PARKING AUTHORITY of the CITY of TRENTON County of Mercer

NEW ISSUE RATINGS: See “RATINGS” herein (BOOK-ENTRY ONLY) In the opinion of McManimon, Scotland & Baumann LLC, Bond Counsel to the Authority (as defined herein), pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and existing statutes, regulations, administrative pronouncements and judicial decisions, and in reliance on the representations, certifications of fact, and statements of reasonable expectation made by the Authority and assuming continuing compliance by the Authority with certain ongoing covenants described herein, interest on the 2016 Series B Bonds (as defined herein) is not included in gross income for Federal income tax purposes and is not an item of tax preference for purposes of calculating the alternative minimum tax imposed on individuals and corporations. Bond Counsel is also of the opinion that interest on the 2016 Series B Bonds held by corporate taxpayers is included in “adjusted current earnings” in calculating alternative minimum taxable income for purposes of the federal alternative minimum tax imposed on corporations. Interest on the 2016 Series A Bonds (as defined herein) is includable in gross income for federal income tax purposes. Further, in the opinion of Bond Counsel, interest on the Bonds (as defined herein) and any gain from the sale thereof are not includable as gross income under the New Jersey Gross Income Tax Act. See “TAX MATTERS” herein. PARKING AUTHORITY OF THE CITY OF TRENTON County of Mercer, New Jersey $3,735,000 $16,965,000 Parking Revenue Refunding Bonds Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016A (City Guaranteed) Series 2016B (Federally Taxable) consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016 Dated: Date of Delivery Due: As shown on the inside cover hereof The $3,735,000 principal amount of Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable) (the “2016 Series A Bonds”) and $16,965,000 principal amount of Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B (the “2016 Series B Bonds” and, together with the 2016 Series A Bonds, the “Bonds”), consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016 of the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey (“Authority”), as authorized by the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948, of the State of New Jersey, as amended and supplemented (“Act”), shall be issued as fully registered bonds and, when issued, will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in the Bonds purchased. As long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (as hereinafter defined) of the Bonds. See “DESCRIPTION OF THE BONDS - Book-Entry Only-System” herein. U.S. Bank National Association, Morristown, New Jersey, will serve as Trustee, Paying Agent and Registrar for the Bonds (“Trustee”, “Paying Agent” and “Registrar”, respectively). The principal or redemption price of and interest on the Bonds will be paid by the Paying Agent. As long as DTC or its nominee, Cede & Co., is the registered owner, such payments will be made directly to Cede & Co. Disbursement of such payments to Direct Participants (as defined herein) is the responsibility of DTC and disbursement of such payments to Beneficial Owners is the responsibility of the Direct Participants and the Indirect Participants (as defined herein), as more fully described herein. Interest on the Bonds will be payable on April 1, 2017 and semi-annually thereafter on October 1 and April 1 of each year until maturity or prior redemption to the registered owner of record as of March 15 and September 15 next preceding such interest payment date as shown on the registration books of the Authority maintained by the Registrar. The Bonds shall mature and bear interest as set forth on the inside front cover. The Bonds are subject to optional and mandatory sinking fund redemption prior to their stated maturities as described herein. See “DESCRIPTION OF THE BONDS – Optional Redemption – Mandatory Sinking Fund Redemption.”

The 2016 Series B Bonds are being issued to provide funds which will be used, together with other available funds of the Authority, to (i) refund all or a portion of the Authority’s outstanding 2013 Refunding Bonds (as defined herein), (ii) finance certain capital improvements to the Authority garages, and (iii) pay the costs of issuing the 2016 Series B Bonds.

The Bonds are direct and general obligations of the Authority and the full faith and credit of the Authority is pledged to the payment of the principal or redemption price of, and interest on, the Bonds. The Bonds are payable from and are secured by the pledge of the funds and accounts held by the Trustee and by a pledge of the Revenues of the Authority, as such term is defined in the “Resolution Authorizing the Issuance of Parking Revenue Bonds of the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey” adopted by the Authority on June 15, 1999, as amended and supplemented (the “General Bond Resolution”), as further amended and supplemented on July 28, 2016 (the “2016 Supplemental Resolution” and, together with the General Bond Resolution, as amended, the “Resolutions”), and an award certificate to be executed by the Chairman of the Authority on the Delivery Date of the Bonds (the “Award Certificate” and together with the Resolutions, the “Resolution”). The Bonds are further secured by a guaranty agreement with the City as authorized by Guaranty Ordinances duly adopted on July 1 1999, February 15, 2001, November 6, 2003, and October 20, 2005, respectively, pursuant to which the City has guaranteed the payment of principal of and interest on outstanding bonds of the Authority in an aggregate amount of $39,850,000, including the Bonds, to the extent that Revenues or certain other funds of the Authority are not available to pay the principal of or interest on the Bonds (the “Guaranty”). See “SECURITY - City Guaranty”, herein.

THE AUTHORITY HAS NO POWER TO LEVY OR COLLECT TAXES, AND THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CREATE A DEBT OR LIABILITY OF THE STATE OF NEW JERSEY OR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE AUTHORITY INCLUDING ANY COUNTY OR MUNICIPALITY, INCLUDING THE CITY OF TRENTON, EXCEPT TO THE EXTENT OF THE GUARANTY.

The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP.

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision.

The Bonds are offered when, as and if issued by the Authority and delivered to the Underwriter, subject to prior sale, to withdrawal or modification of the offer without notice and to approval of legality by the law firm of McManimon Scotland & Baumann, LLC, Roseland, New Jersey and certain other conditions described herein. Certain legal matters will be passed upon for the Authority by its counsel Bier Associates, New Brunswick, New Jersey, for the City by its bond counsel, Wilentz, Goldman & Spitzer P.A., Woodbridge, New Jersey and its Director of Law, Marc A. McKithen, Trenton, New Jersey and for the Underwriter by its counsel, Chiesa Shahinian & Giantomasi PC, West Orange, New Jersey. Delivery is anticipated to be at the offices of McManimon Scotland & Baumann, LLC, Roseland, New Jersey on or about September 27, 2016.

Dated: September 8, 2016 PARKING AUTHORITY OF THE CITY OF TRENTON

Maturities, Amounts, Interest Rates, Yields and CUSIPs*

$3,735,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable)

Serial Bonds

Maturity Date Principal Interest (October 1) Amount Rate Yield CUSIP* 2017 $165,000 1.600% 1.600% 895164JH5 2018 175,000 2.070 2.070 895164JJ1 2019 170,000 2.490 2.490 895164JK8 2020 180,000 2.800 2.800 895164JL6 2021 185,000 2.950 2.950 895164JM4 2022 190,000 3.100 3.100 895164JN2 2023 190,000 3.270 3.270 895164JP7 2024 200,000 3.380 3.380 895164JQ5 2025 210,000 3.490 3.490 895164JR3 2026 220,000 3.590 3.590 895164JS1

Term Bonds**

$1,850,000 4.310% Term Bond due October 1, 2033 – Yield 4.310%, CUSIP* 895164JT9

$16,965,000 Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B**

Parking Revenue Parking Revenue and Refunding Bonds Maturity Date Bonds Principal Principal Interest (April 1) Amount Amount Rate Yield CUSIP*

2017 $1,180,000 $35,000 2.000% 1.040% 895164JU6 2018 930,000 40,000 3.000 1.170 895164JV4 2019 955,000 45,000 4.000 1.300 895164JW2 2020 1,000,000 45,000 4.000 1.430 895164JX0 2021 1,035,000 45,000 4.000 1.560 895164JY8 2022 1,075,000 50,000 4.000 1.760 895164JZ5 2023 1,120,000 50,000 4.000 1.930 895164KA8 2024 1,165,000 55,000 4.000 2.080 895164KB6 2025 1,215,000 55,000 2.000 2.210 895164KC4 2026 1,240,000 55,000 2.000 2.300 895164KD2 2027*** 1,265,000 55,000 4.000 2.400 895164KE0 2028*** 1,310,000 60,000 4.000 2.490 895164KF7 2029 1,360,000 60,000 2.500 2.800 895164KG5 2030 1,400,000 65,000 2.500 2.870 895164KH3

* CUSIP is a registered trademark of the American Bankers Association. CUSIP numbers are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by Standard & Poor’s Capital IQ. This data is not intended to create a database and does not serve in any way as a substitute for Standard & Poor’s Capital IQ. CUSIP numbers have been assigned by an independent company not affiliated with the Authority and are included solely for the convenience of the registered owners of the applicable Bonds. The Authority is not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. 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 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. ** The Bonds are subject to optional and mandatory sinking fund redemption prior to their stated maturities as described herein. See “DESCRIPTION OF THE BONDS – Optional Redemption – Mandatory Sinking Fund Redemption.” *** Priced at the stated yield to the first optional redemption date of April 1, 2026 at the redemption price of 100%.

The information which is set forth herein has been provided by the Authority and by other sources which are believed to be reliable, but the information provided by such other sources is not guaranteed as to accuracy or completeness by the Authority. Certain general and financial information concerning the City of Trenton (“City”) is contained in Appendices B and C to this Official Statement. Such information has been furnished by the City. The Authority has not confirmed the accuracy or completeness of information relating to the City, and the Authority disclaims any responsibility for the accuracy or completeness thereof.

Where the constitution or statutes of the State of New Jersey are referred to, reference should be made to such constitution or statutes for a complete statement thereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

No dealer, broker, salesperson or other person has been authorized by the Authority to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by the foregoing. 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 for such offer, solicitation or sale. The information set forth herein has been obtained from the Authority, the City, The Depository Trust Company and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by the Authority. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstance, create an implication that there has been no change in the affairs of the Authority or the City, since the date hereof.

Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, will not be listed on any stock or other securities exchange and neither the Securities and Exchange Commission, nor any other federal, state, municipal or other governmental entity, other than the Authority (subject to the limitations set forth above), will have passed upon the accuracy or adequacy of this Official Statement.

This Official Statement includes the front and inside cover pages hereof and the Appendices attached hereto. The Underwriter has been authorized by the Authority to imprint the Bond offering prices or yields and its name on the inside cover pages, together with the interest rate per annum adopted for the various maturities of the Bonds.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER 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, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Assured Guaranty Municipal Corp. (“AGM”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “MUNICIPAL BOND INSURANCE” and “APPENDIX H - SPECIMEN MUNICIPAL BOND INSURANCE POLICY”.

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

PARKING AUTHORITY OF THE CITY OF TRENTON IN THE COUNTY OF MERCER, NEW JERSEY

BOARD MEMBERS Andrew Worek, Chairman Harry Reyes, Vice-Chairman Melody Freeman, Treasurer Perry Shaw III, Commissioner Anne LaBate, Commissioner Scott A. Rice, Commissioner William A. Watson, Commissioner

GENERAL COUNSEL Bier Associates New Brunswick, New Jersey

AUDITOR Mercadien, P.C., Certified Public Accountants Hamilton, New Jersey

BOND COUNSEL McManimon Scotland & Baumann, LLC Roseland, New Jersey

TABLE OF CONTENTS Page INTRODUCTION ...... 1 AUTHORIZATION FOR BONDS ...... 1 PURPOSE OF THE BOND ISSUE ...... 2 DESCRIPTION OF THE BONDS ...... 2 General Description ...... 2 Optional Redemption ...... 3 Mandatory Sinking Fund Redemption ...... 3 Notice of Redemption ...... 4 Book-Entry-Only System ...... 4 Discontinuation of Book-Entry Only System ...... 6 No Assurance Regarding DTC Practices...... 6 SECURITY ...... 7 Authority Pledge ...... 7 City Guaranty ...... 7 Bond Reserve Fund Established and Created Under the General Bond Resolution ...... 8 Rate Covenant ...... 8 MUNICIPAL BOND INSURANCE ...... 9 Bond Insurance Policy...... 9 Assured Guaranty Municipal Corp...... 9 ESTIMATED SOURCES AND USES OF FUNDS ...... 11 THE AUTHORITY ...... 12 Creation and Powers ...... 12 Parking Operations ...... 12 Management ...... 13 HISTORICAL AND PROJECTED OPERATIONS OF THE AUTHORITY ...... 15 Historical Operations Years Ended June 30, ...... 15 Projected Operations Years Ended June 30, ...... 15 OUTSTANDING OBLIGATIONS OF THE AUTHORITY ...... 16 SUMMARY OF CERTAIN PROVISIONS OF THE NEW JERSEY CAP LAW ...... 16 PLEDGE OF THE STATE NOT TO LIMIT POWERS OF AUTHORITY OR RIGHTS OF BONDHOLDERS ... 17 BANKRUPTCY ...... 17 LITIGATION ...... 17 LEGALITY FOR INVESTMENT ...... 17 TAX MATTERS ...... 18 The 2016 Series B Bonds ...... 18 Certain Federal Tax Consequences Relating to the 2016 Series B Bonds ...... 18 The 2016 Series A Bonds ...... 18 The Bonds ...... 20 SECONDARY MARKET DISCLOSURE ...... 21 APPROVAL OF LEGAL PROCEEDINGS ...... 21 RATINGS ...... 22 INDEPENDENT AUDITORS ...... 22 FINANCIAL PROJECTIONS ...... 22 VERIFICATION OF MATHEMATICAL ACCURACY ...... 22 UNDERWRITING ...... 23 ADDITIONAL INFORMATION...... 23 MISCELLANEOUS ...... 23

APPENDIX A - FINANCIAL STATEMENTS OF THE AUTHORITY APPENDIX B - CERTAIN INFORMATION REGARDING THE CITY OF TRENTON APPENDIX C - FINANCIAL STATEMENTS OF THE CITY OF TRENTON APPENDIX D - COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION APPENDIX E - FORM OF THE GUARANTY AGREEMENT APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT APPENDIX G - FORM OF LEGAL OPINION OF BOND COUNSEL APPENDIX H - SPECIMEN MUNICIPAL BOND INSURANCE POLICY APPENDIX I - DESCRIPTION OF BONDS TO BE REFUNDED [ THIS PAGE INTENTIONALLY LEFT BLANK ]

OFFICIAL STATEMENT

PARKING AUTHORITY OF THE CITY OF TRENTON

County of Mercer, New Jersey

$3,735,000 $16,965,000 Parking Revenue Refunding Bonds Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016A (City Guaranteed) Series 2016B (Federally Taxable) consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016

INTRODUCTION

This Official Statement, which includes the front and inside cover pages hereof and the Appendices attached hereto, is furnished by the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey (“the Authority”), a public body corporate and politic of the State of New Jersey (“the State”), organized and existing under the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948 of the State (“the Act”), to provide certain information relating to the issuance of $3,735,000 principal amount of Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable) (the “2016 Series A Bonds”) and $16,965,000 principal amount of Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B (the “2016 Series B Bonds” and, together with the 2016 Series A Bonds, the “Bonds”), consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016. This Official Statement is “deemed final” as of its date, within the meaning of Rule 15c2-12 of the Securities and Exchange Commission (“Rule 15c2-12”).

Brief descriptions of the Bonds, the Authority, the City of Trenton, in the County of Mercer, New Jersey (“the City”), the Project (as hereinafter defined), and the provisions of the General Bond Resolution (as hereinafter defined) appear in this Official Statement. The summaries of and references to all documents, statutes, reports, and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each document, statute, report or instrument.

The Authority has compiled financial projections of the Authority’s Revenues in connection with the Project. See “HISTORICAL AND PROJECTED OPERATIONS OF THE AUTHORITY”, herein.

Words and terms used herein which are not otherwise defined herein shall have the meanings assigned to such terms in the General Bond Resolution (as hereinafter defined).

AUTHORIZATION FOR BONDS

The Bonds are to be issued under and pursuant to the Act (as defined herein) and the resolution adopted by the Authority on June 15, 1999, entitled “Resolution Authorizing the Issuance of Parking Revenue Bonds of the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey”, as amended and supplemented (collectively, the “General Bond Resolution”), as further amended and supplemented by a resolution of the Authority entitled, “Supplemental Bond Resolution of the Parking

Authority of the City of Trenton Supplementing the General Bond Resolution and Providing for the Issuance of Not to Exceed an Aggregate $20,000,000 Parking Revenue Refunding Bonds (City Guaranteed) and $750,000 Parking Revenue Bonds (City Guaranteed) and Determining Various Other Matters Related Thereto” adopted on July 28, 2016 (the “2016 Supplemental Resolution”, and, together with the General Bond Resolution, the “Resolutions”) and an award certificate to be executed by the Chairman of the Authority on the Delivery Date of the Bonds (the “Award Certificate” and together with the Resolutions, the “Resolution”). Copies of the Resolution are on file at the offices of the Authority and at the principal corporate trust office of the Trustee (hereinafter defined) in Morristown, New Jersey and reference is made to such documents for the provisions relating, among other things, to the terms and security of the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the holders of the Bonds, and the rights, duties and obligations of the Authority, the Trustee and the City, all as summarized herein.

Pursuant to the provisions of the Local Authorities Fiscal Control Law, N.J.S.A. 40A:5A-1 et seq., on August 10, 2016 the Local Finance Board in the Division of Local Governmental Services, New Jersey Department of Community Affairs (the “Local Finance Board”), issued positive findings in connection with the issuance of the Bonds. The Guaranty Ordinances were approved by the Local Finance Board prior to their adoption by the City.

PURPOSE OF THE BOND ISSUE

The 2016 Series A Bonds are being issued to provide funds which will be used, together with other available funds of the Authority, to (i) refund all or a portion of the Authority’s outstanding Parking Revenue Refunding Bonds (City Guaranteed, Series 2006) (Federally Taxable), originally issued in the aggregate principal amount of $4,520,000 on February 28, 2006 and currently outstanding in the aggregate principal amount of $3,585,000 (the “2006 Bonds”), as more particularly described on APPENDIX I hereto (the “2006 Bonds to be Refunded”) and (ii) pay the costs of issuing the 2016 Series A Bonds (collectively, the “2016 Series A Project”).

The 2016 Series B Bonds are being issued to provide funds which will be used, together with other available funds of the Authority, to (i) refund all or a portion of the Authority’s outstanding Parking Revenue Refunding Bonds (City Guaranteed), Series 2013A, originally issued in the aggregate principal amount of $19,295,000 on March 20, 2013 and currently outstanding in the aggregate principal amount of $16,655,000 (the “2013 Refunding Bonds”), as more particularly described on APPENDIX I hereto (the “2013 Bonds to be Refunded” and, together with the 2006 Bonds to be Refunded, the “Bonds to be Refunded”), (ii) to finance certain capital improvements to the Authority garages, and (iii) to pay the costs of issuing the 2016 Series B Bonds (collectively, the “2016 Series B Project” and, together with the 2016 Series A Project, the “Projects”).

The Bonds to be Refunded will be defeased by either a cash deposit or the purchase of State and Local Government Securities (the “Government Obligations”) purchased with a portion of the proceeds of the Bonds and deposited into an Escrow Fund established pursuant to an Escrow Deposit Agreement (the “Escrow Deposit Agreement”) to be dated September 27, 2016 by and between the Authority and U.S. Bank National Association, Morristown, New Jersey, as Trustee for the Bonds to be Refunded, and as Escrow Agent.

DESCRIPTION OF THE BONDS

General Description

The Bonds are to be dated their delivery date and shall bear interest at the rates and shall mature in the annual amounts and years set forth on the inside front cover page of this Official Statement. Interest will be payable on April 1, 2017 and semiannually thereafter on the first day of October and April 2

of each year until maturity or prior redemption at the interest rates which are set forth on the inside cover page. The Bonds may be purchased in book-entry only form through book-entries made on the books and the records of The Depository Trust Company, New York, New York (“DTC”) and its Participants. Interest on the Bonds shall be credited to the Participants of DTC as listed on the records of DTC as of each March 15th and September 15th next preceding each payment date (the “Record Dates”). U.S. Bank National Association, Morristown, New Jersey has been appointed to serve as trustee, paying agent and registrar for the Bonds (the “Trustee”, “Paying Agent” and “Registrar”, respectively). The Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof not exceeding the maximum amount of each stated maturity. (See “DESCRIPTION OF THE BONDS – Book-Entry Only-System,” herein).

Optional Redemption

2016 Series A Bonds . The 2016 Series A Bonds maturing prior to October 1, 2027 are not subject to optional redemption prior to their stated maturities. The 2016 Series A Bonds maturing on or after October 1, 2027, shall be subject to redemption, at the option of the Authority, prior to their stated maturity dates, as a whole or in part (in order of maturity determined by the Authority and by lot within a maturity) at any time on or after October 1, 2026, upon notice, as provided in the General Bond Resolution, at 100% of the principal amount of the Bonds redeemed, plus accrued interest thereon, if any, to the date fixed for redemption.

2016 Series B Bonds. The 2016 Series B Bonds maturing prior to April 1, 2027 are not subject to optional redemption prior to their stated maturities. The 2016 Series B Bonds maturing on or after April 1, 2027, shall be subject to redemption, at the option of the Authority, prior to their stated maturity dates, as a whole or in part (in order of maturity determined by the Authority and by lot within a maturity) at any time on or after April 1, 2026, upon notice, as provided in the General Bond Resolution, at 100% of the principal amount of the Bonds redeemed, plus accrued interest thereon, if any, to the date fixed for redemption.

Mandatory Sinking Fund Redemption

2016 Series A Bonds . The 2016 Series A Bonds maturing on October 1, 2033 are subject to mandatory sinking fund redemption as follows, commencing on October 1, 2027, at the redemption price of par and shall be selected by lot from among the 2016 Series A Bonds then subject to mandatory sinking fund redemption: Date Amount October 1, 2027 $220,000 October 1, 2028 235,000 October 1, 2029 245,000 October 1, 2030 260,000 October 1, 2031 270,000 October 1, 2032 305,000 October 1, 2033 † 315,000 †Final maturity

Notice of Redemption

In the event that the Trustee is required or authorized, or has received notice from the Authority of its election to redeem Bonds, the Trustee will, in accordance with the terms of the General Bond Resolution, select the Bonds to be redeemed and shall give notice, in the name of the Authority, of the redemption of such Bonds. Such notice shall set forth the information required by the terms of the General Bond Resolution and shall be given by mailing a copy of such notice, postage prepaid, not less than 25 days before the date fixed for redemption, to the Registered Owner of any of the Bonds to be redeemed, at his last address appearing upon the registration books of the Authority which are kept and maintained by the Registrar but such mailing shall not be a condition precedent to such redemption and failure to mail any such notice shall not affect the validity of any proceedings for the redemption of the Bonds or the hereinafter defined Guaranty. (See “APPENDIX D - COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION”, herein).

So long as DTC (or any successor thereto) acts as a Securities Depository for the Bonds, Notice of Redemption shall be sent to such depository and shall not be sent to the Beneficial Owners of the Bonds. Any failure of such depository to advise any of its Participants or any failure of any Participant to notify any Beneficial Owner of any notice of redemption shall not affect the validity of the redemption proceedings.

If notice of redemption has been given as provided herein, the Bonds 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 to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, then from and after the redemption date, interest on such Bonds shall cease to accrue and become payable to the holders entitled to payment thereof on such redemption date, and the interest appertaining thereto maturing subsequent to the redemption date shall be void.

Book-Entry-Only System

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

DTC and its Participants . 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 (the “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 DTC 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 4

maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “Indirect Participants” and, together with the Direct Participants, the “Participants”). DTC has Standard & Poor’s rating of AA+. The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchase of Ownership Interests . Purchases of the 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 (a “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, but Beneficial Owners are 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 whom such Beneficial Owners entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except as specifically provided in the Indenture in the event that use of the book-entry-only system is discontinued.

Payments of Principal, Premium, if any, and Interest . Redemption proceeds, principal and interest payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Trustee on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct and Indirect Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is 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 Participant and not of DTC, the Trustee or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

Notices . Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment 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. 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, or in the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as practicable 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). 5

NEITHER THE AUTHORITY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENT TO, OR THE PROVIDING OF NOTICE FOR, SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES.

Transfers of Bonds . 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 the Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in Beneficial Ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Neither the Authority nor the Trustee will have any responsibility or obligation, legal or otherwise, to any party other than to the registered owners of any Bonds on the registration books of the Trustee.

Discontinuation of Book-Entry Only System

In the event (i) DTC determines not to continue to act as securities depository for the Bonds or (ii) the Authority, with the consent of the Trustee, determines in accordance with the terms of the Resolution that (a) DTC is incapable of discharging its duties or (b) it is in the best interests of the holders of the Bonds not to continue the book-entry-only system or that interests of the Beneficial Owners of the Bonds might be adversely affected if the book-entry-only system is continued, then the Authority will discontinue the book-entry-only system with DTC. Upon the occurrence of the event described in (i) or (ii)(a) above, the Authority will attempt to locate another qualified securities depository. If the Authority fails to identify another qualified securities depository to replace DTC or makes the determination noted in (ii)(b) above, the Trustee will authenticate and deliver the Bonds in accordance with the Resolution.

No Assurance Regarding DTC Practices

The foregoing information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority does not take any responsibility for the accuracy thereof.

So long as Cede & Co. is the registered owner of the Bonds as nominee of DTC, references herein to the holders or registered owners of the Bonds will mean Cede & Co. and will not mean the Beneficial Owners of the Bonds.

Neither the Authority nor the Trustee will have any responsibility or obligation to the Participants, DTC or the persons for whom they act with respect to (i) the accuracy of any records maintained by DTC or by any Direct or Indirect Participant of DTC, (ii) payments or the providing of notice to Direct Participants, the Indirect Participants or the Beneficial Owners, (iii) the selection by DTC or by any Direct or Indirect Participant of any Beneficial Owner to receive payment in the event of a partial redemption of the Bonds or (iv) any other action taken by DTC or its partnership nominee as owner of the Bonds.

SECURITY

Authority Pledge

The Bonds constitute an issue of “Bonds” as authorized and defined in the Resolution and are direct and general obligations of the Authority, and the full faith and credit of the Authority is pledged to the payment of the principal or Redemption Price of, and interest on the Bonds in the order of priority as follows: (1) for the benefit and security of the holders of the Bonds, and (2) to the Bond Insurer, to the extent set forth in the General Bond Resolution, subject further to additional provisions of the General Bond Resolution permitting the payment, setting apart or appropriation thereof to or for other purposes and on the terms, conditions and priorities therein set forth (See “APPENDIX D – COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION”, herein).

In the opinion of Bond Counsel to the Authority, the provisions of the Bonds and the Resolution are deemed to be and do constitute contracts by and among the Authority, the Trustee and the Holders, from time to time, of the Bonds, and the pledge made in the Resolution and the covenants and agreements set forth in the Resolution to be performed on behalf of the Authority shall be for the equal benefit, protection and security of the Holders of any and all Bonds, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or pursuant to the Resolution.

City Guaranty

The City adopted ordinances authorizing the guaranty of bonds issued by the Authority on July 1, 1999, February 15, 2001, November 6, 2003 and October 20, 2005 (collectively the “Guaranty Ordinances”). The Guaranty Ordinances guaranteed outstanding bonds of the Authority in an aggregate amount of $39,850,000 which is an amount greater than the outstanding bonds of the Authority, including the Bonds. Under the authority of the Guaranty Ordinances and the 2016 Supplemental Resolution, the City and the Authority will, simultaneously with the issuance and delivery of the Bonds, enter into a Guaranty Agreement to guarantee the principal of and interest on the Bonds (the “Guaranty”) (See APPENDIX E - “FORM OF THE GUARANTY AGREEMENT”, herein). Therefore, to the extent that Revenues or certain other funds of the Authority are not available to pay the principal of or interest on the Bonds, the Guaranty provides that the City is obligated to provide for such payment (See “APPENDIX D - COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION” herein). All rights of the Authority pursuant to the Guaranty are pledged, in the order of priority and to the extent set forth in the Resolution. All Guaranty funds received by the Authority from the City pursuant to the Guaranty shall be deposited by the Trustee and paid into the Bond Service Fund and/or the Bond Reserve Fund, as applicable, as set forth in the General Bond Resolution.

The payments which are made by the City under the terms of the Guaranty will constitute valid, binding, direct and general obligations of the City and are payable out of the first funds becoming legally available for such purpose. In the opinion of Bond Counsel to the City, the City has the power, and is obligated to levy ad valorem taxes upon all the taxable property in the City (for the purpose of making such payments under the Guaranty) as the same become due, without limitation as to rate or amount, if such funds are not otherwise available. The Guaranty will remain in full force and effect for as long as the Bonds remain outstanding.

THE AUTHORITY HAS NO POWER TO LEVY OR COLLECT TAXES, AND THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CREATE A DEBT OR LIABILITY OF THE STATE OF NEW JERSEY OR OF ANY COUNTY OR MUNICIPALITY OTHER THAN THE AUTHORITY AND THE CITY TO THE EXTENT PROVIDED IN THE GUARANTY AND DO NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE STATE OF NEW JERSEY, OR OF ANY COUNTY OR MUNICIPALITY INCLUDING THE CITY, 7

EXCEPT TO THE EXTENT PROVIDED IN THE GUARANTY, EITHER LEGAL, MORAL OR OTHERWISE. THE ACT PROVIDES THAT NEITHER THE MEMBERS OF THE AUTHORITY NOR ANY PERSON EXECUTING BONDS OF THE AUTHORITY SHALL BE LIABLE PERSONALLY ON SUCH BONDS BY REASON OF THE ISSUANCE THEREOF.

Bond Reserve Fund Established and Created Under the General Bond Resolution

As further security for the payment of the Bonds, the Authority has established the following Bond Reserve Fund under the General Bond Resolution.

Simultaneously with the delivery of the Bonds and if necessary to meet the Bond Reserve Requirement (as defined herein), the Bond Reserve Fund will be funded from the proceeds of the Bonds, as provided for by the General Bond Resolution, in an aggregate amount which is equal to the Bond Reserve Requirement. The Bond Reserve Requirement, as of any particular date of calculation, is equal to the Maximum Annual Debt Service (as defined in the General Bond Resolution) on the Bonds Outstanding on such date (See “APPENDIX D – COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION”, herein).

The moneys deposited by the Trustee from the proceeds of the Bonds into the Bond Reserve Fund at closing will be held in such fund and used solely for the purpose of paying the principal of and interest on the Bonds when due and payable, including Sinking Fund Payments, whenever there are insufficient moneys for such purpose in the Bond Service Fund (See “ESTIMATED SOURCES AND USES OF FUNDS”, herein). Moneys in the Bond Reserve Fund will be invested, pending application, in accordance with the terms of the General Bond Resolution. In the event there is a deficiency in the Bond Service Fund to provide for any withdrawals therefrom required by the terms of the General Bond Resolution, the Trustee will transfer funds from the Bond Reserve Fund in such amounts as are necessary to make up such deficiency therein, first from cash or Investment Obligations on deposit therein, and second from City funds pursuant to the Guaranty (See “SECURITY – City Guaranty”, herein). In the event all amounts which are on deposit in the Bond Service Fund and/or Sinking Fund and Bond Reserve Fund, including funds available under the City Guaranty as provided herein, are insufficient to provide for the payment of the principal of and interest on the Bonds which are due and payable, the Insurer (as defined herein) shall provide funds pursuant to the Policy (as defined herein) (See “MUNICIPAL BOND INSURANCE” and “APPENDIX D – COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION”, herein).

Rate Covenant

Under the General Bond Resolution, the Authority has covenanted to make, impose, charge and collect rents, rates, fees and other charges (the “Service Charges”) in accordance with the provisions of the Act. The Authority must estimate, compute, make, charge, impose and collect such Service Charges pursuant to the Act, so that Revenues from such Service Charges which are collected and paid to the Trustee for each Fiscal Year will at least be sufficient to: (a) pay Operating Expenses in each Fiscal Year, (b) provide an additional amount which is at least equal to the Bond Service Requirement for such Fiscal Year; and (c) to provide an additional amount, if any, needed so that the amount in the Renewal and Replacement Fund will be equal to the System Reserve Requirement (See “APPENDIX D – COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION”, herein).

MUNICIPAL BOND INSURANCE

Assured Guaranty Municipal Corp. has supplied the following information for inclusion in this Official Statement. Reference is made to APPENDIX H for a specimen of the Bond Insurance Policy. The Authority and the Underwriter (as hereinafter defined) make no representation as to the accuracy or completeness of this information or as to the absence of any material adverse changes in this information subsequent to the date hereof.

