030 2,772 2031-2035 2,441 2036-2038 2,386 Total $ 11,221

FINANCIAL SECTION Page 56

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 9 OPERATING LEASES (continued) Lessee-Retirement Fund

The Retirement Fund has entered into an operating lease for office space through April 30, 2026. The lease provides that the lessee pay monthly base rent subject to annual increases, plus an escalation rent computed on costs incurred by the lessor. Upon executing the amendment, the Retirement Fund received rent abatements in the amount of $115,587 which are being amortized over the life of the lease. The unamortized portion was $79,051 at December 31, 2015. The total rental expense was $163,057 for the year ended December 31, 2015.

Following is a schedule of minimum future rental payments for each of the next five years and in the aggregate under the non-cancelable operating lease at December 31, 2015 (amounts are in thousands):

Year Ended December 31, Amount 2016 $ 90 2017 92 2018 95 2019 97 2020 99 2021-2026 569 Total $ 1,042

FINANCIAL SECTION Page 57

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM Summary of Significant Accounting Policies The financial statements of the Retirement Fund are prepared using the accrual basis of accounting.

Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Fair values for bonds and stocks are determined by quoted market prices. Investments, for which market quotations are not readily available, are valued at their fair values as determined by the bank administrator under the direction of the Board of Trustees, with the assistance of a valuation service.

Net appreciation in fair value of investments includes realized gains and losses. Realized amounts are generally recognized when securities are sold, subject to prior period recognition of changes in fair value. Unre- alized amounts are recognized for the change in fair value between reporting periods. Interest and dividends are recorded as earned.

Administrative expenses are paid from employer contributions.

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Park Employees’ & Retirement Board Employees’ Annuity and Benefit Fund (Retirement Fund) and additions to/ deductions from the Retirement Fund’s fiduciary net position have been determined on the same basis as they are reported by the Retirement Fund. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Plan Description

The Park Employees’ & Retirement Board Employees’ Annuity and Benefit Fund (Retirement Fund) is the administrator of a single employer defined benefit plan established by the State of Illinois to provide annuities and benefits for substantially all employees of the Chicago Park District. The Retirement Fund is administered in accordance with the Illinois Compiled Statutes. Management of the Retirement Fund is vested in the board of the Retirement Fund, which consists of seven members– three appointed by the commissioners of the Chicago Park District and four elected by plan members. The defined benefits, as well as the employer and employee contribution levels of the Retirement Fund, are mandated by Illinois State Statutes and may be amended only by the Illinois legislature. The Retirement Fund provides retirement, disability, and death benefits to Retirement Fund members and beneficiaries.

Plan membership at December 31, 2015 consists of the following:

Inactive employees (or their beneficiaries) currently receiving benefits 2,876

Inactive employees entitled to, but not yet receiving benefits 145

Active employees 3,063 Total plan membership 6,084

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CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM (continued)

Pension legislation (Public Act 96-0889) was approved during 2010 and establishes two distinct classes of membership with different retirement eligibility conditions and benefit provisions. For convenience, the Retirement Fund uses a tier concept to distinguish these groups, generally:

Tier 1 – Participants that became members before January 1, 2011.

Tier 2 – Participants that first became members on or after January 1, 2011.

Tier 1 employees attaining the age of 50 with at least ten years of creditable service are entitled to receive a service retirement pension. The retirement pension is based upon the average of the four highest consecutive years of salary within the last ten years of service. The monthly retirement annuity received varies based on final average salary and years of service and is 2.4% of highest average salary for each year of service. If the employee retires prior to the attainment of age 60, the rate associated with the service is reduced by one-quarter percent for each full month the employee is under age 60. There is no reduction if the participant has 30 years of service. Employees with four years of service at age 60 may receive a retirement benefit. The maximum retirement annuity for any employee shall be 80% of the highest average annual salary for any 4 consecutive years within the last 10 years immediately preceding the date of withdrawal.

Tier 2 employees attaining the age of 62 with at least ten years or more of creditable service are entitled to receive a discounted service retirement pension. Employees attaining the age of 67 or more, with at least 10 years of service are entitled to receive a non-discounted annuity benefit. The monthly retirement annuity received varies based on final average salary and years of service and is 2.4% of highest average salary for each year of service. The annuity is discounted one-half percent for each full month the employee is under age 67. The retirement pension is based upon the average of the eight highest consecutive years of salary within the last 10 years of service prior to retirement. Pensionable salary is limited to $111,572 in 2015. The maximum retirement annuity for any employee shall be 80% of the highest average annual salary for any 8 consecutive years within the last 10 years immediately preceding the date of withdrawal.

On August 16, 2012, Public Act 97-0973 was approved, changing the Retirement Fund’s year end from June 30th to December 31st.

On January 7, 2014, Public Act 98-0622 was signed into law, changing the Retirement Fund’s provisions including funding, retirement age, automatic annual increases and duty disability effective Janu- ary 1, 2015.

The retirement age is decreased for Tier 2 employees from 67 to 65, and from 62 to 60 for early retirement. The minimum retirement age for Tier 1 employees increases from 50 to 58 for those employees younger than 45 on January 1, 2015.

The annual annuity increase (AI) for current retirees changed to 1/2 of annual unadjusted percentage increase in the Consumer Price Index-Urban (CPI) or 3% whichever is less, utilizing simple interest. Pay- ments of AI are suspended in years 2015, 2017 and 2019. Spousal increase is not affected.

Duty disability benefits will decrease to 74% of the employees’ annual salary in 2015, 73% in 2017, and 72% in 2019.

FINANCIAL SECTION Page 59

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM (continued)

The Retirement Fund issues a publicly available financial report that includes financial statements and required supplementary information for the plan as well as further information on Plan member benefit provisions. This report may be obtained by writing to the Park Employees’ Annuity and Benefit Fund, 55 East Monroe, Suite 2720, Chicago, Illinois 60603, or electronically on their website: www.chicagoparkpension.org.

Post-Retirement Increase

Tier 1: An employee annuitant under Tier 1 who retires at age 60 or older with at least 30 years of service is eligible to receive an increase of three percent, based on the annuity granted at retirement, payable following the first 12 months of benefits on either the next January or July. If the employee annuitant retires before age 60 with less than 30 years of service, then the increases begin on the January or July following the later of the attainment of age 60 or 12 months of benefits received.

Tier 2: An employee annuitant under Tier 2 that is eligible to receive an increase in the annuity benefit, shall receive an annual increase equal to the lesser of three percent or one-half of the annual unadjusted percentage increase in the Consumer Price Index-U (but not less than zero) as measured in the preceding 12 month period ending with the September preceding increase. The increase is based on the amount of the originally granted benefit (simple). This increase begins after age 67 on the first January following one full year of benefits received.

Funding Policy Covered employees are required by state statutes to contribute 10% of their salary to the Retirement Fund. If a covered employee leaves employment before the age of 55, accumulated employee contributions are refundable without interest. For 2016 the employee contribution rate is 10%, for 2017 and 2018 the rate is 11%, and for 2019 the rate is 12%. Employee contributions will remain at 12% until the Fund is 90% funded, at which time the employee contributions will decrease to 10.5% and remain 10.5% as long as the fund is 90% funded.

The District is required to levy a tax at a rate not more than an amount equal to the total amount of contributions by the employees to the Retirement Fund made in the fiscal year two years prior to the year for which the annual applicable tax is levied, multiplied by a factor. The factor required for 2015 was 1.7. For 2016 the factor is 1.7, for 2017 and 2018 the factor is 2.3 and for 2019 the factor is 2.9. That factor remains in effect until the Retirement Fund is 90% funded, after which the District’s obligation is the lesser of the 2.9 multiplier or the amount necessary to maintain 90% funding. The Distict’s actual contribution to the Retirement Fund was $30.4 million.

In addition, the District shall contribute to the Retirement Fund the following additional specified amounts:

Additional Year Contribution 2015 $12,500,000 2016 $12,500,000 2019 $50,000,000

FINANCIAL SECTION Page 60

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM (continued)

Net Pension Liability and Changes in the Net Pension Liability The District’s net pension liability was measured as of December 31, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date (amounts are in thousands):

Increase / (Decrease) for Fiscal Year Ending December 31, 2015 Total Pension Plan Fiduciary Net Pension Liability Net Position Liability

Balances at beginning of year $ 888,024 $ 435,769 $ 452,255

Changes for the year Service cost 12,976 - 12,976 Interest 64,930 - 64,930 Difference between expected and actual expense 5,447 - 5,447 Contributions - employer - 11,225 (11,225) Contributions - member - 10,831 (10,831) Net investment income - 27,591 (27,591) Benefit payments, including refunds (70,536) (70,536) - Administrative expense - (1,458) 1,458 Net changes 12,817 (22,347) 35,164

Balances at end of year $ 900,841 $ 413,422 $ 487,419

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. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation are summarized in the following table:

Long-term Target expected real allocation rate of return Fixed income 20.5% 1.6% Domestic equity 32.5% 6.7% International equity 12.0% 7.4% Emerging market 4.0% 9.7% Risk parity 3.0% 3.6% Hedge equity 7.0% 3.6% Private equity 7.0% 11.8% Real estate 14.0% 4.5% 100.0%

FINANCIAL SECTION Page 61

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM (continued)

Discount Rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that member and employer contributions will be made as specified by Public Act 98-0622. For this purpose, only employer contributions that are intended to fund benefits of current plan members and their beneficiaries are included. Projected employer contributions and contributions from future plan members that are intended to fund the service costs of future plan members and their beneficiaries are not included. 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.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Retirement Fund, calculated using the discount rate of 7.50%, as well as what the Retirement Fund’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate (amounts are in thousands):

1% Decrease Discount Rate 1% Increase (6.50%) (7.50%) (8.50%)

Net pension liability as of December 31, 2015 $ 583,270 $ 487,419 $ 406,811

Actuarial Methods and Assumptions The total pension liability was determined by an actuarial valuation as of December 31 2014, using the following actuarial assumptions, applied to all periods included in the measurement:

Actuarial assumptions: Inflation 2.75%

Salary increases Service-based ranging from 2.75% to 15.0%

Investment rate of return 7.50%, net of pension plan investment expense

Cost of living adjustments All retiree COLAs are the lesser of 3% and 1/2 CPI of the original benefit. Beneficiary COLAs are 3% compounded. COLAs will not be granted during 2015, 2017, and 2019. (This does not affect COLAs for beneficiaries.)

FINANCIAL SECTION Page 62

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 10. EMPLOYEE RETIREMENT SYSTEM (continued)

For healthy members, mortality rates were based on the RP-2000 Combined Healthy Table, set forward 1 year for female participants, with generational projection from 2003 using Scale AA. The actuarial assumptions used in the December 31, 2014, valuation were based on the results of an experience study for the period July 1, 2007 to June 30, 2012.

Pension Expense and Deferred Outflows of Resources For the year ended December 31, 2015, the District recognized total pension expense of $27.2 million. At December 31, 2014, deferred outflows of resources related to pensions are (amounts are in thousands):

Deferred Outflows of Resources Difference between expected and actual experience $ 4,086

Net differences between projected and actual earnings on pension plan investments 2,575

Total $ 6,661

Amounts reported as deferred outflows of resources related to pensions will be recognized in pension expense as follows (amounts are in thousands):

Year ended December 31: 2015 $ 2,006 2016 2,006 2017 2,006 2018 643 Total $ 6,661

The District’s contributions to the Retirement Fund subsequent to the measurement date of the net pension liability (December 31, 2014) amounted to $30.5 million and are reported as deferred outflows of resources. These amounts will be included in pension expense in fiscal year 2016.

Payable to the Pension Plan

At December 31, 2015, the District reported a payable of $18.0 million for the outstanding amount of contributions payable to the Retirement Fund.

FINANCIAL SECTION Page 63

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 11. POSTEMPLOYMENT HEALTHCARE PLAN Plan Description The Park District Retired Employees Healthcare Plan (Healthcare Plan) is a single-employer defined benefit healthcare plan administered by the District. The Healthcare Plan provides medical and prescription drug insurance benefits to eligible retirees, spouses, and dependents. Eligible retirees are former District employees who have retired at the age of 50 with a minimum of 10 years of creditable service or at the age of 60 with a minimum of 4 years of creditable service. District employees that qualify for Medicare eligibility at the age of 65, generally those hired after April 1984, are not covered by the Healthcare Plan. The Healthcare Plan is unfunded and pays benefits on a pay-as-you-go basis, and therefore, does not issue a publicly available financial report. Funding Policy The contribution requirements of plan members and the District are established and may be amended by the District. The required contribution is based on pay-as-you-go financing. For fiscal year 2015, the District contributed $2.1 million to the plan. Plan members receiving benefits contributed $1.9 million, or approximately 48.5% of the total premiums, through their required contribution of $493/$782 per month for retiree-only coverage, $972/$1,431 for retiree and spouse coverage, and $1,392/$2,049 for family coverage, for HMO/PPO respectively. Note that individuals that retired after December 31, 2007 and elect to participate in the PPO plan pay higher per month rates of $913 for retiree only coverage, $1,581 for retiree plus spouse coverage, and $2,263 for family coverage.

Annual OPEB Cost and Net OPEB Obligation The District’s annual OPEB cost (Expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement No. 45. 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 (or funding excess) over a period not to exceed thirty years.

The District’s annual OPEB cost and net OPEB obligation for fiscal year 2015 were as follows (amounts are in thousands):

Annual required contribution (ARC) $ 3,519 Interest on net OPEB obligation 630 Adjustment to annual required contribution (991) Annual OPEB cost 3,158 Contributions made 2,056 Increase in net OPEB obligation 1,102 Net OPEB obligation at January 1, 2015 18,411 Net OPEB obligation at December 31, 2015 $ 19,513

FINANCIAL SECTION Page 64

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 11. POSTEMPLOYMENT HEALTHCARE PLAN (continued) The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the past three years were as follows (amounts are in thousands):

Employer contribution Annual Net OPEB Percentage OPEB cost contributed obligation Year ended December 31: 2015 $ 3,158 65.1% $ 19,513 2014 1,997 57.1% 18,411 2013 2,014 51.0% 17,554

Funded Status and Funding Progress As of January 1, 2015, the most recent actuarial valuation date, the funded status of the Plan was as follows (amounts are in thousands):

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

The schedule of funding progress, presented as Required Supplementary Information (RSI) following the notes to the basic financial statements, presents multiyear trend information about whether the actuarial values of the Healthcare Plan assets are increasing or decreasing over time relative to the AAL for benefits.

FINANCIAL SECTION Page 65

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 11. POSTEMPLOYMENT HEALTHCARE PLAN (continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as un- derstood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern 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 the effects of short-term volatility in the AAL and the actuarial value of assets, consistent with long-term perspective of the calculations. The table below identifies the actuarial assumptions used in the January 1, 2015 valuation:

Actuarial Methods and Assumptions Actuarial cost method Projected unit credit Amortization method Level dollar Amortization period 30 years (open period) Asset valuation method Actuarial value equals market value Actuarial assumptions: Discount rate 3.42% Inflation rate * Healthcare cost trend rate 6.75% for 2015 and grading down to 5.0% for 2024 and beyond

* There is no explicit inflation rate as valuation is not based on projected payroll.

NOTE 12. RISK MANAGEMENT AND CLAIMS LIABILITIES

The District is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; employees’ injuries and illness; and natural disasters. The District purchases commercial insurance against losses arising from automotive liability, property, property- related business interruption, terrorism, marine property and liability, employment related suits, including discrimination and sexual harassment, and management liability of board members, directors, and officers of the District. Liability coverage is also purchased against losses arising from gymnastic activities, and surety bonds are arranged for various obligations. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

The District is also self-insured for general liability and automotive liability losses up to a limit of $1.5 million per claim at which point stop-loss insurance becomes effective. As of January 1, 2015, the District is self-insured for employee health claims up to a limit of $155 thousand per claim at which point stop- loss insurance becomes effective. The District is self-insured for statutory workers’ compensation claims and obligations. An amount has been recorded at December 31, 2015, for the estimated potential claim liability based upon an actuary’s estimate. Based on prior experience, Management believes the estimated liability for claims is adequate to satisfy all claims filed or to be filed for incidents, which occurred through December 31, 2015.