Bond Insurance Policy

Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. (“AGM”) will issue its Municipal Bond Insurance Policy (the “Policy”) for the Bonds. The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an appendix to this Official Statement .

The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law.

Assured Guaranty Municipal Corp.

AGM is a New York domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO”. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. Neither AGL nor any of its shareholders or affiliates, other than AGM, is obligated to pay any debts of AGM or any claims under any insurance policy issued by AGM.

AGM’s financial strength is rated “AA” (stable outlook) by S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”), “AA+” (stable outlook) by Kroll Bond Rating Agency, Inc. (“KBRA”) and “A2” (stable outlook) by Moody’s Investors Service, Inc. (“Moody’s”). Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings

On July 27, 2016, S&P issued a credit rating report in which it affirmed AGM’s financial strength rating of “AA” (stable outlook). AGM can give no assurance as to any further ratings action that S&P may take.

On August 8, 2016, Moody’s published a credit opinion affirming its existing insurance financial strength rating of “A2” (stable outlook) on AGM. AGM can give no assurance as to any further ratings action that Moody’s may take.

On December 10, 2015, KBRA issued a financial guaranty surveillance report in which it affirmed AGM’s insurance financial strength rating of “AA+” (stable outlook). AGM can give no assurance as to any further ratings action that KBRA may take.

For more information regarding AGM’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Capitalization of AGM

At June 30, 2016, AGM’s policyholders’ surplus and contingency reserve were approximately $3,841 million and its net unearned premium reserve was approximately $1,459 million. Such amounts represent the combined surplus, contingency reserve and net unearned premium reserve of AGM, AGM’s wholly owned subsidiary Assured Guaranty (Europe) Ltd. and 60.7% of AGM’s indirect subsidiary Municipal Assurance Corp.; each amount of surplus, contingency reserve and net unearned premium reserve for each company was determined in accordance with statutory accounting principles.

Incorporation of Certain Documents by Reference

Portions of the following documents filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof:

(i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (filed by AGL with the SEC on February 26, 2016);

(ii) the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016 (filed by AGL with the SEC on May 5, 2016); and

(iii) the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 (filed by AGL with the SEC on August 4, 2016).

All consolidated financial statements of AGM and all other information relating to AGM included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof “furnished” under Item 2.02 or Item 7.01 of Form 8-K, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Municipal Corp.: 1633 Broadway, New York, New York 10019, Attention: Communications Department (telephone (212) 974-0100). Except for the information referred to above, no information available on or through AGL’s website shall be deemed to be part of or incorporated in this Official Statement.

Any information regarding AGM included herein under the caption “MUNICIPAL BOND INSURANCE – Assured Guaranty Municipal Corp.” or included in a document incorporated by reference herein (collectively, the “AGM Information”) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies

or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded.

Miscellaneous Matters

AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “MUNICIPAL BOND INSURANCE”.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds to be received from the sale of the Bonds will be applied approximately as follows:

Sources 2016 Series B

Parking Revenue Parking 2016 Series A Refunding Bonds Revenue Bonds Total Principal Amount of the Bonds $3,735,000.00 $16,250,000.00 $715,000.00 $20,700,000.00 Original Issue Premium/Discount 899,849.90 40,647.85 940,497.75 Other Available Funds 36,447.83 158,574.88 6,977.29 202,000.00 Total Sources $3,771,447.83 $17,308,424.78 $762,625.14 $21,842,497.75

Uses 2016 Series B

Parking Revenue Parking 2016 Series A Refunding Bonds Revenue Bonds Total Deposit to Escrow Fund $3,696,866.58 $16,982,590.07 $20,679,456.65 Deposit to Project Fund $750,000.00 750,000.00 Costs of Issuance * 74,581.25 325,834.71 12,625.14 413,041.10 Total Uses $3,771,447.83 $17,308,424.78 $762,625.14 $21,842,497.75

______* Includes legal, accounting, financial advisory, bond insurance premium, rating agency, printing, paying agent, escrow agent, verification agent and miscellaneous costs incurred in connection with the issuance of the Bonds.

THE AUTHORITY Creation and Powers

The Authority is a public body corporate and politic, organized and existing under the Act and created by virtue of an ordinance of the City adopted on December 16, 1948. The Authority was created for the purpose of acquiring, constructing, maintaining and operating parking facilities to promote commerce and economic renewal.

The Authority has various powers under the Act, including, among others, the following: (1) to sue and to be sued; (2) to enter into leases and contracts and other instruments to carry out its powers; (3) to acquire property by any lawful means, including the exercise of the power of eminent domain with the permission of the City; (4) to hold, to operate and to administer its property; (5) to issue its bonds and to secure their payment and the rights of holders thereof under one or more resolutions; (6) to enter into contracts with and to accept grants from the Federal government, the State and its political subdivisions or any agency thereof, and any person; (7) to fix, alter, charge and collect rents, rates and other charges, at reasonable rates to be determined exclusively by it, for the use of the facilities and projects of the Authority and for all services sold, furnished or supplied directly or indirectly by the Authority through said facilities and projects, which shall, together with any grants, receipts, contributions or income from other sources, be sufficient to provide for the payment of the expenses of the Authority, repair, maintenance and operation of its facilities and projects, and payment of the principal of and interest on, and any premiums upon the redemption of, its bonds and other obligations, and to fulfill the terms and provisions of any agreements made with the purchasers or holders of any such bonds or other obligations; and (8) to make and to enforce rules and regulations for the management of its business affairs.

Parking Operations

The Authority owns and operates five (5) parking facilities, the Merchant Street surface lot, the Warren Street Garage, the South Broad and Front Street Garage (which was temporarily closed as of July, 2012), the Lafayette Yard Parking Garage and the Liberty Commons Parking Facility, which opened on April 12, 2005. Certain financial data contained in this Official Statement, as well as the Appendices attached hereto, contain financial projections which include the anticipated revenue from the Authority's operation of the Liberty Commons Parking Facility as well as historical revenues, including revenues. (See “HISTORICAL AND PROJECTED OPERATIONS OF THE AUTHORITY - Projected Operations”, herein).

The current parking facilities owned or leased by the Authority and charges therefore are as follows:

FACILITY TYPE/USE PARKING RATES

Merchant Street Lot Lot used for daily and monthly $10 daily flat rate commuters $125 monthly*

Warren Street Garage Garage used for daily and $10 daily flat rate monthly commuters $125 monthly*

South Broad and Garage used for daily and Closed as of July 2012 Front Street Garage monthly commuters

Lafayette Yard Garage Garage used for daily and $6 for 2 hours, $8 for 4 hours, $10 monthly commuters for 12 hours, $13 for 24 hours and $125 monthly*

Liberty Commons Parking Facility Garage used for daily and $6 for 2 hours, $8 for 4 hours, $10 monthly commuters for 12 hours, $13 for 24 hours and $125 monthly*

In addition to operating the above-referenced projects, the Authority continues to play an active role in the City’s economic development efforts, and may in the future undertake additional parking projects or acquire the interests in land for parking purposes deemed to be in the best interests of the City and the Authority.

Management

The Authority is governed by a board consisting of seven (7) members, five of whom are appointed by resolution of the governing body of the City and two of whom are appointed by the Mayor, for a term of 5 years. Upon the expiration of a member's term, such member continues to serve until a successor has been appointed by the City and has been qualified.

The current members of the Authority and the respective dates of expiration of their terms are set forth below:

Position Held Term Expires

Name Andrew Worek Chairman December 2016 Harry Reyes Vice-Chairman December 2016 Melody Freeman Treasurer June 2019 Perry Shaw III Commissioner December 2016 Anne LaBate Commissioner December 2016 Scott A. Rice Commissioner June 2017 William A. Watson Commissioner June 2017

The position of Executive Director of the Authority is currently vacant. The Authority is conducting a national search to fill the position of Executive Director and anticipates hiring someone for the position of Executive Director within the next year.

*Anticipated to be $133 monthly as of November 1, 2016.

The duties of the Executive Director relating to the overall executive management of the Authority is currently being fulfilled by the Chairman of the Authority. The day to-day activities of the Authority are overseen and performed by Patrice Harrison, Office Manager of the Authority. Presently, nine (9) full- time and ten (10) part-time employees carry out the daily operations of the Authority. Field staff are managed daily by two (2) field supervisors. The Authority operates 365 days per year, from the hours of 7 AM to 10 PM at the Warren Street and Liberty Commons Garages. Lafayette Yard Garage adjacent to the Wyndham Hotel operates 365 days and 24 hours each day.

The Trenton Parking Authority is not responsible for the management, operation maintenance, repair, replacement and/or enforcement of the City of Trenton on-street parking meter system, which is a City of Trenton operation and financial responsibility.

The Authority’s Fiscal Year is for the twelve month period ending June 30 in each year or for such of their twelve month period as may be determined by a resolution of the Authority. The Authority's Administrative Office is located at 16 East Hanover Street, Trenton, New Jersey 08608.

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HISTORICAL AND PROJECTED OPERATIONS OF THE AUTHORITY

The Revenues, Operating Expenses (as defined in the General Bond Resolution) and Net Revenues Available for Debt Service for the past five years are set forth in the table below:

Historical Operations Years Ended June 30,

2016* 2015 2014 2013 2012 Operating Revenues: Off and On-Street Parking Fees $2,769,804 $3,843,173 $3,413,313 $3,515,902 $3,508,353 Interest Income - - 747 18,296 32,440 Other Income 22,500 29,200 29,700 30,200 26,567

Total Revenues: 2,792,304 3,872,273 3,344,760 3,564,398 3,567,360

Operating Expenses (1) : Salaries and Wages 300,940 411,674 438,211 473,552 600,770 General Expenses (Excluding Depreciation and Amortization) 648,010 1,000,556 815,337 1,100,137 1,084,074

Total Expenses: Net Revenues: $1,843,354 $2,460,143 $2,190,212 $1,990,709 $1,876,516

*Numbers retrieved from nine-month period ended March 31, 2016 compilation report (Unaudited). (1) As defined in the General Bond Resolution, Operating Expenses do not include, among other things, interest on the Bonds.

The projected Revenues, Operating Expenses, and Net Revenues Available for Debt Service for the next five years are set forth in the table below.

Projected Operations Years Ended June 30,

2017 2018 2019 2020 2021 Operating Revenues: Off and On-Street Parking Fees $3,800,032.32 $3,918,431.52 $3,920,098.52 $4,207,212.72 $4,217,212.72 Interest Income 7,265.29 7,265.29 7,265.29 7,265.29 7,265.29 Other Income 30,792.96 30,792.96 30,792.96 30,792.96 30,792.96

Total Revenues: 3,838,090.57 3,956,489.77 3,958,156.77 4,245,270.97 4,255,270.97

Operating Expenses (1) : Salaries and Wages 660,189.93 787,539.02 821,241.71 856,368.69 892,994.44 General Expenses (Excluding Depreciation and Amortization) 699,966.18 716,897.18 734,327.00 752,270.74 770,744.01

Total Expenses: 1,360,156.12 1,504,436.20 1,555,568.71 1,608,639.44 1,663,738.45

Net Revenues Available for Debt Service: $2,477,934.45 $2,452,053.57 $2,402,588.06 $2,636,631.53 $2,591,532.52

(1) As defined in the General Bond Resolution, Operating Expenses do not include, among other things, interest on the Bonds.

OUTSTANDING OBLIGATIONS OF THE AUTHORITY

At the present time, the outstanding obligations of the Authority are (i) the Series 2006 Bonds and (ii) the Series 2013 Bonds. Following the issuance of the Bonds, the debt service on the outstanding bonds of the Authority for each Fiscal Year will be as set forth below. See “APPENDIX I - DESCRIPTION OF BONDS TO BE REFUNDED” for a description of the Series 2006 Bonds and Series 2013 Bonds being refunded with a portion of the proceeds of the Bonds

The Bonds Year Outstanding Debt Service (1) Principal Interest Total (2) 2017 $ 603,543.75 $ 1,215,000 $ 350,030.87 $ 2,168,574.62 2018 601,193.75 1,135,000 659,223.00 2,395,416.75 2019 602,743.75 1,175,000 626,991.75 2,404,735.50 2020 604,093.75 1,215,000 583,064.00 2,402,157.75 2021 585,918.75 1,260,000 536,627.50 2,382,546.25 2022 601,834.38 1,310,000 488,178.75 2,400,013.13 2023 606,250.00 1,360,000 437,505.00 2,403,755.00 2024 614,425.00 1,410,000 384,653.50 2,409,078.50 2025 616,550.00 1,470,000 329,367.00 2,415,917.00 2026 588,125.00 1,505,000 296,922.50 2,390,047.50 2027 604,475.00 1,540,000 263,409.00 2,407,884.00 2028 614,690.00 1,590,000 201,919.00 2,406,609.00 2029 623,506.25 1,655,000 137,313.75 2,415,820.00 2030 582,012.50 1,710,000 91,469.75 2,383,482.25 2031 600,025.00 260,000 43,962.00 903,987.00 2032 606,715.63 270,000 32,540.50 909,256.13 2033 622,025.00 305,000 20,149.25 947,174.25 2034 630,850.00 315,000 6,788.25 952,638.20 Total (2) $10,908,977.51 $20,700,000 $5,490,115.37 $37,099,092.83 ______(1) Excludes debt service on the Bonds to be Refunded. (2) Totals may not add due to rounding.

SUMMARY OF CERTAIN PROVISIONS OF THE NEW JERSEY CAP LAW

Any payments by the City to the Authority under the Guaranty and the Act are exempt from the City’s CAP limitation imposed by Chapter 68 of the Pamphlet Laws of 1976, of the State of New Jersey and as further amended and made permanent by Chapter 89 of the Pamphlet Laws of 1990. The City has not included in its budget for Fiscal Year 2017 any amounts for payment of the principal of or interest on the Bonds. Under present State law (Chapter 316 of the Pamphlet Laws of 1942, of the State), as amended, the Clerk of the City must, not later than the 90 th day after July 1 (the beginning of the budget year), transmit to the County Board of Taxation a statement of the amounts appropriated in the budget and to be raised by taxation for that year. An emergency appropriation could be made later in the budget year. Such emergency appropriation for the purpose of raising amounts required to be paid pursuant to the Guaranty are not subject to the provisions of the CAP law which limits the budgetary appropriations permissible by municipalities within the State. However, any emergency appropriation which, together with prior emergency appropriations during the same year, exceeds 3% of the total operating appropriations budgeted for such year by the total operating appropriations budgeted for such year by the City, would require approval of the Director of the Division of Local Government Services pursuant to the provisions of the Local Budget Law of the State.

PLEDGE OF THE STATE NOT TO LIMIT POWERS OF AUTHORITY OR RIGHTS OF BONDHOLDERS

The Act sets forth the pledge and agreement that the State will not limit or alter the rights vested by the Act in the Authority or in the holders of obligations of the Authority until such obligations are fully met and discharged.

BANKRUPTCY

The undertakings of the Authority should be considered with reference to Chapter 9 of the Bankruptcy Code, 11 United States Code Section 901, et seq. and other bankruptcy laws affecting creditor’s rights and governmental units in general. Chapter 9 permits a political subdivision, public agency, or instrumentality that is insolvent to file a petition in a court of bankruptcy for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of petitioner’s creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner that was or could have been commenced before the commencement of the bankruptcy proceeding; directs a petitioner to file a plan for the adjustment of its debts; and provides that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount and more than one-half in number of allowed claims of each class of creditors.

Reference should also be made to N.J.S.A. 52:27-40 et seq. which provides that a municipality has the power to file a petition in bankruptcy provided the approval of the Municipal Finance Commission has been obtained. The powers of the Municipal Finance Commission have been vested in the Local Finance Board. The Bankruptcy Code specifically provides that Chapter 9 does not limit or impair the power of a state to control, by legislation or otherwise, a municipality of or in such state in the exercise of the political or governmental powers of such municipality, including any expenditures for such exercise.

LITIGATION

In the opinion of Bier Associates, New Brunswick, New Jersey, Counsel to the Authority, no litigation of any nature is now pending in any court restraining or enjoining the authorization, issuance or delivery of the Bonds or in any manner questioning the authority or proceedings for the authorization or issuance of the Bonds or the Guaranty, or in any way their validity, or questioning, contesting, or in any way affecting the creation, organization, corporate existence or powers of the Authority, or the title of any of the present officers thereof to their respective titles. In addition, there is no litigation presently pending, or to the knowledge of the Authority, threatened that would materially affect the financial condition of the Authority.

In the opinion of Marc A. McKithen, Director of Law for the City, no litigation of any nature is now pending in any court restraining or enjoining the authorization of the Guaranty, or in any manner questioning the authority or proceedings for the authorization of the Guaranty. In addition there is no litigation presently pending or threatened that would materially affect the financial condition of the City.

LEGALITY FOR INVESTMENT

The Act provides that the State and all public officers, municipal corporations, political subdivisions, and public bodies, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business and all executors, administrators, guardians, trustees, and other 17

fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any bonds or other obligations issued by the Authority, including the Bonds, and such bonds are authorized security for all public deposits.

TAX MATTERS

The 2016 Series B Bonds

Section 103(a) of the Code provides that interest on obligations such as the 2016 Series B Bonds is not included in gross income for federal income tax purposes only if certain requirements are met. In the Arbitrage and Tax Certificate of the Authority (the “Tax Certificate”) , which will be delivered in connection with the issuance of the 2016 Series B Bonds, the Authority will make certain representations, certifications of fact, and statements of reasonable expectation in connection with the issuance of the 2016 Series B Bonds and certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of the interest on the 2016 Series B Bonds from gross income under Section 103(a) of the Code.

In the opinion of Bond Counsel, under existing statutes, regulations, administrative pronouncements and judicial decisions, and in reliance on the representations, certifications of fact, and statements of reasonable expectation made by the Authority and assuming compliance by the Authority with its ongoing covenants, interest on the 2016 Series B Bonds is not included in the gross income of the owners thereof for federal income tax purposes pursuant to Section 103(a) of the Code and is not an item of tax preference to be included in calculating alternative minimum taxable income under the Code for purposes of the alternative minimum tax imposed with respect to individuals and corporations. Interest on the 2016 Series B Bonds held by corporate taxpayers is included in the relevant income computation for calculation of the federal alternative minimum tax imposed on corporations as a result of interest on the 2016 Series B Bonds being included in “adjusted current earnings.”

Certain Federal Tax Consequences Relating to the 2016 Series B Bonds

Although interest on the 2016 Series B Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the 2016 Series B Bonds may otherwise affect the federal income tax liability of the recipient. The nature and extent of these other tax consequences will depend upon the recipient’s particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences. Purchasers of the 2016 Series B Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions and certain recipients of Social Security benefits, are advised to consult their own tax advisors as to the tax consequences of purchasing or holding the 2016 Series B Bonds.

There can be no assurance that legislation will not be introduced or enacted after the issuance and delivery of the 2016 Series B Bonds so as to affect adversely the exclusion from gross income for federal income tax purposes of interest on the 2016 Series B Bonds. Each purchaser of the 2016 Series B Bonds should consult his or her own advisor regarding any changes in the status of pending or proposed federal tax legislation.

The 2016 Series A Bonds

In the opinion of Bond Counsel, interest on the 2016 Series A Bonds is includable in gross income for federal income tax purposes. The following is a summary of certain United States federal income tax consequences of the ownership of the 2016 Series A Bonds as of the date hereof. Each prospective investor should consult

with its own tax advisor regarding the application of United States federal income tax laws, as well as any state, local, foreign or other tax laws, to its particular situation.

This summary is based on the Code, as well as Treasury Regulations and administrative and judicial rulings and practice. Legislative, judicial and administrative changes may occur, possibly with retroactive effect, that could alter or modify the continued validity of the statements and conclusions set forth herein. This summary is intended as a general explanatory discussion of the consequences of holding the 2016 Series A Bonds generally and does not purport to furnish information in the level of detail or with the investor’s specific tax circumstances that would be provided by an investor’s own tax advisor. For example, this summary is addressed only to original purchasers of the 2016 Series A Bonds that are “U.S. holders” (as defined below), deals only with 2016 Series A Bonds held as capital assets within the meaning of Section 1221 of the Code and does not address tax consequences to holders that may be relevant to investors subject to special rules. In addition, this summary does not address alternative minimum tax issues or the indirect consequences to a holder of an equity interest in the 2016 Series A Bonds.

As used herein, a “U.S. holder” is a “U.S. person” that is a beneficial owner of a 2016 Series A Bond. A “non-U.S. investor” is a holder (or beneficial owner) of a 2016 Series A Bond that is not a U.S. person. For these purposes, a “U.S. person” is a citizen or resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof (except, in the case of a partnership, to the extent otherwise provided in Treasury Regulations), an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if (i) a United States court is able to exercise primary supervision over the trust’s administration, and (ii) one or more United States persons have the authority to control all of the trust’s substantial decisions.

Sale or Redemption of 2016 Series A Bonds

A bondowner’s tax basis for a 2016 Series A Bond is the price such owner pays for the 2016 Series A Bond plus amounts of any original issue discount included in income, reduced on account of any payments received (other than “qualified periodic interest” payments) and any amortized premium. Gain or loss recognized on a sale, exchange or redemption of a 2016 Series A Bond, measured by the difference between the amount realized and the basis of the 2016 Series A Bond as so adjusted, will generally give rise to capital gain or loss if the 2016 Series A Bond is held as a capital asset.

Possible Recognition of Taxable Gain or Loss upon Defeasance of 2016 Series A Bonds

Defeasance of any 2016 Series A Bonds may result in a deemed exchange under Section 1001 of the Code, in which event the holder of such 2016 Series A Bond will recognize taxable gain or loss in an amount equal to the difference between the amount realized on from the deemed exchange (less any accrued qualified stated interest which will be taxable as such) and the holder’s adjusted basis in such 2016 Series A Bond.

Backup Withholding

A bondowner may, under certain circumstances, be subject to “backup withholding” (currently the rate of this withholding tax is 28%, but may change in the future) with respect to interest or original issue discount on the 2016 Series A Bonds. This withholding generally applies if the owner of a 2016 Series A Bond (a) fails to furnish the Authority with its taxpayer identification number; (b) furnishes the Authority an incorrect taxpayer identification number; (c) fails to report properly interest, dividends or other “reportable payments” as defined in the Code; or (d) under certain circumstances, fails to provide the Authority with a certified statement, signed under penalty of perjury, that the taxpayer identification number provided is its correct number and that the holder is not subject to backup withholding. Backup

withholding will not apply, however, with respect to certain payments made to bondowners, including payments to certain exempt recipients (such as certain exempt organizations) and to certain Nonresidents (as defined below). Owners of the 2016 Series A Bonds should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining the exemption.

The amount of “reportable payments” for each calendar year and the amount of tax withheld, if any, with respect to payments on the 2016 Series A Bonds will be reported to the bondowners and to the Internal Revenue Service.

Foreign Bondowners

Under the Code, interest and original issue discount income with respect to 2016 Series A Bonds held by nonresident alien individuals, foreign corporations or other non-United States persons (“Nonresidents”) generally will not be subject to the United States withholding tax (or backup withholding) if the Authority (or other person who would otherwise be required to withhold tax from such payments) is provided with an appropriate statement that the beneficial owner of the 2016 Series A Bonds is a Nonresident. The withholding tax may be reduced or eliminated by an applicable tax treaty, if any. Notwithstanding the foregoing, if any such payments are effectively connected with a United States trade or business conducted by a Nonresident bondowner, they will be subject to regular United States income tax, but will ordinarily be exempt from United States withholding tax.

ERISA

The Employees Retirement Income Security Act of 1974, as amended (“ERISA”), and the Code generally prohibit certain transactions between a qualified employee benefit plan under ERISA (an “ERISA Plan”) and persons who, with respect to that plan, are fiduciaries or other “parties in interest” within the meaning of ERISA or “disqualified persons” within the meaning of the Code. All fiduciaries of ERISA Plans, in consultation with their advisors, should carefully consider the impact of ERISA and the Code on an investment in any 2016 Series A Bonds.

In all events, all investors should consult their own tax advisors in determining the federal, state, local and other tax consequences to them of the purchase, ownership and disposition of the 2016 Series A Bonds.

IRS Circular 230 Disclosure

To ensure compliance with requirements imposed by the Internal Revenue Service, any purchaser of a 2016 Series A Bonds is hereby informed that (i) any U.S. federal tax advice contained in this Official Statement (including any appendices) is not intended or written by Bond Counsel to the Authority to be used, and that it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under the Code; (ii) such advice is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by the written advice; and (iii) the taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

The Bonds

New Jersey Gross Income Tax

In the opinion of Bond Counsel, the interest on the Bonds and any gain realized on the sale of the Bonds are not includable as gross income under the New Jersey Gross Income Tax Act.

Future Events

Tax legislation, administrative action taken by tax authorities, and court decisions, whether at the Federal or State level, may adversely affect the exclusion of interest on and any gain realized on the sale of the Bonds under the existing New Jersey Gross Income Tax Act, and any such legislation, administrative action or court decisions could adversely affect the market price or marketability of the Bonds.

EACH PURCHASER OF THE BONDS SHOULD CONSULT HIS OR HER OWN ADVISOR REGARDING ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED FEDERAL OR STATE TAX LEGISLATION, ADMINISTRATIVE ACTION TAKEN BY TAX AUTHORITIES, OR COURT DECISIONS.

ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATIONS OF THE CODE.

SECONDARY MARKET DISCLOSURE

In accordance with the provisions of Rule 15c2-12, the Authority and the City will, prior to the issuance of the Bonds, enter into a continuing disclosure agreement with U.S. Bank National Association, Morristown, New Jersey, as dissemination agent, substantially in the form set forth in APPENDIX F attached hereto.

The Authority provides continuing disclosure in connection with previously issued and outstanding bonds pursuant to SEC Rule 15c-12 by providing required information electronically to the Electronic Municipal Market Access (“EMMA”) website of the MSRB. The Authority has previously failed to timely file its annual financial information and operating data for the years ending June 30, 2011 through 2015. In addition, the Authority failed to timely file notices with respect to such late filings and event notices with respect to certain insured rating changes. The Authority has subsequently filed all required annual financial information and operating data for the years ending June 30, 2011 through 2015 and event notices with respect to the insured rating changes along with the required failure to file notices with respect to such late filings. The Authority has committed to comply with all existing continuing disclosure agreements in all material respect in the future and has implemented procedures to remedy the oversight.

The City has previously failed to timely file its 2011 through 2015 annual financial information and operating data as required in accordance with SEC Rule 15c2-12. In addition, the City failed to timely file notices with respect to such late filings and event notices with respect to certain underlying and insured rating changes. The City has subsequently filed all required annual financial information and operating data for the years ended June 30, 2011 through 2015, and event notices with respect to the certain underlying and insured rating changes, along with the required failure to file notices with respect to such late filings. The Chief Financial Officer has committed to comply with all continuing disclosure requirements of the City, including those with the Authority, in the future, and has implemented procedures to remedy the oversight.

APPROVAL OF LEGAL PROCEEDINGS

All legal matters incident to the authorization, issuance, sale and delivery of the Bonds are subject to the approval of McManimon Scotland & Baumann, LLC, Roseland, New Jersey, Bond Counsel to the Authority, whose unqualified approving legal opinion will be delivered with the Bonds. The proposed form of such opinion is attached hereto as APPENDIX G. Certain legal matters will be passed upon for the Authority by its counsel, Bier Associates, New Brunswick, New Jersey, and for the City by Wilentz Goldman & Spitzer P.A., Woodbridge, New Jersey, Bond Counsel to the City, and Marc A. McKithen, 21

Trenton, New Jersey, Director of Law for the City, and for the Underwriter by Chiesa Shahinian & Giantomasi PC, West Orange, New Jersey.

The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or the future performance of parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.

RATINGS

Moody’s Investor Services, Inc. (“Moody’s”) is expected to assign the Bonds a rating of “A2” and S&P Global Ratings, acting through Standard & Poor’s Financial Services LLC (“S&P”) is expected to assign the Bonds a rating of “AA”, each based upon the issuance of the Policy by AGM concurrently with the issuance of the Bonds. Moody’s has also assigned the Bonds an underlying rating of “Baa1”. A further explanation of such ratings may be obtained from Moody’s and S&P, respectively. Such ratings reflect only the views of such respective rating agency and are not a recommendation to buy, sell or hold the Bonds. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised and or withdrawn entirely if in the judgement of such rating agency circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price or marketability of the Bonds.

INDEPENDENT AUDITORS

The financial statements of the Authority as of June 30, 2015 and 2014, included in APPENDIX A to this Official Statement, have been audited by Mercadien, P.C., Certified Public Accountants, Hamilton, New Jersey, independent certified public accountants, as stated in their report appearing in APPENDIX A to this Official Statement.

The financial statements of the City as of June 30, 2015, included in APPENDIX C to this Official Statement, have been audited by Mercadien, P.C., Certified Public Accountants, Hamilton, New Jersey, independent certified public accountants, as stated in their report appearing in APPENDIX C to this Official Statement.

FINANCIAL PROJECTIONS

The Authority’s Management has compiled financial projections of the Authority’s Revenues in connection with the Project. See “HISTORICAL AND PROJECTED OPERATIONS OF THE AUTHORITY”, herein.

VERIFICATION OF MATHEMATICAL ACCURACY

Mercadien, P.C. Certified Public Accountants, Hamilton, New Jersey (the “Verification Agent”) will verify, from the information provided to them, the mathematical accuracy as of the date of closing of the Bonds of the computations contained in the provided schedules to determine that the anticipated receipts from the securities and cash deposits to be held in the escrow will be sufficient to pay on the Redemption Date the principal of and interest on the Bonds to be Refunded. The Verification Agent will express no opinion on the assumptions provided to them, nor as to the tax status of the Bonds.

UNDERWRITING

The Bonds are being purchased for re-offering by the Underwriter, NW Capital Markets Inc., pursuant to a purchase contract dated September 8, 2016 (the “Bond Purchase Contract”). The Bond Purchase Contract provides that all of the Bonds will be purchased if any are purchased. The purchase price for the Bonds is $21,536,997.75, which represents the principal amount of the Bonds, plus net original issue premium of $940,497.75, less the Underwriter’s discount in the amount of $103,500.00. The initial public offering prices or yields on the inside cover pages hereof may be changed from time to time by the Underwriter, and the Bonds may be offered and sold by the Underwriter to certain dealers and others at yields higher than the initial public offering yields.

ADDITIONAL INFORMATION

Inquiries regarding this Official Statement, including requests for information in addition to that contained herein, may be directed to the Chairman of the Authority at 110-116 North Warren Street, Trenton, New Jersey, telephone number (609) 393-3469.

MISCELLANEOUS

The references herein to the Act, the Resolution, and various other statutes and documents are brief outlines of certain provisions thereof. Such outlines do not purport to be complete and reference is made to the Act, the Resolution, and such various other documents and statutes for full and complete statements of such provisions. These documents may be inspected at the principal corporate trust office of the Trustee.

This Official Statement is not to be construed as a contract or agreement between the Authority and the purchaser or holder of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. All estimates and assumptions have been made on the best information available and are believed to be reliable but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the City since the date hereof.

The execution and delivery of this Official Statement has been duly authorized by the Authority.

PARKING AUTHORITY OF THE CITY OF TRENTON

By: /s/ Andrew Worek Andrew Worek, Chairman

Dated: September 8, 2016

23 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

APPENDIX A

FINANCIAL STATEMENTS OF THE AUTHORITY

[ THIS PAGE INTENTIONALLY LEFT BLANK ] PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of The City of Trenton, State of New Jersey)

Financial Statements and Supplementary Information

June 30, 2015 PARKING AUTHORITY OF THE CITY OF TRENTON

(A Component Unit of The City of Trenton, State of New Jersey)

TABLE OF CONTENTS

June 30, 2015 ______

Page Number

Management's Discussion and Analysis (Unaudited)...... 1

Independent Auditors' Report...... 5

Basic Financial Statements

Statement of Net Position...... 8

Statement of Revenues, Expenses and Changes in Net Position...... 10

Statement of Cash Flows...... 11

Notes to Financial Statements...... 12

Supplementary Information

Schedule of Operating Revenues, Expenses and Costs Funded By Operating Revenues Compared to Budget...... 26

Schedule of Revenues and Expenses by Garage...... 27

Roster of Officials...... 28 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) ______

OVERVIEW OF THE FINANCIAL STATEMENTS

The annual financial report consists of three parts: Management's Discussion and Analysis (this section), the basic financial statements, and supplementary information. The Parking Authority of the City of Trenton (the "Authority") is a self-supporting entity and follows enterprise fund accounting. The enterprise fund concept is similar to the manner in which private business enterprises are financed and operated. The Authority presents its basic financial statements on the accrual basis of accounting. The statements offer short and long-term financial information about the activities and operations of the Authority. The intent is that the costs of providing access to parking facilities on a continuing basis are financed primarily through parking revenue. The Authority has established certain restricted "funds and accounts," as directed by internal resolution and bond indentures. In an effort to ensure compliance with the Authority's by-laws and to safeguard its assets, internal controls have been developed and implemented by management. These internal controls include policies, procedures, approved organizational structures and approved budgets for capital and operating expenditures. Visit the Authority's website at www.tpanj.com for more information regarding the Authority's parking activity and management contact information.

Financial Highlights

Cash and cash equivalents as of June 30, 2015 were $3,359,059, an increase of 3.97% from the balance as of June 30, 2014.

Total liabilities as of June 30, 2015 were $31,200,817, a decrease of 4.50% from the balance as of June 30, 2014. The Authority repaid $1,355,000 in debt during the fiscal year ended June 30, 2015.

Total revenues were slightly over budget by $104,373 primarily due to the revenues from the licensing agreement with PSE&G for repair and use of the Broad and Front Street garage.

Financial Analysis of the Authority

The Authority’s total net position was approximately $0.1 million as of June 30, 2015. In fiscal year 2015, total assets and deferred outflows of resources decreased approximately 1% to $31.5 million, and total liabilities decreased approximately 4% to $31.4 million. Total net position as of June 30, 2014, was approximately $(0.7) million. This was due to implementation of Governmental Accounting Standard Board Statement No. 68. Total assets and deferred outflows of resources that year decreased approximately 2% to $31.9 million, and total liabilities decreased approximately 1% to $32.7 million. Changes in assets, liabilities and net position between June 30, 2015, 2014 and 2013, are summarized as follows:

1 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) ______

Financial Analysis of the Authority (Continued)

Percentage Change June 30, 2015 June 30, 2014 June 30, 2013 2015-2014 Current assets $ 6,503,751 $ 6,369,006 $ 6,576,992 2 Capital assets, net 23,571,886 24,114,775 24,623,361 (2) Other assets 52,300 - 13,923 100 Deferred outflows of resources 1,409,674 1,463,593 1,508,507 (4) Total assets and deferred outflows of resources 31,537,611 31,947,374 32,722,783 (1)

Long-term debt 28,685,000 30,065,000 31,420,000 (5) Other liabilities 2,515,817 2,606,876 1,559,656 (3) Deferred inflows of resources 248,204 - - 100 Total liabilities and deferred inflows of resources 31,449,021 32,671,876 32,979,656 (4)

Net position Restricted for Debt service 3,388,746 3,598,174 3,593,387 (6) Renewal and Replacement 939,301 939,301 939,301 - Other - - 77,228 - Deficit (4,239,457) (5,261,977) (4,866,789) (19) Total net position $ 88,590 $ (724,502) $ (256,873) 112

Operating Activities

The Authority operates three parking garages in the City of Trenton: Warren Street, Lafayette Yard and Liberty Commons. They also operate a surface lot, which is located on Merchant Street. User fees are generated from monthly passes and daily parkers. Rates are set by the Authority’s Board of Commissioners.

The Authority’s total parking revenue for fiscal year 2015 was $3.843 million, a 12% increase over fiscal year 2014. The Authority’s total operating expenses for fiscal year 2015 were $2.07 million, an increase of 6% from fiscal year 2014. The Authority's operating income for fiscal year 2015 was $1.80 million, an increase of approximately 23% over fiscal year 2014. The Authority’s total parking revenue for fiscal year 2014 was $3.413 million, a 3% decrease over fiscal year 2013. The Authority’s total operating expenses for fiscal year 2014 were $1.94 million, a decrease of 20% from fiscal year 2013. The Authority's operating income for fiscal year 2014 was $1.50 million, an increase of approximately 35% from fiscal year 2013. The following table summarizes the changes in revenue, expenses and net position between the fiscal years of 2015, 2014 and 2013.

2 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) ______

Operating Activities (Continued)

Percentage Year Ended Change June 30, 2015 June 30, 2014 June 30, 2013 2015-2014 Operating Revenues: Parking Revenue $ 3,843,173 $ 3,413,313 $ 3,515,902 13 Other Revenue 29,200 29,700 30,200 (2) Total Operating Revenues 3,872,373 3,443,013 3,546,102 12

Non-Operating Revenues Interest Income 81,166 81,166 81,055 - Investment Return, net of Amortization of Bond Premiums 3,744 747 18,296 401 Total Revenues 3,957,283 3,524,926 3,645,453 12

Operating Expenses: Payroll and Fringe Benefits 565,428 587,835 661,253 (4) Depreciation and Amortization 658,048 691,201 885,611 (5) Other Operating Expenses 846,802 665,713 912,436 27 Total Operating Expenses 2,070,278 1,944,749 2,459,300 6

Non-Operating Expenses/Loss Interest Expense 1,073,914 - 793,856 100 Loss on asset impairment - - 3,503,307 -

Total Expenses/Loss 3,144,192 1,944,749 6,756,463 62

Change in Net Position 813,092 458,979 (565,238) (77)

Net Position, Beginning of Year (724,502) (256,873) 4,147,783 182

Prior Period Adjustment - (926,608) - 100 Net Position, End of Year $ 88,590 $ (724,502) $ 3,582,545 112

3 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) ______

Capital Assets and Debt Administration

At June 30, 2015, the Authority had a total of $30,362,956 invested in property and equipment relating primarily to its parking facilities. The total represents a slight increase from last year. At June 30, 2014, the Authority had a total of $30,322,218 invested in property and equipment relating primarily to its parking facilities. The total represents a slight increase from 2013. The following table summarizes the changes in capital assets, net of depreciation, between the fiscal years 2015, 2014 and 2013.

Percentage Change June 30, 2015 June 30, 2014 June 30, 2013 2015-2014 Land $ 1,788,122 $ 1,788,122 $ 1,788,122 - Buildings 26,460,016 26,460,016 26,460,016 - Improvements 1,976,394 1,941,405 1,834,879 2 Furniture and Fixtures 122,268 116,519 116,519 5 Automotive Equipment 16,156 16,156 16,156 - 30,362,956 30,322,218 30,215,692 - Less: Accumulated Depreciation (6,791,070) (6,207,443) (5,592,331) 9 Total Capital Assets, Net $ 23,571,886 $ 24,114,775 $ 24,623,361 (2)

More detailed information about the Authority's capital assets is presented in Note E of the financial statements.

The following table summarizes the changes in capital debt between the fiscal year 2015, 2014 and 2013:

Percentage Change June 30, 2015 June 30, 2014 June 30, 2013 2015-2014 Bonds Payable $ 30,065,000 $ 31,420,000 $ 32,626,008 (4)

More detailed information about the Authority's bonds payable is presented in Note F of the financial statements.

INDEPENDENT AUDITORS' REPORT (CONTINUED)

Auditors' Responsibility (Continued) expressing an opinion on the effectiveness of the Authority'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 opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of June 30, 2015 and 2014, and the changes in its financial position and cash flows thereof for the years then ended, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter As discussed in Note H to the financial statements, in 2015 the Authority adopted new accounting guidance Governmental Accounting Standards Board ("GASB") Statement No. 68 - Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and Statement No. 71- Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. Our opinion is not modified with respect to this matter.

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages one through four be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the GASB who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority's basic financial statements. The accompanying schedule of operating revenues, expenses and costs funded by operating revenues compared to budget, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information except for the portion marked "unaudited," has been subjected to the auditing procedures applied in the audits of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial

6 INDEPENDENT AUDITORS' REPORT (CONTINUED)

Other Matters (Continued) Supplementary Information (Continued) statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, except for the portion marked "unaudited," the schedule of operating revenues, expenses and costs funded by operating revenues compared to budget is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The schedule of revenues and expenses by garage, and roster of officials has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Mercadien, P.C. Certified Public Accountants

MERCADIEN, P.C. CERTIFIED PUBLIC ACCOUNTANTS

March 2, 2016

7 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

STATEMENT OF NET POSITION ______

June 30, 2015 2014 ASSETS Current unrestricted assets Cash and cash equivalents $ 686,598 $ 349,021 Investments 1,298,768 1,299,183

Accounts receivable, net of allowance for doubtful accounts of $79,500 in 2015 and $69,500 in 2014 107,449 112,470 Accrued interest receivable 26,357 21,998 Prepaid expenses 56,532 48,856 Total current unrestricted assets 2,175,704 1,831,528 Restricted assets Cash and cash equivalents Current debt service account 690,409 980,807 Reserve account 1,042,751 961,585 Renewal and replacement account 939,301 939,301 Subtotal 2,672,461 2,881,693 Investments in debt securities 1,655,586 1,655,785 Total restricted assets 4,328,047 4,537,478 Non-current assets Property and equipment, net 23,571,886 24,114,775 Construction advances 52,300 - Total assets $ 30,127,937 $ 30,483,781

DEFERRED OUTFLOWS OF RESOURCES Pension contribution $ 51,672 $ 31,175 Loss on refunding of bonds 1,358,002 1,432,418 Total deferred outflows of resources $ 1,409,674 $ 1,463,593

8 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

STATEMENT OF NET POSITION (CONTINUED) ______

June 30, 2015 2014 LIABILITIES Current liabilities payable from unrestricted assets Accounts payable $ 41,698 $ 3,303 Accrued liabilities 64,625 48,352 Unearned revenue 99,142 1,866 Total current liabilities payable from unrestricted assets 205,465 53,521 Current liabilities payable from restricted assets Bonds payable - current portion 1,380,000 1,355,000 Accrued interest payable on bonds 264,439 271,747 Total current liabilities payable from restricted assets 1,644,439 1,626,747 Total current liabilities 1,849,904 1,680,268 Non-current liabilities Net pension liability 665,913 926,608 Long-term portion of bonds payable 28,685,000 30,065,000 Total non-current liabilities 29,350,913 30,991,608 Total liabilities $ 31,200,817 $ 32,671,876

DEFERRED INFLOWS OF RESOURCES Pension - change in proportion $ 248,204 $- Total deferred inflows of resources $ 248,204 $-

NET POSITION Restricted for: Debt service $ 3,388,746 $ 3,598,174 Renewal and replacement 939,301 939,301 Deficit (4,239,457) (5,261,977) Total net position $ 88,590 $ (724,502)

See notes to financial statements. 9 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION ______

Years Ended June 30, 2015 2014 Operating revenues Parking revenues $ 3,843,173 $ 3,413,313 Rental income 29,200 29,700 Total revenues 3,872,373 3,443,013 Operating expenses General and administrative 1,412,230 1,253,548 Operating income before depreciation and amortization 2,460,144 2,189,465 Depreciation and amortization 658,048 691,201 Operating income 1,802,096 1,498,264 Non-operating revenues (expenses) Interest income 81,166 81,166 Interest expense (1,073,914) (1,121,198) Investment return, net of amortization of bond premiums 3,744 747 Total non-operating expenses (989,004) (1,039,285) Net income 813,092 458,979 Net Position, Beginning of Year (724,502) (256,873) Prior Period Adjustment - (926,608) Net position, beginning of year, as restated (724,502) (1,183,481) Net position, end of year $ 88,590 $ (724,502)

See notes to financial statements. 10 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

STATEMENT OF CASH FLOWS ______Years Ended June 30, 2015 2014 Cash flows from operating activities Parking revenue $ 3,944,400 $ 3,401,836 Rental income 29,200 29,700 Investment return - 1,764 General and administrative expenses (1,401,508) (1,291,948) Net cash provided by operating activities 2,572,092 2,141,352

Cash flows from investing activities Non-operating interest income 84,905 81,166 Purchase of investments, net 614 (1,764) Net cash provided by investing activities 85,519 79,402

Cash flows from capital and related financing activities Repayment of borrowings (1,355,000) (1,206,008) Purchases of property and equipment (40,738) (106,526) Non-operating interest expense (1,081,228) (1,139,319) Construction advances (52,300) 13,921 Net cash used in financing activities (2,529,266) (2,437,932)

Net increase (decrease) in cash and cash equivalents 128,345 (217,178) Cash and cash equivalents, beginning of year 3,230,714 3,447,892 Cash and cash equivalents, end of year $ 3,359,059 $ 3,230,714

Cash and cash equivalents, unrestricted $ 686,598 $ 349,021 Cash and cash equivalents, restricted 2,672,461 2,881,693 $ 3,359,059 $ 3,230,714 Reconciliation of operating income to net cash provided by operating activities Operating income $ 1,802,096 $ 1,498,264 Adjustments to reconcile operating income to net cash provided by operating activities Depreciation 583,627 615,112 Amortization 74,421 76,089 Bad debt expense/(recovery) 10,000 (137,283) Changes in assets and liabilities Pension contribution (32,982) (30,428) Accounts receivable (4,979) 128,385 Prepaid expenses and deposits (7,676) 451 Accrued interest receivable (4,359) 1,018 Accounts payable 38,395 (2,507) Accrued liabilities 16,273 (5,169) Deferred revenue 97,276 (2,580) Net cash provided by operating activities $ 2,572,092 $ 2,141,352

See notes to financial statements. 11 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______

A. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business Parking Authority of the City of Trenton (the "Authority") was created to construct and operate parking facilities to serve the municipality of Trenton, New Jersey. The Authority collects its revenues from users of the facilities. The Authority is a component unit of the City of Trenton, New Jersey (the "City"), since it is financially accountable to the City.

Basis of Accounting Basis of accounting refers to the point at which revenues or expenses are recognized in the accounts and reported in the financial statements. The accompanying financial statements have been prepared on the accrual basis of accounting and in accordance with accounting principles generally accepted in the United States of America applicable to governmental proprietary-type funds. Revenues are recognized when earned, and expenses are recognized when incurred.

In its accounting and financial reporting, the Authority follows the pronouncements of the Governmental Accounting Standards Board ("GASB") and other entities that promulgate accounting principles. GASB Statement 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, establishes the order of priority of pronouncements and other sources of accounting and financial reporting guidance that a governmental entity should apply. Per the Statement, the sources of authoritative generally accepted accounting principles (“GAAP”) are categorized in descending order of authority as follows: GASB Statements and Interpretations, GASB Technical Bulletins, GASB Implementation Guides, and literature of the American Institute of Certified Public Accountants (“AICPA”) cleared by the GASB. Authoritative GAAP is incorporated periodically into the Codification of Governmental Accounting and Financial Reporting Standards (Codification), and when presented in the Codification, it retains its authoritative status. If the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP described above, a governmental entity should first consider accounting principles for similar transactions or other events within a source of authoritative GAAP described above and then may consider nonauthoritative accounting literature from other sources. These include GASB Concepts Statements; pronouncements and other literature of the Financial Accounting Standards Board (“FASB”), Federal Accounting Standards Advisory Board, International Public Sector Accounting Standards Board, and International Accounting Standards Board, and AICPA literature not cleared by the GASB; practices that are widely recognized and prevalent in state and local government; literature of other professional associations or regulatory agencies; and accounting textbooks, handbooks and articles.

Operating Revenues and Expenses The Authority's operating revenues consist of parking revenues, rental income and interest earned on unrestricted cash and investments. Operating expenses consist of costs related to parking service. All other revenues and expenses are reported as non-operating revenues and expenses.

Cash Equivalents For the purpose of the statements of cash flows, cash equivalents and short-term investments are all highly liquid securities with original maturities of three months or less.

12 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______A. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable, Net of Allowance for Doubtful Accounts The Authority evaluates all accounts receivable on an annual basis. An allowance for doubtful accounts is set up by charging operating expense. Amounts are charged against the allowance for doubtful accounts when management believes that collectibility of certain receivables are uncertain.

Property and Equipment and Depreciation Property and equipment is stated at cost and is depreciated for financial reporting purposes on a straight-line basis over the estimated useful lives of the assets: 25-50 years for buildings, 10-30 years for improvements, 5-15 years for furniture and fixtures, and 5 years for automotive equipment. Repairs and maintenance expenditures which do not extend the useful lives of the related assets are expensed as incurred.

Income Taxes As a public body, the Authority is exempt from both federal and state income taxes under existing statute.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Restricted Accounts In accordance with the bond resolutions and trust agreements, the Authority has established various funds:

Account Amount Use for Which Restricted Current debt service Amounts needed for accrued bond Interest and principal payments due on account interest and principal due in the next October 1 and April 1. succeeding fiscal year, as if such principal amounts accrued evenly throughout the year.

Reserve account Amounts needed for maximum annual Interest and principal payments not debt service. funded by current debt service accounts.

Renewal and Withdrawals. Deposits by resolution Authorized draws for costs and replacement account only. unusual or extraordinary maintenance or repairs, renewal and replacement of equipment, the acquisition of capital additions or improvements.

Rebate fund Withdrawals only. Required draws for rebatable arbitrage.

13 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______A. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Other Post Employment Benefits ("OPEB") Other than Pensions On July 1, 2007, the Authority implemented GASB Number 45, which covers accounting and financial reporting requirements for government employers which provide post employment benefits other than pensions. Since the Authority participates in a multiple-employer cost- sharing plan ("Public Employees' Retirement System" ("PERS")), the Authority's portion of this liability and cost is calculated and recorded at the State of New Jersey level and included in the state's Comprehensive Annual Financial Report. The Authority records OPEB expense based on billings from the State PERS. Required financial statement disclosure requirements are included in Note J of these audited financial statements.

Net Position Restricted Amounts are restricted for debt service, renewal and replacement and other charges as required per bond resolution.

Unrestricted The unrestricted net position represents resources available for current operating expenses net of capital assets and related debt.

2015 2014 Invested in capital assets, net of related debt $ (5,347,252) $ (6,144,554) Unrestricted net position 1,107,795 882,577 (Deficit) Unrestricted $ (4,239,457) $ (5,261,977)

Rounding Some schedules in the financial statements may have dollar differences due to rounding adjustments.

Reclassification of Prior Year Balances Certain prior year balances have been reclassified to conform with current year's presentation.

B. CASH AND CASH EQUIVALENTS

N.J.S.A. 17:9-41 et seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Governmental Unit Deposit Protection Act (“GUDPA”), a multiple financial institutional collateral pool, which was enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking institution in New Jersey. Public depositories include state or federally chartered banks, savings banks or associations located in or having a branch office in the State of New Jersey, the deposits of which are federally insured.

14 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______B. CASH AND CASH EQUIVALENTS (CONTINUED)

The market value of the collateral must equal five percent of the average daily balance of public funds; and, if the public funds deposited exceed 75 percent of the capital funds of the depository, the depository must provide collateral having a market value equal to 100 percent of the amount exceeding 75 percent.

All collateral must be deposited with the Federal Reserve Bank, the Federal Home Loan Bank Board or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000.

As of June 30, 2015 and 2014, the Authority’s bank balances were exposed to custodial credit risk as follows:

June 30, 2015 2014 Insured and Collateralized $ 574,878 $ 574,878 Uninsured and Collateralized 2,778,368 2,682,125 Total $ 3,353,246 $ 3,257,003

Deposits Custodial credit risk for deposits is the risk that in the event of a bank failure, the Authority’s deposits may not be returned or the Authority will not be able to recover collateral securities in the possession of an outside party. The Authority’s policy requires deposits to be secured by collateral valued at market or par, whichever is lower, less the amount covered by the Federal Deposit Insurance Corporation ("FDIC"). The Authority approves and designates the authorized depository institution based on evaluation of solicited responses and certifications provided by financial institutions.

Concentration of Credit Risk – This is the risk associated with the amount of investments the Authority has with any one issuer that exceeds five percent or more of its total investments. Investments issued or explicitly guaranteed by the U.S. government and the New Jersey Cash Management Fund are excluded from this requirement. None of the investments held by the Authority are exposed to concentration of credit risk.

Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. In general, the Authority does not have an investment policy regarding Credit Risk, however, the Authority had no investments that were subject to credit risks as of June 30, 2015 and 2014.

Interest Rate Risk – This is the risk that changes in interest rates will adversely affect the fair value of an investment. The Authority has a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from interest rate fluctuations. However, its practice is to hold investments to maturity.

15 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______C. INVESTMENTS

Investments consist of treasury obligations and taxable bonds. These investments are held by the Authority's custodial agent in an account for the Authority and are included in Restricted Assets on the statement of net position. Unrestricted investments are held by the Authority's investment advisors and are carried at fair value.

Fair Value Measurements The Authority follows the Fair Value Measurements Topic of the FASB Accounting Standards Codification, which provides a framework for measuring fair value under accounting principles generally accepted in the United States of America.

As defined in the Fair Value Measurements Topic of the FASB Accounting Standards Codification, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Authority uses the stock market index approach. Based on this approach, the Authority often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Authority utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based·on the observability of the inputs used in the valuation techniques the Authority is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 - Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 1 also includes U.S. Treasury and federal agency securities and federal agency mortgage-backed securities, which are traded by dealers or brokers in active markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or similar assets or liabilities. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 - Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

Investments The fair value of investment securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers. If listed prices or quotes are not available, fair value is based upon externally developed models that use unobservable inputs due to the limited market activity of the instrument.

16 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______C. INVESTMENTS (CONTINUED)

Fair Value on a Recurring Basis The table below presents the balances of investments measured at fair value on the statement of net position as of June 30, 2015 and 2014: June 30, 2015 Total Level 1 Level 2 Level 3 Available for sale securities $ 2,954,354 $ 2,954,354 $-$- Total $ 2,954,354 $ 2,954,354 $-$-

June 30, 2014 Total Level 1 Level 2 Level 3 Available for sale securities $ 2,954,968 $ 2,954,968 $-$- Total $ 2,954,968 $ 2,954,968 $-$-

D. CONCENTRATION OF RISK Revenues collected from the State of New Jersey were 46% and 39% of total parking revenues for the years ended June 30, 2015 and 2014, respectively. Any additional substantial decrease in these revenues could have a material effect on the operations of the Authority.

E. PROPERTY AND EQUIPMENT Property and equipment for the years ended June 30, 2015 and 2014, consist of the following:

June 30, June 30, 2014 Additions Deletions 2015 Land $ 1,788,122 $ - $ - $ 1,788,122 Buildings 26,460,016 - - 26,460,016 Improvements 1,941,405 34,989 - 1,976,394 Furniture and fixtures 116,519 5,749 - 122,268 Automotive equipment 16,156 - - 16,156 Subtotal 30,322,218 40,738 - 30,362,956 Less accumulated depreciation 6,207,443 583,627 - 6,791,070 Total property and equipment $ 24,114,775 $ (542,889) $-$ 23,571,886

June 30, June 30, 2013 Additions Deletions 2014 Land $ 1,788,122 $ - $ - $ 1,788,122 Buildings 26,460,016 - - 26,460,016 Improvements 1,834,879 106,526 - 1,941,405 Furniture and fixtures 116,519 - - 116,519 Automotive equipment 16,156 - - 16,156 Subtotal 30,215,692 106,526 - 30,322,218 Less accumulated depreciation 5,592,331 615,112 - 6,207,443 Total property and equipment $ 24,623,361 $ (508,586) $-$ 24,114,775

17 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______

E. PROPERTY AND EQUIPMENT (CONTINUED)

Depreciation expense charged to operations was $583,627 and $615,112 for the years ended June 30, 2015 and 2014, respectively. In July 2012, the Authority closed its Broad and Front garage and relocated all parkers to other garages. As of June 30, 2013, the garage was impaired and the remaining value of the building and improvements was written down completely and a loss due to impairment was recognized in the amount of $3,503,307. F. BONDS PAYABLE The bonds are payable as to principal and interest from the fees, rentals or other charges derived by the Authority from the operation of its parking system and the full faith, credit and taxing power of the City of Trenton, New Jersey. The City guarantees the payment of the bonds. Additionally, the bonds have been insured to guarantee payment of principal and interest. The bonds mature annually from April 1, 2005 through April 1, 2034. Bond resolutions have been adopted by the Authority for the purpose of acquiring, constructing and making improvements to the parking facilities in the City. The following is a summary of revenue bonds outstanding: Interest Amount of Series Issue Date Rates Original Issue 5.26%- Parking Revenue (Series 2006) 3/7/06 5.50% $ 4,520,000 1.50%- Parking Revenue (Series 2013A) 3/7/13 4.00% 19,295,000 1.50%- Parking Revenue (Series 2013B) 3/7/13 4.00% 9,030,000 Total $ 32,845,000 June 30, June 30, Series 2014 Additions Deletions 2015 Parking Revenue (Series 2006) $ 3,945,000 $ - $ 115,000 $ 3,830,000 Parking Revenue Refunding (Series 2013) 27,475,000 - 1,240,000 26,235,000 Total 31,420,000 - 1,355,000 30,065,000 Less current portion 1,355,000 1,380,000 1,355,000 1,380,000 Bonds payable, net of current portion $30,065,000 $ (1,380,000) $-$ 28,685,000 June 30, June 30, Series 2013 Additions Deletions 2014 Parking Revenue (Series 2003) $ 251,008 $ - $ 251,008 $ - Parking Revenue (Series 2006) 4,050,000 - 105,000 3,945,000 Parking Revenue Refunding 28,325,000 - 850,000 27,475,000 (Series 2013) Total 32,626,008 - 1,206,008 31,420,000 Less current portion 1,206,008 1,355,000 1,206,008 1,355,000 Bonds payable, net of current portion $31,420,000 $ (1,355,000) $-$ 30,065,000

18 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______F. BONDS PAYABLE (CONTINUED)

Total maturities of bonds are as follows: Year Ending June 30, Principal Interest Total 2016 $ 1,380,000 $ 1,050,947 $ 2,430,947 2017 1,420,000 1,009,933 2,429,933 2018 1,470,000 958,466 2,428,466 2019 1,525,000 903,926 2,428,926 2020 1,580,000 847,516 2,427,516 2021 - 2025 8,815,000 3,340,886 12,155,886 2026 - 2030 10,380,000 1,765,768 12,145,768 2031 - 2034 3,495,000 303,491 3,798,491 Total $ 30,065,000 $ 10,180,933 $ 40,245,933 Refunding Bond Issues In March 2006, the Authority issued $4,520,000 in Parking Revenue Refunding Bonds to advance-refund the callable portion, $4,075,000, of the $14,035,000 of outstanding Series 2003 Parking Revenue Bonds of the Authority used to construct the Liberty Commons facility. The net proceeds of $4,169,516 (after payment of $350,484 in underwriting fees, insurance and other issuance costs, as well as a $347,225 deposit to the Bond Reserve Fund) were used to purchase state and local government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all scheduled interest and principal payments on the Series 2003 Parking Revenue Bonds to and including October 1, 2033. The portion of the bonds maturing on or after October 1, 2017, is subject to redemption on or after October 1, 2016, and the bonds maturing on October 1, 2026 and October 1, 2033, are subject to mandatory sinking fund redemption. The advance-refunding met with the requirement of an in-substance debt defeasance, $4,075,000 of the Series 2003 Parking Revenue Bonds were removed from the Authority's financial statements. In addition, the trust account assets are not included in the Authority's financial statements. As a result of the advance-refunding, the Authority increased its total debt service requirement by $1,579,430, which resulted in an economic loss (difference between present value of the debt service payments on the old and new debt) of $683,060. In addition, the Authority recorded a deferred loss on defeasance, principally representing the difference between the carrying value of the refunded bonds and the re-acquisition price, of $208,060. This loss on defeasance is being amortized on a straight-line basis over the life of the new debt. Amortization expense for the years ended June 30, 2015 and 2014, was $7,543. In March 2013, the Authority issued $19,295,000 in Series 2013A and $9,030,000 in Series 2013B Parking Revenue Refunding Bonds which refunded Series 2001 bonds in the amount of $18,840,000 and advance-refunded Series 2003 bonds in the amount of $8,460,000. The net proceeds of $28,204,066 (after payment of $493,652 in underwriting fees, insurance and other issuance costs) were used to purchase state and local government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all scheduled interest and principal payments on the Series 2001 Parking Revenue Refunding Bonds and 2003 Parking Revenue Bonds up to and including April 1, 2030 and October 1, 2033, respectively. The portion of Series 2013A Bonds maturing on or after April 1, 2017, is subject to redemption on or after April 1, 2016, and the portion of Series 2013B Bonds maturing on or after October 1, 2023, is subject to redemption on or after October 1, 2022.

19 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______F. BONDS PAYABLE (CONTINUED)

Refunding Bond Issues (Continued) As a result of the advance-refunding, the Authority decreased its total debt service requirement by $1,204,601, which resulted in an economic gain (difference between present value of the debt service payments on the old and new debt) of $849,942. In addition, the Authority recorded a deferred loss on defeasance, principally representing the difference between the carrying value of the refunded bonds and the re-acquisition price of $1,370,908. This loss on defeasance is being amortized on a straight-line basis over the life of the new debt. Amortization expense for the years ended June 30, 2015 and 2013, was $66,878 and $68,545, respectively.

Refunded bonds outstanding at June 30, 2015, are comprised of the following:

Principal Amount Outstanding Issue June 30, 2015 2006 Refunding Parking Revenue (Series 2003) $ 3,280,000 2013 Refunding Parking Revenue (Series 2001) 16,720,000 2013 Refunding Parking Revenue (Series 2003) 7,910,000 $ 27,910,000

G. COMMITMENTS AND CONTINGENCIES

The Authority's employees have agreed to be contracted with a local union. The effects of a labor or contract problem of any kind have not been determined and have not been reflected in these financial statements.

H. PRIOR PERIOD ADJUSTMENT

During fiscal year ended June 30, 2015, there was a change in accounting and financial reporting as a result of GASB Statement No. 68 Accounting and Financial Reporting for Pensions-an amendment of GASB Statement No 27 and Statement No 71 Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB Statement No 68. This Statement establishes accounting and financial reporting standards for measuring and recognizing liabilities, deferred outflows of resources and deferred inflows of resources, and expenses/expenditures. GASB Statement No 68 and 71 are retroactive to the prior reporting period. The adjustment is detailed as follows.

20 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______H. PRIOR PERIOD ADJUSTMENT (CONTINUED) Summary Statement of Net Position As of June 30, 2014

Previously Prior Period Reported Adjustment Restated Assets Cash, cash equivalents and investments $ 6,185,682 $ - $ 6,185,682 Accounts receivable 134,468 - 134,468 Other assets 48,856 - 48,856 Capital assets, net of accumulated depreciation 24,114,775 - 24,114,775 Total assets $ 30,483,781 $-$30,483,781 Deferred outflows of resources Pension contribution $ - $ 31,175 $ 31,175 Loss on refunding of bonds 1,432,418 - 1,432,418 Total deferred outflows of resources $ 1,432,418 $ 31,175 $ 1,463,593 Liabilities Accounts payable and accrued expenses $ 51,655 $ - $ 51,655 Other liabilities 1,866 926,608 928,474 Accrued interest payable 271,747 - 271,747 Bonds payable 31,420,000 - 31,420,000 Total liabilities 31,745,268 (926,608) 32,671,876

Net position $ 170,931 $ (895,433) $ (724,502) Total liabilities and net position $ 170,931 $ (895,433) $ (724,502)

Summary Statement of Revenues, Expenses and Changes in Net Position For the Year Ended June 30, 2014

Previously Prior Period Reported Adjustment Restated Revenues Parking revenues $ 3,413,313 $ - $ 3,413,313 Rental income 29,700 - 29,700 Other income 81,913 - 81,913 Total revenues 3,524,926 - 3,524,926 Expenses General and administrative 1,284,723 (31,175) 1,253,548 Other expenses 1,121,198 - 1,121,198 Depreciation and amortization 691,201 - 691,201 Total expenses 3,097,122 (31,175) 3,065,947 Change in net position 427,804 31,175 458,979 Net position - June 30, 2013 (256,873) (926,608) (1,183,481) Net position - June 30, 2014 $ 170,931 $ (895,433) $ (724,502)

21 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______I. PENSION PLAN

Some of the Authority’s employees participate in one of the two following defined benefit pension plans: (1) the Public Employees' Retirement System (“PERS”) or (2) the New Jersey Alternate Benefit Program (“ABP”), both of which are administered and/or regulated by the New Jersey Division of Pensions and Benefits. In addition, several Authority employees participate in the Defined Contribution Retirement Program (“DCRP”), which is a defined contribution pension plan. This plan is administered by Prudential Financial for the New Jersey Division of Pensions and Benefits. Each plan has a board of trustees that is primarily responsible for its administration. The Division issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to:

State of New Jersey Division of Pensions and Benefits P.O. Box 295 Trenton, New Jersey 08625-0295

Plan Description

PERS is a cost-sharing multiple-employer defined benefit pension plan which was established as of January 1, 1955.