FINANCIAL SECTION Page 66

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 12. RISK MANAGEMENT AND CLAIMS LIABILITIES (Continued)

The following is a reconciliation of the District’s claims liability (amounts are in thousands):

2015 2014 Accrued self-insurance – beginning of year $ 20,729 18,412 Claims and other expenses incurred – during year 14,405 16,223 Claims paid – during year (16,196) (13,906) Accrued self-insurance – end of year $ 18,938 20,729

NOTE 13. FUND BALANCE The Board of Commissioners adopted a fund balance policy to establish and maintain general fund balances. The policy is as follows:

Working Capital. These funds are to be used for short term cash management and to alleviate the need to issue short-term debt or other external financing in lieu of property tax collections. The Board of Commissioners must approve any amounts which will not be repaid in accordance with section 1.2 of the Long-Term Income Reserve Fund Balance Policy. Any other draw from the Reserve must be approved by the Board of Commissioners and should only be for non-recurring expenditures or one-time capital costs as the result of occurrence of a natural disaster or other major event, and not ongoing operational type expenditures.

Economic Stabilization. A range of 8% to 16% of the preceding fiscal year’s general fund expenditures are to be designated as Economic Stabilization funds. These monies are to be expended in cases of General Fund revenue shortages of 10% or more below expectations, caused by economic downturns or the occurrence of natural disasters or other major events. Funds may also be held in this category in order to maintain or improve debt or credit ratings. The Board of Commissioners must give prior approval of any amounts to be expended from the Economic Stabilization funds. A repayment plan which projects to restore the balance to the minimum level, must also be submitted and approved prior to expenditure. After expenditures have occurred, the General Superintendent or his designees shall provide a summary report to the Board as soon as practical on the usage of these funds.

Budget Stabilization. Any amounts which will be used to balance a subsequent year’s budget will be categorized as Budget Stabilization funds. The amounts may vary from fiscal year to fiscal year or depending on the District’s budgetary condition, may not be designated at all. The funds may be assigned by the General Superintendent/CEO or his designee, up to the amount of available unassigned fund balance at the end of the prior fiscal year. The budget stabilization amount cannot, in any fiscal year, exceed the amount of the expected budgetary shortfall.

Long-Term Liability. A fund balance assignment for Long-Term Liability is to be used to supplement pension employer contributions from 2015 through 2019.

FINANCIAL SECTION Page 67

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 14. DEFICIT FUND BALANCE

As of December 31, 2015, the Federal, State, and Local Grants Fund had a deficit fund balance of approximately $14.3 million. This deficit is created by the revenues which are received after the financial statement date (and the period of availability for revenue recognition under the modified accrual basis of accounting) and the repayment of disbursements to the General Fund, which originally funded the grant expenditures. In addition, the Park Improvements Fund had a deficit fund balance of $14.5 million. This deficit was created primarily as a result of the timing of financing issued for funding capital improvements.

NOTE 15. LITIGATION AND COMMITMENTS Construction Commitments The District has various outstanding construction projects, with significant encumbrances, estimated at December 31, 2015 to be $20.5 million as follows:

Amount Fund (in millions) Federal, State, and local grant fund $ 11.0 Park improvements 7.6 Garage revenue capital improvements 1.4 Other governmental funds 0.5 Total $ 20.5

Contractor Long-Term Financing Arrangement The District signed a new management contract for its golf courses in 2009. Provisions in this contract require the contractor to provide the District with $1.5 million in advanced funding for capital purchases and $.25 million each year thereafter. A liability was set up to recognize the financing agreement, and the District will amortize the advance over the 20-year life of the contract.

As of December 31, 2015, the total capital funding was $2.7 million, and in 2015 amortization was $153 thousand. Litigation The District is routinely involved in a number of legal proceedings and claims that cover a wide range of matters. In the opinion of management, all claims that are probable of an unfavorable outcome have been accrued as a liability. Although other claims exist that may be material, the outcome for these claims cannot be determined at this time. Management does not expect the outcome of these matters to have any adverse impact on the District’s operations.

Federal, State and Locally Assisted Grant Programs

The District participates in a number of Federal and State-assisted grant programs. In addition, the City of Chicago provides funding for various capital projects through its Tax Increment Financing program, which the District accounts for as grants. Many of these grants are subject to audits by or on behalf of the grantors to assure compliance with grant provisions. Any liability for reimbursement, which may arise as the result of audits of grant programs, is not believed by District Management to be material. The State of Illinois has not passed a budget for their fiscal year ending June 30, 2016. As a result, the District wrote down receivables as of December 31, 2015 and uncertainty remains about the availability of future state funding.

FINANCIAL SECTION Page 68

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 16. RESTATEMENT FOR IMPLEMENTATION OF A NEW ACCOUNTING STANDARD

For the year ended December 31, 2015, the District implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. As a result of implementing these standards, the District was required to re- state its January 1, 2015 net position, to record the effect of the net pension liability and deferred outflows of resources as of the measurement date for the previous year. The effect of the restatement is as follows (amounts are in thousands): Govenmental Activities

Net position as previously reported December 31, 2014 $ 1,238,051

Net pension liability (452,255)

Write-off the net pension obligation 131,467

Deferred outflow of resources - pension contributions subsequent to the measurement date 11,226

Net position as restated, January 1, 2015 $ 928,489

Restatement for the beginning balances for deferred outflows of resources and deferred inflows of resources related to pensions was not done because it was not practical to determine all such amounts. Additionally, the impact on the change in net position for FY 2014 was not determined.

NOTE 17. SHORT-TERM DEBT

On March 3, 2015, the District issued a Bond Anticipation Note (BAN) under a line of credit with PNC Bank not to exceed $40 million with an interest rate per annum equal to the sum of (A) seventy percent (70%) of LIBOR plus (B) ninety basis points (0.90%) calculated monthly for a LIBOR Interest Period.

In March 2015, $31.3 million was withdrawn for capital improvements and repaid in full on October 6, 2015. The security and repayment of the BAN was derived from the sale of bonds issued pursuant to Section 20 of the Chicago Park District Act (70 ILCS 1505) and other available funds of the District. The line of credit was terminated on December 22, 2015.

The short-term loan activity under the line of credit was as follows (amounts are in thousands):

Amount

Balance - January 1, 2015 $ -

Additions 31,340

Deletions 31,340

Balance - December 31, 2015 $ -

FINANCIAL SECTION Page 69

CHICAGO PARK DISTRICT Notes to Basic Financial Statements December 31, 2015

NOTE 18. SUBSEQUENT EVENTS Bond Anticipation Note The Park District issued on March 21, 2016 a Bond Anticipation Note (BAN) under a Line of Credit with PNC Bank not to exceed $40M with an interest rate per annum equal to the sum (A) seventy percent (70%) of LI- BOR plus (B) ninety basis points (0.90%) calculated monthly for a LIBOR Interest Period. The security and payment of the BAN will be derived from the sale of bonds to be issued pursuant to Section 20 of the Chica- go Park District Act and other available funds of the Park District, or a combination thereof. No provision has been made for a direct annual tax upon taxable property for the payment of principal or interest. All outstanding principal is due and payable in full on March 20, 2017.

Personal Property Replacement Tax Revenue In April 2016, the Illinois Department of Revenue (IDOR) informed the District that as a result of an error in the allocation calculation of the personal property replacement tax, distributions made in 2014 and 2015 had been overstated. IDOR intends to recoup the excess contributions over a two year period beginning in Jan- uary 2017. IDOR has requested a review of the calculations by the State’s Auditor General.

The estimated allocation error to the Park District is approximately $5.5 million. Of this amount, $421 thousand had been passed on to the Aquarium & Museums. The Park District will recoup this amount consistent with the State’s adjustments to future PPRT distributions to the Park District. The 2015 PPRT revenue has been adjusted by the amount of the allocation error and the District has reported a liability to the State as of December 31, 2015.

Pension

On January 7, 2014 Public Act 98-0622 was signed into law effective January 1, 2015. The Act changed the Retirement Fund’s provisions including employee and employer funding, retirement age, automatic annual increases, and duty disability benefit. In October 14, 2015, the Retirement Fund was served a summons and complaint, which challenges the constitutionality of Public Act 98-0622.

The Park District was granted permission to intervene in the lawsuit challenging the constitutionality of Public Act 98-622 (Biedron v. Park Employees’ and Retirement Board Employees Annuity and Benefit Fund, et al., No. 2015 CH 14869, currently pending in the circuit court of Cook County, Illinois). The court stayed proceedings in the lawsuit pending receipt of the decision by the Illinois Supreme Court in the case of Jones v. Municipal Employees’ Annuity & Benefit Fund, 2015 IL 118585, where the Court was deciding the constitutionality of Public Act 98-641, legislation patterned after Public Act 98-622 and affecting the Municipal Em- ployee’s Annuity and Benefit Fund of Chicago and the Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund. The Supreme Court issued its opinion on March 24, 2016, finding that legislation to be unconstitutional. At a status hearing in Biedron on June 9, 2016, counsel for the plaintiffs, Park District and the Pension Fund advised the court that in light of the Supreme Court’s decision in Jones and the similarities between Public Acts 98-622 and 98-641, the parties want the opportunity to explore the possibility of negotiating a modified approach to pension relief. The court encouraged the parties to do so and offered to assist in serving as a mediator. The court stayed any further proceedings until the next status hearing on Septem- ber 14, 2016. The provisions of Public Act 98-622 remain in effect while the litigation is pending, but it is the District’s expectation that in the absence of a negotiated resolution, the court in Biedron, following the Court’s decision in Jones, will find Public Act 98-622 unconstitutional and enjoin its enforcement.

If Public Act 98-0622 is ruled unconstitutional (either in whole or in part), the projected employer and employee contributions could decrease, and the District’s net pension liability impact will be significant. The impact to the pension liability has not been estimated at this time.

FINANCIAL SECTION Page 70 CHICAGO PARK DISTRICT Required Supplementary Information Schedule of Revenues and Expenditures– Budget and Actual General Operating Fund (Budgetary Basis) (Unaudited) Year ended December 31, 2015 (Amounts are in thousands of dollars)

Variance Budgeted amounts with final Original Final Actual budget Revenues: Property tax $ 158,318 158,318 163,095 4,777 Tax Increment Financing 3,260 3,260 5,086 1,826 Personal property replacement tax 28,709 28,709 26,381 (2,328) Interest on investments 360 360 293 (67) Concession revenue 6,383 6,383 3,726 (2,657) Parking fees 4,829 4,829 4,768 (61) Harbor fees 12,633 12,633 11,387 (1,246) Golf fees 5,375 5,375 5,308 (67) Park fees 15,363 15,363 13,588 (1,775) Soldier Field 31,699 31,699 42,418 10,719 Donations and grant income 855 855 1,674 819 Rentals 3,669 3,669 1,060 (2,609) Miscellaneous income 1,285 1,285 1,571 286 Permits 13,633 13,633 14,173 540 Northerly Island 1,700 1,700 1,211 (489) Other user charges - - 4,586 4,586 Capital contributions 1,100 1,100 - (1,100) Use of prior year fund balance 4,000 4,000 - (4,000) Use of long-term obligation fund reserve 12,500 12,500 5,000 (7,500) Total revenues 305,671 305,671 305,325 (346) Expenditures: - Personnel services 157,196 154,196 153,792 404 Materials and supplies 5,691 5,691 5,359 332 Small tools and equipment 472 472 414 58 Contractual services 122,194 125,694 122,338 3,356 Program expense 918 918 695 223 Other expense 6,700 6,200 6,048 152 Supplemental contribution to Pension Fund 12,500 12,500 12,500 - Total expenditures 305,671 305,671 301,146 4,525 Revenues over (under) expenditures $- - 4,179 4,179

FINANCIAL SECTION Page 71 CHICAGO PARK DISTRICT Required Supplementary Information Schedule of Revenues and Expenditures– Budget and Actual Federal, State, and Local Grants Fund (Budgetary Basis) (Unaudited) Year ended December 31, 2015 (Amounts are in thousands of dollars)

Variance Budgeted amounts with final Original Final Actual budget Revenues: Park fees $ - 13 13 - Donations and grant income 5,000 4,944 4,458 (486) Total revenues 5,000 4,957 4,471 (486) Expenditures: Personnel services 1,886 2,724 1,219 1,505 Materials and supplies 921 597 149 448 Small tools and equipment - 75 13 62 Contractual services 2,193 5,397 2,683 2,714 Program expense - 1,480 107 1,373 Other expense - 451 66 385 Total expenditures 5,000 10,724 4,237 6,487

Revenues over (under) expenditures $- (5,767) 234 6,001

FINANCIAL SECTION Page 72 CHICAGO PARK DISTRICT Required Supplementary Information Notes to Budgetary Comparison Schedule (Unaudited) A reconciliation of the different basis of revenue and expenditure recognition December 31, 2015 (Amounts are in thousands of dollars)

Federal, State and General local grants Revenues, GAAP basis $ 300,325 41,954

Add proceeds from insurance recovery - 1,719

Less revenue from funds with no adopted budget: Interest on investments - (76) Grants and donations - (39,126)

Use of long-term obligation fund reserve 5,000 -

Revenues, budgetary basis $ 305,325 4,471

Expenditures, GAAP basis $ 301,467 47,617

Less expenditures from funds with no adopted budget (321) (43,380)

Expenditures, budgetary basis $ 301,146 4,237

*See notes to budgetary comparison schedule - included in Notes to Basic Financial Statements (note 2).

FINANCIAL SECTION Page 73 CHICAGO PARK DISTRICT Required Supplementary Information Schedule of Changes in net Pension Liability and Related Ratios Last Ten Fiscal Years (Unaudited) December 31, 2015 (Amounts are in thousands of dollars)

2015 Total pension liability: Service cost $ 12,976 Interest 64,930 Difference between expected and actual experience 5,447 Benefit payments, including refunds (70,536) Changes of assumptions - Changes of benefit terms -

Net change in total pension liability 12,817

Total pension liability - beginning 888,024 Total pension liability - ending $ 900,841

Plan fiduciary net position: Contributions - employer $ 11,225 Contributions - member 10,831 Net investment income 27,591 Benefit payments, including refunds (70,536) Administrative expense (1,458)

Net change in plan fiduciary net position (22,347)

Plan fiduciary net position - beginning 435,769 Plan fiduciary net position - ending $ 413,422

Net pension liability - ending $ 487,419

Plan fiduciary net position as a percentage of the total pension liability 45.9%

Actual covered employee payroll $ 118,988

Plan net pension liability as a percentage of covered employee payroll 409.6%

Until a full ten-year trend is compiled, the Park District has presented as many years as are available.

See accompanying notes to basic financial statements.

FINANCIAL SECTION Page 74 CHICAGO PARK DISTRICT Required Supplementary Information Schedule of Employer Contributions (Unaudited) December 31, 2015 (Amounts are in thousands of dollars)

Schedule of Employer Contributions - Last Ten Fiscal Years Contributions Contributions in as a Relation to the Percentage of Actuarially Actuarially Contribution Covered Covered Fiscal Year Determined Determined Deficiency Employee Employee Ended Contributions Contributions (Excess) Payroll Payroll Dec. 31, 2014 $ 35,307 $ 11,225 $ 24,082 118,988 9.4% Dec. 31, 2013 41,835 15,708 26,127 117,782 13.3% Dec. 31, 2012 16,787 5,268 11,519 58,232 9.0% June 30, 2012 28,052 10,868 17,184 114,224 9.5% June 30, 2011 25,319 10,981 14,338 107,687 10.2% June 30, 2010 22,400 10,829 11,571 107,361 10.1% June 30, 2009 18,285 9,668 8,617 108,883 8.9% June 30, 2008 16,073 8,999 7,074 111,698 8.1% June 30, 2007 14,572 9,595 4,977 106,602 9.0% June 30, 2006 16,437 5,174 11,263 101,058 5.1%

Notes to schedule

Valuation date December 31, 2013

Methods and assumptions used to establish "actuarially determined contribution" rates: Actuarial cost method Entry Age Actuarial cost method Amortization method 28-year closed, level percentage of payroll amortization Asset valuation method 5-year smoothed market

Actuarial assumptions: Investment rate of return 7.50%, net of investment expense Projected salary increases Service-based ranging from 2.75% to 15% Mortality Post-retirement mortality rates were based on the RP-2000 Combined Healthy Mortality Tables set forward 1 year for females with generational projection from 2003 using scale AA for mortality improvements. Pre-retirement mortality rates are the same as post-retirement rates. Cost of living adjustments All retiree COLAs are the lesser of 3% and 1/2 of CPI of the original benefit. Beneficiary COLAs are 3% compounded. COLAs will not be granted during 2015, 2017, and 2019. (This does not affect COLAs for beneficiaries.)

Other assumptions: Same as those used in the December 31, 2014, actuarial funding valuations.

FINANCIAL SECTION Page 75 CHICAGO PARK DISTRICT Required Supplementary Information Schedule of Funding in Progress (Unaudited) December 31, 2015 (Amounts are in thousands of dollars)

Schedule of Funding Progress ― Healthcare Plan Actuarial accrued Unfunded UAAL as a liability actuarial percent of Actuarial (AAL) accrued AAL Annual annual Actuarial value of -proj. unit liability funding covered covered valuation assets of credit (U AAL) ratio payroll payroll date (a) (b) (b-a) (a/b) (c) ((b-a)/c) January 1, 2015 $ - $ 49,840 $ 49,840 0.0%$ 118,987 41.9% January 1, 2013 - $ 31,256 31,256 0.0%$ 130,165 24.0% January 1, 2011 - 39,976 39,976 0.0% 123,762 32.3%

FINANCIAL SECTION Page 76

APPENDIX D REPORT OF THE CONSULTING ACTUARY ON THE DISTRICT RETIREMENT FUND

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Park Employees' Annuity and Benefit Fund of Chicago Actuarial Valuation and Review as of December 31, 2015

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1RUWK:DFNHU'ULYH6XLWH&KLFDJR,/ 7ZZZVHJDOFRFRP May 31, 2016 Board of Trustees Park Employees' Annuity and Benefit Fund of Chicago 55 East Monroe Street, Suite 2720 Chicago, Illinois 60603 Dear Board Members: We are pleased to submit this annual Actuarial Valuation and Review as of December 31, 2015. It summarizes the actuarial data used in the valuation, establishes the net pension liability under Governmental Accounting Standards Board (GASB) Statement No. 67 and the funding requirements for the fiscal year ending December 31, 2016, and analyzes the preceding year's experience. This report was prepared in accordance with generally accepted actuarial principles and practices at the request of the Board to assist in administering the Park Employees’ Annuity and Benefit Fund of Chicago. The census information and financial information on which our calculations were based was prepared by the Fund staff. That assistance is gratefully acknowledged. We have not subjected the census data to any auditing procedures, but have examined the data for reasonableness and consistency with the prior year’s data. The actuarial assumptions and methods are set by the Board of Trustees, based upon recommendations made by the Fund’s actuary. The assumptions and methods used for the December 31, 2015 actuarial valuation were based on an experience analysis covering the five-year period ending June 30, 2012 and were adopted by the Board, effective for the December 31, 2012 valuation. These actuarial assumptions and methods comply with the parameters for disclosure in GASB Statement No. 67. Further, in our opinion, the assumptions as approved by the Board are reasonable related to the experience of the Fund. The investment return assumption is based on the Fund being invested according to the target asset allocation in the Investment Policy Statement. To the extent that the liquidation of assets to pay benefit payments and expenses requires a shift in investment allocation to more liquid, lower return asset classes, a lower discount rate may be required in the future. The funding policy of the Fund is to have contributions sufficient to amortize the unfunded liability over the 30-year period ending December 31, 2042. For Fiscal 2016, employer contributions come from a property tax levied by the District equal to

the total amount of contributions made by employees in the calendar year two years prior to the year of the levy, multiplied by 1.7. The 1.7 factor is known as the tax multiple. The tax multiple increases to 2.3 for 2017 and 2018, and to 2.9 for 2019 and thereafter. Once the funded ratio reaches 90%, the employer contribution will be the lesser of 2.9 times the employee contributions for the fiscal year two years prior, or the amount needed to maintain a funded ratio of 90%. Additional employer contributions will be made in the amounts of $12,500,000 in 2016 and $50,000,000 in 2019.

This report includes the following schedules for the financial section of the Comprehensive Annual Financial Report: Schedule of Changes in Employer’s Net Pension Liability Schedule of Employer’s Net Pension Liability Schedule of Employer Contributions The actuarial section of the Comprehensive Annual Financial Report includes this actuarial valuation report replicated in its entirety. The measurements shown in this actuarial valuation may not be applicable for other purposes. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements; and changes in plan provisions or applicable law. The actuarial calculations were directed under our supervision. We are members of the American Academy of Actuaries and we meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion herein. To the best of our knowledge, the information supplied in the actuarial valuation is complete and accurate. Further, in our opinion, the assumptions as approved by the Board are reasonably related to the experience of and the expectations for the Fund. We look forward to reviewing this report at your next meeting and to answering any questions. Sincerely,

Segal Consulting, a Member of The Segal Group, Inc.

By: ______Kim Nicholl, FSA, MAAA, EA, FCA Matthew A. Strom, FSA, MAAA, EA Senior Vice President and Actuary Vice President and Actuary

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SUPPLEMENTAL REPORTING VALUATION SUMMARY VALUATION RESULTS INFORMATION INFORMATION GASB INFORMATION Purpose ...... i A. Member Data ...... 1 EXHIBIT A EXHIBIT I EXHIBIT 1 Significant Issues in B. Financial Information .. 4 Table of Fund Summary of Actuarial Net Pension Liability ... 44 Coverage ...... 13 Valuation Results ...... 27 Valuation Year ...... i C. Actuarial Experience.... 6 EXHIBIT 2 EXHIBIT B EXHIBIT II Schedule of Changes in Summary of Key D. Development of Participants in Active Schedule of Employer Net Pension Liability ... 46 Valuation Results ...... iv Employer Costs ...... 11 Service as of Contributions ...... 29 Important Information EXHIBIT 3 December 31, 2015 ...... 14 about Actuarial EXHIBIT III Schedule of Employer Valuations ...... v EXHIBIT C Schedule of Funding Contribution – Last Reconciliation of Progress ...... 30 Ten Fiscal Years ...... 47 Participant Data ...... 15 EXHIBIT IV EXHIBIT D Solvency Test at Schedule of Pensioners December 31…...... 31 and Beneficiaries EXHIBIT V Added to and Removed Projection of from Rolls ...... 16 Contributions, EXHIBIT E Liabilities, and Summary Statement of Assets ...... 32 Income and Expenses EXHIBIT VI on a Fair Value Basis Actuarial Assumptions at December 31 ...... 17 and Actuarial Cost EXHIBIT F Method ...... 35 Summary Statement of EXHIBIT VII Fund Assets at Summary of Plan December 31 ...... 18 Provisions ...... 39 EXHIBIT G Development of the Fund Through December 31, 2015 ...... 19 EXHIBIT H Development of Unfunded Actuarial Accrued Liability ...... 20 EXHIBIT I Definitions of Pension Terms ...... 21

SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

Purpose

This report has been prepared by Segal Consulting to present a valuation of the Park Employees' Annuity and Benefit Fund of Chicago (the Fund) as of December 31, 2015. The valuation was performed to determine whether the assets and contributions are sufficient to provide the prescribed benefits. The contribution requirements presented in this report are based on:

The benefit provisions of the Fund, as administered by the Board; The characteristics of covered active participants, inactive vested participants, and retired participants and beneficiaries as of December 31, 2015, provided by the Fund staff; The assets of the Fund as of December 31, 2015, provided by the Fund staff; Economic assumptions regarding future salary increases and investment earnings; and Other actuarial assumptions, regarding employee terminations, retirement, death, etc.

Significant Issues in Valuation Year

The following key findings were the result of this actuarial valuation:

1. This valuation includes the benefit and funding provisions contained in Public Act 98-0622. The constitutionality of Public Act 98-0622 is currently being challenged in the court of law. If Public Act 98-0622 is ruled unconstitutional (either in whole or in part), the liability of the Fund will immediately increase, projected contributions could decrease, and the projected solvency of the Fund will be in jeopardy. 2. The funded ratio based on the actuarial value of assets over the actuarial accrued liability as of December 31, 2015, is 43.5%, compared to 43.7% as of December 31, 2014. This ratio is a measure of funding status, its history is a measure of funding progress. Using the fair value of assets, the funded ratio as of December 31, 2015, is 43.2%, compared to 45.9% as of December 31, 2014. 3. Employer contributions to the Fund come from a tax levied upon all taxable property in the City of Chicago. The amount of tax that is levied is 1.7 times the amount of employee contributions made two years prior. The 1.7 factor is known as the tax multiple. As shown in Chart 13, for the fiscal year beginning January 1, 2016, the actuarially determined contribution amount (ADC) is $37,130,268. Based on the 1.7 tax multiple, and using the Fund’s assumption of 3% loss on collections, we have estimated the employer contribution for the fiscal year beginning January 1, 2016, to be $17,735,701. Compared to the ADC of $37,130,268, the contribution deficiency is

i SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

$19,394,567 as of January 1, 2016. Reflecting the additional fiscal 2016 scheduled contribution of $12,500,000 lowers the deficiency to $6,894,567. Each year of a contribution deficiency leads to an increased deficiency in all future years. 4. For the year ended December 31, 2015, Segal has determined that the asset return on a fair value basis was 2.2%. After gradual recognition of investment gains and losses under the actuarial smoothing method, the actuarial rate of return was 8.2%. This represents an experience gain when compared to the assumed rate of 7.50%. As of December 31, 2015, the actuarial value of assets ($395.7 million) represents 100.6% of the fair value ($393.2 million). 5. The portion of deferred investment gains and losses recognized in the calculation of the December 31, 2015, actuarial value of assets resulted in a gain of $2,629,339. Additionally, the demographic and liability experience resulted in a $529,175 loss. 6. The total unrecognized investment loss as of December 31, 2015, is $2,496,768. This investment loss will be recognized in the determination of the actuarial value of assets for funding purposes in the next few years, to the extent it is not offset by recognition of investment gains derived from future experience. This implies that earning the assumed rate of investment return of 7.50% per year (net of expenses) on a fair value basis will result in investment losses on the actuarial value of assets in the next few years. Therefore, if the actual fair value return is equal to the assumed 7.50% rate and all other actuarial assumptions are met, the contribution requirements would increase in each of the next few years. 7. As mentioned above, the current method used to determine the actuarial value of assets yields an amount that is 100.6% of the fair value of assets as of December 31, 2015. Guidelines in Actuarial Standard of Practice No. 44 (Selection and Use of Asset Valuation Methods for Pension Valuations) recommend that asset values fall within a reasonable range around the corresponding fair value. We believe the actuarial asset method currently complies with these guidelines. 8. The Governmental Accounting Standards Board (GASB) approved two new Statements affecting the reporting of pension liabilities for accounting purposes. Statement 67 replaced Statement 25 and is for plan reporting. Statement 68 replaces Statement 27 and is for employer reporting. Statement 67 was effective with the fiscal year ended December 31, 2014, for plan reporting. Statement 68 is effective with the fiscal year ending December 31, 2015, for employer reporting. The information contained in this valuation is intended to be used (along with other information) in order to comply with both Statements 67 and 68. 9. The net pension liability (NPL) is equal to the difference between the Total Pension Liability (TPL) and the Plan’s fiduciary net position. The Plan’s fiduciary net position is equal to the fair value of assets. The NPL as of December 31, 2015, is $517,105,022.

ii SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

10.If Public Act 98-0622 is ruled unconstitutional, the TPL and NPL measures would increase substantially, primarily as a result of the lower discount rate that would be required due to the blended discount rate calculation under paragraphs 44 and 45 of Statement 67. 11.In November 2014, the Society of Actuaries Retirement Plans Experience Committee published the RP-2014 Mortality Tables Report, which includes mortality experience covering the years 2004 through 2008. The current Fund post- retirement mortality assumption was studied recently in 2012 as part of a five-year experience analysis. We considered whether the new RP-2014 mortality tables should be used in this December 31, 2015, actuarial valuation, but given that the Fund has experienced mortality gains over the past several years, we were inclined to evaluate the applicability of the RP-2014 tables relative to the Fund and in the context of all the other demographic assumptions as part of the experience study planned for 2017. 12.This actuarial report as of December 31, 2015, is based on financial data as of that date. Changes in the value of assets subsequent to that date are not reflected. Declines in asset values will increase the cost of the plan, while increases in asset values (in excess of expected) will decrease the cost of the plan.

iii SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

Summary of Key Valuation Results

2016 2015 Contributions for fiscal year beginning: Actuarially determined contribution requirement $37,130,268 $36,273,994 Estimated employer contributions (provided by the Fund, reflecting 3% 30,235,701 29,936,105 loss on collections), including supplemental contribution of $12,500,000 due in 2015 and 2016 Actual employer contribution -- 30,588,976 Funding elements for fiscal year beginning: Normal cost, including administrative expenses $2,066,718 $2,338,848 Fair value of assets 393,155,338 413,421,716 Actuarial value of assets 395,652,106 393,762,692 Actuarial accrued liability 910,260,360 900,840,617 Unfunded actuarial accrued liability 514,608,254 507,077,925 Funded ratio 43.47% 43.71% GASB Information: Discount rate 7.50% 7.50% Total pension liability $910,260,360 $900,840,617 Plan fiduciary net position 393,155,338 413,421,716 Net pension liability 517,105,022 487,418,901 Plan fiduciary net position as a percentage of total pension liability 43.19% 45.89% Demographic data for plan year beginning: Number of retired participants and beneficiaries 2,876 2,891 Number of vested former participants 145 147 Number of active participants 3,063 2,973 Total salary supplied by the Fund $126,294,812 $120,376,477 Average salary 41,232 40,490

iv SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

Important Information About Actuarial Valuations

An actuarial valuation is a budgeting tool with respect to the financing of future projected benefit obligations. It is an estimated forecast – the actual long-term cost of the Fund will be determined by the actual benefits and expenses paid and the actual investment experience of the Fund.