Benefits Provided

The PERS plan provides retirement, death and disability, and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43:15A and 43:38. All benefits vest after ten years of service, except for medical benefits, which vest after 25 years of service or under the disability provisions of PERS.

Contributions

The contribution requirements of plan members are determined by State statute. In accordance with Chapter 62, P.L. 1994, plan members enrolled in the PERS were required to contribute 5.00% of their annual covered salary. Effective July 1, 2008, however, in accordance with Chapter 92, P .L. 2007 and Chapter 103, P .L. 2007, plan members are required to contribute 5.50% of their annual covered salary. For employees enrolled in the retirement system prior to July 1, 2008, the increase is effective with the payroll period that begins immediately after July 1, 2008. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate increased to 6.5% plus an additional 1.00% phased-in over seven years. The phase-in of the additional incremental member contribution amount began July 1, 2012, and increases each subsequent July 1. The active member effective contribution rates were July 1, 2014, 6.92%, July 1, 2013, 6.78%, and July 1, 2012, 6.64%. The State Treasurer has the right under the current law to make temporary reductions in member rates based on the existence of surplus pension assets in the retirement system; however, the statute also requires the return to the normal rate when such surplus pension assets no longer exist.

The Authority is billed annually for its normal contribution plus any accrued liability. Contributions to PERS from the Authority were $30,732 and $31,175 for the years ended June 30, 2015 and 2014, respectively.

22 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______I. PENSION PLAN (CONTINUED)

Pension Liabilities, Pension Expense, and Deferred Outflows or Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2015 and 2014, the Authority reported a liability of $665,913 and $926,608 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2014 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Authority’s proportion of the net pension liability was based on a projection of the Authority’s long-term share of contributions to the pension plan relative to the projected contributions of all participating members of the plan, actuarial determined. At June 30, 2014 the Authority’s proportion was 0.0035567095%, which was a decrease of .001% from its proportion measured as of June 30, 2013. For the year ended June 30, 2015, the Authority recognized pension expense of (2,256). At June 30, 2015, the Authority reported deferred outflows of resources as follows:

Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ - $ - Changes in assumptions 20,940 - Net difference between projected and actual earnings on pension plan investments - 39,685 Changes in proportion and differences between Authority contributions and proportionate share of contributions - 208,519 Authority contributions subsequent to the measurement date 30,732 - $ 51,672 $ 248,204

$30,732 reported as deferred outflows of resources related to pensions resulting from Authority contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2015. Other amounts reported as deferred outflows or resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30, 2015-thereafter PERS 2015 $ (6,072) 2016 (6,072) 2017 (6,072) 2018 (6,072) 2019 3,849 Thereafter 1,694 $ (18,745)

23 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______I. PENSION PLAN (CONTINUED) Actuarial Assumptions The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.01% Salary increases: 2012-2021 2.15-4.40% based on age Salary increases: Thereafter 3.15-5.40% (based on age) Investment rate of return 7.90% Mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables, with adjustments for mortality improvements from the base year 2012 based on Projection Scale AA. The actuarial assumptions used in the July 1, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2008 to June 30, 2011. In accordance with State statue, the long term expected rate of return on plan investments is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pension and Benefits, the board of trustees and the actuaries. Best estimates of arithmetic real rates of return of each major asset class included in PERS’s target asset allocation as of June 30, 2014 are summarized in the following table: Long-Term Expected Asset Class Target Allocation Real Rate of Return Cash6.00 % 0.80 % Core Bonds1.00 % 2.49 % Intermediate-Term Bonds11.20 % 2.26 % Mortgages2.50 % 2.17 % High Yield Bonds5.50 % 4.82 % Inflation-Indexed Bonds2.50 % 3.51 % Broad US Equities25.90 % 8.22 % Developed Foreign Equities12.70 % 8.12 % Emerging Market Equities6.50 % 9.91 % Private Equities8.25 % 13.02 % Hedge Funds/Absolute Return12.25 % 4.92 % Real Estate (Property)3.20 % 5.80 % Commodities2.50 % 5.35 % 100.00 % The discount rate used to measure the total pension liability was 5.39% and 5.55% as of June 30, 2014 and 2013, respectively. The single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.9%, and a municipal bond rate of 4.29% and 4.63% as of June 30, 2014 and 2013, respectively, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years of contributions made in relation to the last five years of recommended contributions. Based on those assumptions the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2033. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2033, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

24 PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

NOTES TO FINANCIAL STATEMENTS ______I. PENSION PLAN (CONTINUED)

Schedule of Required Supplementary Information Schedule of Authority's Proportionate Share of the Net Pension Liability PERS Last 10 Fiscal Years

2014 2013 Authority's proportion of the net pension liability 0.0035567% 0.00484831% Authority's proportionate share of the net pension liability $ 665,913 $ 926,608 Authority's covered-employee payroll 411,674 438,211 Authority's proportionate share of the net pension liability as a percentage of payroll1.618 % 2.115 % Plan fiduciary net position as a percentage of the total pension liability52.08 % 48.72 %

2014 2013 Contractually required contribution $ 30,732 $ 31,175 Contributions in relation to the contractually required contribution 30,732 31,175

Authority's covered-employee payroll 411,674 438,211 Contributions as a percentage of covered employee payroll0.075 % 0.071 %

J. OTHER POST EMPLOYMENT BENEFITS ("OPEB") OTHER THAN PENSIONS

The Authority participates in a cost sharing multiple-employer defined benefit PERS, which is administered by the State of New Jersey. PERS provides continued health care benefits to employees retiring after twenty-five years of services. Benefits, contributions, funding and the manner of administration are determined by the State Legislature. The Division of Pensions charges the Authority for its contribution. Three employees were receiving benefits as of June 30, 2015, 2014 and 2013, respectively. The total cost for these post-retirement benefits, included in fringe benefits, were $18,037, $19,301 and $22,060, respectively.

Please refer to the State website, www.state.nj.us for more information regarding the plan. The PERS report may be obtained by writing to the State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey 08625-0295.

25 [ THIS PAGE INTENTIONALLY LEFT BLANK ] SUPPLEMENTARY INFORMATION PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

SCHEDULE OF OPERATING REVENUES, EXPENSES AND COSTS FUNDED BY OPERATING REVENUES COMPARED TO BUDGET ______

Years Ended June 30, 2015 June 30, 2014 (Unaudited) Audited Audited Budget Actual Actual Revenues Parking revenues $ 3,740,000 $ 3,843,173 $ 3,413,313 Rental income 28,000 29,200 29,700 Total revenues $ 3,768,000 $ 3,872,373 $ 3,443,013 Expenses Payroll $ 376,500 $ 411,674 $ 438,211 Heat, light and water 140,000 104,107 92,176 Facilities maintenance 216,500 254,994 225,423 Parking tickets 2,500 1,766 3,065 Laundry and uniforms 1,000 2,901 390 Insurance 165,000 167,053 163,278 Telephone 25,000 26,566 23,496 Office expenses 36,500 49,273 45,394 Fringe benefits 193,000 153,754 149,624 Professional fees 86,500 91,210 109,599 Consulting Fees 128,000 128,585 129,657 Travel, meetings and workshops 1,000 3,598 1,561 Miscellaneous expenses 7,500 6,749 8,957 Bad debt (recovery)/expense - 10,000 (137,283) Total expenses 1,379,000 1,412,230 1,253,548 Interest expense - bonds 1,081,222 1,073,914 1,121,198 Other costs funded by operating revenues Principal maturity 1,355,000 1,355,000 1,206,008 Capital outlays 204,000 93,038 92,605 Unreserved retained earnings (251,222) (61,809) (230,346) Total costs funded by operating revenues $ 3,768,000 $ 3,872,373 $ 3,443,013

See independent auditors' report. 26

PARKING AUTHORITY OF THE CITY OF TRENTON (A Component Unit of the City of Trenton, State of New Jersey)

ROSTER OF OFFICIALS ______

AUTHORITY COMMISSIONERS POSITION Harry Reyes Chairman Andrew Worek Vice Chairman Melody P. Freeman Commissioner Scott Rice Commissioner Anne LaBate Commissioner Duncan Harrison Commissioner OTHER OFFICIAL Walter Smith Chief Operating Officer

See independent auditors' report. 28

APPENDIX B

CERTAIN INFORMATION REGARDING THE CITY OF TRENTON

[ THIS PAGE INTENTIONALLY LEFT BLANK ] THE CITY OF TRENTON GENERAL INFORMATION General Description

The City was first settled in 1680 and incorporated as a City in 1792. It is located in the west-central portion of the State of New Jersey on the Delaware River and is the Capitol City of the State.

Governmental Structure

The form of government in the City is the Mayor-Council Plan C of the Optional Municipal Charter Law of 1950, N.J.S.A. 40:69A-55 et seq. (Laws of New Jersey 1950, Chapter 210).

The City Council consists of seven members, three of whom are elected at large and four of whom are elected by wards. Members of the City Council are elected for a term of four years at a regular municipal election. The legislative power of the City is exercised by the City Council, except as otherwise provided by general law. The Mayor is elected by the voters of the City at a regular municipal election and serves for a term of four years. The Mayor is the chief executive and administrative officer of the City.

Governmental Services

The City provides standard municipal services through specified departments and funded by general revenues including: police and fire protection; construction and maintenance of streets and bridges; trash collection and disposal; recreation programs and facilities; supervision of health programs; acquisition and maintenance of City real and personal property; maintenance of building codes and regulation of licenses and permits; maintenance of records; collection of taxes and revenues; purchase of supplies and equipment; and maintenance of a Judicial system.

In addition, the City provides, through the Department of Public Works and funded by user charges, a sewage collection and treatment system and a water supply and distribution system. The Sewer Utility services the City and, as such, the City is empowered to adjust user rates to support annual appropriations for operating and maintaining the system and to pay required annual debt service incurred for capital expenditures on the system. The Water Utility services the City as well as the Townships of Ewing, Lawrence, Hopewell, and Hamilton (collectively, the "Townships"). The City changed to the an equal water rate system in 2006 and is no longer required to apply to the New Jersey Board of Regulatory Commissioners for rate changes. Rate increases are now adopted by ordinance of the Trenton City Council.

Education

The Trenton School District, at an election held on November 6, 1984, was changed (effective February 1, 1985) from a Type II School District to a Type I School District. The District has twenty elementary schools, one junior high school and two senior high schools. The estimated total enrollment for the 2007-2008 school year is 13,599. In addition, seventeen private primary schools located in the City and two private high schools located in bordering communities serve the City. Higher educational opportunities are available at The College of New Jersey, Rider College, Mercer County Community College, Thomas Edison College and Princeton University, located in Mercer County. .

The Board of Education consists of nine members appointed by the Mayor. All members serve until the appointment and qualification of their successors. Meetings are twice a month. Additional special meetings are frequently scheduled – and the time required for review and preparation is significant. The Board of Education has full power to operate the local public schools as it deems fit in compliance with State and Federal mandates and pertinent laws of the municipality. The Board of Education’s required functions are the development of policy and the employment of the Chief School Administrator who shall carry out its policies through the development and implementation of regulations.

The School District receives a significant amount of State Aid for operating purposes, debt service and capital outlay paid primarily pursuant to the Comprehensive Educational Improvement & Financing Act of 1996 (P.L. 1996, c. 138.). Funding for certain capital programs are continued under the Educational Facilities Construction and Financing Act (P.L. 2000, c.72). Consequently, a significant portion of the debt service listed in this report will be funded with State Aid.

Economic Development

Downtown Trenton

The $75 million renovation of the Trenton Transit Center was completed in 2008. The vision for the Trenton Transit Center is one of a bustling inter-modal transportation hub, combining train, bus, trolley and taxi service, which will also host a variety of commercial enterprises. The redesigned station provides a strong visual presence, a grand entranceway and a grand central space that reflects the great history of the City of Trenton and be a fitting gateway to a resurgent city.

In January 2008, the completed $45 million renovation of the Broad Street Bank Building opened for tenants. Trenton’s first skyscraper, a listed landmark building, now hosts 15,000 square feet of retail space and 124 rental units. Located in downtown Trenton, this apartment complex is within walking distance of the newly renovated Trenton Transit Center.

The Commonwealth Building on East State Street, across the street from the Broad Street Bank Building is being converted by Barcar Realty LLC into mixed-use ground level retail and 20 upper residential units.

In addition to the Broad Street Bank Building and the Commonwealth Building, the City of Trenton recently selected a developer for the development of the historic Bell Telephone Building on the next block east. The developer is proposing renovation of the seven-story building into apartments on the upper levels and retail space on the lower levels. The Bell Building is also in walking distance to the newly renovated Trenton Transit Center.

The $2.25 million American Corners Project by the Woodrose firm, converting the historic Golden Swan Tavern on Warren Street to mixed use, including loft apartments with wireless connectivity and office and retail space, was completed in 2007. Across the street from this project, Woodrose constructed a three-story office building with retail on the first floor, which was completed in 2010 and is fully occupied.

The Roebling Mansion, a legacy of Trenton’s mighty industrial family, was renovated and reopened as the West State Street headquarters of the New Jersey League of Municipalities in 2007.

Clarke Caton Hintz has restored the upper floors of the Masonic Temple to be used as office space and relocated their Ewing operation into this downtown Trenton location in early 2009.

In 2007, the Tourist information center located across the street from the Old Barracks Museum and the Trenton War Memorial was reopened by the Trenton Downtown Association.

2 The non-profit Lafayette Yard Community Development Corporation (the "Corporation") was created in spring 2000 to finance, together with other funds, the construction of a 200-room hotel and conference center with 40,000 square feet of meeting space on Lafayette Street, adjacent to the newly restored War Memorial Auditorium in the downtown of the City. The Corporation’s bonds issued to finance the Center were guaranteed by the City. The hotel/conference center, which opened for business on April 2, 2002, was owned by the Corporation. Beginning in 2006, the City was called upon to contribute money to replenish the Debt Service Reserve Fund and, in certain years, the City made an appropriation to cover operating losses. The Corporation ultimately filed for bankruptcy and sold the Hotel, and the City issued general obligation bonds to refund the Corporation bonds that were not defeased through the sale proceeds and other available cash. See "THE LAFAYETTE YARD COMMUNITY DEVELOPMENT CORPORATION", herein.

The Parking Authority of the City of Trenton (the "Parking Authority") has issued $21 million of bonds to finance, among other things, the construction of a garage to serve the hotel and conference center described in the preceding paragraph (see "THE PARKING AUTHORITY OF THE CITY OF TRENTON", herein). It also owns and operating other parking facilities. All bonds issued by the Parking Authority are guaranteed by the City.

In connection with this development, the City is working with the Trenton Downtown Association (the organization that administers the downtown Special Improvement District) and the Capitol City Redevelopment Corporation (an agency of the State) to restore downtown commercial buildings for mixed use residential and commercial development and to diversify the retail mix in the area.

In 2009, the City completed its $400,000 downtown master plan which sets forth an ambitious redevelopment strategy and calls for the conversion of many downtown State parking lots into mixed use development. Legislation was passed in December 2009 which will enable CCRC to work with the City of Trenton to implement this plan.

Roebling Complex and Arena District

With substantial financial assistance from the State and the City, the Roebling Market project opened in the spring of 1996. This complex provides 110,000 square feet of retail space (including a new full- size supermarket recently reoccupied in July 2008), 30,000 square feet of flex space, and the 66,000 square foot new headquarters of the New Jersey Housing and Mortgage Finance Agency. The complex contains 700 parking spaces in three separate parking areas.

The $50 million, 10,000 seat Sun Bank Center (formerly the Sovereign Bank Arena), initiated by Mercer County, is home to the Trenton Titans, a professional sports franchise from the East Coast Hockey League. It also hosts a variety of other sporting, entertainment, family and civic events. The arena opened in the fall of 1999. The arena employs 325 part-time and 23 full-time workers. More than 2,000 parking spaces are provided within easy walking distance of the arena. Mercer County has established an Arena Improvement District with an oversight board comprised of community representatives, business owners and government officials.

Route 29 Project

The vision behind the Route 29 Project is to realign Route 29 inland from the Delaware River and develop the State-owned surface parking lots in order to create a waterfront center in Trenton. The plan includes the creation of boulevards and park space along the beautiful river in addition to the development of mixed-use commercial and residential buildings. Currently, the city is working with CCRC to secure funding for this $150 million project.

3 Assunpink Creek Greenway

Restoration for the Assunpink Creek area continues with plans for a 99-acre urban park and greenway that will include several baseball and soccer fields, playgrounds, picnic areas, tennis and basketball courts, and an 18-hole chip and putt golf course.

Housing

The Division of Housing Production is the arm of the Department of Housing and Economic Development with direct responsibility for furthering housing development. The Division is responsible for setting housing priorities, assembling and coordinating financial resources and providing technical support services to nonprofit and for-profit housing development entities. It acts as an advocate for affordable housing within and outside City government, using its resources to facilitate the approval process for affordable housing development in the public and private sectors.

The mission of the Division is to improve the city’s housing stock by fostering the construction and rehabilitation of housing, to address the full range of the community’s needs and to ensure that new housing in the city revitalizes and stabilizes the city’s neighborhoods. Housing Production also administers the city’s HOME Program Funds, , Regional Contribution Agreement Funds, , , Rehabilitation Program, and Façade Improvement Programs.

Currently, there are several major housing projects in various stages of development throughout the City of Trenton, including the HHG proposed renovation of a former Roebling Factory site into 138 loft apartments. HHG recently received $16 million in tax credits from the New Jersey Economic Development Authority for the project. In addition, there are another 100 – 200 units of market rate, rental housing being proposed in areas throughout the City.

South Trenton Waterfront

Mercer County Waterfront Park baseball stadium opened in 1994 and has been a huge success and has established the viability of the South Trenton waterfront area as a key destination. The stadium, created through the leadership of the County, is the home of the AA Trenton Thunder, which is an affiliate of the New York Yankees. The Thunder has regularly drawn sold out crowds since its opening. The Thunder has recently signed a new lease with the Mercer County Improvement Authority for the next 20 years.

The City has worked with Mercer County on a comprehensive master plan for the development of the waterfront district. Key waterfront development elements that have been completed are discussed in the following paragraphs.

Riverview Plaza is a modern office complex adjacent to Waterfront Park and Katmandu Restaurant and Nightclub. The Plaza is home to five privately-owned businesses and two state office buildings.

Katmandu Restaurant and Nightclub is the adaptive reuse of an historic riverfront industrial building as a major restaurant, nightclub, and entertainment destination. It opened in 1997 and features outdoor dining, live music, and dancing.

The Route 29 tunnel facilitates access to the Delaware River waterfront for recreation and relaxation. The tunnel was opened on March 2, 2002 and construction of a park on top of the tunnel was completed in 2004.

4 The City has initiated design of a Riverwalk, which will provide attractive pedestrian and bicycle access from the South Trenton waterfront upriver to downtown Trenton. The Riverwalk may eventually become part of a continuous walkway along the span of the Delaware River, currently under consideration by the National Park Service.

Neighborhood Commercial Development

The City and the Eagle Group, a local developer, have completed the rehabilitation of Lalor Plaza, a once-dilapidated shopping center in South Trenton. More than $2 million has been invested and 70 jobs created in this 45,000 square foot shopping center.

The City completed its work with Community Concepts, Inc. to develop a supermarket and retail center on Pennington Avenue that opened for business in 2003.

US Route 1 Commerce Center

The City constructed a new 46,000 square foot manufacturing building and leased it to Central Aluminum an aluminum fabricator which brought 50 jobs into the City. The Urban Enterprise Zone Assistance Fund contributed $800,000 to this project to make the building competitive with available market alternatives.

The City assisted a developer in the acquisition and rehabilitation of a building on Mulberry Street which was then leased to Hutchinson Industries, allowing them to expand their operations in the City and bring 50+ new jobs.

In 1995, the City acquired the 11-acre Crane site on North Clinton Avenue. The City designated a private developer and set aside $200,000 for site cleanup and preparation. Eight thriving businesses are now located on the Crane site, employing approximately 200 persons.

The Hill Complex

In the fall of 1995, CV Hill Refrigeration (then the largest manufacturing firm in the City) left Trenton to relocate to rural Virginia. At the end of 1996, the City agreed to accept the facility from its owners. The facility contains over 800,000 square feet of buildings on 23 acres. The City recruited a total of eight manufacturing and distribution firms to the site.

Using a combination of public and private funds, the City and its private partners have converted the front building of the facility into 37 affordable residential rental units. The balance of the property has been developed into a modern industrial park with 8 new businesses. More than 136 people are employed at the site.

The City uses many different resources and governmental organizations to facilitate economic development, including:

• Urban Enterprise Zone (3% sales tax) • Tax Incentives (Fox-Lance) • Small Business Assistance Programs • Loans through the Trenton Business Assistance Corporation • Technical assistance through the Trenton Business and Technology Center • Facade grants through the Trenton Downtown Association

5 • Artists housing and Live-Work Space through the Trenton Arts Connection • Community Development Block Grants • Technical Assistance for Housing Developer • Property Improvement Grants and Loan Subsidies for low income homeowners • Job Training

City of Trenton Elected Officials

Title Name Mayor ...... Eric E. Jackson Council President (West Ward) ...... Zachary Chester Council Vice-President (East Ward) ...... Verlina Reynolds-Jackson Councilman (At-Large) ...... Alex Bethea Councilwoman (North Ward) ...... Marge Caldwell-Wilson Councilwoman (At-Large) ...... Phyllis Holly-Ward Councilman (At-Large) ...... Duncan W. Harrison, Jr. Councilman (South Ward) ...... George Muschal

The terms of the Mayor and the members of the City Council expire on June 30, 2018.

The principal administrators of the City, all of whose terms coincide with that of the Mayor, are as follows:

City Clerk ...... Richard M. Kachmar Law ...... David L. Minchello, Director Finance ...... Janet Schoenhaar, Comptroller Fire ...... Qareeb Bashir, Director Police ...... Ernest Parrey, Director Inspections ...... ,Vacant* Housing and Development ...... Monique King-Viehland Director Administration ...... Terry McEwen, Business Administrator Public Works ...... Jacqueline Foushee, Director Health and Human Services ...... James Brownlee, Director Municipal Courts ...... Harold W. George, Chief Judge

* Department is being overseen by the Business Administrator until a Director is appointed

Additional Governmental Bodies of the City of Trenton

In addition to the above-mentioned major departments of the City, the General Ordinances provide for the establishment of the following boards, authorities or commissions, each of which functions in a specialized area of responsibility:

Zoning Board of Adjustment Planning Board Parking Authority Housing Authority Trenton Commons Commission Museum Commission Memorial Building Commission Trent House Commission Public Employees' Award Committee Citizens Advisory Committee Board of Construction Appeals on Parks and Recreation Landmarks Commission Arts Commission

POPULATION

City of County of State of Year Trenton Mercer New Jersey 1950 128,009 229,781 4,835,319 1960 114,167 266,392 6,067,412 1970 104,786 304,116 7,168,164 1980 92,124 307,863 7,364,158 1990 88,675 325,824 7,750,000 2000 85,403 350,761 8,614,350 2010 84,913 366,513 8,791,894

Source: U.S. Census

TEN LARGEST EMPLOYERS

Number of Employer Employees State of New Jersey 22,500 Capital Health Systems 2,500 (formerly Helene Fuld and Mercer Medical Centers) Trenton School System 2,400 County of Mercer 1,627 City of Trenton 1,500 Saint Francis Medical Center 1,045 The Hibbert Company 480 Hutchinson Industries 350 Mercer Unit ARC 221 Water's Edge Convalescent Center 219

TEN LARGEST TAXPAYERS

Assessed Valuation Tax Levy 33-50 State Street LLC ...... $41,966,000 2,394,580 ISTAR 100, 200-300 Riverview ...... 34,311,300 1,957,803 Robert & Richards (Office Building) ...... 19,884,200 1,134,593 ENDOV Associates ...... 18,420,200 1,051,057 Trois Holdings LLC ...... 14,362,800 819,541 Verizon ...... 14,089,704 803,959 DREI Holdings LLC ...... 10,822,000 617,503 Clinton Commons Associates ...... 10,765,800 614,297 Water’s Edge ...... 10,624,900 606,257 Uptown Limited ...... 8,692,820 496,011

7 TEN LARGEST IN-LIEU-OF-TAX PAYMENTS

Assessed Valuation Payment The Richard Hughes Justice Complex ...... 102,069,300 8,617,228 One State Street Square ...... 25,770,660 669,239 Kingsbury ...... 10,977,770 322,502 Roebling Urban Renewal ...... 8,263,800 231,457 Roger Gardens ...... 6,356,300 227,020 Trenton Lutheran ...... 6,436,800 206,440 South Village II ...... 10,260,900 197,491 North 25 Associates ...... 9,479,500 189,537 South Village I ...... 4,268,600 131,363 Matrix East Front Street ...... 5,093,700 90,992

8 CITY OF TRENTON GENERAL DEBT

Statutory Debt as of June 30, 2016

Gross Deductions Net

Bonds & Notes Issued-School ...... $20,740,000 Authorized but not Issued ...... 675,000 Less Applicable Deductions ...... 21,415,000 Net Debt for School ...... -0-

Bonds & Notes Issued Self-Liquidating ...... 139,543,090 Authorized but not Issued ...... 87,067,212 Less Applicable Deductions ...... 226,610,902 Net Debt Self-Liquidating ...... -0-

Bonds & Notes Issued-General ...... 162,971,852 Authorized but not Issued ...... 13,410,500 Bonds Guaranteed by City ...... 29,868,019 Less Applicable Deductions ...... 41,586,594 Net Debt General Purposes ...... 151,253,277 ______

TOTAL GROSS DEBT ...... $440,865,773 TOTAL STATUTORY DEDUCTIONS $289,612,496 TOTAL NET DEBT ...... $151,253,277

Deduction column is utilized to reflect deductions permitted under New Jersey Statutes in determining the portion of school debt and self-liquidating debt that is chargeable to the statutory borrowing capacity of the City and is not intended to reflect that the school district or the utility is not responsible for the payment of the gross debt shown above. Also deducted is the principal outstanding on the City’s 2003 Early Retirement Initiative Refunding Bonds.

9 EQUALIZED VALUATION OF REAL PROPERTY PLUS ASSESSED VALUATION OF CLASS II RAILROADS

Year Amount

2013 ...... 2,493,212,666 2014 ...... 2,287,970,781 2015 ...... 2,353,671,425

Equalized Valuation Basis ...... $2,378,284,957 Net Debt (June 30, 2016) ...... $ 151,253,277 % Net Debt of Equalized Valuation Basis ...... 6.36%

10 GENERAL (TAX SUPPORTED) DEBT ANALYSIS DEBT SERVICE ON BONDS PRESENTLY OUTSTANDING

Fiscal Year Principal Interest Total 2016 $11,685,904 $5,534,548 $17,220,452 2017 11,553,618 5,725,655 17,279,273 2018 11,864,903 5,364,133 17,229,036 2019 12,144,616 4,951,052 17,095,638 2020 12,589,329 4,525,525 17,114,854 2021 13,154,043 4,085,961 17,240,004 2022 14,007,066 3,320,503 17,327,569 2023 13,905,000 1,754,661 15,659,661 2024 14,685,000 1,110,901 15,795,901 2025 11,545,000 524,926 12,069.926 2026 3,180,000 202.525 3,382,525 2027 1,910,000 54,000 1,964,000

Includes debt service on 2003 Pension Refunding Bonds, the outstanding balance of which is not includable in the City’s net debt

BOND ANTICIPATION NOTES (General) as of June 30, 2016

Maturity Amount June 16, 2017 $13,410,500 (1)

(1) This amount represents the General Improvement portion of a $35,000,500 Bond Anticipation Note, with the balance consisting of $18,900,000 Water Utility, $1,065,000 Sewer Utility, and $1,625,000 Temporary (School) Note

11 WATER UTILITY

The Water Utility services the City, as well as the Townships of Ewing, Lawrence, Hopewell, and Hamilton. Approximately 38% of water utility revenues are derived from City users and 62% from users in the four Townships. The service area population exceeds 200,000. In 2012, rates were increased by approximately 37%; this was the first rate increase since 1991.

The typical quarterly charge for City of Trenton residential users is $125.00. The charge consists of a $46.24 demand (minimum) charge and a consumption charge calculated at $2.116 per 100 cubic feet.

12 WATER UTILITY DEBT SERVICE ON BONDS PRESENTLY OUTSTANDING

Fiscal Year Principal Interest Total 2016 $3,181,879 $1,832,161 $5,014,040 2017 3,304,561 1,841,652 5,146,213 2018 3,333,638 1,741,927 5,075,565 2019 3,365,391 1,630,089 4,995,480 2020 2,540,534 1,520,339 4,060,873 2021 2,550,534 1,429,039 3,979,573 2022 2,550,534 1,347,489 3,898,023 2023 2,545,534 1,251,739 3,797,273 2024 2,555,534 1,171,564 3,727,098 2025 2,560,534 1,094,389 3,654,923 2026 2,560,534 1,019,489 3,580,023 2027 2,570,534 942,264 3,512,798 2028 2,570,534 864,064 3,434,598 2029 2,560,534 787,820 3,348,354 2030 2,555,534 708,792 3,264,326 2031 2,385,534 631,279 3,016,813 2032 2,385,534 556,451 2,941,985 2033 2,270,534 481,269 2,751,803 2034 2,275,534 407,326 2,682,860 2035 2,137,023 332,638 2,469,661 2036 1,335,000 266,888 1,601,888 2037 1,335,000 210,638 1,545,638 2038 650,000 152,900 802,900 2039 650,000 123,100 773,100 2040 650,000 93,300 743,300 2041 650,000 63,500 713,500 2042 270,000 43,200 313,200 2043 270,000 32,400 302,400 2044 270,000 21,600 291,600 2045 270,000 10,800 280,800

BOND ANTICIPATION NOTES (Water Utility) as of June 20, 2016

Maturity Amount June 16, 2017 $18,900,000 (1)

(1) This amount represents the Water Utility portion of a $35,000,500 Bond Anticipation Note, with the balance consisting of $13,410,500 General Improvement, $1,065,000 Sewer Utility, and $1,625,000 Temporary (School) Note

13 SEWER UTILITY

In 1985, the City completed a $43,000,000 improvement program to its sewerage collection and treatment system ($24,000,000 of which represented the treatment plant). The City is 100% sewered with a treatment capacity of 20 mgd, of which 17 mgd is presently utilized. All current United States Environmental Protection Agency standards are being satisfied.

The average residential quarterly user charge is $81.72 which is based on water consumption calculated at $2.27 per 100 cubic feet. The current rate structure has been in place since September 1991.

14 SEWER UTILITY DEBT SERVICE ON BONDS PRESENTLY OUTSTANDING

Fiscal Year Principal Interest Total 2016 $370,000 $236,241 $606,241 2017 330,000 269,896 599,896 2018 330,000 256,881 586,881 2019 340,000 242,131 582,131 2020 345,000 226,631 571,631 2021 345,000 211,281 556,281 2022 345,000 196,731 541,731 2023 355,000 179,681 534,681 2024 360,000 164,406 524,406 2025 355,000 148,319 503,319 2026 345,000 134,787 479,787 2027 345,000 121,231 466,231 2028 345,000 108,073 453,073 2029 340,000 95,401 435,401 2030 330,000 82,694 412,694 2031 235,000 71,744 306,744 2032 290,000 61,400 351,400 2033 290,000 49,810 339,810 2034 295,000 38,032 333,032 2035 145,000 29,063 174,063 2036 80,000 24,275 104,275 2037 80,000 20,625 100,625 2038 80,000 16,900 96,900 2039 80,000 13,100 93,100 2040 80,000 9,300 89,300 2041 80,000 5,500 85,500 2042 20,000 3,200 23,200 2043 20,000 2,400 22,400 2044 20,000 1,600 21,600 2045 20,000 800 20,800

BOND ANTICIPATION NOTES (Sewer Utility) as of June 20, 2016

Maturity Amount June 16, 2017 $1,065,000 (1)

1) This amount represents the Sewer Utility portion of a $35,000,500 Bond Anticipation Note, with the balance consisting of $13,410,500 General Improvement, $18,900,000 Water Utility, and $1,625,000 Temporary (School) Note

15 PARKING UTILITY

In 1973, the City established a Parking Utility for the purpose of owning and operating a parking garage and nine parking lots.