In order to prepare a valuation, Segal Consulting (“Segal”) relies on a number of input items. These include:

Plan of benefits Plan provisions define the rules that will be used to determine benefit payments, and those rules, or the interpretation of them, may change over time. Even where they appear precise, outside factors may change how they operate. It is important to keep Segal informed with respect to plan provisions and administrative procedures, and to review the plan summary included in our report to confirm that Segal has correctly interpreted the plan of benefits. Participant data An actuarial valuation for the Fund is based on data provided to the actuary by Fund staff. Segal does not audit such data for completeness or accuracy, other than reviewing it for obvious inconsistencies compared to prior data and other information that appears unreasonable. It is important for Segal to receive the best possible data and to be informed about any known incomplete or inaccurate data. Assets The valuation is based on the fair value of assets as of the valuation date, as provided by Fund staff, and uses an “actuarial value of assets” that differs from fair value to gradually reflect year-to-year changes in the fair value of assets in determining the contribution requirements. Actuarial assumptions In preparing an actuarial valuation, Segal projects the benefits to be paid to existing plan members for the rest of their lives and the lives of their beneficiaries. This projection requires actuarial assumptions as to the probability of death, disability, withdrawal, and retirement of each member for each year. In addition, the benefits projected to be paid for each of those events in each future year reflect actuarial assumptions as to salary increases and cost-of-living adjustments. The projected benefits are then discounted to a present value, based on the assumed rate of return that is expected to be achieved on the Fund’s assets. There is a reasonable range for each assumption used in the projection and the results may vary materially based on which assumptions are selected. It is important for any user of an actuarial valuation to understand this concept. Actuarial assumptions are periodically reviewed to ensure that future valuations reflect emerging plan experience. While future changes in actuarial assumptions may have a significant impact on the reported results, that does not mean that the previous assumptions were unreasonable.

v SECTION 1: Valuation Summary for the Park Employees' Annuity and Benefit Fund of Chicago

The user of Segal’s actuarial valuation (or other actuarial calculations) should keep the following in mind:

The actuarial valuation is prepared at the request of the Board. Segal is not responsible for the use or misuse of its report, particularly by any other party. An actuarial valuation is a measurement of the Fund’s assets and liabilities at a specific date. Accordingly, except where otherwise noted, Segal did not perform an analysis of the potential range of future financial measures. The actual long-term cost of the Fund will be determined by the actual benefits and expenses paid and the actual investment experience of the Fund. If the Board is aware of any event or trend that was not considered in the valuation that may materially change the results of the valuation, Segal should be advised, so that we can evaluate it. Segal does not provide investment, legal, accounting, or tax advice. Segal’s valuation is based on our understanding of applicable guidance in these areas and of the Fund’s provisions, but they may be subject to alternative interpretations. The Board should look to their other advisors for expertise in these areas. The measurements shown in this actuarial valuation may not be applicable for other purposes. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period); and changes in plan provisions or applicable law.

As Segal has no discretionary authority with respect to the management or assets of the Fund, it is not a fiduciary in its capacity as actuaries and consultants with respect to the Fund.

vi SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

A. MEMBER DATA The Actuarial Valuation and Review considers the number This section presents a summary of significant statistical and demographic characteristics of covered members, data on these participant groups. including active members, inactive members, retirees and beneficiaries. More detailed information for this valuation year and the preceding valuation can be found in Section 3, Exhibits A, B, and C.

A historical perspective of CHART 1 how the member population has changed Member Population: 2007 – 2015 over the past ten valuations can be seen in Ratio of Actives this chart. Active Vested Terminated Retirees to Retirees and Census Date Members Members* and Beneficiaries Beneficiaries

June 30, 2007 3,040 162 3,056 0.99

June 30, 2008 3,031 161 3,013 1.01

June 30, 2009 2,865 159 3,013 0.95

June 30, 2010 2,816 160 2,956 0.95

June 30, 2011 2,795 141 2,913 0.96

June 30, 2012 2,977 153 2,921 1.02

December 31, 2012 3,053 152 2,906 1.05

December 31, 2013 3,076 148 2,904 1.06

December 31, 2014 2,973 147 2,891 1.03

December 31, 2015 3,063 145 2,876 1.07

*Excludes terminated members due a refund of employee contributions 1 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Active Members Inactive Participants Plan costs are affected by the age, years of service and In this year’s valuation, there were 145 members with a payroll of active members. In this year’s valuation, there vested right to a deferred or immediate vested benefit. were 3,063 active members with an average age of 41.8, average years of service of 11.1 years and average salary of In addition, there were 3,976 members entitled to a return $41,232. The 2,973 active participants in the prior of their employee contributions. valuation had an average age of 41.7, average years of service of 10.9 years and average salary of $40,490.

These graphs show a CHART 2 CHART 3 distribution of active members by age and by Distribution of Active Members by Age as of Distribution of Active Members by Years of Service as of years of service. December 31, 2015 December 31, 2015

2 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Retirees and Beneficiaries As of December 31, 2015, 2,097 retirees, 767 beneficiaries, and 12 dependent children were receiving total monthly benefits of $5,673,167. For comparison, in the previous valuation, there were 2,101 retirees, 773 beneficiaries, and 17 dependent children receiving monthly benefits of $5,689,318.

These graphs show a CHART 4 CHART 5 distribution of the current retirees based on their Distribution of Retirees by Monthly Amount as of Distribution of Retirees by Age as of December 31, 2015 monthly amount and age. December 31, 2015

3 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

B. FINANCIAL INFORMATION It is desirable to have level and predictable plan costs from The amount of the adjustment to recognize fair value is one year to the next. For this reason, the Board has treated as income, which may be positive or negative. approved an asset valuation method that gradually adjusts Realized and unrealized gains and losses are treated to fair value. Under this valuation method, the full value of equally and, therefore, the sale of assets has no immediate market fluctuations is not recognized in a single year and, effect on the actuarial value. as a result, the asset value and the plan costs are more stable.

The chart shows the CHART 6 determination of the Determination of Actuarial Value of Assets for Fiscal Years Ended December 31 actuarial value of assets as of the valuation date. 2015 2014

1. Actuarial value of assets as of prior valuation date $393,762,662 $404,292,435

2. Employer and employee contributions and other income 42,957,762 22,085,614

3. Benefits and expenses 72,135,716 71,994,873

4. Expected investment income 28,438,026 28,450,335

5. Total investment income, including income for securities lending 8,911,576 27,562,296

6. Investment gain/(loss): (5) – (4) -19,526,450 -888,039

7. Expected actuarial value of assets: (1) + (2) - (3) + (4) 393,022,734 382,833,511

% % 8. Calculation of unrecognized return Original Amount* Recognized Recognized

(a) Year ended December 31, 2015 -$19,526,450 20% -$3,905,290 -- --

(b) Year ended December 31, 2014 -888,039 20% -177,608 20% -$177,608

(d) 6-month period ended December 31, 2012 7,796,423 20% 1,559,285 20% 1,559,285

(e) Year ended June 30, 2012 -33,453,504 20% -6,690,701 20% -6,690,701

(f) Year ended June 30, 2011 45,124,290 10%** 4,512,429 20% 9,024,858

(g) Year ended June 30, 2010 -1,179,100 10%** -117,910

(h) Total recognized return 2,629,372 10,929,181

9. Actuarial value of assets as of current valuation date: (7) + (8h) $395,652,106 $393,762,692

* Total return minus expected return on actuarial value

** 10% was recognized, instead of 20%, due to the short fiscal year ended December 31, 2012 in order to maintain a 5-year smoothing period.

4 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Both the actuarial value and fair value of assets are representations of the fund’s financial status. As investment gains and losses are gradually taken into account, the actuarial value of assets tracks the fair value of assets. The actuarial asset value is significant because the Fund’s liabilities are compared to these assets to determine what portion, if any, remains unfunded. Amortization of the unfunded actuarial accrued liability is an important element in determining the contribution requirement.

This chart shows the CHART 7 change in the actuarial value of assets versus the Actuarial Value of Assets vs. Fair Value of Assets as of June 30, 2007 – December 31, 2015 fair value over the past ten valuation dates.

0LOOLRQV Actuarial Value

Fair Value -XQ 'HF 'HF 'HF 'HF

5 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

C. ACTUARIAL EXPERIENCE To calculate the actuarially determined contribution development and that, over the long term, experience will requirement, assumptions are made about future events that return to the original assumptions. For contribution affect the amount and timing of benefits to be paid and requirements to remain stable, assumptions should assets to be accumulated. Each year actual experience is approximate experience. measured against the assumptions. If overall experience is more favorable than anticipated (an actuarial gain), the If assumptions are changed, the contribution requirement is contribution requirement will decrease from the previous adjusted to take into account a change in experience year. On the other hand, the contribution requirement will anticipated for all future years. increase if overall actuarial experience is less favorable The total gain is $2,156,301: $2,629,339 from investment than expected (an actuarial loss). gains and $473,038 in losses from all other sources. The Taking account of experience gains or losses in one year net experience variation from individual sources other than without making a change in assumptions reflects the belief investments was 0.1% of the actuarial accrued liability. A that the single year’s experience was a short-term discussion of the major components of the actuarial experience is on the following pages.

This chart provides a CHART 8 summary of the actuarial experience during the past Actuarial Experience for Year Ended December 31, 2015 year.

1. Net gain from investments* $2,629,339

2. Net gain from administrative expenses 56,137

3. Net loss from other experience** -529,175

4. Net experience gain: (1) + (2) + (3) $2,156,301

* Details in Chart 9 ** Details in Chart 12

6 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Investment Rate of Return Since the actual return for the year was greater than the A major component of projected asset growth is the assumed return, the Fund experienced an actuarial gain assumed rate of return. The assumed return should during the fiscal year ended December 31, 2015, with represent the expected long-term rate of return, based on regard to its investments. the the Fund’s investment policy. For valuation purposes, the assumed rate of return on the actuarial value of assets is 7.50%. The actual rate of return on an actuarial basis for the year ended December 31, 2015, was 8.19%.

This chart shows the CHART 9 gain/(loss) due to investment experience. Actuarial Value Investment Experience for Year Ended December 31, 2015

1. Actual return $31,067,368

2. Average value of assets 379,173,715

3. Actual rate of return: (1) (2) 8.19%

4. Assumed rate of return 7.50%

5. Expected return: (2) x (4) $28,438,029

6. Actuarial gain: (1) – (5) $2,629,339

7 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Because actuarial planning is long term, it is useful to see how the assumed investment rate of return has followed actual experience over time. The chart below shows the rate of return on an actuarial basis compared to the fair value investment return for the last ten valuation years, including five-year and ten-year averages.

Chart 10 Investment Return

Fiscal Year Ended Fair Value Actuarial Value

June 30, 2007 16.2% 9.3% June 30, 2008 -3.0% 8.1% June 30, 2009 -18.6% 2.0% June 30, 2010 11.3% 1.5% June 30, 2011 21.0% 3.1% June 30, 2012 0.9%* -0.6%* December 31, 2012 6.3%* 1.0%* December 31, 2013 16.9%** 6.5%* December 31, 2014 6.9%** 10.4%* December 31, 2015 1.9%** 8.2%* Average Returns Last 5 valuation years: 7.2% 5.6% Last 10 valuation years: 5.7% 5.1% * As determined by Segal **As determined by Investment Consultant

8 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Subsection B described the actuarial asset valuation Administrative Expenses method that gradually takes into account fluctuations in the Administrative expenses for the year ended December 31, fair value rate of return. The effect of this is to stabilize the 2015 totaled $1,533,700 compared to the assumption of actuarial rate of return, which contributes to leveling the $1,531,773. This resulted in a gain of $56,137 for the year actuarially required contribution. when adjusted for timing.

This chart illustrates how CHART 11 this leveling effect has actually worked over the Fair and Actuarial Rates of Return for Years Ended June 30, 2007 – December 31, 2015 years 2007 - 2015.

Actuarial Value Fair Value -XQ 'HF 'HF 'HF 'HF

9 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

Other Experience the number of disability retirements, and There are other differences between the expected and the actual experience that appear when the new valuation is salary increases different than assumed. compared with the projections from the previous valuation. The net loss from this other experience for the year ended These include: December 31, 2015, amounted to $529,175, which is 0.1% of the actuarial accrued liability. the extent of turnover among the participants, A brief summary of the demographic gain/(loss) retirement experience (earlier or later than expected), experience of the Fund for the year ended December 31, mortality (more or fewer deaths than expected), 2015 is shown in the chart below.

The chart shows elements CHART 12 of the experience gain/(loss) for the most Experience Due to Changes in Demographics for Year Ended December 31, 2015 recent year.

1. Turnover -$813,251

2. Retirement -1,214,810

3. Experience among retired members and beneficiaries related to mortality and benefit amount 1,782,699

4. Salary/service increase for continuing actives -765,745

5. Other 481,932

6. Total -$529,175

10 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

D. DEVELOPMENT OF EMPLOYER COSTS The amount of actuarially determined contribution is The actuarially determined contribution had been based on comprised of an employer normal cost payment and a a 30-year, level percentage of pay amortization of the payment on the unfunded actuarial accrued liability. This unfunded actuarial accrued liability. In April 2013, the total amount is then divided by the projected payroll for Board of Trustees elected to close the 30-year amortization active members to determine the actuarially determined period, which ends on December 31, 2042. As of contribution of 28.29% of payroll. January 1, 2016, there are 27 years remaining on the amortization period.

The chart compares this CHART 13 valuation’s actuarially determined contribution Actuarially Determined Contribution with the prior valuation.

Year Beginning January 1

2016 2015

% of % of Amount Payroll Amount Payroll

1. Total normal cost $13,763,768 10.49% $13,417,795 10.75%

2. Administrative expenses 1,558,218 1.19% 1,531,772 1.22%

3. Expected employee contributions -13,255,268 -10.10% -12,610,719 -10.10%

4. Employer normal cost: (1) + (2) + (3) $2,066,718 1.57% $2,338,848 1.87%

5. Employer normal cost, adjusted for timing* 2,142,355 1.63% 2,424,445 1.94%

6. Actuarial accrued liability 910,260,360 900,840,617

7. Actuarial value of assets 395,652,106 393,762,692

8. Unfunded actuarial accrued liability: (6) - (7) $514,608,254 $507,077,925

9. Payment on unfunded actuarial accrued liability 34,987,913 26.66% 33,849,549 27.12%

10. Actuarially determined contribution, adjusted for timing*: (5) + (9) $37,130,268 28.29% $36,273,994 29.06%

11. Projected payroll $131,229,459 $124,822,858

*Recommended contributions are assumed to be paid at the middle of every month.

11 SECTION 2: Valuation Results for the Park Employees' Annuity and Benefit Fund of Chicago

The actuarially determined contribution as of January 1, 2016, is based on all of the data described in the previous sections, the actuarial assumptions described in Section 4, and the Plan provisions adopted at the time of preparation of the Actuarial Valuation. They include all changes affecting future costs, adopted benefit changes, actuarial gains and losses and changes in the actuarial assumptions.

The chart reconciles the CHART 14 actuarially determined contribution from the Reconciliation of Actuarially Determined Contribution from January 1, 2015 to January 1, 2016 prior valuation to the

amount determined in Actuarially Determined Contribution as of January 1, 2015 $36,273,994

this valuation. Effect of expected change in amortization payment due to payroll growth $930,863

Effect of change in administrative expense assumption 27,413

Effect of change in other actuarial assumptions 0

Effect of contributions less than recommended contribution 439,257

Effect of investment gain -170,868

Effect of other gains and losses on accrued liability 30,740

Effect of net other changes -401,131

Total change $856,274

Actuarially Determined Contribution as of January 1, 2016 $37,130,268

12 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT A Table of Fund Coverage

December 31 Change From Category 2015 2014 Prior Year Active members in valuation: Number 3,063 2,973 3.0% Average age 41.8 41.9 N/A Average years of service 11.1 10.9 N/A Total salary supplied by the Fund $126,294,812 $120,376,477 4.9% Average salary $41,232 $40,490 1.8% Total active vested members with at least 10 years of service 1,334 1,280 4.2% Vested terminated members 145 147 -1.4% Non-vested terminated members eligible for a return of contributions 3,976 3,876 2.6% Service retirees: Number in pay status 2,097 2,101 -0.2% Average age 71.8 71.1 N/A Average monthly benefit $2,224 $2,238 -0.6% Beneficiaries (including children) in pay status: Number in pay status 779 790 -1.4% Average age 77.6 76.9 N/A Average monthly benefit $1,271 $1,230 3.3% Total number of members 10,060 9,887 1.7%

13 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT B Participants in Active Service as of December 31, 2015 By Age, Years of Service, and Average Payroll

Years of Service Age Total 0-4 5-9 10-14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 & over Under 25 419 255 164 ------$19,870 $18,848 $21,459 ------25 - 29 431 185 198 48 ------26,627 26,521 26,431 $27,844 ------30 - 34 328 112 98 109 9 ------38,995 36,389 39,439 41,091 $41,201 ------35 - 39 266 91 56 58 60 1 ------48,434 48,338 46,695 48,495 50,089 $51,809 ------40 - 44 281 84 54 57 65 21 ------50,088 47,271 49,437 48,337 52,647 59,863 ------45 - 49 347 45 56 93 83 44 25 1 - - - - 48,773 43,632 38,802 48,020 50,570 58,663 $59,662 $51,931 - - - - 50 - 54 352 51 59 63 97 27 38 17 - - - - 50,791 37,549 37,008 43,277 57,633 66,908 63,335 73,512 - - - - 55 - 59 295 40 33 45 75 28 33 29 12 - - 49,660 33,566 35,803 42,624 51,506 44,099 72,413 69,171 $59,517 - - 60 - 64 214 25 25 32 68 21 26 6 7 4 52,008 27,890 48,804 45,374 53,172 59,779 70,202 61,692 65,599 $58,660 65 - 69 85 10 6 17 18 13 9 6 3 3 46,377 23,990 50,359 37,498 47,008 52,027 63,487 52,806 64,484 52,781 70 & over 45 3 2 6 10 6 11 4 - - 3 49,341 50,106 24,605 56,101 43,946 25,349 63,401 66,513 - - 43,067 Total 3,063 901 751 528 485 161 142 63 22 10 $41,232 $31,594 $33,305 $43,409 $52,268 $55,995 $66,070 $67,629 $62,129 $52,218

14 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT C Reconciliation of Member Data

Active Inactive Members Members Retirees Beneficiaries Total Number as of December 31, 2014 2,973 4,023 2,101 790 9,887 New participants 407 N/A N/A N/A 407 Terminations (145) 145 0 0 0 Retirements (59) (25) 84 N/A 0 New disabilities 0 0 N/A N/A 0 Died with beneficiary (4) 0 (40) 40 (4) Died without beneficiary (1) (3) (48) (46) (98) Refunds (119) (24) 0 0 (143) Rehire 10 (10) 0 N/A 0 Certain period expired N/A N/A 0 (5) (5) Data adjustments 1 15 0 0 16 Number as of December 31, 2015 3,063 4,121 2,097 779 10,060

15 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT D Schedule of Pensioners and Beneficiaries Added to and Removed from Rolls

Added to Rolls Removed from Rolls Rolls – End of Year % Increase in Average Fiscal Annual Annual Annual Avg. Annual Annual Year Number Allowances Number Allowances Number* Allowances Allowances Allowances 2006 117 $3,304,140 184 $2,631,780 3,092 $56,086,841 3.4 $18,139 2007 112 3,487,985 159 1,927,814 3,045 56,974,652 3.2 18,711 2008 127 3,714,283 177 2,321,096 2,995 58,367,839 4.2 19,488 2009 137 4,920,931 136 2,637,590 2,996 60,651,180 3.9 20,244 2010 113 3,442,389 167 2,903,979 2,942 61,189,590 2.7 20,799 2011 124 3,735,377 167 2,828,495 2,899 62,096,472 3.0 21,420 6/2012 167 4,681,195 158 2,797,326 2,908 63,980,341 2.7 22,001 12/2012 71 2,470,960 91** 1,290,060 2,888 65,161,241 2.6 22,563 12/2013 147 4,594,883 147 2,788,285 2,888 66,967,839 2.8 23,188 12/2014 126 4,085,581 138 2,781,597 2,876 68,271,823 2.4 23,738 12/2015 94 1,823,238 106 2,271,591 2,864 67,823,470 -0.7 23,681

* Does not include child beneficiaries receiving a pension.

** Includes removal of 17 QDROs for participant count purposes.

16 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT E Summary Statement of Income and Expenses on a Fair Value Basis at Fiscal Year Ended December 31

2015 2014 Net position at fair value at the beginning of the year $413,421,716 $435,768,679 Contribution income: Employer contributions $30,588,976 $11,225,438 Employee contributions 12,368,636 10,831,434 Less administrative expenses -1,533,700 -1,458,831 Net contribution income 41,423,912 20,598,041 Securities lending income 87,963 71,776 Other income 150 28,742 Investment income: Interest, dividends and other income $5,571,724 $5,203,367 Asset appreciation 5,476,079 24,707,166 Less investment and administrative fees -2,224,190 -2,420,013 Net investment income 8,823,613 27,490,520 Total income available for benefits $50,335,638 $48,189,079 Less benefit payments: Annuity payments -$67,935,347 -$67,206,100 Disability & death -618,494 -600,551 Refund of contributions -2,048,175 -2,729,391 Net benefit payments -$70,602,016 -$70,536,042 Change in reserve for future benefits -$20,266,378 -$22,346,963 Net position at fair value at the end of the year $393,155,338 $413,421,716

17 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT F Summary Statement of Fund Assets at Fiscal Year Ended December 31

2015 2014 Accounts receivable $20,420,057 $12,297,043 Investments, at fair value: Collective investment funds $93,042,804 $100,312,592 Bonds 62,725,711 69,958,140 Common and preferred stocks 53,062,089 60,342,493 Real estate 41,728,500 46,031,161 Private equity partnerships 39,901,128 50,163,093 Hedged equity 23,565,871 35,663,184 Infrastructure 20,826,213 0 Mutual funds 16,017,830 12,613,552 Foreign common stocks 13,620,861 0 Short-term investments 4,818,526 22,968,749 Total investments at fair value 369,309,533 398,052,964 Invested securities lending collateral 45,712,100 45,579,952 Prepaid annuity benefits 4,308,029 4,190,601 Furniture and fixtures, net 65,251 40,335 Prepaid expenses 65,046 60,721 Total assets $439,880,016 $460,221,616 Less accounts payable: Accounts payable -$410,862 -$334,969 Accrued benefits payable -405,881 -725,214 Securities lending collateral -45,712,100 -45,579,952 Due to broker -116,784 -72,743 Deferred rent -79,051 -87,022 Total accounts payable -$46,724,678 -$46,799,900 Net position at fair value $393,155,338 $413,421,716 Net position at actuarial value $395,652,106 $393,762,692

18 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT G Development of the Fund Through December 31, 2015

Actuarial Net Value of Fiscal Year Employer Employee Investment Administrative Benefit Assets at Ended Contributions Contributions Return* Expenses Payments End of Year June 30, 2007 $9,594,593 $9,719,082 $51,140,015 $1,237,899 $58,578,971 $583,295,949 June 30, 2008 8,998,687 10,264,805 45,344,625 1,289,579 59,938,455 586,676,032 June 30, 2009 9,667,765 10,141,146 11,549,827 1,335,180 62,945,073 553,754,517 June 30, 2010 10,829,339 9,829,998 8,194,551 1,465,562 62,560,242 518,582,601 June 30, 2011 10,981,419 9,791,650 15,218,630 1,498,905 63,704,890 489,370,505 June 30, 2012 10,868,361 10,404,827 -2,804,426 1,644,603 65,502,658 440,692,006 December 31, 2012 5,268,363 5,371,084 4,121,362 723,802 33,281,012 421,448,001 December 31, 2013 15,707,814 10,732,730 26,107,300 1,367,443 68,335,967 404,292,435 December 31, 2014 11,225,438 10,831,434 39,408,258 1,458,831 70,536,042 393,762,692 December 31, 2015 30,588,976 12,368,636 31,067,518 1,533,700 70,602,016 395,652,106

* On an actuarial basis, net of investment fees

19 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT H Development of Unfunded Actuarial Accrued Liability

Plan Year Ended December 31

2015 2014 1. Unfunded actuarial accrued liability at beginning of year $507,077,925 $483,730,929 2. Normal cost (including administrative expenses) at beginning of year 14,949,567 14,411,589 3. Total contributions 42,957,612 22,056,872 4. Interest (a) Unfunded actuarial accrued liability and normal cost $39,152,063 $37,360,689 (b) Total contributions 1,457,388 748,304 (c) Total interest: (4a) – (4b) 37,694,675 36,612,385 5. Expected unfunded actuarial accrued liability: (1) + (2) – (3) + (4c) $516,764,555 $512,698,031 6. Changes due to (gain)/loss from: (a) Investments -$2,629,339 -$10,929,182 (b) Demographics and other 473,038 5,309,076 (c) Total changes due to (gain)/loss: (6a) + (6b) -$2,156,301 -$5,620,106 7. Change to due plan amendments 0 0 8. Unfunded accrued liability at end of year: (5) + (6c) + (7) $514,608,254 $507,077,925

20 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT I Definitions of Pension Terms

The following list defines certain technical terms for the convenience of the reader:

Actuarial Accrued Liability For Actives: The equivalent of the accumulated normal costs allocated to the years before the valuation date. Actuarial Accrued Liability For Pensioners: The single-sum value of lifetime benefits to existing pensioners. This sum takes account of life expectancies appropriate to the ages of the pensioners and the interest that the sum is expected to earn before it is entirely paid out in benefits.

Actuarial Cost Method: A procedure allocating the Actuarial Present Value of Future Benefits to various time periods; a method used to determine the Normal Cost and the Actuarial Accrued Liability that are used to determine the actuarially determined contribution.

Actuarial Gainor Actuarial Loss: A measure of the difference between actual experience and that expected based upon a set of Actuarial Assumptions, during the period between two Actuarial Valuation dates. Through the actuarial assumptions, rates of decrements, rates of salary increases, and rates of fund earnings have been forecasted. To the extent that actual experience differs from that assumed, Actuarial Accrued Liabilities emerge which may be the same as forecasted, or may be larger or smaller than projected. Actuarial gains are due to favorable experience, e.g., the Fund's assets earn more than projected, salary increases are less than assumed, members retire later than assumed, etc. Favorable experience means actual results produce actuarial liabilities not as large as projected by the actuarial assumptions. On the other hand, actuarial losses are the result of unfavorable experience, i.e., actual results yield in actuarial liabilities that are larger than projected. Actuarial gains will shorten the time required for funding of the actuarial balance sheet deficiency while actuarial losses will lengthen the funding period.

21 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

Actuarially Equivalent: Of equal actuarial present value, determined as of a given date and based on a given set of Actuarial Assumptions.

Actuarial Present Value (APV): The value of an amount or series of amounts payable or receivable at various times, determined as of a given date by the application of a particular set of Actuarial Assumptions. Each such amount or series of amounts is: a. Adjusted for the probable financial effect of certain intervening events (such as changes in compensation levels, marital status, etc.) b. Multiplied by the probability of the occurrence of an event (such as survival, death, disability, termination of employment, etc.) on which the payment is conditioned, and c. Discounted according to an assumed rate (or rates) of return to reflect the time value of money. Actuarial Present Value of Future Plan Benefits: The Actuarial Present Value of benefit amounts expected to be paid at various future times under a particular set of Actuarial Assumptions, taking into account such items as the effect of advancement in age, anticipated future compensation, and future service credits. The Actuarial Present Value of Future Plan Benefits includes the liabilities for active members, retired members, beneficiaries receiving benefits, and inactive members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would be provide sufficient assets to pay all projected benefits and expenses when due.

Actuarial Valuation: The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB, such as the Actuarially Determined Contribution (ADC) and the Net Pension Liability (NPL).

Actuarial Value of Assets: The value of the Fund’s assets as of a given date, used by the actuary for valuation purposes. This may be the market or fair value of plan assets, but commonly plans use a smoothed value in order to reduce the year-to-year volatility of calculated results, such as the funded ratio and the ADC. 22 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

Actuarially Determined: Values that have been determined utilizing the principles of actuarial science. An actuarially determined value is derived by application of the appropriate actuarial assumptions to specified values determined by provisions of the law. Actuarially Determined Contribution (ADC): The employer’s periodic required contributions, expressed as a dollar amount or a percentage of covered plan compensation, determined under the Fund’s funding policy. The ADC consists of the Employer Normal Cost and the Amortization Payment.

Amortization Method: A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the Amortization Payment is one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the assumed rate at which total covered payroll of all active members will increase. Amortization Payment: The portion of the pension plan contribution, or ADC, that is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability.

Assumptions or Actuarial Assumptions: The estimates on which the cost of the Fund is calculated including: (a) Investment return - the rate of investment yield that the Fund will earn over the long-term future; (b) Mortality rates - the death rates of employees and pensioners; life expectancy is based on these rates; (c) Retirement rates - the rate or probability of retirement at a given age; (d) Turnover rates - the rates at which employees of various ages are expected to leave employment for reasons other than death, disability, or retirement; (e) Salary increase rates - the rates of salary increase due to inflation and productivity growth. 23 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

Closed Amortization Period: A specific number of years that is counted down by one each year, and therefore declines to zero with the passage of time. For example, if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc. See Open Amortization Period. Decrements: Those causes/events due to which a member’s status (active-inactive-retiree- beneficiary) changes, that is: death, retirement, disability, or termination. Defined Benefit Plan: A retirement plan in which benefits are defined by a formula applied to the member’s compensation and/or years of service. Defined Contribution Plan: A retirement plan, such as a 401(k) plan, a 403(b) plan, or a 457 plan, in which the contributions to the plan are assigned to an account for each member, the plan’s earnings are allocated to each account, and each member’s benefits are a direct function of the account balance.

Employer Normal Cost: The portion of the Normal Cost to be paid by the employers. This is equal to the Normal Cost less expected member contributions. Experience Study: A periodic review and analysis of the actual experience of the Fund that may lead to a revision of one or more actuarial assumptions. Actual rates of decrement and salary increases are compared to the actuarially assumed values and modified as deemed appropriate by the Actuary. Funded Ratio: The ratio of the actuarial value of assets (AVA) to the actuarial accrued liability (AAL). Plans sometimes calculate a market funded ratio, using the fair value of assets (MVA), rather than the AVA.

24 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

GASB: Governmental Accounting Standards Board. GASB 67 and GASB 68: Governmental Accounting Standards Board Statements No. 67 and No. 68. These are the governmental accounting standards that set the accounting rules for public retirement systems and the employers that sponsor or contribute to them. Statement No. 68 sets the accounting rules for the employers that sponsor or contribute to public retirement systems, while Statement No. 67 sets the rules for the systems themselves.

Investment Return: The rate of earnings of the Fund from its investments, including interest, dividends and capital gain and loss adjustments, computed as a percentage of the average value of the fund. For actuarial purposes, the investment return often reflects a smoothing of the capital gains and losses to avoid significant swings in the value of assets from one year to the next.

Net Pension Liability (NPL): The Net Pension Liability is equal to the Total Pension Liability minus the Plan Fiduciary Net Position. Normal Cost: That portion of the Actuarial Present Value of pension plan benefits and expenses allocated to a valuation year by the Actuarial Cost Method. Any payment in respect of an Unfunded Actuarial Accrued Liability is not part of Normal Cost (see Amortization Payment). For pension plan benefits that are provided in part by employee contributions, Normal Cost refers to the total of employee contributions and employer Normal Cost unless otherwise specifically stated. Open Amortization Period: An open amortization period is one which is used to determine the Amortization Payment but which does not change over time. If the initial period is set as 30 years, the same 30-year period is used in determining the Amortization Period each year. In theory, if an Open Amortization Period with level percentage of payroll is used to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never decrease, but will become smaller each year, in relation to covered payroll, if the actuarial assumptions are realized.

25 SECTION 3: Supplemental Information for the Park Employees' Annuity and Benefit Fund of Chicago

Plan Fiduciary Net Position: Fair value of assets.