PARKING UTILITY DEBT SERVICE ON BONDS PRESENTLY OUTSTANDING

Fiscal Year Principal Interest Total 2016 $5,000 $3,025 $8,025 2017 5,000 2,775 7,775 2018 5,000 2,525 7,525 2019 5,000 2,275 7,275 2020 5,000 2,025 7,025 2021 5,000 1,775 6,775 2022 10,000 1,450 11,450 2023 10,000 1,050 11,050 2024 10,000 638 10,638 2025 10,000 213 10,213

16 SCHOOL (TAX SUPPORTED) DEBT ANALYSIS DEBT SERVICE ON BONDS PRESENTLY OUTSTANDING

Fiscal Year Principal Interest Total 2016 $3,810,000 $1,008,043 $4,818,043 2017 3,890,000 858,665 4,748,665 2018 1,950,000 724,835 2,674,835 2019 2,050,000 626,765 2,676,765 2020 2,150,000 522,435 2,672,435 2021 2,255,000 411,075 2,666,075 2022 1,025,000 291,165 1,316,165 2023 590,000 244,125 834,125 2024 590,000 222,525 812,525 2025 590,000 200,438 790,438 2026 590,000 177,863 767,863 2027 590,000 155,288 745,288 2028 300,000 134,250 434,250 2029 300,000 120,750 420,750 2030 300,000 107,250 407,250 2031 300,000 93,750 393,750 2032 300,000 80,063 380.063 2033 300,000 66,188 366,188 2034 300,000 52,125 352,125 2035 300,000 37,500 337,500 2036 300,000 22,500 322,500 2037 300,000 7,500 307,500

includes debt service on 2003 School Pension Refunding Bonds, the outstanding balance of which is not includable in the City’s net debt; the School District reimburses the City in full for the debt service on the School Pension Refunding Bonds pursuant to an interlocal agreement between the City and the School District

TEMPORARY SCHOOL NOTES as of June 20, 2016

Maturity Amount June 16, 2017 $1,625,000

These amounts will be paid at maturity through a combination of proceeds of the School Notes and the School Bonds referred to herein.

NOTE 1. The School District receives a significant amount of State Aid for operating purposes, debt service and capital outlay paid primarily pursuant to the Comprehensive Educational Improvement & Financing Act of 1996 (P.L. 1996, c. 138. Funding for certain capital programs are continued under the Educational Facilities Construction and Financing Act (P.L. 2000, c.72). Consequently, a significant portion of the debt service listed above will be funded with State Aid. See Summary of the Elementary and Secondary Education System in the State of New Jersey herein.

17 CITY OF TRENTON - STATEMENT OF CURRENT FUND OPERATIONS

Year Ending June 30, 2015

CURRENT REVENUE ON A CASH BASIS: Current Taxes ...... $107,516,676 Delinquent Taxes ...... 1,770,511 Other Revenue and Additions/Credits to Income ...... 117,999,747

Total Funds ...... $227,286,928

EXPENDITURES AND TAX REQUIREMENTS: Municipal Appropriations ...... $185,139,620 School Taxes ...... 21,115,662 County Taxes ...... 14,384,534 Special District Taxes ...... 561,968 Other Expenditures and Deductions ...... 1,685,143

Total ...... $222,886,927

Excess in Revenue ...... $4,400,001

Surplus Balance July lst ...... $15,899,383

Subtotal ...... $20,299,384 Less: Fund Balanced Utilized as Revenue ...... 2,000,000

Surplus Balance June 30th ...... $18,299,384

18 CITY OF TRENTON - STATEMENT OF WATER UTILITY OPERATIONS

Year Ending June 30, 2015

Surplus Balance July lst ...... $14,051,277

REVENUES: Fund Balance Utilized ...... $ 3,640,508 Water Rents ...... 40,052,281 Fire Hydrant Service ...... 833,360 Miscellaneous ...... 233,577 Unexpended Balances ...... 4,737,291 Unallocated Receipts ...... 23,017 Total Funds…… …………………………………………………………………….. $49,518,034 EXPENDITURES: Paid or Charged ...... $30,042,899 Capital Improvements ...... 0 Current Fund ...... 3,150,000 Reserved ...... 9,837,163 Refund of Prior Year’s Revenue ...... 19,609 Total ...... $43,049,671

Excess in Revenue ...... $6,468,363

Subtotal ...... $20,519,640 Less: Fund Balance Utilized ...... 3,640,508

Surplus Balance June 30th ...... $16,879,133

19 CITY OF TRENTON - STATEMENT OF SEWER UTILITY OPERATIONS

Year Ending June 30, 2015

Surplus Balance July 1st ...... $4,727,179

REVENUES: Fund Balance Utilized ...... 1,497,750 Sewer Rents ...... 13,449,959 Miscellaneous ...... 2,950 Unexpended Balance ...... 411,743

Total Revenue ...... $15,362,402

EXPENDITURES: Paid or Charged ...... 10,478,012 Current Fund ...... 1,500,000 Capital Improvement Fund ...... 360,000 Reserved ...... 1,657,706 Refund of Prior Year's Revenue ...... 1,912

Total ...... 13,997,630

Excess in Revenue ...... 1,364,773

Subtotal ...... 6,091,952 Less: Fund Balance Utilized as Revenue ...... 1,497,750

th Surplus Balance June 30 ...... $4,594,202

20 CITY OF TRENTON - STATEMENT OF PARKING UTILITY OPERATIONS

Year Ending June 30, 2015

Surplus Balance July 1st ...... $927,850

REVENUES: Operating Surplus Anticipated ...... 283,950 Parking Fees and Charges ...... 28,202 Lease Agreements ...... 1,484,576 Miscellaneous ...... 63 Unexpended Balances and Other Credits to Income ...... 22,873

Total Funds ...... $1,819,664

EXPENDITURES: Paid or Charged ...... 885,909 Current Fund ...... 800,000 Total ...... 1,685,909

Excess in Revenue ...... $133,755

Subtotal ...... $1,061,605

Less: Fund Balance Utilized ...... 283,950

Surplus Balance June 30th ...... $777,655

FISCAL YEAR 2016 BUDGET

The Budget for Fiscal Year 2016 was adopted on March 17, 2016. It provided appropriations (including expenditures of grants) of $207,725,414. The amount to be raised by taxes in support of the municipal budget is $78,761,089, an increase of 2.2% versus fiscal year 2015.

The total tax levy budgeted for Fiscal Year 2016, combining municipal, county and school purpose, was $115,168,547.

The total CMPTRA and Energy Receipts Taxes (in the aggregate) are anticipated to increase by $4,860,000 (to $48,795,000), while Transitional Aid will decrease by a similar amount (to $20,000,000); this represents a shifting of a portion of “Transitional Aid” into the permanent revenue base of the City.

The budget anticipates $5,000,000 in Current Fund Surplus; the Fund Balances as of June 30, 2015 was $18,299,384. The budget also anticipates receipts of operating surplus’ from the various utilities at the same levels as in fiscal year 2015 and other non-grant revenues are approximately equal to fiscal year 2015 levels. The City received a SAFER grant (for fire and emergency response staffing) of approximately $14 million.

Total appropriations are approximately $17.6 million higher in fiscal year 2016 compared to fiscal year 2015; $13,000,000 of this increase is due to higher grants received (and appropriated). There are no other significant increases in expense line items.

Based on year-to-date results, the City expects to end fiscal year 2016 with a fund balance draw of between $1 million and $1.5 million.

ADDITIONAL APPROVED BORROWING RELATED TO THIRD-PARTY FRAUD

Within the past year, the City discovered that its third-party payroll provider was not depositing Federal taxes that had been withheld. The City is liable for the monies owed to the IRS, which will be a maximum of $4.7 million. The City has received approval from the New Jersey Local Finance Board to issue debt to fund this payment, and repay the debt over a five-year period. The IRS and FBI are investigating the payroll provider in an attempt to recover the missing funds, and the City has filed suit to recover the funds. When these investigations and litigation are complete, the City will issue debt to fund the final amount due (which will not exceed $4.7 million).

22 PARKING AUTHORITY OF THE CITY OF TRENTON

The Parking Authority of the City of Trenton (the “Parking Authority”) was created in 1948 and currently owns and operates two parking garages and two parking lots.

The Parking Authority issued $21,000,000 Parking Revenue Bonds (City Guaranteed, Series 2000), dated April 1, 2000 (the “Parking Authority Bonds”) and guaranteed by the City. Proceeds of this issue were used to: (a) construct a 650 space parking facility structure which will be connected to the hotel and conference center to be constructed by the Lafayette Yard Community Development Corporation, a not-for-profit entity; (b) pay any costs deemed appropriate by the Authority in connection with the aforementioned hotel and conference center; (c) acquire from the City facilities currently constituting part of the City's parking utility or other similar facilities; and (d) all costs and expenses related thereto (including capitalized interest and the funding of a bond reserve fund).

In October 2001, the Parking Authority issued $20,590,000 Parking Revenue Refunding Bonds (City Guaranteed, Series 2001), dated October 1, 2001 (the “Parking Authority Refunding Bonds”) and guaranteed by the City. The proceeds of the Parking Authority Refunding Bonds were used to advance refund certain callable maturities of the Parking Authority Bonds, producing annual debt service savings for the Authority (total net present value savings were approximately 3.20% of the refunded bonds).

In conjunction with the acquisition of facilities from the City parking utility, the Parking Authority took over responsibility for the payment of debt service on bonds related to the acquired facilities. Such debt service is still, ultimately, the responsibility of the City, but it is anticipated that such debt service will be paid from Parking Authority revenues. The debt service to be paid by the Authority represents approximately 80% of the amounts shown under "Parking Utility".

In December 2003, the Parking Authority issued $14,075,000 Parking Revenue Bonds (City Guaranteed, Series 2003) dated December 15, 2003 (the “2003 Parking Authority Bonds”) and guaranteed by the City. The proceeds of the 2003 Parking Authority Bonds were used to finance the acquisition of a parking lot located at Broad and Front Streets and to finance the construction of a parking garage on this site. . The construction of an adjacent office building (the “Liberty Commons Project”), to be owned by the Trenton Economic Development Corporation (the “EDC”), was underway and had been delayed.

The EDC has since worked out the financing and leasing of this office space, and a primary tenant (Wachovia Bank) has moved in. Wachovia is leasing 160 of the 560 spaces on a long-term basis; this necessitated the refunding of approximately 28.5% of the 2003 Parking Authority Bonds with taxable bonds. This office building will likely provide additional demand for monthly and daily parking in the garage. Other monthly and daily demand for the garage will come from individuals who previously parked on the surface lot upon which the garage and office building are being built, as well as other individuals and companies in close proximity in downtown Trenton.

23 THE LAFAYETTE YARD COMMUNITY DEVELOPMENT CORPORATION

On April 26, 2000, the Lafayette Yard Community Development Corporation (the "Corporation") (a not-for-profit entity) issued $31,000,000 of Hotel/Conference Center Project Revenue Bonds, Series 2000 (City of Trenton Guaranteed) (the "Hotel/Conference Center Bonds"), which bonds were guaranteed by the City.

The proceeds of the Hotel/Conference Center Bonds, together with other available funds, were used to finance: (a) the costs of the hotel and conference project, consisting of (i) the acquisition of a fee interest in land at the Lafayette Yard in the City, (ii) the construction thereon and equipping of a hotel and conference center with appropriate interconnections to both a parking facility (see (iii), below) and the State War Memorial Building, (iii) the structured parking facility to be constructed by the Corporation on behalf of the Parking Authority, and (iv) all related infrastructure and site improvements related thereto; (b) funding a deposit to the debt service reserve fund for the Hotel/Conference Center Bonds; (c) funding capitalized interest on the Hotel/Conference Center Bonds; (d) funding a deposit to the working capital reserve fund; and (e) funding costs of issuing the Hotel/Conference Center Bonds. A portion of the costs of the Project were provided by loans or other sources of funding from the Parking Authority, the State of New Jersey, the New Jersey Economic Development Authority and the Capital City Redevelopment Corporation. In addition, certain costs were funded by an Urban Enterprise Zone grant.

In September 2001, the Corporation issued its $33,770,000 Conference Center Revenue Bonds, Refunding Series 2001 (City of Trenton Guaranteed), dated August 15, 2001, also guaranteed by the City, the proceeds of which were used to advance refund all of the Hotel/Conference Center Bonds at a net present value debt service savings of $960,485, or 3.10% of the refunded bonds principal.

While gross revenues of the Hotel have been in line with the original projections, net revenues have lagged behind projections. In April 2006, the City had to contribute approximately $770,000 to make up a required withdrawal from the Debt Service Reserve Fund. In April, 2009, the City contributed $1,391,968.76 and a similar amount in fiscal years 2010 and 2011.

In 2007, the City pledged certain new PILOT payments from State-owned property as security on an issuance of bonds by the New Jersey Economic Development Authority. The proceeds were used to defease approximately 50% of the outstanding City Guaranteed Bonds.

In August 2008, management of the Hotel operations was transferred to the Waterford Group. This transfer was approved by the Marriott Corporation (the prior manager) and runs for a three-year period expiring in August 2011. The Hotel will continue to operate as a Marriott franchise for the term of this management contract.

In Fiscal Year 2012, the Corporation refinanced its outstanding 2001 Refunding Bonds and realized debt service savings that reduced the required appropriation by approximately $500,000 in that year (without increase in the debt service in any subsequent year).

LYCDC filed for bankruptcy protection pursuant to Chapter 11 of the United States Bankruptcy Code. The hotel was sold to Edison Broadcasting Company earlier this year in accordance with an asset purchase agreement approved by the Bankruptcy Court. The City issued bonds in 2014 to redeem the remaining LYCDC City-guaranteed obligations, net of: (i) the sale proceeds of the hotel; (ii) reserve funds related to the LYCDC Bonds held by Wells Fargo Bank, N.A. as Trustee for the LYCDC Bonds; (iii) funds budgeted by the City for scheduled debt service of such LYCDC Bonds due on April 1, 2014.

24 SUMMARY OF VALUATIONS

Total True Value Real and Of Real Equalization Real Personal Year Property Ratio Property Property 2005 2,110,712,200 94.59 1,900,273,595 1,918,990,947 2006 2,456,824,015 82.25 1,939,226,395 1,954,523,088 2007 2,962,790,672 68.32 1,950,196,475 1,963,785,641 2008 3,265,599,068 62.25 1,955,839,810 1,967,081,328 2009 3,342,189,250 61.38 1,971,198,680 1,983,865,463 2010 3,087,981,717 66.52 1,971,366,430 1,983,835,190 2011 3,095,628,125 65.70 1,967,856,520 1,980,295,615 2012 2,829,945,784 72.20 1,970,385,970 1,984,535,097 2013 2,577,801,239 79.03 1,963,078,930 1,976,511,504 2014 2,376,294,583 85.80 1,965,315,640 1,979,405,344

Source: Mercer County Abstract of Ratables

ASSESSED VALUE CLASSIFICATION

2011 2012 2013 2014 2015 Vacant $ 18,112,390 $ 17,546,890 $ 17,302,790 $ 17,785,320 $ 18,133,720 Residential 1,334,734,770 1,339,504,290 1,335,184,580 1,334,319,300 1,344,020,060 Commercial 525,411,960 523,470,660 521,227,760 522,861,920 530,215,720 Industrial 39,114,400 37,948,100 37,949,100 37,421,100 36,589,200 Apartments 50,483,000 51,914,400 51,414,700 52,928,000 54,011,500 Telephone 12,439.095 14,149,127 13,432,574 14,089,704 13,682,458

Total $1,980,295,615 $1,984,535,097 $1,967,511,504 $1,979,405,344 1,966,653,658

TAX LEVY AND COLLECTIONS

Fiscal Tax Current Year Levy Collections Percentage 2006 81,403,670 79,651,581 97.85 2007 81,056,387 79,593,674 98.19 2008 84,893,892 83,651,100 98.54 2009 93,024,092 91,373,171 98.23 2010 105,319,651 102,743,237 97.13 2011 108,732,789 104,573,496 96.17 2012 111,992,199 107,057,431 96.02 2013 112,058,846 107,705,171 96.11 2014 114,083,575 109,073,221 95.61 2015 114,340,917 107,516,676 94.03

TAX RATE ANALYSIS Tax Rate Per $100 Assessed Valuation

Fiscal Tax Rate Year Per $100 A.V. School County Municipal 2006 4.10 1.08 0.64 2.38 2007 4.19 1.08 0.71 2.40 2008 4.38 1.07 0.78 2.53 2009 4.69 1.06 0.81 2.82 2010 5.48 1.07 0.79 3.63 2011* 5.64 1.07 0.78 3.74 2012 5.53 1.06 0.78 3.64 2013 5.67 1.07 0.78 3.78 2014 5.71 1.07 0.74 3.86 2015 5.73 1.06 0.74 3.90

*beginning in 2011, the municipal library levy was broken out from the municipal tax levy. The library levy for 2011 was 0.051, 0.046 for 2012, 0.042 in 2013, and 0.039 in 2014 and 2015

26 EMPLOYEES

The City provides services through approximately 1,200employees. City employees are represented as follows: Police – 217 Police Benevolent Association, 30 Trenton Superior Officer's Association; Firefighters - 169 Firemen's Mutual Benevolent Association, 55 Trenton Fire Officer's Association; Municipal Employees - 618 American Federation of State, County and Municipal Employees and; 40 Supervisor's Union. The remaining employees are managerial and non-represented.

PENSION INFORMATION

Those municipal employees who are eligible for pensions are enrolled in the State of New Jersey pension system. Three pension systems were established by act of the State Legislature. Benefits, contributions, means of funding and the manner of administration are determined by statute.

The three State-administered pension funds are: the Consolidated Police and Firemen's Pension Fund (N.J.S.A. 43:16A), the Police and Firemen's Retirement System (N.J.S.A. 43:16A), and the Public Employees' Retirement System (N.J.S.A. 43:15A). The Division of Pensions within the Treasury Department of the State of New Jersey is the administrator of the funds. This Division charges governmental units their respective contributions on an annual basis. State law requires that these systems be subject to actuarial valuation every year and actuarial investigation every three years.

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APPENDIX C

FINANCIAL STATEMENTS OF THE CITY OF TRENTON

[ THIS PAGE INTENTIONALLY LEFT BLANK ] CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

FINANCIAL STATEMENTS

June 30, 2015

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

TABLE OF CONTENTS

June 30, 2015

TITLE PAGE

INDEPENDENT AUDITORS' REPORT Independent Auditors' Report ...... 1

BASIC FINANCIAL STATEMENTS – REGULATORY BASIS Combined Statement of Assets, Liabilities, Reserves and Fund Balance – All Fund Types and Account Group ...... 3 Combined Statement of Revenues, Expenditures and Changes in Fund Balance – Current and Utility Operating Funds ...... ……...... 5 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Current Fund…...... 7 Combined Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Utility Operating Funds…… ...... 8 Notes to Financial Statements ...... 9

INDEPENDENT AUDITORS' REPORT

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BASIC FINANCIAL STATEMENTS

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

COMBINED STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2015

Totals Utility Funds Utility Funds Fixed Asset Memorandum Only Current Grant Capital CDBG Trust Funds (1) Operating (2) Capital (2) Account Group June 30, 2015 June 30, 2014 ASSETS AND OTHER DEBITS Cash and Cash Equivalents$ 8,606,157.14 $ - $ 83,817.50 $ 309,778.53 $ 11,413,474.89 $ 9,093,652.08 $ 4,667,591.12 $ - $ 34,174,471.26 $ 50,176,845.20

Investments 30,844,754.82 - 24,990.89 - 9,215,675.80 35,769,320.64 2,609,883.07 - 78,464,625.22 48,397,374.55

Federal and State Grants Receivable - 14,171,109.67 7,255,420.72 13,353,434.79 - - - - 34,779,965.18 52,976,142.28

Due from State of New Jersey 169,303.00 ------169,303.00 1,472,788.72

Receivables and Other Assets Loan Proceeds Receivable - - 2,329,244.86 - - - - - 2,329,244.86 2,729,244.86

Delinquent Property Taxes 904,376.85 ------904,376.85 792,223.71

Tax Title Liens Receivable 20,384,958.83 ------20,384,958.83 17,169,220.03

Property Acquired for Taxes at Assessed Valuation 56,994,200.00 ------56,994,200.00 11,772,987.46 51,358,000.00 7,721,099.27

InterfundsUtility Funds Receivable - Receivable with Reserves 3,288,662.88 - 3,769,426.46 - - - - - 3,891,893.81 - 823,004.31 13,499,921.86 1,691,472.00 - - - 15,191,393.86 16,623,731.83

WasteWater Bonds Receivable ------14,658,778.00 - 14,658,778.00 10,093,988.00

Deferred Charges 10,004,823.79 ------10,004,823.79 12,087,675.95

Deferred Charges - Funded & Unfunded - - 203,333,189.47 - - - - - 203,333,189.47 208,246,624.13

Fixed Capital ------339,010,855.56 - 339,010,855.56 328,630,518.06

Fixed Capital Authorized and Uncompleted ------94,615,227.45 - 94,615,227.45 79,702,370.83

Fixed Assets ------282,465,217.00 282,465,217.00 294,509,256.00 $ 131,197,237.31 $ 17,940,536.13 $ 213,026,663.44 $ 13,663,213.32 $ 24,521,044.50 $ 59,185,898.89 $ 457,253,807.20 $ 282,465,217.00 $ 1,199,253,617.79 $ 1,182,687,103.42

(1) - Includes Animal Control, Municipal Public Defender, Employees' US Saving Bond Account, Unemployment Comp Insurance, Workers' Comp Insurance, Compre Liab Ins Fund, Special Law Enforcement Fund, General Trust Fund, Neighborhood Preservation Fund, Revolving Loan Fund, and Redevelopment Fund. (2) - Includes Water, Parking and Sewer Utility funds There were Bonds and Notes Authorized but not Issued at June 30, 2015 and 2014, in the amount of $125,645,837.15 and $103,443,837.15, respectively.

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

COMBINED STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - ALL FUND TYPES AND ACCOUNT GROUP (CONTINUED) JUNE 30, 2015

Totals Utility Funds Utility Funds Fixed Asset Memorandum Only Current Grant Capital CDBG Trust Funds (1) Operating (2) Capital (2) Account Group June 30, 2015 June 30, 2014 LIABILITIES, RESERVES AND FUND BALANCE Tax/Sewer Fee Overpayments$ 76,628.82 $ - $ - $ - $ - $ - $ - $ - $ 76,628.82 $ 78,373.29 Appropriation Reserves 9,724,624.52 - - - - 11,623,699.96 - - 21,348,324.48 20,352,660.50 Prepaid Taxes/Sewer Fees 160,030.61 ------160,030.61 107,392.01 Grant Fund Accounts Payable - Grants ------Reserves for Special Purposes - 17,831,677.12 ------17,831,677.12 36,556,262.04 Accrued Payroll - Grants - 78,611.15 - 20,892.83 - - - - 99,503.98 101,177.60 Other Liabilities and Reserves Due from State of NJ 313,127.28 ------313,127.28 314,683.03 Capital Improvement Fund ------19,473.03 - 19,473.03 454,473.03 Other Reserves 2,634,980.25 - 716,304.52 - 17,059,836.40 - - - 20,411,121.17 13,535,180.32 Improvement Authorizations - - 37,356,544.07 - - - 82,146,812.91 - 119,503,356.98 99,733,469.82 Encumbrances Payable 2,184,817.14 - - - 975,437.43 - - - 3,160,254.57 2,888,430.24 Reserve for Encumbrances - - 5,751,622.32 5,079,118.71 - 3,660,248.69 12,468,414.54 - 26,959,404.26 27,590,957.31 Interfund Payable 7,273,223.07 - 748,495.27 2,888,267.25 62,600.00 800,395.64 6.23 - 11,772,987.46 7,721,099.27 Bond Anticipation Notes - - 8,807,500.00 - - - 5,715,000.00 - 14,522,500.00 20,563,500.00 Reserve for Loan Payments - - - 61,877.69 - - - - 61,877.69 1,553,064.95 Reserve for Grants - - - 5,613,056.84 - - - - 5,613,056.84 2,992,701.79 Serial Bonds - - 155,664,479.30 - - - 77,995,170.28 - 233,659,649.58 236,309,802.77 Serial Bonds - Qualified - Utility Capital ------51,857,000.00 - 51,857,000.00 48,175,000.00 Deposits - - - - - 21,314.00 - - 21,314.00 21,314.00 Loans Payable - - 1,444,209.34 - - - - - 1,444,209.34 1,704,378.10 Reserve for Receivables 81,572,198.56 - 2,329,244.86 - - 13,499,921.86 1,691,472.00 - 99,092,837.28 91,876,191.21 Reserve for Retro Active Payroll & Sick & Vacation Pay 7,709,758.69 - - - - 5,500,728.40 - - 13,210,487.09 11,189,691.77 Reserve for Tax Appeals 1,200,000.00 ------1,200,000.00 1,100,000.00 Accounts Payable 48,463.92 - - - 4,745,484.70 525,467.63 - - 5,319,416.25 5,681,538.68 Accrued Interest on Bonds and Notes - - - - - 1,303,132.88 - - 1,303,132.88 1,349,164.15 Accrued Payroll ------Reserve for Amortization & Deferred Amortization ------224,652,162.39 - 224,652,162.39 216,640,790.98 Other Payables - 30,247.86 - - 1,574,343.81 - - - 1,604,591.67 2,960,970.14 Investment in General Fixed Assets ------282,465,217.00 282,465,217.00 294,509,256.00 Fund Balance 18,299,384.45 - 208,263.76 - 103,342.16 22,250,989.83 708,295.82 - 41,570,276.02 36,625,580.42 $ 131,197,237.31 $ 17,940,536.13 $ 213,026,663.44 $ 13,663,213.32 $ 24,521,044.50 $ 59,185,898.89 $ 457,253,807.20 $ 282,465,217.00 $ 1,199,253,617.79 $ 1,182,687,103.42

See notes to financial statements. 4

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CURRENT AND UTILITY OPERATING FUNDS Year Ended June 30, 2015

Utility Operating Current Fund Funds Revenues and Other Income Realized Fund Balance Utilized$ 2,000,000.00 $ - Miscellaneous Revenues Realized 109,612,008.45 236,527.45 Operating Surplus Anticipated - 5,422,208.00 Fees, Charges and Rents - 55,848,378.58 Receipts from Delinquent Taxes 1,770,510.70 - Receipts from Current Taxes 107,516,676.17 - Non-Budget Revenue 319,666.29 63.26 Other Credits to Income Encumbrances & Accounts Payable Cancelled 75,121.52 23,017.24 Appropriation Reserves Lapsed 2,906,331.36 5,169,906.73 Cancellation of Prior Year Outstanding Checks 2,270.45 - Total Revenues 224,202,584.94 66,700,101.26

Expenditures Budget and Emergency Appropriations Operations Salaries and Wages 71,262,501.23 - Other Expenses 62,692,955.00 - Grants-Public and Private Programs Offset by Revenues 4,430,668.51 - Municipal Debt Service 21,490,021.71 6,685,113.64 Operating Expenses - 39,655,580.00 Deferred Charges and Statutory Expenditures 17,347,194.36 2,494,534.00 Capital Outlay 223,523.05 503,259.00 For Local District Purposes School Debt Service 4,656,779.00 - Local School District Tax 21,115,662.00 - County Taxes 14,384,534.46 - Special District Taxes 561,967.88 - Refund of Prior Year Receivable - 1,787.14 Overexpenditure of Budget Appropriation 9,511.45 - Overexpenditure of Appropriation Reserves 95,312.34 - Qualified Bond P&I (Current Fund) - 3,923,171.89

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CURRENT AND UTILITY OPERATING FUNDS (CONTINUED) Year Ended June 30, 2015

Utility Operating Current Fund Funds Interfunds Advanced 84,892.10 - Prior Year Senior Citizens & Veterans Deductions 250.00 - Surplus (Current Fund) - 5,450,000.00 Prior Year Revenue Refunded - 19,408.64 Deferred Charge - State Aid 1,500,000.00 - Reserve for Tax Appeals 100,000.00 - Misc. Expenditures - 355.89 Total Expenditures 219,955,773.09 58,733,210.20

Excess in Revenues 4,246,811.85 7,966,891.06

Adjustments to Income Expenditures Included above that are, by Statute, Deferred Charges to Budget of Succeeding Year Overexpenditures of Budget Appropriation 9,511.45 - Overexpenditures of Appropriation Reserves 95,312.34 - 104,823.79 -

Statutory Excess to Fund Balance 4,351,635.64 7,966,891.06

Fund Balance, July 1, 2014 15,899,383.23 19,706,306.77

Subtotal 20,251,018.87 27,673,197.83

Add Prior Year Adjustments - Grants 48,365.58 - Less Fund Balance Utilized 2,000,000.00 5,422,208.00 Fund Balance, June 30, 2015$ 18,299,384.45 $ 22,250,989.83

See notes to financial statements. 6

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - CURRENT FUND Year Ended June 30, 2015

Budget as Modified Actual Variance Revenues Fund Balance Anticipated$ 2,000,000.00 $ 2,000,000.00 $ - Miscellaneous Revenues 109,586,005.87 109,612,008.45 26,002.58 Receipts from Delinquent Taxes 1,500,000.00 1,770,510.70 270,510.70 Amount to be Raised by Taxes for Support of Municipal Budget: Local Tax for Municipal Purposes 77,035,050.40 76,435,947.61 (599,102.79) Other Income Local School District Tax 21,115,662.00 21,115,662.00 - County Taxes 14,384,534.46 14,384,534.46 - Special Assessment 561,967.88 561,967.88 - Total Budget Revenues 226,183,220.61 225,880,631.10 (302,589.51)

Non-Budget Revenue - 319,666.29 319,666.29 Other Credits to Income Encumbrances & Accounts Payable Cancelled - 75,121.52 75,121.52 Appropriation Reserves Lapsed - 2,906,331.36 2,906,331.36 Misc. Revenue - 2,270.45 2,270.45 Total Other Credits to Income - 2,983,723.33 2,983,723.33 Total Revenues 226,183,220.61 229,184,020.72 3,000,800.11

Expenditures: Current Fund: Operations Within CAPS 133,103,364.13 130,649,364.12 2,454,000.01 Deferred Charges and Statutory Expenditures 17,227,194.36 16,747,194.36 480,000.00 Current Fund Excluded from CAPS: 3,306,092.10 3,306,092.10 - State and Federal Grants 4,430,668.51 4,430,668.51 - Debt Service 21,490,522.39 21,490,021.71 500.68 Local District School Purposes 4,656,779.00 4,656,779.00 - Capital Improvements 325,000.00 223,523.05 101,476.95 Deferred Charges 600,000.00 600,000.00 - Reserve for Uncollected Taxes 4,981,435.78 4,981,435.78 - Total Budget Expenditures 190,121,056.27 187,085,078.63 3,035,977.64

Other Expenditures Local School District Tax 21,115,662.00 21,115,662.00 - County Taxes 14,384,534.46 14,384,534.46 - Special Assessment 561,967.88 561,967.88 - Overexpenditure of Budget Appropriation - 9,511.45 (9,511.45) Overexpenditure of Appropriation Reserves - 95,312.34 (95,312.34) Interfunds Advanced - 84,892.10 (84,892.10) Prior Year Senior Citizens & Veterans Deductions - 250.00 (250.00) Deferred Charge - State Aid - 1,500,000.00 (1,500,000.00) Reserve for Tax Appeals - 100,000.00 (100,000.00)

Total Expenditures 226,183,220.61 224,937,208.86 1,246,011.75

Excess in Revenues - 4,246,811.86 4,246,811.86

Adjustments to Income before Fund Balance: Expenditures Included Above that are, by Statute, Deferred Charges - 104,823.79 104,823.79 - 104,823.79 104,823.79

Statutory Excess to Fund Balance$ - 4,351,635.65 $ 4,351,635.65

Fund Balance, July 1, 2014 15,899,383.23 20,251,018.88

Add: Prior Year Adjustments - Grants 48,365.58 Less: Utilized in Budget 2,000,000.00 Fund Balance, June 30, 2015 $ 18,299,384.45

See notes to financial statements. 7

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - UTILITY OPERATING FUNDS Year Ended June 30, 2015

Budget as Modified Actual Variance

Revenues Fund Balance Anticipated$ 5,422,208.00 $ 5,422,208.00 $ - Miscellaneous Revenues 53,604,153.00 56,084,969.29 2,480,816.29

Total Budget Revenue 59,026,361.00 61,507,177.29 2,480,816.29

Other Credits to Income - 5,171,372.30 5,171,372.30

Total Revenues 59,026,361.00 66,678,549.59 7,652,188.59

Expenditures Operating Expenses 39,798,839.00 39,798,839.00 - Debt Service 11,282,988.00 10,968,285.53 314,702.47 Other Expenses 7,944,534.00 7,944,534.00 -

Total Expenditures 59,026,361.00 58,711,658.53 314,702.47 Excess in Revenues$ - 7,966,891.06 $ 7,966,891.06

Fund Balance July 1, 2014 19,706,306.77

Subtotal 27,673,197.83 Decreased by Utilized in Budget 5,422,208.00 Fund Balance June 30, 2015$ 22,250,989.83

See notes to financial statements. 8 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

NOTES TO FINANCIAL STATEMENTS

CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity The general purpose financial statements of the City of Trenton (the “City”) include every board, body, officer or commission supported and maintained wholly or in part by funds appropriated by the City of Trenton, as required by N.J.S. 40A:5-5. However, the operations of the Trenton Board of Education, Trenton Free Public Library and Trenton Parking Authority are not included in the City's general purpose financial statements.