Total Pension Liability (TPL): The actuarially accrued liability under the entry age normal cost method and based on the blended discount rate as described in GASB 67 and 68. Unfunded Actuarial Accrued Liability: The excess of the Actuarial Accrued Liability over the Actuarial Value of Assets. This value may be negative in which case it may be expressed as a negative Unfunded Actuarial Accrued Liability, also called the Funding Surplus. Valuation Date or Actuarial Valuation Date: The date as of which the value of assets is determined and as of which the Actuarial Present Value of Future Plan Benefits is determined. The expected benefits to be paid in the future are discounted to this date

26 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT I Summary of Actuarial Valuation Results

The valuation was made with respect to the following data supplied to us: 1. Pensioners as of the valuation date (including 767 beneficiaries and 12 dependent children) 2,876 2. Members inactive as of the valuation date with vested rights 145 3. Members active as of the valuation date 3,063 Fully vested 1,334 Not vested 1,729 4. Other non-vested inactive members as of the valuation date 3,674 The actuarial factors as of the valuation date are as follows: 1. Employer normal cost, including administrative expenses $2,066,718 2. Actuarial accrued liability 910,260,360 Retirees and beneficiaries $625,396,307 Inactive members with vested rights 21,817,615 Active members 263,046,438 3. Actuarial value of assets ($393,155,338 at fair value) 395,652,106 4. Unfunded actuarial accrued liability $514,608,254 5. Funded ratio: (3) ÷ (2) 43.5%

27 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT I (continued) Summary of Actuarial Valuation Results

The determination of the actuarially determined contribution is as follows: 1. Total normal cost $13,763,768 2. Administrative expenses 1,558,218 3. Expected employee contributions -13,255,268 4. Employer normal cost: (1) + (2) + (3) $2,066,718 5. Employer normal cost projected, adjusted for timing 2,142,355 6. Payment on projected unfunded/(overfunded) actuarial accrued liability 34,987,913 7. Total actuarially determined contribution: (5) + (6), adjusted for timing $37,130,268 8. Estimated employer contributions provided by the Fund, reflecting 3% loss on collections and 30,235,701 supplemental contribution of $12,500,000 due in 2016 9. Projected payroll $131,229,459 10. Total actuarially determined contribution as a percentage of projected payroll: (7) ÷ (9) 28.29%

28 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT II Comparison of Employer Contribution to Actuarially Determined Contribution

Actuarially Determined Actual Percentage Fiscal Year Ended Contribution (ADC)* Contributions Contributed June 30, 2007 $14,571,540 $9,594,593 65.8% June 30, 2008 16,073,257 8,998,687 56.0% June 30, 2009 18,285,474 9,667,765 52.9% June 30, 2010 22,399,740 10,829,339 48.3% June 30, 2011 25,319,145 10,981,419 43.4% June 30, 2012 28,051,528 10,868,361 38.7% December 31, 2012 16,786,671 5,268,636 31.4% December 31, 2013 41,834,857 15,707,814 37.5% December 31, 2014 35,307,186 11,225,438 31.8% December 31, 2015 36,273,994 30,588,976 84.3% December 31, 2016 37,130,268 - - - -

*Prior to 2015, this amount was the Annual Required Contribution (ARC)

29 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT III Schedule of Funding Progress

Unfunded/ UAAL as a Actuarial Actuarial (Overfunded) Percentage of Actuarial Value Accrued Liability AAL Funded Covered Covered Valuation of Assets (AAL) (UAAL) Ratio Payroll Payroll* Date (a) (b) (b) - (a) (a) / (b) (c) [(b) - (a)] / (c) 06/30/2007 $583,295,949 $767,930,632 $184,634,683 75.96% $106,601,982 173.20% 06/30/2008 586,676,032 795,379,129 208,703,097 73.76% 111,698,366 186.85% 06/30/2009 553,754,517 823,896,936 270,142,419 67.21% 108,882,742 248.10% 06/30/2010 518,582,601 833,025,948 314,443,347 62.25% 107,361,021 292.88% 06/30/2011 489,370,505 843,943,240 354,572,735 57.99% 107,686,693 329.26% 06/30/2012 440,692,006 866,370,565 425,678,559 50.87% 114,223,909 372.67% 12/31/2012 421,448,001 971,807,222 550,359,221 43.37% 58,231,511 472.56%** 12/31/2013 404,292,435 888,023,364 483,730,929 45.53% 117,781,596 410.70% 12/31/2014 393,762,692 900,840,617 507,077,925 43.71% 118,987,507 426.16% 12/31/2015 395,652,106 910,260,360 514,608,254 43.47% 122,382,584 420.49%

* Not less than zero ** Adjusted for annualized covered payroll

30 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT IV Solvency Test at December 31

12/31/2015 12/31/2014 12/31/2013 12/31/2012 06/30/2012 06/30/2011 1. Actuarial accrued liability (AAL) a. Active member contributions $173,241,768 $169,952,178 $171,065,449 $166,554,660 $158,144,793 $151,828,106 b. Retirees and beneficiaries 625,396,307 625,641,580 621,827,982 662,153,615 599,353,146 583,999,785 c. Active and inactive members (employer financed) 111,622,285 105,246,859 95,129,933 143,098,947 108,872,626 108,115,349 d. Total $910,260,360 $900,840,617 $888,023,364 $971,807,222 $866,370,565 $843,943,240 2. Actuarial value of assets 395,652,106 393,762,692 404,292,435 421,448,001 440,692,006 489,370,505 3. Cumulative portion of AAL covered a. Active member contribution 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% b. Retirees and beneficiaries 35.6% 35.8% 37.5% 38.5% 47.1% 57.8% c. Active and inactive members (employer financed) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

31 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT V Projection of Contributions, Liabilities, and Assets

Based on the results of the December 31, 2015, actuarial valuation, we have projected valuation results for a 40-year period commencing with Fiscal Year 2016.

For purposes of the projections, all assets, contributions, and benefit payments have been included. Our projections of contributions, liabilities, and assets are based on the actuarial assumptions, membership data and benefit provisions that were used for the regular actuarial valuation.

In order to determine projected contributions, liabilities, and assets, certain calculations needed to be made that are not normally required in a regular actuarial valuation. Benefit payout requirements, actuarial liabilities, and payroll were estimated over the 40-year period from 2016 through 2054 by projecting the membership of the Fund over the 40-year period, taking into account the impact of new entrants into the Fund over the 40-year period.

To make the required projections, assumptions needed to be made regarding the age and salary distribution of new entrants as well as the size of the active membership of the Fund. The assumptions regarding the profile of new entrants to the Fund were based on the recent experience of the Fund with regard to new entrants. The size of the active membership of the Fund was assumed to remain constant over the 40-year projection period. The results of our projections are shown on the following pages.

32 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT V (continued) Projection of Contributions, Liabilities, and Assets

$FWXDULDO 8QIXQGHG )LVFDO (PSOR\HH (PSOR\HU 6XSSOHPHQWDO %HQHILW (VWLPDWHG 7RWDO$FWXDULDO 9DOXHRI $FWXDULDO )XQGHG

33 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT V (continued) Projection of Contributions, Liabilities, and Assets

$FWXDULDO 8QIXQGHG )LVFDO (PSOR\HH (PSOR\HU 6XSSOHPHQWDO %HQHILW (VWLPDWHG 7RWDO$FWXDULDO 9DOXHRI $FWXDULDO )XQGHG

34 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT VI Actuarial Assumptions and Actuarial Cost Method

Mortality Rates: The RP-2000 Combined Healthy Mortality Table, set forward 1 year for female participants with generational projection from 2003 using Scale AA (adopted December 31, 2012). The mortality table specified above was determined to contain provision appropriate to reasonably reflect future mortality improvement, based on a review of mortality experience as of the measurement date. Select and ultimate termination rates are based on recent experience of the Fund Termination: (adopted December 31, 2012). Ultimate rates applicable for members with eight or more years of service are shown for sample ages in the table on the next page. Select rates are as follows:

Years of Service Rate (%) 0 - 0.99 15.0 1 - 1.99 13.5 2 - 2.99 12.0 3 - 3.99 11.0 4 - 4.99 10.0 5 - 5.99 9.0 6 - 6.99 8.5 7 - 7.99 8.0

35 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

Ultimate rates:

Age Rate (%) 20 7.0 25 7.0 30 6.0 35 5.0 40 3.5 45 3.3 50 3.0 55 3.0

Retirement Rates: For employees first hired prior to January 1, 2011, rates of retirement for each age from 50 to 75 based on the recent experience of the Fund were used (adopted December 31, 2012). Sample rates are shown below. Rate (%) Age <30 Years of Service 30+ Years of Service 50 5.0 40.0 55 5.0 20.0 60 6.0 6.0 65 12.0 12.0 70 14.0 14.0 75 100.0 100.0

36 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

For employees first hired on or after January 1, 2011, rates of retirement for each age from 62 to 75 were used (adopted June 30, 2011; revised December 31, 2013). Sample rates are shown below. Age Rate (%) 60 20.0 62 50.0 65 20.0 67 50.0 70 20.0 75 100.0

Salary Increases: Assumed salary increases are based on the recent experience of the Fund were used (adopted December 31, 2012). Rates are shown below. Years of Service Rate (%) 0 - 0.99 15.00 1 - 1.99 7.50 2 - 2.99 3.75 3 - 3.99 3.25 4+ 2.75

Valuation of Inactive Vested Participants: The liability for an inactive member is equal to his or her existing account balance, or, if the participant has at least 10 years of service, twice the existing account balance. Unknown Data for Participants: Same as those exhibited by participants with similar known characteristics. If not specified, participants are assumed to be male. Spouses: 75% of participants were assumed to be married and females are assumed to be 2 years younger than males. Disability Benefit Valuation: Disability benefits are valued in normal cost by annualizing the actual monthly disability payment amounts for the month prior to the valuation date.

37 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

Net Investment Return: 7.50% per year (adopted December 31, 2012)

Inflation: 2.75% per year (adopted December 31, 2012)

Payroll Growth: 2.75% per year (adopted December 31, 2012) Administrative Expenses: Equal to actual expenses for the prior year, increased by 5%.

Actuarial Value of Assets: The actuarial value of assets was determined by smoothing unexpected gains and losses over a period of 5 years. The gain or loss for a year is calculated as the total investment income on the fair value of assets, minus expected investment return on the prior actuarial value of assets. The final actuarial value is equal to the expected actuarial value plus (or minus) 20% of the calculated gain (or loss) in the prior 5 years.

Actuarial Cost Method: Entry Age Normal (adopted December 31, 2012). Under this method, a normal cost is calculated for each employee that is the level annual contribution as a percent of pay required to be made from the employee’s date of hire for as long as he/she remains active so that sufficient assets will be accumulated to provide his/her benefit. The accrued liability is the difference between the present value of all future benefits and the present value of all future normal costs.

38 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT VII Summary of Plan Provisions

This exhibit summarizes the major provisions of the Fund included in the valuation. It is not intended to be, nor should it be interpreted as, a complete statement of all plan provisions.

Membership: Any person employed by the Chicago Park District in a position requiring service for 6 months or more in a calendar year is required to become a member of the Fund as a condition of employment.

Employee Contributions: All members of the Fund are required to contribute 10% of salary to the Fund as follows: 8% for the retirement pension, 1% for the spouse’s pension, and 1% for the automatic increases in the retirement pension. In addition, employees are required to contribute $3.60 per month toward the cost of the single sum death benefit. This 8% towards the retirement pension will increase to 9% in 2017 and 10% in 2019. This will decrease to 8.5% only if the funded ratio reaches 90%, but it will revert back to 10% if the funding ratio subsequently falls below 90%.

Retirement Pension: a. Eligibility – An employee may retire at age 50 (age 58 for members younger than age 45 as of January 1, 2015) with at least 10 years of service or at age 60 with 4 years of service. If retirement occurs before age 60, the retirement pension is reduced ¼ of 1% of each month that the age of the member is below 60. However, there is no reduction if the employee has at least 30 years of service. b. Amount – The retirement pension is based on the average of the 4 highest consecutive years of salary within the last 10 years. For an employee who withdraws from service on or after December 31, 2003, the amount of the retirement pension is 2.4% of highest average salary for each year of service. The maximum pension payable is 80% of the highest annual salary.

39 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

An employee who was a participant before July 1, 1971 is entitled to the pension provided under the money purchase formula if it provides a greater pension than that provided under the above fixed benefit formula. An employee who first becomes a participant on or after January 1, 2011 is subject to the following provisions: 1. The highest salary for annuity purposes is equal to the average monthly salary obtained by dividing the participant’s total salary during the 96 consecutive months of service within the last 120 months of service in which the total compensation was the highest by the number of months in that period. 2. For 2016, the annual salary is limited to $111,571.63. Limitations for future years shall automatically be increased by the lesser of 3% or one-half the percentage change in the Consumer Price Index-U during the preceding calendar year. 3. A participant is eligible to retire with unreduced benefits after attainment of age 67 with at least 10 years of service credit. However, a participant may elect to retire at age 62 with at least 10 years of service credit and receive a retirement annuity reduced by ½ of 1% for each month that the age of the member is below 67. Effective January 1, 2015, the age 62 and 67 requirements become 60 and 65, respectively.

Post-Retirement Increase: An employee retiring at age 60 or over, or an employee with 30 or more years of service, is entitled to automatic annual increases of 3% of the originally granted pension following one year’s receipt of pension payments. In the case of an employee with less than 30 years of service who retires before age 60, the increases begin following the later of attainment of age 60 and receipt of one year’s pension payments. Automatic annual increases (AAI) in the retirement annuity for employees who first became a participant on or after January 1, 2011 are payable starting at age 65 effective January 1, 2015. Automatic annual increases in the retirement annuity are equal to the lesser of 3% or one-half the annual change in the Consumer Price Index-U, whichever is less, based on the originally granted retirement annuity. No AAI is payable in 2017 or 2019.

40 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

Surviving Spouse’s Pension: A surviving spouse is entitled to a pension upon the death of an employee while in service or on retirement. If the surviving spouse is age 60 or over and the employee or retiree had at least 20 years of service, the minimum surviving spouse’s pension is 50% of the deceased employee’s or retired employee’s pension at the date of death. If the age of the surviving spouse is less than 60, the pension is reduced ½ of 1% for each month the surviving spouse is under age 60. If the employee had less than 20 years of service, the surviving spouse is entitled to a pension under the money purchase formula, taking into account employee and employer contributions toward the surviving spouse’s pension. Surviving spouse’s pensions are subject to annual increases of 3% per year based on the current amount of pension. For employees who first become a participant on or after January 1, 2011, the initial survivor’s annuity is equal to 66 2/3% of the participant’s earned retirement annuity at the date of death, subject to automatic annual increases of the lesser of 3% or one-half of the increase in the Consumer Price Index-U during the preceding calendar year, based on the originally granted survivor’s annuity.

Children’s Pension: Unmarried children of a deceased employee under the age of 18 are entitled to a children’s pension. If either parent is living, the pension is $100.00 per month. If no parent survives, the pension for each child is $150.00 per month. The total amount payable to a spouse or children may not exceed 60% of the employee’s final salary.

Single Sum Death Benefit: A death benefit is payable upon the death of an employee in service in addition to any other benefits payable to the surviving spouse or minor children. The death benefit payable is as follows: $3,000 benefit during the first year of service, $4,000 benefit during the second year of service, $5,000 benefit during the third year of service, $6,000 benefit during the fourth through tenth year of service, and $10,000 benefit if death occurs after ten or more years of service.

41 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

Upon the death of a retired member with ten or more years of service, the $10,000 maximum benefit is reduced to $6,000 if death occurs during the first year of retirement. Thereafter, it is reduced by $1,500 for each year or fraction of a year while on retirement, but shall not be less than $3,000.

Ordinary Disability Benefit: An ordinary disability benefit is payable after eight consecutive days of absence for illness without pay. The amount of the benefit is 45% of salary. The benefit is payable for a period not to exceed ¼ of the length of service or five years, whichever is less.

Occupational Disability Benefit: Upon disability resulting from an injury incurred while on duty, an employee is entitled to a disability benefit of 74% of salary from the first day of absence without pay. The occupational disability benefit is decreased to 73% of salary in 2017 and 72% in 2019. The benefit is payable during the period of disability until the employee attains age 65 if disability is incurred before age 60, or for a period of five years if disability is incurred after age 60.