Description of Funds The accounting policies of the City conform to the accounting principles applicable to municipalities which have been prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgeting restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the City accounts for its financial transactions through the following separate funds:

Current Fund - resources and expenditures for governmental operations of a general nature, including federal and state grant funds, except as otherwise noted.

Trust Other Fund - receipts, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created, pursuant to the provisions of N.J.S.A. 40A: 4-39.

General Capital Fund - receipt and disbursement of funds for the acquisition of general capital facilities other than those acquired by the Current Fund. General and school bonds and notes payable are recorded in this fund, offset by deferred charges to future taxation.

Water, Parking and Sewer Utility Funds - receipt and disbursement of funds for the operations and acquisition of capital facilities of the municipality-owned water, parking and sewer utilities.

General Fixed Assets Account Group - used to account for fixed assets used in general government operations.

The Governmental Accounting Standards Board ("GASB") is the accepted standards-setting body for establishing government accounting and financial reporting principles. GASB's Codification of Governmental Accounting and Financial Reporting Standards recognizes three fund categories as appropriate for the accounting and reporting of the financial position and results of operations in accordance with United States generally accepted accounting principles ("GAAP"). This structure of funds differs from the organization of funds prescribed under the regulatory basis of accounting utilized by the City. The resultant presentation of financial position and results of operations in the form of financial statements is not intended to present the general-purpose financial statements required by GAAP.

9 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Other Post Employment Benefits ("OPEB") Other than Pensions On July 1, 2007, the City implemented GASB Statement Number 45, which covers accounting and financial reporting requirements for government employers which provide post employment benefits other than pensions. Since the City participates in a multiple-employer cost-sharing plan (Public Employees' Retirement System (“PERS”)), the City's portion of this liability and cost is calculated and recorded at the State of New Jersey level and included in the state's Comprehensive Annual Financial Report. The City records OPEB expense based on billings from the State PERS. Required financial statement disclosure requirements are included in Note P of these audited financial statements.

Basis of Accounting The accounting principles and practices prescribed for municipalities by the State of New Jersey ("State") differ in certain respects from GAAP applicable to local government units. The significant differences relate primarily to the cash basis for recognition of revenue, the recording of appropriation reserves in connection with expenditures, the liability for unused compensated absences, and the accounting for general fixed assets. The following is a summary of significant accounting policies:

A modified accrual basis of accounting is followed with minor exceptions. Modifications from the accrual basis are as follows: Revenues are recorded when received in cash, except for certain amounts that are due from other governmental units. Receipts from federal and state grants are realized as revenue when anticipated in the City budget. Receivables for property taxes are recorded with offsetting reserves on the balance sheet of the City's Current Fund. Accordingly, such amounts are not recorded as revenue until collected. Other amounts which are due to the City are also recorded as receivables with offsetting reserves and are recorded as revenue when received.

Property acquired for taxes is recorded in the current fund at the assessed valuation when the property was acquired and fully reserved.

Investments are carried at cost. Purchases are limited by New Jersey Statute 40A:5-15.1 to bonds or obligations of or guaranteed by the federal government and bonds or other obligations of federal or local units having a maturity date not more than twelve months from the date of purchase.

Expenditures are recorded on the "budgetary" basis of accounting. Generally, expenditures are recorded when an amount is encumbered for goods or services through the issuance of a purchase order in conjunction with the Encumbrance Accounting System. Outstanding encumbrances at June 30 of each year are reported as cash liabilities in the financial statements and constitute part of the City's Regulatory Appropriation Reserve balance. Appropriation reserves covering unexpended appropriation balances are automatically created at the end of each year and are recorded as liabilities, except for amounts which may be canceled by the governing body. Appropriation reserves are available, until lapsed at the close of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed appropriation reserves are recorded as income. Appropriations for principal payments on outstanding general capital bonds and notes are provided on the cash basis, and interest on general capital indebtedness is on the cash basis.

10 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Interfund receivables in the Current Fund are recorded with offsetting reserves; interfund payables are created by charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in other funds are not offset by reserves.

Inventories of Supplies - The cost of inventories of supplies for all funds is recorded as expenditure at the time individual items are purchased. The cost of inventories is not included in the various fund balance sheets.

General Fixed Assets - In accordance with New Jersey Administrative Code 5:30-5-6, Accounting for Governmental Fixed Assets, as promulgated by the Division of Local Government Services, which differs in certain respects from GAAP, the City is required to have and maintain a fixed asset and reporting system for non-expendable personal/real property with an acquisition cost of $5,000 or more per unit and a useful life of more than one year.

Fixed assets used in governmental operations (“general fixed assets”) are accounted for in the General Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of certain improvements made to items other than buildings, such as roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems, are not capitalized.

For the classification of land, buildings and other improvements, actual cost was used. A significant number of items were valued at their replacement costs, since the original costs were not available. Property and equipment purchased by each of the utility funds are recorded in their capital accounts at cost, and the accounts are adjusted for dispositions and abandonments. The amount reported for reserve for amortization of fixed capital acquired on the balance sheet of each of the utility capital funds represents the aggregate charges (capital outlay and debt service) to the operating budget for the costs of acquisitions of property and equipment and proceeds from grants-in-aid. No depreciation is provided for in the financial statements.

Expenditures for construction in progress are recorded in the Capital Funds until such time as the construction is completed and the related asset is placed in operation.

Fixed assets acquired through grants-in-aid or contributed capital have not been accounted for separately.

It is the policy of the City not to capitalize interest cost on fixed assets constructed.

Budgets are adopted on the same basis of accounting utilized for the preparation of the City's general purpose financial statements.

Reserve for Uncollected Taxes represents an appropriation made to allow total current tax billings to be levied at an amount greater than the appropriations needed. Reserve for Uncollected Taxes is not recognized under GAAP.

Rounding Some schedules in the financial statements may have dollar differences due to rounding adjustments.

11 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

B. CASH, CASH EQUIVALENTS AND INVESTMENTS

Cash includes amounts on deposit, petty cash, change funds and short-term investments with original maturities of three months or less.

New Jersey Governmental Unit Deposit Protection Act (“NJGUDPA”) permits the deposit of public funds in the State of New Jersey Cash Management Fund or in institutions located in New Jersey that are insured by the Federal Deposit Insurance Corporation (“FDIC”) or by any other agencies of the United States that insure deposits. NJGUDPA requires public depositories to maintain collateral for deposit of public funds that exceed insurance limits as follows:

Each deposit participating in the NJGUDPA system must pledge collateral equal to at least 5% of the average amount of its public deposits and 100% of the average amount of its public funds in excess of the lesser of 75% of its capital funds or $200 million. The minimum 5% pledge applies to institutions that are categorized as “well capitalized” by Federal banking standards. The percentage of the required pledge will increase for institutions that are less than “well capitalized.”

No collateral is required for amounts covered by FDIC or National Credit Union Share Insurance Fund (“NCUSIF”) insurance. The collateral which may be pledged to support these deposits includes obligations of the State and Federal governments, insured securities and other collateral approved by the Department of Banking and Insurance. When the capital position of the depository deteriorates or the depository takes an unusually large amount of public deposits, the Department of Banking and Insurance requires additional collateral to be pledged.

If a governmental depository fails and the FDIC or NCUSIF insurance does not insure or pay out the full amount of public deposits, the collateral pledged to protect these funds would first be liquidated and paid out. If this amount is insufficient, other institutions holding public funds would be assessed pro rata up to 4% of their uninsured public funds. Although these protections do not constitute a 100% guarantee of the safety of all funds, no governmental unit under NJGUDPA has ever lost protected deposits.

As of June 30, 2015, the City’s bank balances, which includes New Jersey Cash Management Fund investments of $36,111,104.00, were exposed to custodial credit risk as follows:

Insured$ 750,000.00 Uninsured and Collateralized 35,361,104.00 $ 36,111,104.00

Deposits Custodial credit risk for deposits is the risk that in the event of a bank failure, the City’s deposits may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. The City’s policy requires deposits to be secured by collateral valued at market or par, whichever is lower, less the amount covered by the FDIC. The City Council approves and designates the authorized depository institution based on evaluation of solicited responses and certifications provided by financial institutions.

12 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

B. CASH, CASH EQUIVALENTS AND INVESTMENTS (CONTINUED)

Deposits (Continued) Concentration of Credit Risk – This is the risk associated with the amount of investments the City has with any one issuer that exceeds five percent or more of its total investments. Investments issued or explicitly guaranteed by the U.S. government and investments in the New Jersey Cash Management Fund are excluded from this requirement.

Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. In general, the City does not have an investment policy regarding Credit Risk, however, the City had no investments that were subject to credit risks as of June 30, 2015. The New Jersey Cash Management Fund is not rated.

Interest Rate Risk – This is the risk that changes in interest rates will adversely affect the fair value of an investment. The City does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from interest rate fluctuations. However, its practice is to hold investments to maturity.

Investments New Jersey statutes permit the City to purchase the following types of securities:

- Bonds or other obligations of the United States or obligations guaranteed by the United States. - Bonds of any Federal Intermediate Credit Bank, Federal Home Loan Bank, Federal National Mortgage Association, or United States Bank for Cooperatives that have a maturity date not greater than twelve months from the date of purchase. - Bonds or other obligations of the City or bonds or other obligations of school districts that are a part of the City or are located within the City. - Bonds or other obligations having a maturity date of not more than twelve months from the date of purchase that are approved by the New Jersey Department of Treasury, Division of Investments.

The City’s investments carried at cost which approximate market value were as follows at June 30, 2015:

Fair Market Type Collateral Value Book

U.S. Government Securities U.S. Government$ 78,464,625.00 $ 78,464,625.00 Total$ 78,464,625.00 $ 78,464,625.00

13 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

C. FUND BALANCE APPROPRIATED

Current fund balances at June 30 were appropriated and included as anticipated revenue in the succeeding year's budget as follows:

Utilized in Budget of Succeeding Year Balance June 30, Year 2015$ 18,299,384.45 $ - 2014 15,899,383.23 2,000,000.00 2013 15,815,369.00 3,331,862.00 2012 13,932,485.00 - 2011 5,907,937.00 -

Water, Parking and Sewer Utility Fund balances at June 30 were appropriated and included as anticipated revenue in the succeeding year's Water, Parking and Sewer Utility Fund budgets as follows:

Utilized in Budget of Succeeding Year Balance June 30, Year Water Utility Fund 2015$ 16,879,132.64 $ - 2014 14,051,277.41 3,640,508.00 2013 12,028,371.00 3,646,791.00 2012 13,565,366.00 6,803,918.00 2011 11,137,751.00 1,876,982.00

Parking Utility Fund 2015$ 777,655.33 $ - 2014 927,850.03 283,950.00 2013 895,976.00 - 2012 875,805.00 16,741.00 2011 271,983.00 141,946.00

Sewer Utility Fund 2015$ 4,594,201.86 $ - 2014 4,727,179.33 1,497,750.00 2013 4,687,360.00 477,086.00 2012 3,785,000.00 - 2011 2,008,324.00 754,390.00

14 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

D. LONG-TERM DEBT

Summary of Municipal Debt (Excluding Current and Operating Debt/Type I School Debt)

June 30, 2015 2014 2013 Summary of Municipal Debt Issued General Bonds and Notes$ 170,181,979.00 $ 177,799,124.00 $ 176,550,585.00 Water Utility, Bonds and Notes 127,703,961.16 123,140,424.73 127,335,370.00 Parking Utility, Bonds and Notes 70,000.00 75,000.00 180,000.00 Sewer Utility, Bonds and Notes 7,793,209.12 7,968,132.84 8,263,057.00 Total Issued 305,749,149.28 308,982,681.57 312,329,012.00

Authorized but not Issued General 37,416,499.86 32,677,499.86 36,992,574.86 Water Utility, Bonds and Notes 83,639,022.77 67,076,022.77 47,979,121.77 Parking Utility, Bonds and Notes 552,000.00 552,000.00 552,000.00 Sewer Utility, Bonds and Notes 4,038,314.52 3,138,314.52 3,253,314.52 Total Authorized but not Issued 125,645,837.15 103,443,837.15 88,777,011.15 Net Bonds and Notes Issued and Authorized but not Issued$ 431,394,986.43 $ 412,426,518.72 $ 401,106,023.15

Summary of Regulatory Debt Condition - Annual Debt Statement

The summarized statement of debt condition which follows is prepared in accordance with the required method of setting up the Annual Debt Statement and indicates a regulatory net debt of 6.855%. The City’s excess borrowing is 3.355%.

Gross Debt Deductions Net Debt Local School District Debt$ 25,355,000.00 $ 29,190,000.00 $ - Water, Parking and Sewer Utility Debt 223,796,507.57 223,796,507.57 - General Debt 208,042,688.50 45,021,688.64 163,020,999.86 $ 457,194,196.07 $ 298,008,196.21 $ 163,020,999.86

Net debt of $163,020,999.86, divided by Equalized Valuation Basis per N.J.S.A. 40A:2-2, as amended, which is $2,378,284,957, equals 6.855%. A revised Annual Debt Statement should be filed by the CFO.

Borrowing Power under N.J.S. 40A:2-6 as Amended

3 -1/2% of Equalized Valuation Basis (Municipal) $ 83,239,973.51 Net Debt 163,020,999.86 Excess Borrowing $ (79,781,026.35)

15 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

D. LONG-TERM DEBT (CONTINUED)

The City has obtained permission from the Local Finance Board to exceed the regulatory 3.5% debt limitation.

Schedule of Annual Debt Service for Principal and Interest for Bonded Debt Issued and Outstanding.

Bonded General Debt Type 1 School Water Utility Fiscal Debt Principal Interest Principal Interest Principal Interest

2015$ 11,480,904.45 $ 5,357,486.81 $ 3,940,000.00 $ 689,512.00 $ 7,837,550.98 $ 2,703,954.25 2016 10,723,617.90 5,080,483.65 3,970,000.00 579,873.60 8,073,479.21 2,550,998.00 2017 12,024,902.50 4,776,027.50 1,985,000.00 493,293.60 8,160,462.85 2,391,948.00 2018 12,339,615.95 4,437,383.19 2,045,000.00 440,261.80 8,263,111.25 2,211,740.50 2019 12,759,329.40 4,087,284.42 2,105,000.00 382,666.50 7,477,589.14 2,030,340.50 2020-2024 67,936,109.10 9,707,191.01 4,830,000.00 1,153,929.62 38,094,752.27 7,846,142.51 2025-2029 5,345,000.00 189,325.94 2,080,000.00 677,400.00 25,989,381.54 4,134,069.64 2030-2034 - - 1,500,000.00 329,625.00 12,057,634.70 1,764,380.38 2035-2039 - - 600,000.00 30,000.00 4,620,000.00 429,824.00 2040-2044 - - - - 1,730,000.00 9,500.00 Total$ 132,609,479.30 $ 33,635,182.52 $ 23,055,000.00 $ 4,776,562.12 $ 122,303,961.94 $ 26,072,897.78

Bonded Sewer Utility Parking Utility Total Fiscal Debt Principal Interest Principal Interest Principal Interest

2015$ 394,923.72 $ 331,126.26 $ 5,000.00 $ 3,025.00 $ 23,658,379.15 $ 9,085,104.32 2016 404,923.72 316,121.26 5,000.00 2,775.00 23,177,020.83 8,530,251.51 2017 404,923.72 300,316.26 5,000.00 2,525.00 22,580,289.07 7,964,110.36 2018 419,923.72 283,979.26 5,000.00 2,275.00 23,072,650.92 7,375,639.75 2019 409,911.24 267,154.26 5,000.00 2,025.00 22,756,829.78 6,769,470.68 2020-2024 1,913,603.00 1,067,057.30 45,000.00 5,125.00 112,819,464.37 19,779,445.44 2025-2029 1,715,000.00 613,125.06 - - 35,129,381.54 5,613,920.64 2030-2034 1,255,000.00 214,183.15 - - 14,812,634.70 2,308,188.53 2035-2039 400,000.00 52,200.00 - - 5,620,000.00 512,024.00 2040-2044 160,000.00 1,500.00 - - 1,890,000.00 11,000.00 Total$ 7,478,209.12 $ 3,446,762.81 $ 70,000.00 $ 17,750.00 $ 285,516,650.36 $ 67,949,155.23

The City’s bonded debt activity during the year 2015 comprised of the following:

Balance Balance June 30, 2014 Increases Decreases June 30, 2015 General Capital$ 163,938,245.20 $ 6,672,000.00 $ 14,945,765.90 $ 155,664,480.07 Water Capital 113,088,424.22 16,334,173.00 7,118,636.05 122,303,961.17 Sewer Capital 7,383,132.28 470,000.00 374,923.16 7,478,209.12 Parking Capital 75,000.00 - 5,000.00 70,000.00 Total$ 284,484,802.30 $ 23,476,173.00 $ 22,444,325.11 $ 285,516,650.36

The City has lease revenue bonds outstanding in the amount of $300,000.00 at June 30, 2015, with Mercer County Improvement Authority.

16 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

E. DEFERRED CHARGES

During fiscal year 2007, the City charged to operations an amount of $16,500,000 representing a previously recorded state aid receivable. This amount had been anticipated as revenue in the City’s 2002 annual operating budget which had been approved by the State prior to adoption. However, during the 2008 budget preparation process, the State indicated that this amount would not be paid.

The City believes this amount should be paid since it was previously approved by the State in the City’s operating budget. The City intends to continue to attempt to recover this amount from the State of New Jersey.

In accordance with the State of New Jersey, Division of Local Government Services, a deferred charge was recorded at June 30, 2007, for the $16,500,000. Per Department of Community Affairs, such deferred charge is to be charged to operations in the amount of $1,500,000 (if surplus is available and not included in the City budget) each year over a ten year period beginning with the fiscal year 2010. In fiscal year ended June 30, 2015, $1,500,000 was charged to current year operations. The City had an overexpenditure of budget appropriation of $9,511.45 and overexpenditure of appropriation reserve of $95,312.34, which will be raised in fiscal year 2016 budget.

In fiscal year 2014, the City issued a $3,000,000 special emergency appropriation for revaluation which is being raised in the City’s succeeding year budgets from 2015-2019.

F. PROPERTY TAXES

A taxable valuation of real property is prepared by the Tax Assessor as of October 1 in each year and filed with the County Board of Taxation by January 10 of the following year. The County Board of Taxation establishes tax rates to reflect the levy necessary for municipal, local school district, special district and county taxes.

The provisions of P.L. 1994, C. 72 changed the procedures for State fiscal year billing originally established in P.L. 1991, C. 75. Chapter 72 moves the billing calculation back on a calendar year basis, which permits tax levies to be proved more readily than before.

The formula used to calculate tax bills under P.L. 1994, C. 72 is as follows:

The third and fourth installments, for municipal purposes, would equal one-half of an estimated annual tax levy, plus the balance of the full tax levied during the current tax year for school, county and special district purposes. The balance of the full tax for non-municipal purposes is calculated by subtracting amounts due on a preliminary basis from the full tax requirement for the tax year. The first and second installments, for municipal purposes, will be calculated on a percentage of the previous years billing necessary to bill the amount required to collect the full tax levy, plus the non-municipal portion, which represents the amount payable to each taxing district for the period of January through June 30.

17 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

G. TAXES COLLECTED IN ADVANCE

Taxes collected in advance are shown as cash liabilities in the financial statements as follows:

Balance Balance Balance June 30, 2015 June 30, 2014 June 30, 2013 Prepaid taxes $ 160,030.61 $ 107,392.01 $ 96,769.04

H. PENSION PLANS

Employees who are eligible to participate in a pension plan are enrolled in one of two pension systems administered by the Division of Pensions, Department of the State of New Jersey. The state-administered plans are: (1) the Public Employees’ Retirement System (“PERS”), and (2) the Police and Firemen's’ Retirement System (“PFRS”). The Division annually charges municipalities and other participating governmental units for their respective contributions to the plans based upon actuarial calculations. A portion of the cost is contributed by the employees. The City's share of pension costs for these plans amounted to $14,744,471.41 for the year ended June 30, 2015. Employees are also covered by the Federal Insurance Contribution Act.

A substantial number of the City’s employees participate in the following defined benefit pension plans: the Public Employees' Retirement System (“PERS”) and Police and Firemen’s Retirement System (“PFRS”), which are administered and/or regulated by the New Jersey Division of Pensions and Benefits. Both plans has a board of trustees that is primarily responsible for its administration. The Division issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to:

State of New Jersey Division of Pensions and Benefits P.O. Box 295 Trenton, New Jersey 08625-0295

Plan Description PERS is a cost-sharing multiple-employer defined benefit pension plan which was established as of January 1, 1955. PFRS is a cost-sharing multiple-employer defined benefit pension plan which was established in 1944.

Benefits Provided The PERS plan provides retirement, death and disability, and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43:15A and 43:38. All benefits vest after ten years of service, except for medical benefits, which vest after 25 years of service or under the disability provisions of PERS.

The PFRS plan provides retirement as well as death and disability benefits. All benefits vest after ten years of service, except disability benefits which vest after four years of service.

18 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

H. PENSION PLANS (CONTINUED)

Contributions The contribution requirements of PERS plan members are determined by State statute. In accordance with Chapter 62, P.L. 1994, plan members enrolled in the PERS were required to contribute 5.00% of their annual covered salary. Effective July 1, 2008, however, in accordance with Chapter 92, P .L. 2007 and Chapter 103, P .L. 2007, plan members are required to contribute 5.50% of their annual covered salary. For employees enrolled in the retirement system prior to July 1, 2008, the increase is effective with the payroll period that begins immediately after July 1, 2008. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contribution rate increased to 6.5% plus an additional 1.00% phased-in over seven years. The phase-in of the additional incremental member contribution amount began July 1, 2012, and increases each subsequent July 1. The active member effective contribution rates were July 1, 2014, 6.92%, July 1, 2013, 6.78%, and July 1, 2012, 6.64%. The State Treasurer has the right under the current law to make temporary reductions in member rates based on the existence of surplus pension assets in the retirement system; however, the statute also requires the return to the normal rate when such surplus pension assets no longer exist.

The contribution policy for PFRS is set by N.J.S.A 43:16A and requires contributions by active members and contributing employers. State legislation has modified the amount that is contributed by the State. The State’s contribution is based on an actuarially determined rate which includes the normal cost and unfunded accrued liability. For fiscal year 2014 and 2013, the State contributed an amount less than the actuarially determined amount. The Local employers’ contribution amounts are based on an actuarially determined rate which includes the normal cost and unfunded accrued liability. Chapter 19, P.L. 2009 provided an option for local employers of PFRS to contribute 50% of the normal and accrued liability contribution amounts certified for payments due in State fiscal year 2009. Such employers will be credited with the full payment and any such amounts will not be included in their unfunded liability. The actuaries will determine the unfunded liability of those retirement systems, by employer, for the reduced normal and accrued liability contributions provided under this law. This unfunded liability will be paid by the employer in level annual payments over a period of 15 years beginning with the payments due in the fiscal year ended June 30, 2012, and will be adjusted by the rate of return on the actuarial value of assets.

The City is billed annually for its normal contribution plus any accrued liability. Contributions to PERS from the City were $3,721,310.00 and $3,438,678.81 for the years ended June 30, 2015 and 2014, respectively. Contributions to PFRS from the City were $11,103,571.85 and $11,181,778.73 for the years ended June 30, 2015 and 2014, respectively.

Pension Liabilities, Pension Expense and Deferred Outflows or Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2015 and 2014, the City had a liability of $79,993,990.00 and $81,223,809.00, respectively, for its proportionate share of the net pension liability in PERS and $166,919,043.00 and $174,374,099, respectively, for its proportionate share of the net pension liability in PFRS. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating members of the plan, actuarial determined. At June 30, 2014, the City’s proportion was .4272558980%, which was a decrease of .002 from its proportion measured as of June 30, 2013, for PERS and .6653754486% in Plan 1 and .6615828209% in Plan 2, which was a decrease of .007 and .009, respectively, from its proportion measured as of June 30, 2013, for PFRS. 19 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

H. PENSION PLANS (CONTINUED)

Actuarial Assumptions The total pension liability in the June 30, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

PERS PFRS Inflation 3.01% 3.01% Salary Increases: 2012-2021 (based on age) 2.15 - 4.40% 3.95 - 8.62% Salary Increases: Thereafter (based on age) 3.15 - 5.40% 4.95 - 9.62% Investment rate of return 7.90% 7.90%

For PERS, mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables, with adjustments for mortality improvements from the base year 2012 based on Projection Scale AA. For PFRS, mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables, with adjustments for mortality improvements from the base year 2011 based on Projection Scale AA.

For PERS, the actuarial assumptions used in the July 1, 2013, valuation were based on the results of an actuarial experience study for the period July 1, 2008 to June 30, 2011. For PFRS, the actuarial assumptions used in the July 1, 2013, valuation were based on the results of an actuarial experience study for the period July 1, 2007 to June 30, 2010.

In accordance with State statue, the long term expected rate of return on plan investments is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pension and Benefits, the board of trustees, and the actuaries. Best estimates of arithmetic real rates of return of each major asset class included in PERS’s and PFRS’s target asset allocation as of June 30, 2014, are summarized in the following table:

Long-Term Expected Real Target Rate of Asset Class Allocation Return Cash 6.00% 0.80% Core Bonds 1.00% 2.49% Intermediate-Term Bonds 11.20% 2.26% Mortgages 2.50% 2.17% High Yield Bonds 5.50% 4.82% Inflation-Indexed Bonds 2.50% 3.51% Broad US Equities 25.90% 8.22% Developed Foreign Equities 12.70% 8.12% Emerging Market Equities 6.50% 9.91% Private Equity 8.25% 13.02% Hedge Funds/Absolute Return 12.25% 4.92% Real Estate (Property) 3.20% 5.80% Commodities 2.50% 5.35%

20 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

H. PENSION PLANS (CONTINUED)

PERS The discount rate used to measure the total pension liability for was 5.39% and 5.55% as of June 30, 2014 and 2013, respectively. The single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.9%, and a municipal bond rate of 4.29% and 4.63% as of June 30, 2014 and 2013, respectively, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based on the average of the last five years of contributions made in relation to the last five years of recommended contributions. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2033. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2033, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

PFRS The discount rate used to measure the total pension liability for was 6.32% and 6.45% as of June 30, 2014 and 2013, respectively. The single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.9%, and a municipal bond rate of 4.29% and 4.63% as of June 30, 2014 and 2013, respectively, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made based on the average of the last five years of contributions made in relation to the last five years of actuarially determined contributions. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2045. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2045, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

21 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

H. PENSION PLANS (CONTINUED)

Schedule of Required Supplementary Information Schedule of City's Proportionate Share of Net Pension Liability

PERS - Last 10 Fiscal Years 2014 2013 City's proportion of the net pension liability 0.4272558980% 0.4249888260% City's proportionate share of net pension liability$ 79,993,990.00 $ 81,223,809.00 City's covered-employee payroll 23,707,678.00 20,969,973.00 City's proportionate share of net pension liability as a % of payroll 337.42% 387.33% Plan fiduciary net position as a % of total pension liability 52.08% 48.72% PFRS Plan 1 - Last 10 Fiscal Years 2014 2013 City's proportion of the net pension liability 0.6653754486% 0.6588826244% City's proportionate share of net pension liability$ 83,698,060.00 $ 87,592,499.00 City's covered-employee payroll 24,889,543.91 24,779,084.33 City's proportionate share of net pension liability as a % of payroll 336.28% 353.49% Plan fiduciary net position as a % of total pension liability 62.41% 58.70% PFRS Plan 2 - Last 10 Fiscal Years 2014 2013 City's proportion of the net pension liability 0.6615828209% 0.6527829318% City's proportionate share of net pension liability$ 83,220,983.00 $ 86,781,600.00 City's covered-employee payroll 24,747,674.09 24,549,688.73 City's proportionate share of net pension liability as a % of payroll 336.28% 353.49% Plan fiduciary net position as a % of total pension liability 62.41% 58.70%

Schedule of City's Contributions PERS - Last 10 Fiscal Years 2014 2013 Contractually required contribution$ 3,522,236.00 $ 3,202,204.00 Contributions in relation to the contractually required contribution 3,438,678.81 4,013,127.00

City's covered employee payroll 23,707,678.00 20,969,973.00 Contributions as a % of covered employee payroll 14.50% 19.14%

PFRS Plan 1 - Last 10 Fiscal Years 2014 2013 Contractually required contribution$ 5,110,543.00 $ 4,807,061.00 Contributions in relation to the contractually required contribution 5,606,868.88 6,643,694.94

City's covered employee payroll 24,889,543.91 24,779,084.33 Contributions as a % of covered employee payroll 22.53% 26.81%

PFRS Plan 2 - Last 10 Fiscal Years

2014 2013 Contractually required contribution$ 5,081,413.00 $ 4,762,559.00 Contributions in relation to the contractually required contribution 5,574,909.85 6,582,190.06

City's covered employee payroll 24,747,674.09 24,549,688.73 Contributions as a % of covered employee payroll 22.53% 26.81%

22 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

I. LITIGATION

The City is a defendant in various legal proceedings. If these cases were decided against the City, their costs would either be covered by insurance or raised by future taxation. The City has allocated monies in the general liability trust fund to cover any excess costs. The City expects such amounts, if any, to be immaterial.

J. UNUSED SICK LEAVE, VACATION BENEFITS AND POST-RETIREMENT BENEFITS

The City has permitted employees to accrue sick leave pay, which may be taken as time off or paid upon termination, resignation or retirement. Sick time payout is limited to one half of total sick time up to $20,000 and vacation payout is capped at two years of accumulated time.

The total balance of unused sick and vacation time benefits amounts to approximately $10,147,539 at June 30, 2015. Such amounts are not required to be included in accrued liabilities at June 30, 2015.

K. INSURANCE

Effective January 1, 1978, most municipal employees were eligible for unemployment compensation insurance (N.J.S. 43:21-3 et seq.). The City has elected to provide a self-insured plan whereby the municipal cost, if any, and employee contributions are deposited in a trust fund from which claims, if any, will be paid. During 2015, deposits amounted to $187,830.55 and payments for claims amounted to $478,810.67. The reserve, which is not based on an actuarial analysis, was $646,726.59 at June 30, 2015.