Occupational Death Benefit: Upon the death of an employee resulting from an accident incurred in the performance of duty, the surviving spouse is entitled to an occupational death benefit of 50% of salary. Each unmarried child under the age of 18 is entitled to a benefit of $100 per month. The combined payments to a family may not exceed 75% of the employee’s final salary. The total payments are reduced by Workmen’s Compensation benefits.

42 SECTION 4: Reporting Information for the Park Employees' Annuity and Benefit Fund of Chicago

Refunds: An employee who terminates employment before qualifying for a pension is entitled to a refund of employee contributions. The refund is payable to any employee who withdraws before age 55, regardless of the length of service. It is also payable to an employee who withdraws between age 55 and 60 with less than 10 years of service, and to an employee who withdraws after age 60 with less than 5 years of service. An employee who is unmarried at date of retirement is entitled to a refund of the full amount contributed for the spouse’s pension, without interest.

Plan Year: January 1 through December 31. Prior to December 31, 2012, the plan year was July 1 through June 30. Employer Contributions: The tax multiple is 1.7 for 2016 and increases to 2.3 for 2017 and 2018, and 2.9 for 2019 and thereafter. Once the funding ratio reaches 90%, the employer contribution will be the lesser of 2.9 times the employee contributions during the fiscal year two years prior, or the amount needed to maintain a funding ratio of 90%. Additional employer contributions will be made in the amounts of $12,500,000 in 2016 and $50,000,000 in 2019.

43 SECTION 5: GASB Information for Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT 1 Net Pension Liability

The components of the net pension liability of the Fund at December 31, 2015 were as follows: Total pension liability $910,260,360 Plan fiduciary net position 393,155,338 Net pension liability 517,105,022 Plan fiduciary net position as a percentage of the total pension liability 43.19%

Actuarial assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2015, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.75% Salary increases Service-based ranging from 15% to 2.75% Investment rate of return 7.50%, net of pension plan investment expense, including inflation+

Cost of living adjustments All retiree COLAs are the lesser of 3% and 1/2 of CPI of the original benefit. Beneficiary COLAs are 3% compounded. COLAs will not be granted during 2017 and 2019. (This does not affect COLAs for beneficiaries.) For healthy members, mortality rates were based on the RP-2000 Combined Healthy Table, set forward 1 year for female participants, with generational projection from 2003 using Scale AA. The actuarial assumptions used in the December 31, 2015, valuation were based on the results of an experience study for the period July 1, 2007 to June 30, 2012. Discount rate: The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that member and employer contributions will be made as specified by Public Act 98-0622. For this purpose, only employer contributions that are intended to fund benefits of current plan members and their beneficiaries are included. Projected employer contributions and contributions from future plan members that are intended to fund the service costs of future plan members and their beneficiaries are not included. Based on those assumptions, the pension plan's

44 SECTION 5: GASB Information for Park Employees' Annuity and Benefit Fund of Chicago

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. Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the Fund, calculated using the discount rate of 7.50%, as well as what the Fund’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

Current 1% Decrease Discount Rate 1% Increase (6.50%) (7.50%) (8.50%) Net pension liability as of December 31, 2015 $614,722,758 $517,105,022 $435,018,062

45 SECTION 5: GASB Information for Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT 2 Schedule of Changes in Net Pension Liability

2015 2014

Total pension liability Service cost $13,417,795 $12,975,774 Interest 65,921,805 64,929,834 Change of benefit term 0 0 Differences between expected and actual experience 682,159 5,447,687 Changes of assumptions 0 0 Benefit payments, including refunds of employee contributions -70,602,016 -70,536,042 Net change in total pension liability 9,419,743 12,817,253

Total pension liability – beginning 900,840,617 888,023,364 Total pension liability – ending (a) 910,260,360 900,840,617

Plan fiduciary net position Contributions – employer 30,588,976 11,225,438 Contributions – employee 12,368,636 10,831,434 Net investment income 8,823,613 27,490,520 Benefit payments, including refunds of employee contributions -70,602,016 -70,536,042 Administrative expense -1,533,700 -1,458,831 Other 88,113 100,518 Net change in plan fiduciary net position -20,266,378 -22,346,963

Plan fiduciary net position – beginning 413,421,716 435,768,679 Plan fiduciary net position – ending (b) 393,155,338 413,421,716 Fund’s net pension liability – ending (a) – (b) 517,105,022 487,418,901

Plan fiduciary net position as a percentage of the total pension liability 43.19% 45.89% Covered employee payroll 122,382,584 118,987,507 Fund’s net pension liability as percentage of covered employee payroll 422.53% 409.64%

46 SECTION 5: GASB Information for Park Employees' Annuity and Benefit Fund of Chicago

EXHIBIT 3 Schedule of Employer Contribution – Last Ten Fiscal Years

Contributions in Relation to the Contributions as Actuarially Actuarially a Percentage of Fiscal Year Determined Determined Contribution Covered-Employee Covered Employee Ended Contributions Contributions Deficiency (Excess) Payroll Payroll June 30, 2007 $14,571,540 $9,594,593 $4,976,947 $106,601,982 9.00% June 30, 2008 16,073,257 8,998,687 7,074,570 111,698,366 8.06% June 30, 2009 18,285,474 9,667,765 8,617,709 108,882,742 8.88% June 30, 2010 22,399,740 10,829,339 11,570,401 107,361,021 10.09% June 30, 2011 25,319,145 10,981,419 14,337,726 107,686,693 10.20% June 30, 2012 28,051,528 10,868,361 17,183,167 114,223,909 9.51% December 31, 2012 16,786,671 5,268,363 11,518,308 58,231,511 9.05% December 31, 2013 41,834,857 15,707,814 26,127,043 117,781,596 13.34% December 31, 2014 35,307,186 11,225,438 24,081,748 118,987,507 9.43% December 31, 2015 36,273,994 30,588,976 5,685,018 122,382,584 24.99%

47 SECTION 5: GASB Information for Park Employees' Annuity and Benefit Fund of Chicago

Notes to EXHIBIT 3

Valuation date Actuarially determined contribution amount is determined as of December 31, with appropriate interest to the middle of the year. Methods and assumptions used to establish “actuarially determined contribution” rates: Actuarial cost method Entry Age Actuarial cost method Amortization method 27-year closed, level percentage of payroll amortization Asset valuation method 5-year smoothed market Actuarial assumptions: Investment rate of return 7.50%, net of investment expense Projected salary increases Service-based ranging from 15% to 2.75% Mortality Post-retirement mortality rates were based on the RP-2000 Combined Healthy Mortality Tables set forward 1 year for females with generational projection from 2003 using scale AA for mortality improvements. Pre-retirement mortality rates are the same as post-retirement rates. Cost of living adjustments All retiree COLAs are the lesser of 3% and 1/2 of CPI of the original benefit. Beneficiary COLAs are 3% compounded. COLAs will not be granted during 2017 and 2019. (This does not affect COLAs for beneficiaries.) Other assumptions: Same as those used in the December 31, 2015, actuarial funding valuations.

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APPENDIX E- FORMS OF OPINIONS OF CO-BOND COUNSEL RELATED TO THE BONDS

[TO BE DATED DATE OF ISSUANCE OF THE BONDS]

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General Obligation Limited Tax Park Bonds, Series 2016A

General Obligation Limited Tax Refunding Bonds, Series 2016B

General Obligation Limited Tax Refunding Bonds, Series 2016C

______, 2016

The Board of Commissioners of the Chicago Park District

Dear Commissioners:

We have examined a record of proceedings relating to the issuance of $______,000 principal amount of General Obligation Limited Tax Park Bonds, Series 2016A (the “2016A Bonds”), $______,000 principal amount of General Obligation Limited Tax Refunding Bonds, Series 2016B (the “2016B Bonds”) and $______,000 principal amount of General Obligation Limited Tax Refunding Bonds, Series 2016C (the “2016C Bonds” and together with the 2016A Bonds and the 2016B Bonds, the “Bonds”) of the Chicago Park District (the “District”), a body politic and corporate of the State of Illinois. The 2016A Bonds are authorized and issued pursuant to the provisions of the Chicago Park District Act, 70 Illinois Compiled Statutes 1505, and the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350, and by virtue of an ordinance adopted by the Board of Commissioners of the District on October 19, 2016, and entitled: “Ordinance Authorizing the Issuance of General Obligation Bonds of 2016 of the Chicago Park District” (the “Bond Ordinance”). The 2016B Bonds and the 2016C Bonds are authorized and issued pursuant to the Chicago Park District Act, the Local Government Debt Reform Act and the Park District Refunding Bond Act, 70 Illinois Compiled Statutes 1270, and by virtue of the Bond Ordinance.

The Bonds are issuable in the form of fully registered bonds in the denominations of $5,000 and any integral multiple thereof. The Bonds delivered on original issuance are dated ______, 2016 and bear interest from their date payable on ______1, 2017 and semiannually thereafter on January 1 and July 1 in each year.

The 2016A Bonds mature on January 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the 2016A Bonds maturing in each such year bear interest at the rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate 20__ $ ,000 % 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

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The 2016A Bonds maturing on or after January 1, 20__ are subject to redemption prior to maturity at the option of the District, in such principal amounts and from such maturities as the District shall determine and by lot within a single maturity, on January 1, 20__ and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed.

The 2016A Bonds maturing in the years 20__ and 20__ are subject to mandatory redemption, in part and by lot, on January 1 of the years and in the respective principal amounts set forth in the following tables, by the application of sinking fund installments, at a redemption price equal to the principal amount thereof to be redeemed:

20__ Bonds 20__ Bonds Year Principal Amount Year Principal Amount 20__ $ ,000 20__ $ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

The 2016B Bonds mature on January 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the 2016B Bonds maturing in each such year bear interest at the respective rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate 20__ $ ,000 . % 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

The 2016B Bonds maturing on or after January 1, 20__ are subject to redemption prior to maturity at the option of the District, in such principal amounts and from such maturities as the District shall determine and by lot within a single maturity, on January 1, 20__ and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed.

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The 2016C Bonds mature on January 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the 2016C Bonds maturing in each such year bear interest at the respective rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate 20__ $ ,000 . % 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

The 2016C Bonds maturing on or after January 1, 20__ are subject to redemption prior to maturity at the option of the District, in such principal amounts and from such maturities as the District shall determine and by lot within a single maturity, on January 1, 20__ and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed.

The Bonds are “limited bonds” as defined in the Local Government Debt Reform Act, which are payable from the “debt service extension base” of the District as defined in the Property Tax Extension Limitation Law, 35 Illinois Compiled Statutes 200/18-185 through 18-245.

In our opinion, the Bonds are valid and legally binding general obligations of the Chicago Park District, and the District has power and is obligated to levy ad valorem taxes upon all the taxable property within the District for the payment of the Bonds and the interest thereon, without limitation as to rate, but limited as to amount by provisions of the Property Tax Extension Limitation Law. However, the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore or hereafter enacted.

The Code contains certain requirements that must be satisfied from and after the date hereof in order to preserve the exclusion from gross income for Federal income tax purposes of interest on the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The District has covenanted in the Bond Ordinance to comply with these requirements.

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With respect to the exclusion from gross income for Federal income tax purposes of interest on the Bonds we have relied on the verification report of Robert Thomas, CPA LLC, certified public accountants, regarding the computation of the arbitrage yield on the Bonds and of certain investments made with the proceeds of the Bonds.

Interest on the Bonds is not exempt from Illinois income taxes.

Very truly yours,

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General Obligation Unlimited Tax Refunding Bonds, Series 2016D

General Obligation Unlimited Tax Refunding Bonds, Series 2016E

______, 2016

The Board of Commissioners of the Chicago Park District

Dear Commissioners:

We have examined a record of proceedings relating to the issuance of $______,000 principal amount of General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) (the “2016D Bonds”) and $______,000 principal amount of General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) (the “2016E Bonds” and together with the 2016D Bonds, the “Bonds”) of the Chicago Park District (the “District”), a body politic and corporate of the State of Illinois. The Bonds are authorized and issued pursuant to the provisions of the Chicago Park District Act, 70 Illinois Compiled Statutes 1505, and the Local Government Debt Reform Act, 30 Illinois Compiled Statutes 350, and by virtue of an ordinance adopted by the Board of Commissioners of the District on October 19, 2016, and entitled: “Ordinance Authorizing the Issuance of General Obligation Bonds of 2016 of the Chicago Park District” (the “Bond Ordinance”).

The Bonds are issuable in the form of fully registered bonds in the denominations of $5,000 and any integral multiple thereof and the Bonds delivered on original issuance are dated ______, 2016.

The 2016D Bonds mature on January 1, in each of the following years in the respective principal amount set opposite each such year in the following table, and the 2016D Bonds maturing in each such year bear interest from their date payable on ______1, 2017 and semiannually thereafter on January 1 and July 1 of each year at the rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate

20__ $ ,000 % 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

The 2016D Bonds maturing on or after January 1, 20__ are subject to redemption prior to maturity at the option of the District, in such principal amounts and from such maturities as the District shall determine and by lot within a single maturity, on January 1, 20__ and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed.

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The 2016E Bonds mature on November 15, in each of the following years in the respective principal amount set opposite each such year in the following table, and the 2016E Bonds maturing in each such year bear interest from their date payable on May 15, 2017 and semiannually thereafter on May 15 and November 15 of each year at the respective rate of interest per annum set forth opposite such year:

Year Principal Amount Interest Rate

20__ $ ,000 . % 20__ ,000 20__ ,000 20__ ,000 20__ ,000 20__ ,000

The 2016E Bonds maturing on or after November 15, 20__ are subject to redemption prior to maturity at the option of the District, in such principal amounts and from such maturities as the District shall determine and by lot within a single maturity, on November 15, 20__ and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. The Bonds are “alternate bonds” issued pursuant to Section 15 of the Local Government Debt Reform Act. In our opinion, the Bonds are valid and legally binding general obligations of the Chicago Park District, and the District has power and is obligated to levy ad valorem taxes upon all the taxable property within the District for the payment of the Bonds and the interest thereon, without limitation as to rate or amount. However, the enforceability of rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights and remedies heretofore or hereafter enacted.

We are of the opinion that, under existing law, interest on the Bonds is not includable in the gross income of the owners thereof for Federal income tax purposes. If there is continuing compliance with the applicable requirements of the Internal Revenue Code of 1986 (the “Code”), we are of the opinion that interest on the Bonds will continue to be excluded from the gross income of the owners thereof for Federal income tax purposes. We are further of the opinion that the Bonds are not “private activity bonds” within the meaning of Section 141(a) of the Code. Accordingly, interest on the Bonds is not an item of tax preference for purposes of computing individual or corporate alternative minimum taxable income. However, interest on the Bonds is includable in corporate earnings and profits and therefore must be taken into account when computing corporate alternative minimum taxable income for purposes of the corporate alternative minimum tax. The Code contains certain requirements that must be satisfied from and after the date hereof in order to preserve the exclusion from gross income for Federal income tax purposes of interest on the Bonds. These requirements relate to the use and investment of the proceeds of the Bonds, the payment of certain amounts to the United States, the security and source of payment of the Bonds and the use of the property financed with the proceeds of the Bonds. The District has covenanted in the Bond Ordinance to comply with these requirements. With respect to the exclusion from gross income for Federal income tax purposes of interest on the Bonds we have relied on the verification report of Robert Thomas, CPA LLC, certified public accountants, regarding the computation of the arbitrage yield on the Bonds and of certain investments made with the proceeds of the Bonds.

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Interest on the Bonds is not exempt from Illinois income taxes.