The Workers’ Compensation Insurance Fund, regulated by N.J.S. 34:15-127, is used to pay claims and medical expenses due to on-the-job injuries and settlements. The City makes annual contributions to the fund in accordance with estimates provided by a third-party administrator to meet the needs of claims to be paid out during the current fiscal year. During 2015, the City contributed $4,160,234.73 to this fund. The reserve balance of $5,337,838.33 is not indicative of the City’s total liability for claims, since it is not determined on an actuarial basis (because determination on such basis is not required by the Division of Local Government Services).

The Comprehensive Liability Insurance Fund, regulated by N.J.S. Title 59, is used to fund general liability claims, police, professional liabilities and automobile liabilities. The City makes annual contributions to the fund in accordance with estimates provided by a third-party administrator to meet the needs of claims to be paid out during the current fiscal year. During 2015, the City contributed $3,273,323.37 to this fund. The reserve balance of $5,027,121.89 is not indicative of the City’s total liability for claims, since it is not determined on an actuarial basis (because determination on such basis is not required by the Division of Local Government Services).

23 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

L. WATER UTILITY

The Trenton Water Utility is subject to regulations defined by New Jersey Statute and accounting principles as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey.

The City has entered into several agreements with the State of New Jersey to obtain loans to finance the construction of various water utility projects. The following loans totaling $77,461,961.16 are outstanding: Interest Date Purpose Amounts Rates Maturities November 1998 Filtration Project$ 1,905,000.00 4.25%-4.5% to 2018 1,396,332.92 $ 3,301,332.92

October 1999 De-Watering Facility$ 288,942.00 4.75%-5.7% to 2019 200,906.04 $ 489,848.04

October 2004 Clean & Lining$ 3,420,000.00 3.00%-5.0% to 2024 Project 3,448,801.76 $ 6,868,801.76

November 2006 Pre-treatment$ 8,965,000.00 4.00%-5.00% to 2026 Project 22,248,982.91 $ 31,213,982.91

November 2007 Pre-treatment$ 2,625,000.00 3.40-5.00% to 2027 Project 6,346,966.52 $ 8,971,966.52

March 2010 Central Pumping$ 1,780,000.00 3.00-5.00% to 2030 4,782,203.40 $ 6,562,203.40

December 2010 Reservoir$ 4,895,000.00 5.00% to 2030 4,076,652.60 $ 8,971,652.60

May 2015 Clean & Lining$ 2,615,000.00 4.00-5.00% to 2035 8,467,173.00 $ 11,082,173.00

The annual debt service for principal and interest on the outstanding loan amounts is included in Note D – Long-Term Debt.

24 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

M. URBAN DEVELOPMENT ACTION GRANT LOAN

In December 1987, the City entered into an agreement with the Trenton District Energy Company (“TDEC”) and other interested parties whereby the City exchanged the unpaid balance and accumulated interest on its Urban Development Action Grant Loan with TDEC for a 15% equity interest in the reorganized venture. The loan and accumulated interest approximated $4,131,000. Under the agreement, the City is to receive a preferential payment annually until an amount equivalent to the loan and agreed interest is recovered, and thereafter it is to receive payments approximating 15% of the defined cash flow of TDEC. This claim is cumulative and prior to the claim of any other party. The agreement provides for scheduled payments of $322,000 in 2002 and then $233,000 annually through 2017. A payment of $169,586 was received in 1989 on the 1988 and 1989 scheduled amounts. A payment of $200,000 was received in 1991 on the 1990 and 1991 scheduled amounts. Payments in the amount of $869,353 and $11,452 were received in 1994. A payment of $334,441 was received in 2004. No payments were received from 1995-2015, 1993 and 1992. The ability of TDEC to achieve a level of cash flow sufficient to pay cumulative amounts due and future scheduled payments cannot presently be determined. No amounts are included in these financial statements.

N. GENERAL FIXED-ASSET ACCOUNT GROUP

Prior to 2004, the City recorded land, buildings and improvements at estimated values based on insurance appraisals and other estimated values. Subsequently, substantially all of the assets were adjusted to assessed and fair value where applicable. The City had an inventory done of all vehicles, furniture and fixtures, and equipment as of June 30, 2015, and accordingly, the fixed asset account group was adjusted at that time.

O. RELATED PARTY TRANSACTIONS

The City Council adopted a Resolution authorizing a “City Subsidy Agreement” between the City and Lafayette Yard Community Development Center ("LYCDC") dated April 1, 2000. That agreement serves as the guarantee of the bonds issued to construct the hotel and authorizes payment of same.

In December 2013, the City assumed the guaranteed portion of bonds outstanding for the Lafayette Yard Hotel (formerly the “Marriott Hotel”) due to a bankruptcy filing. In February 2014, the City issued $9,875,000 General Obligation Bonds, to redeem the remaining City – guaranteed obligations, net of (i) the sale proceeds of the hotel; (ii) reserve funds related to the Lafayette Yard Community Development Corporation (“LYCDC”) bonds held by Wells Fargo Bank, N.A., as Trustee for the LYCDC Bonds; and (iii) funds budgeted by the City for scheduled debt service of LYCDC Bonds due on April 1, 2014.

There are no longer any outstanding LYCDC bonds, and the City has no further financial obligations relating to the hotel.

25 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

P. OTHER POST EMPLOYMENT BENEFITS (“OPEB”) OTHER THAN PENSIONS

Plan Description

The City contributes to the State Health Benefits Program ("SHBP"), a cost-sharing, multiple-employer defined benefit post employment healthcare plan administered by the State of New Jersey Division of Pensions and Benefits. SHBP was established in 1961 under N.J.S.A. 52:14-17.25 et seq., to provide health benefits to State employees, retirees and their dependents. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. SHBP provides medical, prescription drugs, mental health/substance abuse and Medicare Part B reimbursement to retirees and their covered dependents. The SHBP, was extended to employees, retirees and dependents of participating local public employers in 1964. Local employers must adopt a resolution to participate in the SHBP. In 2000, the City authorized participation in the SHPB’s post-retirement benefit program through resolution number 146-00. The City adopted the PERS requirement of providing continued health care benefits to employees retiring after twenty-five years of service. City eligible employees receive the SHBP benefits as noted in paragraph one.

The State Health Benefits Commission is the executive body established by statute to be responsible for the operation of the SHBP. The State of New Jersey Division of Pensions and Benefits issues a publicly available financial report that includes financial statements and required supplementary information for the SHBP. That report may be obtained by writing to: State of New Jersey Division of Pensions and Benefits, P.O. Box 295, Trenton, NJ 08625-0295 or by visiting their website at www.state.nj.us/treasury/pensions/gasb-43-sept2008.pdf.

Funding Policy

Participating employers are contractually required to contribute based on the amount of premiums attributable to their retirees. Post-retirement medical benefits under the plan have been funded on a pay-as-you-go basis since 1994. Prior to 1994, medical benefits were funded on an actuarial basis.

Contributions to pay for the health premiums of participating retirees in the SHBP are billed to the City on a monthly basis. Contributions, funding and the cost sharing policy, and the manner of administration are determined by the State.

The City contributions to SHBP for the years ended June 30, 2015, 2014 and 2013, were $29,132,669.00, $29,132,669.00 and $27,011,042.00, respectively, which equaled the required contributions for each year. There were approximately 924, 924 and 917 retired participants eligible at June 30, 2015, 2014 and 2013, respectively.

26 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

Q. BOND ANTICIPATION NOTES

The City issues bond anticipation notes to temporarily finance various capital projects prior to the issuance of serial bonds. The terms of the notes cannot exceed one year, but the notes may be renewed from time to time for a period not exceeding one year. All such notes must be paid not later than the tenth anniversary of the original note. The State of New Jersey also prescribed that, on or before the third anniversary of the date of the original note, a payment of at least equal to the first legally payable installment of the bonds, in anticipation of which such notes were issued, be paid or retired. A second legal installment must be paid if the notes are to be renewed beyond the fourth anniversary of the date of the original issue. At June 30, 2015, the City had bond anticipation notes in Capital, Water Capital, Parking Capital and Sewer Capital Funds, totaling $14,522,500.00.

R. SUBSEQUENT EVENTS

Management has evaluated subsequent events that occurred after the statement of assets, liabilities, reserves and fund balance date but before April 29, 2016, the date the financial statements were available to be issued. The following items were determined by management to require disclosure.

On July 29, the City priced its $19,915,000 General Obligation Refunding Bonds (the “Bonds”), consisting of:  $15,850,000 General Improvement Refunding Bonds  $1,490,000 Sewer Utility Refunding Bonds  $2,575,000 Water Utility Refunding Bonds

The Bonds were issued to realize savings (due to currently-low interest rates) through a current refunding of certain callable maturities of the City’s 2005 Bonds. Since the 2005 Bonds were, themselves, refunding bonds, the Bonds could not be closed until September 4, 2015 (90 days of the call date for the 2015 Bonds).

The City sold its bonds through a negotiated sale with RBC Capital Markets (“RBC”). RBC was selected by the City due to previous (and highly-successful) work serving as underwriter to the City.

The City was able to secure a municipal bond insurance policy from Build America Mutual Assurance Company, which allowed the Bonds to be issued with a rating of A2.

Other issuance costs totaled just under $80,000, and all savings (discussed below) are NET of all fees and expenses.

27 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

R. SUBSEQUENT EVENTS (CONTINUED)

This bond sale generated outstanding results for the City and will provide financial benefits that will last 15 years:

 General Improvement debt service savings of $1,663,000 (average of $135,000- $140,000/year in FY 2016 – 2027).  Water Utility debt service savings of $233,000 (average of $15,000/year in FY 2016 - 2030).  Sewer Utility debt service savings of $131,000 (average of $9,000/year in FY 2016 – 2030).

The total present value savings are $1,710,658, which is more than 8.05% of the bonds to be refunded.

On December 30, 2015, the City closed on the sale of $17,095,000 General Obligation Refunding Bonds, consisting of $15,380.000 General Improvement and $1,715,000 for the Sewer Utility.

Proceeds of the bonds were used to advance refund certain callable maturities of the City’s 2007 Bonds with a total principal amount of $17,225,000 ($15,625,000 General Improvements and $1,600,000 Sewer Utility). The purpose of the refunding was to take advantage of lower interest rates to realize annual debt service savings.

The City issued the bonds through a negotiated sale with RBC Capital Markets. The General Improvement Refunding Bonds had a final maturity in fiscal 2024 and carried a true interest cost of 2.83%, while the Sewer Utility Refunding Bonds had a final maturity in fiscal year 2034 and were sold at a true interest cost of 3.81%. The final maturity for each series mirrored that on the respective bonds to be refunded.

Savings Summary

Note – all figures below are net of all issuance expenses.

For General Improvements:

 Average annual savings of approximately $70,500/year for fiscal years 2016-2024 (with savings in every year).  Savings in FY 2016 of approximately $84,000.  Net present value savings of $573,000 (equating to 3.67% of the principal amount refunded).

For the Sewer Utility:

 Average annual savings of approximately $3,500/year for fiscal years 2016-2034 (with savings in every year).  Savings in FY 2016 of approximately $4,750.  Net present value savings of $55,000 (equating to 3.45% of the principal amount refunded).

In addition, the Refunding Bonds were sold at a net premium which results in a reduction in the City’s net debt of $245,000.

28 CITY OF TRENTON COUNTY OF MERCER, STATE OF NEW JERSEY NOTES TO FINANCIAL STATEMENTS

R. SUBSEQUENT EVENTS (CONTINUED)

At the end of the Calendar year of 2015, it was discovered that the City's third party payroll provider, Innovative Payroll Services, was not depositing the Federal and State taxes on a timely basis. The amounts owed are from the 3rd and 4th quarter of 2015 and 1payroll for 2016. The amount owed is $4,697,528.34.

The filed a Civil Lawsuit against the owner, John Scholtz and others for breach of contract, breach of covenant of good faith and fair dealing, unjust enrichment, conversion, breach of fiduciary duty, legal fraud, equitable fraud, piercing the corporate veil and civil conspiracy . The City is asking for reimbursement for the money owed. The payroll provider, Innovative Payroll Services does have liability insurance of $1,000,000 but the City does not know what share of the money the City will receive.

In the interim, the City will be funding the amount due by a refunding bond ordinance to finance the emergency appropriation. The City will be asking for $4,725,000, which includes the cost of borrowing, to be paid over a period of years. The borrowing will occur prior to the end of the fiscal year 2016.

APPENDIX D

COPIES OF GENERAL BOND RESOLUTION AND 2016 SUPPLEMENTAL RESOLUTION

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SUPPLEMENTAL BOND RESOLUTION OF THE PARKING AUTHORITY OF THE WHEREAS, pursuant to Section 22(1)(e) of the Act, the City is authorized to CITY OF TRENTON SUPPLEMENTING THE GENERAL BOND RESOLUTION AND unconditionally guaranty the punctual payment of the principal of and interest on any bonds of PROVIDING FOR THE ISSUANCE OF NOT TO EXCEED AN AGGREGATE the Authority by ordinance duly adopted or by instruments or other action authorized by such $20,000,000 PARKING REVENUE REFUNDING BONDS (CITY GUARANTEED) AND ordinance; $750,000 PARKING REVENUE BONDS (CITY GUARANTEED) AND DETERMINING VARIOUS OTHER MATTERS RELATED THERETO I. THE LAFAYETTE YARD SITE FINANCING AND REFUNDING WHEREAS, the City of Trenton, in the County of Mercer, New Jersey (the "City") pursuant to the Parking Authority Law of the State of New Jersey, constituting Chapter 198 of WHEREAS, on July 1, 1999, pursuant to the Act, the City finally adopted a guaranty the Public Laws of New Jersey of 1948, as amended and supplemented (N.J.S.A. 40:11A-1, et ordinance (the “1999 Guaranty Ordinance”) to guaranty the timely payment of the principal and seq.)(the "Act") heretofore created a body corporate and politic known as the "Parking Authority interest on outstanding bonds of the Authority in an aggregate principal amount not exceeding of the City of Trenton" (the "Authority"); and $21,000,000 for the 2000 Project; and

WHEREAS, adequate provision of properly located parking spaces for motor vehicles is WHEREAS, the Authority issued $21,000,000 aggregate principal amount of Parking a public responsibility; and Revenue Bonds (City Guaranteed, Series 2000), dated April 1, 2000 (hereinafter collectively referred to as the "2000 Bonds") to provide funds to pay part of the cost of the 2000 Project; and WHEREAS, in order to provide increased public parking at the Lafayette Yard site in the City and to coordinate parking for the proposed hotel/conference center redevelopment WHEREAS, in order to provide for savings in debt service as a result of lower interest project at the Lafayette Yard site to be owned and operated by the Lafayette Yard Community rates in the bond market, the Authority determined to refund a portion of the 2000 Bonds, Development Corporation, a non-profit corporation organized under the laws of the State of New specifically those maturing on or after April 1, 2011 by the issuance of additional bonds under Jersey, (the "Corporation"), the Authority determined to construct a 650-space structured parking the General Bond Resolution (the “2001 Refunding”); and facility on the Lafayette Yard site, provide for certain expenditures associated with the hotel/conference center and provide for structural improvements to other facilities of the WHEREAS, on February 15, 2001, pursuant to the Act, the City finally adopted a Authority (the “2000 Project"); and guaranty ordinance (the “2001 Guaranty Ordinance”) to guaranty the timely payment of the principal and interest on an additional $2,200,000 bonds of the Authority, which along with the WHEREAS, in order to provide increased public parking at the Liberty Commons 1999 Guaranty Ordinance guaranteed an aggregate principal amount not exceeding $23,200,000 commercial development site within the City located on Front Street between Broad Street and for outstanding bonds of the 2000 Project and the 2001 Refunding; and Warren Street across from the Department of Community Affairs Building (the “Site”) and to coordinate parking for the proposed commercial development to be owned by the Economic WHEREAS, the Authority issued $20,590,000 aggregate principal amount of Parking Development Corporation of Trenton, Inc., a non-profit corporation organized under the laws of Revenue Refunding Bonds (City Guaranteed, Series 2001), dated October 1, 2001 (hereinafter the State of New Jersey, (the "Trenton Corporation"), which has been designated by the City as collectively referred to as the "2001 Bonds") to provide funds to pay part of the cost of the 2001 the redeveloper of the Site pursuant to the Local Redevelopment and Housing Law (N.J.S.A. Refunding; 40A:12A-1 et. seq.), the Authority has determined to acquire from the Trenton Corporation and finance the construction of an approximately 560-space structured parking facility on the Site, II. including access ramps, doors, bridges, structural and off-site improvements associated with the THE LIBERTY COMMONS PROJECT FINANCING AND REFUNDING commercial development and surrounding structures the Liberty Commons Project (the “2003 Project”); and WHEREAS, on November 6, 2003, pursuant to the Act, the City finally adopted a guaranty ordinance (the “2003 Guaranty Ordinance”) to guaranty the timely payment of the WHEREAS, to alleviate the parking problems in the City, particularly around the 2000 principal and interest on outstanding bonds of the Authority in an aggregate principal amount not Project and the 2003 Project, and pursuant to a resolution of the Authority duly adopted on June exceeding $14,250,000 for the 2003 Project and in and aggregate amount of $39,200,000 for all 15, 1999 and entitled “Resolution Authorizing the Issuance of Parking Revenue Bonds of the of the outstanding bonds of the Authority (consisting of the 2000 Bonds, the 2001 Bonds and the Parking Authority of the City of Trenton in the County of Mercer, New Jersey” as amended and hereinafter defined “2003 Bonds”); and supplemented (the “General Bond Resolution”) to provide funds for the 2000 Project and the 2003 Project; and WHEREAS, the Authority issued $14,070,000 aggregate principal amount of Parking Revenue Bonds (City Guaranteed, Series 2003), dated December 15, 2003 (hereinafter

1 2 collectively referred to as the "2003 Bonds") to provide funds to pay part of the cost of the 2003 WHEREAS, the Authority requested the City to provide assistance in the marketing of Project; and the 2013 Refunding Bonds by unconditionally guarantying the principal of and interest on the 2013 Refunding Bonds; and WHEREAS, in order to accommodate a long-term private use at the 2003 Project, the Authority determined to refund a portion of the 2003 Bonds, specifically the defeasance of at WHEREAS, pursuant to the 2005 Guaranty Ordinance which guaranteed outstanding least 28.5% of the outstanding 2003 Bonds, by the issuance of additional taxable bonds under the bonds of the Authority in an aggregate amount of $39,850,000, the 2013 Refunding Bonds were General Bond Resolution (the “2006 Refunding”); and guaranteed by the City because after the issuance of the 2013 Refunding Bonds, the Authority had outstanding bonds in an amount less than $39,850,000; WHEREAS, on October 20, 2005, pursuant to the Act, the City finally adopted a guaranty ordinance (the “2005 Guaranty Ordinance”) to guaranty the timely payment of the IV. principal and interest on an additional $650,000 bonds of the Authority, which along with the THE 2016 REFUNDING AND NEW MONEY 2003 Guaranty Ordinance guaranteed an aggregate principal amount not exceeding $14,900,000 for outstanding bonds of the 2003 Project and the 2006 Refunding, and guaranteed an aggregate WHEREAS, in order to provide for savings in debt service as a result of lower interest principal amount not exceeding $39,850,000 for outstanding bonds of the 2000 Project, the 2001 rates in the bond market, the Authority has determined to refund all or a portion of the 2006 Refunding, the 2003 Project and the 2006 Refunding; and Bonds and the 2013 Refunding Bonds (collectively, the “Refunded Bonds”) by the issuance of additional bonds under the General Bond Resolution (the “2016 Refunding”); and WHEREAS, the Authority issued $4,520,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed, Series 2006) (Federally Taxable), dated February WHEREAS, to effectuate such debt service savings in compliance with the provisions of 28, 2006 (hereinafter collectively referred to as the "2006 Bonds") to provide funds to pay a the Internal Revenue Code, the Authority must issue a greater principal amount of 2016 portion of the cost of the 2006 Refunding; Refunding Bonds (as hereinafter defined) to refund the specific portion of the Refunded Bonds being refunded; and III. THE 2013 REFUNDING WHEREAS, the Authority desires to adopt this supplemental bond resolution (the “2016 Supplemental Resolution” and together with the General Bond Resolution, as supplemented and WHEREAS, in order to provide for savings in debt service as a result of lower interest amended, the “Resolutions”) as provided for in the General Bond Resolution authorizing the rates in the bond market, the Authority determined to refund all or a portion of the 2001 Bonds issuance of not to exceed $20,000,000 aggregate principal amount of Parking Revenue and the 2003 Bonds (collectively, the “2013 Refunded Bonds”) by the issuance of additional Refunding Bonds (City Guaranteed) (the “2016 Refunding Bonds”) and not to exceed $750,000 bonds under the General Bond Resolution (the “2013 Refunding”); and of Parking Revenue Bonds (the “2016 New Money Bonds” and collectively with the 2016 Refunding Bonds, the “Bonds”); WHEREAS, to effectuate such debt service savings in compliance with the provisions of the Internal Revenue Code, the Authority issued a greater principal amount of 2013 Bonds (as WHEREAS, the 2016 New Money Bonds will be issued in an amount not to exceed hereinafter defined) to refund the specific portion of the 2013 Refunded Bonds being refunded; $750,000 to finance certain capital improvements to the Authority garages as set forth on and Appendix A hereto; and

WHEREAS, the Authority adopted a supplemental bond resolution (the “2013 WHEREAS, the Bonds will be issued upon the issuance of positive findings from the Supplemental Resolution”) and together with the General Bond Resolution, as supplemented and Local Finance Board, a regulatory body of State of New Jersey within the Department of amended, as provided for in the General Bond Resolution authorizing the issuance of not to Community Affairs; and exceed $29,500,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed, Series 2013) (the “2013 Refunding Bonds”), subsequent to the approval from the WHEREAS, the Authority has requested the City to provide assistance in the marketing Local Finance Board, a regulatory body of State of New Jersey within the Department of of the Bonds by unconditionally guarantying the principal of and interest on the Bonds; and Community Affairs; and WHEREAS, pursuant to the 2005 Guaranty Ordinance which guaranteed outstanding WHEREAS, on January 9, 2013, the Local Finance Board considered the Authority’s bonds of the Authority in an aggregate amount of $39,850,000, the Bonds are guaranteed by the application concerning the issuance of the 2013 Refunding Bonds and issued positive findings City because after the issuance of the Bonds, the Authority will have outstanding bonds in an thereto; and amount less than $39,850,000; now, therefore;

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BE IT RESOLVED BY THE PARKING AUTHORITY OF THE CITY OF ARTICLE I TRENTON, and the Members thereof, as follows: DEFINITIONS AND INTERPRETATIONS OF THE AUTHORITY

SECTION 101. Short Title. This resolution may hereafter be cited by the Authority, and is hereinafter sometimes referred to as the "2016 Supplemental Resolution".

SECTION 102. Terms Defined in General Bond Resolution. Whenever used or referred to in this 2016 Supplemental Resolution, all words or terms which are defined in Section 101 of the General Bond Resolution of the Authority adopted on June 15, 1999, as supplemented and amended, shall have the meanings given or ascribed to such words or terms in said Section 101, except to the extent that words or terms are or shall be otherwise defined in this 2016 Supplemental Resolution.

SECTION 103. Amendment to the General Bond Resolution. The definition of "City Guaranty” in Section 1.01 of the General Bond Resolution, to the extent not already done, is hereby amended to include at the end: "and as supplemented by the City Council of the City by ordinance duly adopted on October 20, 2005;”

SECTION 104. Terms Defined Herein. As used or referred to, and unless a different meaning clearly appears from the context, in this 2016 Supplemental Resolution:

(1) “Act” means the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948 of the State of New Jersey, and the acts amendatory thereof and supplemental thereto;

(2) “Credit Facility Provider” means the provider, if any, of the Bond Reserve Credit Facility in accordance with Section 522 of the General Bond Resolution;

(3) “Dissemination Agent” means U.S. Bank National Association, Morristown, New Jersey, as set forth in Section 303 of this 2016 Supplemental Resolution, and its successor or successors and any other corporation or association which may at any time be substituted in its place pursuant to the Disclosure Agreement (as defined in Section 310, herein), provided that such Dissemination Agent shall meet the requirement set forth therein;

(4) “General Bond Resolution” means the resolution of the Authority adopted on June 15, 1999 and entitled “Resolution Authorizing the Issuance of Parking Revenue Bonds of the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey” as amended and supplemented, prior to the adoption of this 2016 Supplemental Resolution;

(5) "Paying Agent" means U.S. Bank National Association, Morristown, New Jersey, as set forth in Section 303 of this 2016 Supplemental Resolution, and its successor or successors and any other corporation or association which may at any time be substituted in its place pursuant to the General Bond Resolution, provided that such Paying Agent shall meet the requirements of Section 1102 of the General Bond Resolution;

5 6 (6) "Registrar" means U.S. Bank National Association, Morristown, New Jersey, as SECTION 109. Parties Interested Herein. Nothing in this 2016 Supplemental set forth in Section 303 of this 2016 Supplemental Resolution, and its successor or successors Resolution expressed or implied is intended or shall be construed to confer upon, or to give to, and any other corporation or association which may at any time be substituted in its place any person or corporation, other than the Authority, the Fiduciaries, the Dissemination Agent and pursuant to the General Bond Resolution, provided that such Registrar shall meet the the holders of the Bonds, any right, remedy or claim under or by reason of such resolution or any requirements of Section 1102 of the General Bond Resolution; covenant, condition or stipulation thereof. All the covenants, stipulations, promises and agreements in this 2016 Supplemental Resolution contained by and on behalf of the Authority (7) "Resolutions" means the General Bond Resolution, together with this 2016 shall be for the sole and exclusive benefit of the Authority, the Fiduciaries, the Dissemination Supplemental Resolution; Agent and the holders of the Bonds.

(8) "Trustee" means U.S. Bank National Association, Morristown, New Jersey, as set SECTION 110. Severability of Invalid Provision. If any one or more of the covenants forth in Section 303 of this 2016 Supplemental Resolution, and its successor or successors and or agreements made or provided for in the 2016 Supplemental Resolution to be performed on the any other corporation or association which may at any time be substituted in its place pursuant to part of the Authority, the Fiduciaries or the Dissemination Agent should be contrary to law, then the General Bond Resolution, provided that such Trustee shall meet the requirements of Section such covenant or covenants, agreement or agreements, shall be deemed separable from the 1101 of the General Bond Resolution. remaining covenants and agreements, and shall in no way affect the validity of the other provisions of this 2016 Supplemental Resolution or of the Bonds. (9) “2016 Project” means the issuance of bonds for the following: (a) the current refunding of all or a portion of the Authority’s $4,520,000 Parking Revenue Refunding Bonds SECTION 111. Effective Date. This 2016 Supplemental Resolution shall be effective (City Guaranteed, Series 2006) (Federally Taxable), outstanding in the amount of $3,585,000, immediately. (b) the current refunding of all or a portion of the Authority’s Parking Revenue Refunding Bonds (City Guaranteed), Series 2013A, outstanding in the amount of $16,655,000, (c) the capital improvements to the Authority garages as set forth on Attachment A hereto, in an amount not to (End of Article I) exceed $750,000, (d) the funding of the Bond Reserve Fund, if necessary; and (e) the payment of the costs of issuing the Bonds.

SECTION 105. Articles and Sections. Articles and Sections mentioned by number are the respective Articles and Sections of this 2016 Supplemental Resolution so numbered unless otherwise indicated.

SECTION 106. Incorporation of Prior Resolutions. This 2016 Supplemental Resolution supplements the General Bond Resolution. The General Bond Resolution is incorporated herein by reference thereto.

SECTION 107. Words. Words importing persons include firms, associations and corporations, and words importing the singular number include the plural number and vice versa.

SECTION 108. Successors and Assigns. Whenever in the Resolutions the Authority is named or referred to, it shall and shall be deemed to include its successors and assigns whether so expressed or not. All of the covenants, stipulations, obligations, and agreements by or on behalf of, and other provisions for the benefit of the Authority contained in the Resolutions shall bind and inure to the benefit of such successors and assigns and of any officer, board, commission, authority, agent or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Authority, or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this 2016 Supplemental Resolution.