Very truly yours,

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APPENDIX F SCHEDULE OF REFUNDED BONDS

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CHICAGO PARK DISTRICT SCHEDULE OF REFUNDED BONDS

GENERAL OBLIGATION LIMITED TAX PARK BONDS, SERIES 2006A Original Principal Amount: $35,000,000 Dated: January 4, 2006 Redemption Date: December ___, 2016

AMOUNT ($) REFUNDED BONDS AMOUNT ($) YEAR OUTSTANDING REFUNDED

2030 __,___,000 __,___,000

GENERAL OBLIGATION UNLIMITED TAX REFUNDING BONDS, SERIES 2008A (PERSONAL PROPERTY REPLACEMENT TAX ALTERNATE REVENUE SOURCE)

Original Principal Amount: $8,330,000 Dated: January 23, 2008 Redemption Date: January 1, 20__

AMOUNT ($) REFUNDED BONDS AMOUNT ($) YEAR OUTSTANDING REFUNDED

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GENERAL OBLIGATION UNLIMITED TAX PARK BONDS, SERIES 2008E (SPECIAL RECREATION ACTIVITY ALTERNATE REVENUE SOURCE)

Original Principal Amount: $24,725,000 Dated: January 27, 2009 Redemption Date: November 15, 20__

AMOUNT ($) REFUNDED BONDS AMOUNT ($) YEAR OUTSTANDING REFUNDED

GENERAL OBLIGATION LIMITED TAX PARK BONDS, SERIES 2008F

Original Principal Amount: $16,115,000 Dated: December 11, 2008 Redemption Date: January 1, 20__

AMOUNT ($) REFUNDED BONDS AMOUNT ($) YEAR OUTSTANDING REFUNDED

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GENERAL OBLIGATION LIMITED TAX REFUNDING BONDS, SERIES 2008G

Original Principal Amount: $36,140,000 Dated: December 11, 2008 Redemption Date: January 1, 20__

AMOUNT ($) REFUNDED BONDS AMOUNT ($) YEAR OUTSTANDING REFUNDED

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APPENDIX G GLOBAL BOOK-ENTRY FORM OF OWNERSHIP

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GLOBAL BOOK-ENTRY FORM OF OWNERSHIP

The information in this Appendix concerning DTC and DTC’s book-entry only system has been obtained from DTC and neither the District nor any Underwriter takes responsibility for the accuracy or completeness thereof.

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

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a S& P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial

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Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

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

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

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

Redemption proceeds, distributions, and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Bond Registrar, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the District and the Bond Registrar, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District and the Bond Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

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

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APPENDIX H FORM OF CONTINUING DISCLOSURE UNDERTAKING OF THE CHICAGO PARK DISTRICT

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CONTINUING DISCLOSURE UNDERTAKING FOR THE PURPOSE OF PROVIDING CONTINUING DISCLOSURE INFORMATION UNDER SECTION (b)(5) OF RULE 15c2-12

This Continuing Disclosure Undertaking (the “Agreement”) is executed and delivered by the Chicago Park District (the “District”) in connection with the issuance of $______General Obligation Limited Tax Park Bonds, Series 2016A (the “Series 2016A Limited Tax Bonds”), $______General Obligation Limited Tax Refunding Bonds, Series 2016B (the “Series 2016B Limited Tax Bonds”), $______General Obligation Limited Tax Refunding Bonds, Series 2016C (the “Series 2016C Limited Tax Bonds”), and, together with the Series 2016A Limited Tax Bonds and the Series 2016B Limited Tax Bonds, the “Series 2016 Limited Tax Bonds”), $______General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) (the “Series 2016D Unlimited Tax Bonds”) and $______General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) (the “Series 2016E Unlimited Tax Bonds”, and collectively with the Series 2016 Limited Tax Bonds and the Series 2016D Unlimited Tax Bonds, the “Bonds”). The Bonds are being issued pursuant to an ordinance providing for their sale and delivery, duly adopted by the Board of Commissioners of the District on October 19, 2016 (the “Bond Ordinance”), as supplemented by a Bond Order (as defined in the Bond Ordinance).

In consideration of the issuance of the Bonds by the District and the purchase of such Bonds by the beneficial owners thereof, the District covenants and agrees as follows:

1. PURPOSE OF THIS AGREEMENT. This Agreement is executed and delivered by the District as of the date set forth below, for the benefit of the beneficial owners of the Bonds and in order to assist the Participating Underwriters in complying with the requirements of the Rule (as defined below). The District represents that it will be the only obligated person with respect to the Bonds at the time the Bonds are delivered to the Participating Underwriters and that no other person is expected to become so committed at any time after issuance of the Bonds.

2. DEFINITIONS. The terms set forth below shall have the following meanings in this Agreement, unless the context clearly otherwise requires.

“Annual Financial Information” means the financial information and operating data described in Exhibit I.

“Annual Financial Information Disclosure” means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in Section 4.

“Audited Financial Statements” means the audited financial statements of the District prepared pursuant to the standards as described in Exhibit I.

“Commission” means the Securities and Exchange Commission.

“Dissemination Agent” means any agent designated as such in writing by the District and which has filed with the District a written acceptance of such designation, and such agent’s successors and assigns.

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“EMMA” means the MSRB through its Electronic Municipal Market Access system for municipal securities disclosure or through any other electronic format or system prescribed by the MSRB for purposes of the Rule.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“MSRB” means the Municipal Securities Rulemaking Board.

“Participating Underwriter” means each broker, dealer or municipal securities dealer acting as an underwriter in the primary offering of the Bonds.

“Reportable Event” means the occurrence of any of the Events with respect to the Bonds set forth in Exhibit II.

“Reportable Events Disclosure” means dissemination of a notice of a Reportable Event as set forth in Section 5.

“Rule” means Rule 15c2-12 adopted by the Commission under the Exchange Act, as the same may be amended from time to time.

“State” means the State of Illinois.

“Undertaking” means the obligations of the District pursuant to Sections 4 and 5.

3. CUSIP NUMBER/FINAL OFFICIAL STATEMENT. The CUSIP Numbers of the Bonds are as provided in Exhibit III attached hereto. The final Official Statement relating to the Bonds is dated ______, 2016 (the “Final Official Statement”). The District will include the CUSIP Numbers in all disclosure materials described in Sections 4 and 5 of this Agreement.

4. ANNUAL FINANCIAL INFORMATION DISCLOSURE. Subject to Section 8 of this Agreement, the District hereby covenants that it will disseminate its Annual Financial Information and its Audited Financial Statements (in the form and by the dates set forth in Exhibit I) to EMMA in such manner and format and accompanied by identifying information as is prescribed by the MSRB or the Commission at the time of delivery of such information and by such time so that such entities receive the information by the dates specified. MSRB Rule G-32 requires all EMMA filings to be in word-searchable PDF format. This requirement extends to all documents to be filed with EMMA, including financial statements and other externally prepared reports.

If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the District will disseminate a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs.

If any amendment or waiver is made to this Agreement, the Annual Financial Information for the year in which such amendment or waiver is made (or in any notice or supplement provided to EMMA) shall contain a narrative description of the reasons for such amendment or waiver and its impact on the type of information being provided.

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5. REPORTABLE EVENTS DISCLOSURE. Subject to Section 8 of this Agreement, the District hereby covenants that it will disseminate in a timely manner (not in excess of ten business days after the occurrence of the Reportable Event) Reportable Events Disclosure to EMMA in such manner and format and accompanied by identifying information as is prescribed by the MSRB or the Commission at the time of delivery of such information. MSRB Rule G-32 requires all EMMA filings to be in word-searchable PDF format. This requirement extends to all documents to be filed with EMMA, including financial statements and other externally prepared reports. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Bonds or defeasance of any Bonds need not be given under this Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the Bondholders pursuant to the Bond Ordinance.

6. CONSEQUENCES OF FAILURE OF THE DISTRICT TO PROVIDE INFORMATION. The District shall give notice in a timely manner to EMMA of any failure to provide Annual Financial Information Disclosure when the same is due hereunder. In the event of a failure of the District to comply with any provision of this Agreement, the beneficial owner of any Bond may seek mandamus or specific performance by court order, to cause the District to comply with its obligations under this Agreement. Any court action to enforce this Agreement must be commenced in the Circuit Court of Cook County, Illinois. A default under this Agreement shall not be deemed a default under the Bonds or the Bond Ordinance, and the sole remedy under this Agreement in the event of any failure of the District to comply with this Agreement shall be an action to compel performance.

7. AMENDMENTS; WAIVER. Notwithstanding any other provision of this Agreement, the District by resolution or ordinance authorizing such amendment or waiver, may amend this Agreement, and any provision of this Agreement may be waived, if: (a) (i) The amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, including without limitation, pursuant to a “no-action” letter issued by the Commission, a change in law, or a change in the identity, nature, or status of the District, or type of business conducted; (ii) This Agreement, as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (iii)The amendment or waiver does not materially impair the interests of the beneficial owners of the Bonds, as determined either by parties unaffiliated with the District (such as co-bond counsel) at the time of the amendment or waiver; or (b) The amendment or waiver is otherwise permitted by the Rule. In the event that the Commission or the MSRB or other regulatory authority shall approve or require Annual Financial Information Disclosure or Reportable Events Disclosure to be made to a central post office, governmental agency or similar entity other than EMMA or in lieu of

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EMMA, the District shall, if required, make such dissemination to such central post office, governmental agency or similar entity without the necessity of amending this Agreement.

8. TERMINATION OF UNDERTAKING. The Undertaking of the District shall be terminated hereunder if the District shall no longer have any legal liability for any obligation on or relating to repayment of the Bonds under the Bond Ordinance.

9. DISSEMINATION AGENT. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.

10. ADDITIONAL INFORMATION. Nothing in this Agreement shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Agreement or any other means of communication, or including any other information in any Annual Financial Information Disclosure or notice of occurrence of a Reportable Event, in addition to that which is required by this Agreement. If the District chooses to include any information from any document or notice of occurrence of a Reportable Event in addition to that which is specifically required by this Agreement, the District shall have no obligation under this Agreement to update such information or include it in any future disclosure or notice of occurrence of a Reportable Event.

11. BENEFICIARIES. This Agreement has been executed in order to assist the Participating Underwriters in complying with the Rule; however, this Agreement shall inure solely to the benefit of the District, the Dissemination Agent, if any, and the beneficial owners of the Bonds, and shall create no rights in any other person or entity.

12. RECORDKEEPING. The District shall maintain records of all Annual Financial Information Disclosure and Reportable Events Disclosure, including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure.

13. ASSIGNMENT. The District shall not transfer its obligations under the Bond Ordinance unless the transferee agrees to assume all obligations of the District under this Agreement or to execute an Undertaking under the Rule.

14. GOVERNING LAW. This Agreement shall be governed by the internal laws of the State without reference to its choice of law principles.

IN WITNESS WHEREOF, the Chicago Park District has caused this Continuing Disclosure Undertaking in connection with the Chicago Park District’s General Obligation Limited Tax Park Bonds, Series 2016A, General Obligation Limited Tax Refunding Bonds, Series 2016B, General Obligation Limited Tax Refunding Bonds, Series 2016C, General Obligation Unlimited Tax Refunding Bonds Series 2016D (Personal Property Replacement Tax Alternate Revenue Source), and General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source) to be executed by its duly authorized representatives as of the date below written.

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CHICAGO PARK DISTRICT

By: General Superintendent & CEO

By: Treasurer Dated: ______, 2016

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EXHIBIT I ANNUAL FINANCIAL INFORMATION DISCLOSURE AND TIMING AND AUDITED FINANCIAL STATEMENTS

“Annual Financial Information” means financial information and operating data of the type contained in the Official Statement and under the following captions:

• “EMPLOYEE RETIREMENT SYSTEM”, Tables 1 through 7.

• APPENDIX B: “TAXATION OF REAL PROPERTY – STATISTICAL INFORMATION;” “TAX SUPPORTED BONDED DEBT;” “THE DISTRICT’S OUTSTANDING GENERAL OBLIGATION BONDS AND OTHER LONG TERM DEBT OBLIGATIONS;” and “CHICAGO PARK DISTRICT PROCEDURES” (tabular information only).

• APPENDIX E: REPORT OF THE CONSULTING ACTUARY ON THE DISTRICT RETIREMENT FUND.

All or a portion of the Annual Financial Information and the Audited Financial Statements as set forth below may be included by reference to other documents which have been submitted to EMMA or filed with the Commission. If the information included by reference is contained in a Final Official Statement, the Final Official Statement must be available on EMMA; the Final Official Statement need not be available from the Commission. The District shall clearly identify each such item of information included by reference.

Annual Financial Information, exclusive of the Audited Financial Statements, will be submitted to EMMA within 210 days after the last day of the District’s fiscal year (currently December 31). Audited Financial Statements as described below are expected to be filed at the same time as the Annual Financial Information. If Audited Financial Statements are not available when the Annual Financial Information is filed, unaudited financial statements (if available or if prepared) will be submitted to EMMA and Audited Financial Statements will be submitted to EMMA within 30 days after availability to the District.

“Audited Financial Statements” will be prepared using accounting standards as follows: Generally Accepted Accounting Principles, as defined by the pronouncements of the Governmental Accounting Standards Board, subject to any express requirements of State law. Audited Financial Statements will be submitted to EMMA within 30 days after availability to the District.

If any change is made to the Annual Financial Information as permitted by Section 4 of the Agreement, the District will disseminate or cause to be disseminated a notice of such change as required by Section 4.

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EXHIBIT II

EVENTS WITH RESPECT TO THE BONDS FOR WHICH REPORTABLE EVENTS DISCLOSURE IS REQUIRED

1. Principal and interest payment delinquencies 2. Non-payment related defaults, if material 3. Unscheduled draws on debt service reserves reflecting financial difficulties 4. Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds 7. Modifications to the rights of Bond holders, if material 8. Bond calls, if material, and tender offers 9. Defeasances 10. Release, substitution or sale of property securing repayment of the Bonds, if material 11. Rating changes 12. Bankruptcy, insolvency, receivership or similar event of the District∗ 13. The consummation of a merger, consolidation, or acquisition involving the District or the sale of all or substantially all of the assets of the District, 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 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material

Certain of these Events may not be applicable to the Bonds.

∗ This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the District 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 District, 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 District

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EXHIBIT III MATURITIES, PRINCIPAL AMOUNTS, COUPONS AND CUSIP NUMBERS

$______General Obligation Limited Tax Park Bonds, Series 2016A

Maturity (January Principal 1) Amount Coupon CUSIP* 20 $ % 20 20 20 20

$______; ___% Term Bonds due January 1, 20__, CUSIP*:

$______General Obligation Limited Tax Refunding Bonds, Series 2016B

Maturity Principal (January 1) Amount Coupon CUSIP*

20 $ % 20 20 20

* Copyright 2016, American Bankers Association. CUSIP data herein are provided by S&P Global Ratings, CUSIP Service Bureau, a Division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed are being provided solely for the convenience of the Bondholders only at the time of issuance of the Bonds and the District does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

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$______General Obligation Limited Tax Refunding Bonds, Series 2016C

Maturity Principal (January 1) Amount Coupon CUSIP*

20 $ % 20 20 20

$______General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source)

Maturity Principal (January 1) Amount Coupon CUSIP*

20 $ % 20 20 20

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$______General Obligation Unlimited Tax Refunding Bonds, Series 2016E (Special Recreation Activity Alternate Revenue Source)

Maturity Principal (November 15) Amount Coupon CUSIP*

20 $ % 20 20 20

______* Copyright 2016, American Bankers Association. CUSIP data herein are provided by S&P Global Ratings, CUSIP Service Bureau, a Division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed are being provided solely for the convenience of the Bondholders only at the time of issuance of the Bonds and the District does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

H-10 The Chicago Park District is: CHICAGO PARK DISTRICT • General Obligation Limited Tax Park Bonds, Series 2016A, General Obligation Limited Tax Refunding Bonds, Series 2016B and Series 2016C, General Obligation Unlimited Tax Refunding Bonds, Series 2016D (Personal Property Replacement Tax Alternate Revenue Source) and Series 2016E (Special Recreation Activity Alternate Revenue Source)