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ARTICLE II ARTICLE III DETERMINATIONS AND OBLIGATIONS OF THE AUTHORITY AUTHORIZATION, TERMS, EXECUTION AND ISSUANCE OF THE BONDS

SECTION 201. Authority for 2016 Supplemental Resolution. This 2016 SECTION 301. Purpose and Authorization of the Bonds. In accordance with the Act Supplemental Resolution is adopted by virtue of and pursuant to the provisions of the Act and is and subject to and pursuant to the provisions of the Resolutions and for the purpose of financing intended to supplement the General Bond Resolution. The Authority has ascertained and hereby and raising funds to pay the cost of the 2016 Project, the Bonds are hereby authorized to be determines and declares that adoption of this 2016 Supplemental Resolution is necessary to carry issued by the Authority in the aggregate principal amount of not to exceed $20,750,000. out the powers and duties expressly provided by the Act, that each and every act, matter, thing of course of conduct as to which provision is made in this 2016 Supplemental Resolution is SECTION 302. Details of the Bonds. necessary or convenient in order to carry out and effectuate the purposes of the Authority in accordance with the Act and to carry out powers expressly given in the Act, and that each and (1) Description. (a) The Bonds shall be issued in fully registered form, with interest every covenant or agreement herein contained and made is necessary, useful or convenient in rates fixed to maturity, and shall each be entitled and designated, and be distinguished from all order to better and to further secure the Bonds and are contracts or agreements necessary, useful other Series by the title and designation, "Parking Revenue [Refunding] Bonds (City Guaranteed, and convenient to carry out and effectuate the corporate purposes of the Authority under the Act. Series 2016)" or such other title as the Authority shall determine. The aggregate principal amount of the Bonds which may be issued under this 2016 Supplemental Resolution is limited to SECTION 202. 2016 Project and Estimated Cost Thereof. The Authority hereby $20,750,000. determines to undertake the financing of the 2016 Project authorized by this 2016 Supplemental Resolution and the General Bond Resolution. The estimated cost of the 2016 Project is (2) Delegation of Sale of Bonds. The Executive Director of the Authority is hereby $20,750,000, inclusive of any original issue discount to be incurred upon the sale of the Bonds, designated as the individual who shall have the power to determine, among other things (a) the underwriter’s discount, bond insurance, if any, accrued interest from the dated date of the Bonds principal amount of Bonds to be issued, in an aggregate principal amount not to exceed through, but not including the date of delivery of such Bonds, proceeds earned from investment $20,750,000, on either a tax-exempt or taxable basis, in one or more series, (b) the time, date, of the Bonds funds and other cost of issuance of the Bonds. series, denomination(s), maturity dates, redemption provisions, manner of sale and place of payment of the Bonds, (c) the rate of interest for such Bonds, and (d) such other terms and SECTION 203. Bonds To Constitute Additional Bonds. The Bonds shall constitute conditions as may be necessary or related to the sale of the Bonds, including the provision of Additional Bonds as such term is defined in the General Bond Resolution and shall be issued Bond Insurance, and the funding of Bond Reserve Fund, as either may be necessary, in pursuant to and in accordance with the General Bond Resolution accordance with the General Bond Resolution. The Bonds of the Authority may be sold at private sale to an underwriter selected by the Executive Director or sold to an underwriter at SECTION 204. Resolutions to Constitute Contract. In consideration of the purchase public sale (the purchaser hereinafter being known as the “Underwriter”) Following such public and acceptance of the Bonds by those who shall hold the same from time to time, the provisions or private sale, the Executive Director of the Authority is further authorized to execute a contract of the Resolutions shall be part of the contract of the Authority with the holders of the Bonds and of purchase in connection with the sale of the Bonds (including the making of representations shall be deemed to be and shall constitute a contract between the Authority, the Trustee and the and warranties reasonably requested) and award the Bonds to the Underwriter, with such award holders from time to time of the Bonds, and coupons, if any. The provisions, covenants and being evidenced by the execution of a certificate by the Executive Director (the "Award agreements herein set forth to be performed on behalf of the Authority shall be for the equal Certificate"). The contract of purchase and the Award Certificate shall determine the terms and benefit, protection and security of the holders of any and all of the Bonds and coupons, all of conditions relating to the sale of the Bonds, including the rate of interest to be borne by the which, regardless of the time or times of their issue or maturity, shall be of equal rank without Bonds and the Underwriter's discount, if any, which is payable to the underwriter in connection preference, priority or distinction of any of the Bonds or coupons over any other thereof except with the sale of the Bonds; provided however, that without the further authorization of the as expressly provided herein. Authority, (i) the average rate of interest to be borne by the Bonds shall not exceed six per centum (6.0%) per annum (ii) the Underwriter's total compensation for the public offering of the SECTION 205. Obligation of the Bonds. The Bonds shall be direct and general Bonds shall not exceed $8.00 per $1,000 principal amount of such Bonds, it being understood obligations of the Authority, and the full faith and credit of the Authority are hereby pledged to that the structure of this financing may include an Underwriter’s discount, original issue discount the payment of the principal and Redemption Price of (as hereinafter defined) and interest on the or premium above the par amount of the Bonds and (iii) the size, structure, terms and conditions Bonds. of the sale of the Bonds are not materially different from the terms and conditions set forth in the Authority’s amended application to the Local Finance Board, dated as of July __, 2016. The (End of Article II) contract of purchase and the Award Certificate shall contain such other terms and conditions as shall be deemed to be necessary in connection with the sale of the Bonds. The Award Certificate

9 10 shall be presented to the members of the Authority at the next regular meeting following such form attached hereto as Exhibit B is hereby approved and incorporated by reference herein, sale and award as evidence of the terms and details of the sale of the Bonds. including any such changes, insertions and omissions as deemed necessary and as approved by the Authority's Executive Director and attorney as are not inconsistent with this approval. (3) Denomination and Place of Payment. The Bonds shall be issued in book-entry form only and, when issued, will be registered in the name of and held by Cede & Co., as nominee for SECTION 307. Execution of Supplemental Agreements. The Chairman and DTC. The Bonds shall be issued in the form of one certificate for each maturity, in the aggregate Executive Director of the Authority are hereby authorized to make such representations and principal amount of such maturity. As long as DTC or its nominee, Cede & Co., is the warranties and to enter into agreements and to make all arrangements for the provision of bond Registered Owner of the Bonds, payments of the principal of, Redemption Price (as defined insurance, if necessary and the Bond Reserve Credit Facility, if necessary, the verification of herein), if any, and interest on the Bonds will be made by the Paying Agent directly to DTC or calculations related to the refunding of the Bonds and to undertake such other actions, including its nominee, Cede & Co., which will remit payments to DTC participants, which will remit such but not limited to publications, printing and ratings, which may be required for the sale of the payments to the beneficial owners of the Bonds. All other terms and conditions with respect to Bonds. the payment of the principal of, redemption premium, if any, and interest on the Bonds shall be as provided in the Award Certificate. SECTION 308. Provisions of General Bond Resolution. All of the provisions, covenants, or matters authorized, required or provided for, by or under the General Bond SECTION 303. Appointment of Trustee, Paying Agent, Registrar, Dissemination Resolution shall be for the equal benefit and security of the Bonds. Including and without Agent and Escrow Agent. In accordance with the provisions of the General Bond Resolution, limiting the generality of the foregoing, the pledge of Revenues and other funds made or U.S. Bank National Association, Morristown, New Jersey is hereby appointed to serve as provided for in or by Section 502 of the General Bond Resolution, the assignment of the City Trustee, Paying Agent, Registrar, Dissemination Agent and Escrow Agent for the Bonds and Guaranty made or provided for in or by Section 503 and the remedies and other provisions set shall accept and carry out its duties and obligations as Trustee, Paying Agent, Registrar, forth in Article X of the General Bond Resolution as if, and by this reference they are, fully Dissemination Agent and Escrow Agent as provided in and as required by the terms of the incorporated herein. Resolutions or any supplemental contracts with the Authority executed by the Executive Director in connection with the sale of the Bonds. SECTION 309. Covenant of Authority as to Compliance with Federal Tax Matters. The Authority hereby covenants that it will take all actions within its control that are necessary to SECTION 304. Form of the Bonds. Pursuant to Section 1207 of the General Bond assure that interest on the Bonds is excludable from gross income under the Internal Revenue Resolution, the Bonds shall be substantially in the form attached hereto as Exhibit A, which form Code of 1986, as amended (the "Code") and the Authority will refrain from taking any action is hereby approved and incorporated by reference herein. that would adversely affect the exclusion of interest on the Bonds from gross income under the provisions of the Code. SECTION 305. Depository Trust Company. The Chairman and the Executive Director of the Authority are hereby authorized to make representations and warranties, to enter SECTION 310. Secondary Market Disclosure. (1) Solely for purposes of complying into agreements and to make all arrangements with DTC, as may be necessary in order to with Rule 15c2-12 of the Securities and Exchange Commission, as amended and interpreted provide that the Bonds will be eligible for deposit with DTC and to satisfy any obligation from time to time (the "Rule"), and provided that the Bonds are not exempt from the Rule and undertaken in connection therewith. provided that the Bonds are not exempt from the following requirements in accordance with paragraph (d) of the Rule, for so long as the Bonds remain outstanding (unless the Bonds have SECTION 306. Authorization for Execution of Guaranty Agreement. Pursuant to been wholly defeased), the Authority shall provide for the benefit of the holders of the Bonds and in accordance with the terms of the Act, the Authority and its Chairman and/or Executive and the beneficial owners thereof: Director are hereby authorized to execute a guaranty agreement with the City providing for the guaranty by the City of the timely payment of the principal of and interest on any bonds which (a) On or prior to January 1 of each fiscal year beginning on January 1, 2017, to are issued by the Authority, including the Bonds, in an aggregate principal amount not exceeding the Municipal Securities Rulemaking Board's (“MSRB”) Electronic Municipal Market Access $39,850,000 for the purpose described herein, on such terms and with such interest rates as shall System (“EMMA”), an internet based filing system created and maintained by the MSRB in be determined by the Authority in a manner which is consistent with the provisions of the Act. accordance with the SEC Release, annual financial information with respect to the Authority The term "Bonds" shall include all bonds issued for or with respect to these purposes or any consisting of the audited financial statements (or unaudited financial statements if audited bonds issued to refund the Bonds issued for these purposes, provided that the total amount of financial statements are not then available, which audited financial statements will be delivered bonds outstanding entitled to the benefits of its guaranty shall not exceed $39,850,000. Any when and if available) of the Authority and certain financial information and operating data bonds which are no longer considered outstanding under the resolution of the Authority consisting of (i) Authority indebtedness, (ii) the Authority's most current adopted budget, and authorizing the bonds shall not be considered outstanding for the purpose of this guaranty. A (iii) user rates and collection data. The audited financial information will be prepared in copy of the guaranty agreement by and between the Authority and the City, substantially in the accordance with modified cash accounting as mandated by State statutory principles in effect

11 12

from time to time or with generally accepted accounting principles as modified by governmental provided such amendment is, in the opinion of nationally recognized bond counsel, in accounting standards as may be required by State law; compliance with the Rule.

(b) in a timely manner to EMMA, notice of the following events with respect to (4) In the event that the Authority fails to comply with the Rule or the written contracts the Refunding Bonds, if material (herein "Material Events"): or undertakings specified herein, the Authority shall not be liable for monetary damages, remedy being hereby specifically limited to specific performance of the Rule requirements or the written (1) Principal and interest payment delinquencies contracts or undertakings therefor. (2) Non-payment related defaults, if material (3) Unscheduled draws on debt service reserves reflecting financial (5) For the benefit of the holders of the Refunding Bonds and to assist the purchaser difficulties thereof in complying with the Rule, the Chairman and Executive Director of the Authority are hereby authorized to make representations and warranties and enter into a continuing disclosure (4) Unscheduled draws on credit enhancements reflecting financial agreement (the “Disclosure Agreement”), by and among the Authority, the Underwriter, difficulties; Purchaser and the City, as may be required. (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of SECTION 311. This supplemental bond resolution shall supersede and replace, in proposed or final determinations of taxability, Notices of Proposed Issue its entirety, the supplemental bond resolution adopted by the Authority on June 23, 2016 and (IRS Form 5701-TEB) or other material notices or determinations with such bond resolution shall be of no further force and effect. respect to the tax status of the security, or other material events affecting the tax status of the security; (End of Article III) (7) Modifications to rights of security holders, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the securities, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the County; (13) The consummation of a merger, consolidation, or acquisition involving the County or the sale of all or substantially all of the assets of the County, 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.

(2) If all or any part of the Rule ceases to be in effect for any reason, then the information required to be provided under this 2016 Supplemental Resolution, insofar as the provision of the Rule no longer in effect required the provision of such information, shall no longer be required to be provided.

(3) The Executive Director shall determine, in consultation with Bond Counsel, the application of the Rule or the exemption from the Rule for each issue of obligations of the Authority prior to their offering. Such officer is hereby authorized to enter into additional written contracts or undertakings to implement the Rule and is further authorized to amend such contracts or undertakings or the undertakings set forth in this 2016 Supplemental Resolution,

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APPENDIX E

FORM OF THE GUARANTY AGREEMENT

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GUARANTY AGREEMENT

By and Between

PARKING AUTHORITY OF THE CITY OF TRENTON

and

CITY OF TRENTON, IN THE COUNTY OF MERCER, NEW JERSEY

(Amending and Restating the Guaranty Agreement dated as of April 1, 2000, and amended and restated on October 1, 2001, December 30, 2003, March 1, 2006 and March 20, 2013)

ISSUED IN CONJUNCTION WITH THE

PARKING AUTHORITY OF THE CITY OF TRENTON

$3,735,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable)

$16,965,000 Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B consisting of

$16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016

Dated: September 1, 2016

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THIS GUARANTY AGREEMENT (hereinafter the "Guaranty Agreement") made and dated as of the 1st day of September, 2016 (and amending and restating the guaranty agreement dated as of April 1, 2000, and amended and restated on October 1, 2001, December 30, 2003, March 1, 2006 and March 20, 2013) by and between the Parking Authority of the City of Trenton (hereinafter referred to as the "Authority"), a public body corporate and politic of the State of New Jersey, and the City of Trenton, in the County of Mercer (hereinafter referred to as the "City"), a municipal corporation of the State of New Jersey (capitalized terms used but not defined herein shall have the meanings assigned to them in the General Bond Resolution, as defined herein),

W I T N E S S E T H:

WHEREAS, the City, pursuant to the Parking Authority Law of the State of New Jersey, constituting Chapter 198 of the Public Laws of New Jersey of 1948, as amended and supplemented (N.J.S.A. 40:11A-1, et seq.) (the "Act"), heretofore created a body corporate and politic known as the "Parking Authority of the City of Trenton" (the "Authority"); and

WHEREAS, adequate provision of properly located parking spaces for motor vehicles is a public responsibility; and

WHEREAS, in order to provide increased public parking at the site commonly referred to as the Lafayette Yard site in the City and to coordinate parking for the hotel/conference center redevelopment project at the Lafayette Yard site which was purchased, owned and operated by the Lafayette Yard Community Development Corporation, a non-profit corporation organized under the laws of the State of New Jersey, (the "Corporation"), the Authority determined to construct a 650-space structured parking facility on the Lafayette Yard site, provide for certain expenditures associated with the hotel/conference center and provide for structural improvements to other facilities of the Authority (the “2000 Project"); and

WHEREAS, in order to provide increased public parking at the Liberty Commons commercial development site within the City located on Front Street between Broad Street and Warren Street across from the Department of Community Affairs Building (the “Site”) and to coordinate parking for the commercial development owned by the Economic Development Corporation of Trenton, Inc., a non-profit corporation organized under the laws of the State of New Jersey (the "Trenton Corporation"), which was designated by the City as the redeveloper of the Site pursuant to the Local Redevelopment and Housing Law (N.J.S.A. 40A:12A-1 et. seq.), the Authority acquired from the Trenton Corporation and financed the construction of an approximately 560-space structured parking facility on the Site, including access ramps, doors, bridges, structural and off-site improvements associated with the commercial development and surrounding structures commonly referred to as the Liberty Commons Project (the “2003 Project”); and

WHEREAS, to alleviate the parking problems in the City, particularly around the 2000 Project and the 2003 Project, and pursuant to a resolution of the Authority duly adopted on June 15, 1999 and entitled “Resolution Authorizing the Issuance of Parking Revenue Bonds of the Parking Authority of the City of Trenton in the County of Mercer, New Jersey” as amended and

supplemented (the “General Bond Resolution”), the City decided to provide funds for the 2000 Project and the 2003 Project; and

WHEREAS, pursuant to Section 22(1)(e) of the Act, the City is authorized to unconditionally guaranty the punctual payment of the principal of and interest on any bonds of the Authority by ordinance duly adopted or by instruments or other action authorized by such ordinance;

I. THE LAFAYETTE YARD SITE FINANCING AND REFUNDING

WHEREAS, on July 1, 1999, pursuant to the Act, the City finally adopted a guaranty ordinance (the “1999 Guaranty Ordinance”) to guaranty the timely payment of the principal of and interest on outstanding bonds of the Authority, in an aggregate principal amount not exceeding $21,000,000 for the 2000 Project; and

WHEREAS, the Authority issued $21,000,000 aggregate principal amount of Parking Revenue Bonds (City Guaranteed, Series 2000), dated April 1, 2000 (hereinafter collectively referred to as the "2000 Bonds") to provide funds to pay part of the cost of the 2000 Project; and

WHEREAS, in order to provide for savings in debt service as a result of lower interest rates in the bond market, the Authority determined to refund a portion of the 2000 Bonds, specifically those maturing on or after April 1, 2011 by the issuance of additional bonds under the General Bond Resolution (the “2001 Refunding”); and

WHEREAS, on February 15, 2001, pursuant to the Act, the City finally adopted a guaranty ordinance (the “2001 Guaranty Ordinance”) to guaranty the timely payment of the principal of and interest on an additional $2,200,000 bonds of the Authority, which along with the 1999 Guaranty Ordinance guaranteed an aggregate principal amount not exceeding $23,200,000 for outstanding bonds of the 2000 Project and the 2001 Refunding; and

WHEREAS, the Authority issued $20,590,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed, Series 2001), dated October 1, 2001 (hereinafter collectively referred to as the "2001 Bonds") to provide funds to pay part of the cost of the 2001 Refunding;

II. THE LIBERTY COMMONS PROJECT FINANCING AND REFUNDING

WHEREAS, on November 6, 2003, pursuant to the Act, the City finally adopted a guaranty ordinance (the “2003 Guaranty Ordinance”) to guaranty the timely payment of the principal of and interest on outstanding bonds of the Authority in an aggregate principal amount not exceeding $14,250,000 for the 2003 Project, which along with the 1999 Guaranty Ordinance and the 2001 Guaranty Ordinance guaranteed an aggregate principal amount of $39,200,000 for all of the outstanding bonds of the Authority (which consisted of the 2000 Bonds, the 2001 Bonds and the hereinafter defined “2003 Bonds”); and

WHEREAS, the Authority issued $14,070,000 aggregate principal amount of Parking Revenue Bonds (City Guaranteed, Series 2003), dated December 15, 2003 (hereinafter collectively referred to as the "2003 Bonds") to provide funds to pay part of the cost of the 2003 Project; and

WHEREAS, in order to accommodate a long-term private use at the 2003 Project, the Authority determined to refund a portion of the 2003 Bonds, specifically the defeasance of at least 28.5% of the outstanding 2003 Bonds, by the issuance of additional taxable bonds under the General Bond Resolution (the “2006 Refunding”); and

WHEREAS, on October 20, 2005, pursuant to the Act, the City finally adopted a guaranty ordinance (the “2005 Guaranty Ordinance”) to guaranty the timely payment of the principal of and interest on an additional $650,000 bonds of the Authority, which along with the 2003 Guaranty Ordinance guaranteed an aggregate principal amount not exceeding $14,900,000 for outstanding bonds of the 2003 Project and the 2006 Refunding, which along with the 1999 Guaranty Ordinance, the 2001 Guaranty Ordinance, and the 2003 Guaranty Ordinance, guaranteed an aggregate principal amount not exceeding $39,850,000 for all of the outstanding bonds of the Authority (which consisted of the 2000 Bonds, the 2001 Bonds, the 2003 Bonds and the hereinafter defined 2006 Bonds); and

WHEREAS, the Authority issued $4,520,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed, Series 2006) (Federally Taxable), dated March 7, 2006, (hereinafter collectively referred to as the "2006 Bonds") to provide funds to pay a portion of the cost of the 2006 Refunding;

III. THE 2013 REFUNDING

WHEREAS, in order to provide for savings in debt service as a result of lower interest rates in the bond market, the Authority determined to refund all or a portion of the 2001 Bonds and the 2003 Bonds (collectively, the “2013 Refunded Bonds”) by the issuance of additional bonds under the General Bond Resolution (the “2013 Refunding”); and

WHEREAS, to effectuate such debt service savings in compliance with the provisions of the Internal Revenue Code, as amended, the Authority issued a greater principal amount of 2013 Refunding Bonds (as hereinafter defined) to refund the specific portion of the 2013 Refunded Bonds being refunded; and

WHEREAS, after receiving positive findings and approval from the Local Finance Board, a regulatory body of State of New Jersey within the Department of Community Affairs; on January 9, 2013, the Authority adopted a supplemental bond resolution (the “2013 Supplemental Resolution”) which supplemented and amended the General Bond Resolution, to authorize the issuance of not to exceed $29,500,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed, Series 2013) (the “2013 Refunding Bonds”); and

WHEREAS, the Authority requested the City to provide assistance in the marketing of the 2013 Refunding Bonds by unconditionally guarantying the principal of and interest on the 2013 Refunding Bonds; and

WHEREAS, pursuant to the 1999, Guaranty Ordinance, the 2001 Guaranty Ordinance, the 2003 Guaranty Ordinance, and the 2005 Guaranty Ordinance (collectively, the “Guaranty Ordinance”) which guaranteed outstanding bonds of the Authority in an aggregate amount of $39,850,000, the 2013 Refunding Bonds were guaranteed by the City because after the issuance of the 2013 Refunding Bonds, the Authority had outstanding bonds in an amount less than $39,850,000;

IV. THE 2016 REFUNDING AND NEW MONEY

WHEREAS, in order to provide for savings in debt service as a result of lower interest rates in the bond market, the Authority has determined to refund all or a portion of the 2006 Bonds and the 2013 Refunding Bonds (collectively, the “Refunded Bonds”) by the issuance of additional bonds under the General Bond Resolution (the “2016 Refunding”); and

WHEREAS, to effectuate such debt service savings in compliance with the provisions of the Internal Revenue Code, as amended, the Authority must issue a greater principal amount of 2016 Refunding Bonds (as hereinafter defined) to refund the specific portion of the Refunded Bonds being refunded; and

WHEREAS, the Authority adopted a supplemental bond resolution on July 28, 2016 (the “2016 Supplemental Resolution” and together with the General Bond Resolution, as supplemented and amended, the “Resolutions”), as provided for in the General Bond Resolution, authorizing the issuance of not to exceed $20,000,000 aggregate principal amount of Parking Revenue Refunding Bonds (City Guaranteed) (the “2016 Refunding Bonds”) and not to exceed $750,000 of Parking Revenue Bonds (the “2016 New Money Bonds” and collectively with the 2016 Refunding Bonds, the “Bonds”);

WHEREAS, the 2016 New Money Bonds will be issued in an amount not to exceed $750,000 to finance certain capital improvements to various garages owned by the Authority (the “2016 New Money Project”); and

WHEREAS, on June 8, 2016, the Local Finance Board considered the Authority’s application concerning the issuance of the Bonds and issued positive findings thereto; and

WHEREAS, the Authority has requested the City to provide assistance in the marketing of the Bonds by unconditionally guarantying the principal of and interest on the Bonds; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the Authority and the City, and its successors and assigns, do mutually covenant, promise and agree as follows:

Section 1. Pursuant to the provisions of the Act, and the Guaranty Ordinance, and this Guaranty Agreement, the City agrees to guaranty the punctual payment of the principal of and interest on any bonds which are issued by the Authority, in a maximum principal amount not exceeding $39,850,000; the aggregate amount of outstanding bonds guaranteed by the City after giving effect to the issuance of the Bonds herein, is $27,910,000 (collectively, the “City Guaranteed Bonds”) which amount is less than the authorized amount of guaranteed bonds under the Guaranty Ordinance. The full faith and credit of the City are hereby pledged for the full and punctual performance of this guaranty (the "City Guaranty").

Section 2. The Authority agrees to apply the proceeds derived from the sale of the Bonds for Costs (as defined in the Act) associated with the: (a) current refunding of all or a portion of the Authority’s $4,520,000 Parking Revenue Refunding Bonds (City Guaranteed, Series 2006) (Federally Taxable), outstanding in the principal amount of $3,585,000, (b) the current refunding of a portion of the Authority’s Parking Revenue Refunding Bonds (City Guaranteed), Series 2013A, outstanding in the principal amount of $16,655,000, (c) 2016 New Money Project, (d) funding of the Bond Reserve Fund, if necessary; and (e) payment of the costs of issuing the Bonds (collectively, the “2016 Project”).

Section 3. The Authority will keep, or cause to be kept, proper books of record and account in which complete and correct entries shall be made of its transactions relating to the 2016 Project and all prior projects and which, together with all other books and papers of the Authority, shall at all reasonable times be subject to inspection by the City and the Insurer, if any.

Section 4. Within ten (10) days after the date of issuance of the Bonds, the Authority shall notify the City, in writing (by letter addressed to the Mayor), of the date of issuance, the maturity dates, the interest rate or rates and the paying agent on the Bonds and all other City Guaranteed Bonds then outstanding.

Section 5. If, forty-five (45) days prior to any date established for the payment of the principal of or interest on the City Guaranteed Bonds (including the payment of scheduled sinking fund installments, if applicable), the amounts which are on deposit in the Bond Service Fund and/or in the Sinking Fund established under the General Bond Resolution available to make payments on the City Guaranteed Bonds are insufficient to provide for the payment of the principal of and/or interest on the City Guaranteed Bonds which are due and payable on such payment date, and after application of all cash, excluding the application of any Bond Reserve Credit Facility, if any, on deposit in the Bond Reserve Fund to meet the Bond Reserve Requirement, as set forth in the General Bond Resolution, the Authority or the Trustee shall notify the City Business Administrator and the Chief Financial Officer within three (3) Business Days of the amounts which are necessary to provide for the payment of the principal of and/or interest on the City Guaranteed Bonds. The City shall be obligated to make payment to the Authority or the Trustee of the principal of and interest on the City Guaranteed Bonds (including the payment of scheduled sinking fund installments, if applicable), as well as the replenishment of all funds expended from the Bond Reserve Fund, including draws on any Bond Reserve Credit Facility on deposit therein, for the payment of principal of and interest on the City Guaranteed Bonds (including the payment of scheduled sinking fund installments, if applicable), so that the amount on deposit in the Bond Reserve Fund meets the Bond Reserve Requirement, within thirty (30) days of its receipt of such

notice. If received by the Authority, such sums shall be deposited promptly by the Authority in the name of the Trustee with the Trustee for further deposit into the Bond Service Fund and/or the Bond Reserve Fund, as applicable, pursuant to the General Bond Resolution. Notwithstanding any other provision of this Guaranty Agreement, failure by the Authority or the Trustee to give the City notice as provided herein shall not relieve the City of its obligations to make payment under the terms of the City Guaranty.

Section 6. When notice has been provided, as described above, the City shall take all necessary actions to make payment of an amount which, when added to the amounts which are on deposit in the funds and accounts established and created under the General Bond Resolution, excluding any Bond Reserve Credit Facility, is sufficient to pay the principal of and/or interest on the City Guaranteed Bonds when due. Such actions shall include the adoption of an emergency appropriation or an emergency temporary appropriation and the funding of such appropriation in accordance with the requirements of the Local Budget Law, the levy of ad valorem taxes on all taxable property in the City, without limitation as to rate or amount, or any other actions that are legally permitted to be taken to meet the requirements of such City Guaranty (including the adoption of a bond ordinance pursuant to the provisions of the Local Bond Law).

Section 7. The Authority hereby covenants to the City that in the event the City Guaranty is called upon the Authority shall be obligated and will take all actions within its power (in accordance with the terms of the Act) so as to enable the Authority to reimburse the City (but solely from funds and collateral available under and pursuant to the terms of the General Bond Resolution, excluding any Bond Reserve Credit Facility) for amounts which have been paid by the City pursuant to the terms of this Guaranty Agreement, at the earliest practicable date, as set forth in the General Bond Resolution.

Section 8. The obligations of the City under this Guaranty Agreement shall be absolute and unconditional and shall remain in full force and effect until the entire principal of and interest on the City Guaranteed Bonds shall have been paid or duly provided for in accordance with the provisions of the General Bond Resolution. This Guaranty constitutes a guaranty of payment and not of collection. The obligations of the City hereunder shall not be affected, modified or impaired upon the occurrence from time to time of any event, including without limitation any of the following, whether or not with notice to, or the consent of, the City:

(a) The waiver, compromise, settlement, release or termination of any or all of the obligations, covenants or agreements of the Authority which are contained in the General Bond Resolution and any lease agreement with any local unit of government or any other agreement which is executed and delivered for or with respect to the City Guaranteed Bonds (collectively, the "Financing Documents"), or of the payment, performance or observance thereof;

(b) The failure to give notice to the City of the occurrence of an event of default under the provisions of this Guaranty Agreement;

(c) The transfer, assignment or mortgaging or the purported transfer, assignment or mortgaging of all or any part of the interest or security interest of the

Authority in the Initial Project or any Additional Project as such terms are defined in the General Bond Resolution;

(d) The extension of the time for payment of the principal of or interest on the City Guaranteed Bonds or of the time for performance of any obligations, covenants or agreements under or arising out of the Financing Documents;

(e) The modification or amendment (whether material or otherwise) of any obligation, covenant or agreement set forth in the Financing Documents;

(f) The taking, suffering or the omission of any of the actions referred to in the General Bond Resolution or of any actions under this Guaranty Agreement;

(g) Any failure, omission, delay or lack on the part of the Authority to enforce, assert or exercise any right, power or remedy conferred on the Authority in this Guaranty Agreement, the General Bond Resolution, the Supplemental Resolution or any other act or acts on the part of the Authority or any of the holders from time to time of the City Guaranteed Bonds;

(h) The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustment or other similar proceedings affecting the Authority or any party to the Financing Documents or any of the assets of any of them, or any allegation or contest of the validity of the City Guaranty, the Supplemental Resolution or the General Bond Resolution;

(i) To the extent permitted by law, any event or action that would, in the absence of this clause, result in the release or discharge by operation of law of the City from the performance or observance of any obligation, covenant or agreement contained in this Guaranty Agreement;

(j) The default or failure of the City fully to perform any of its obligations set forth in this Guaranty Agreement;

(k) The destruction, non-use or non-availability of the Initial Project or any Additional Project; or

(l) Any payment being made under an insurance policy (the “Policy”) insuring the payment of principal of, redemption premium and interest on any Outstanding Bonds.

Section 9. No set-off, counterclaim, reduction, or diminution of any obligation, or any defense of any kind or nature (other than performance by the City of its obligations hereunder) which the City has or may have against the Authority, the Trustee, the Insurer or against any holder of the City Guaranteed Bonds, shall be available to the City hereunder against the Authority or anyone succeeding to the Authority's interest.

Section 10. The City further guarantees that all payments made with respect to the City Guaranteed Bonds will, when made, be final and agrees that if such payment is recovered from or repaid by or on behalf of the Authority or the holders of the City Guaranteed Bonds in whole or in part in any bankruptcy, insolvency or similar proceeding instituted by or against the Authority, the City Guaranty shall continue to be fully applicable to such liabilities to the same extent as though the payment so recovered or repaid had never been originally made on such liabilities.

Section 11. In the event of a default in payment of the principal of or interest on the City Guaranteed Bonds when and as the same shall become due, whether at the stated maturity thereof or otherwise, the Authority or any party to whom the Authority's rights have been assigned may proceed to enforce its rights hereunder and may proceed first and directly against the City under the terms of this Guaranty Agreement without proceeding against or exhausting any other remedies which it may have and without resorting to any other security held by the Authority. All moneys recovered pursuant to this Guaranty Agreement shall be applied in accordance with the provisions of the General Bond Resolution.

Section 12. This Guaranty Agreement shall terminate after payment in full of the principal of and interest on the City Guaranteed Bonds have been made, or provision for the payment of same has been made in accordance with the terms of the General Bond Resolution.

Section 13. This agreement may be executed in any number of counterparts, each of which shall be executed by the Authority and by the City and all of which shall be regarded for all purposes as one original and shall constitute and be but one and the same.

Section 14. The City hereby acknowledges and consents to the irrevocable assignment of the right of the Authority to receive payments from the City under the provisions of the City Guaranty by the Authority to the Trustee for the benefit of the holders of the City Guaranteed Bonds, as and to the extent provided in the General Bond Resolution.

[Section 15. The Authority and the City shall not modify or amend this Guaranty, or waive any non-performance hereunder, without the prior written consent of the Insurer and evidence that rating on the City Guaranteed Bonds will not be affected. The City hereby agrees that it shall not be a beneficiary of the 2006 Policy and the 2013 Policy and any principal and interest on the 2006 Bonds or the Refunding Bonds paid by the Insurer under the 2006 Policy or the 2013 Policy shall remain outstanding for purposes of this Guaranty Agreement until the Insurer has been reimbursed in accordance with the respective terms of the 2006 Policy and the 2013 Policy. ]

Section 16. Notwithstanding anything contained herein to the contrary, in the event that the form of government is changed so that there is no longer a Business Administrator of the City, any notices contemplated hereunder shall be provided to and any actions contemplated to be taken hereunder shall be taken by the Mayor.

IN WITNESS WHEREOF, the parties hereto have caused their respective seals to be hereunto affixed and attested, these presents to be signed by their respective officers thereunto duly authorized and this agreement to be dated as of the date and the year first above written.

ATTEST: CITY OF TRENTON, NEW JERSEY

By: By: ______City Clerk Mayor

[SEAL]

ATTEST: THE PARKING AUTHORITY OF THE CITY OF TRENTON

By: By: ______Secretary Chairman

[SEAL]

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APPENDIX F

FORM OF CONTINUING DISCLOSURE AGREEMENT

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BY AND AMONG

PARKING AUTHORITY OF THE CITY OF TRENTON

CITY OF TRENTON

AND

U.S. BANK NATIONAL ASSOCIATION, AS DISSEMINATION AGENT

Dated as of September 1, 2016

Entered into with respect to:

$3,735,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable)

$16,965,000 Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B consisting of

$16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016

[ THIS PAGE INTENTIONALLY LEFT BLANK ] CONTINUING DISCLOSURE AGREEMENT

THIS CONTINUING DISCLOSURE AGREEMENT (the "Agreement"), made and entered into as of September 1, 2016, by and among the PARKING AUTHORITY OF THE CITY OF TRENTION (the "Authority”), a public body corporate and politic of the State of New Jersey (the "State") organized and existing under the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948, of the State of New Jersey, as amended and supplemented (“Act”), CITY OF TRENTON, a municipal corporation of the State (the "Local Unit"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (the "Dissemination Agent").

W I T N E S S E T H:

WHEREAS, the Authority is issuing its $3,735,000 principal amount of Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable) (the “2016 Series A Bonds”) and $16,965,000 principal amount of Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B (the “2016 Series B Bonds” and, together with the 2016 Series A Bonds, the “Bonds”), consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series; and

WHEREAS, the Bonds are being issued pursuant to and in accordance with the “Resolution Authorizing the Issuance of Parking Revenue Bonds of the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey” adopted by the Authority on June 15, 1999, as amended and supplemented (the “General Bond Resolution”), as further amended and supplemented on July 28, 2016 (the “2016 Supplemental Resolution” and, together with the General Bond Resolution, as amended, the “Resolutions”), and an award certificate to be executed by the Chairman of the Authority on the Delivery Date of the Bonds (the “Award Certificate” and together with the Resolutions, the “Resolution”) and the Act; and

WHEREAS, the Dissemination Agent has duly accepted the obligations imposed upon it by the Resolution as Trustee for the holders from time to time of the Bonds; and

WHEREAS, the Securities and Exchange Commission (the "SEC"), pursuant to the Securities Exchange Act of 1934, as amended and supplemented (codified as of the date hereof at 15 U.S.C. §77 et seq.), has adopted amendments effective July 3, 1995 to its Rule 15c2-12 (codified at 17 C.F.R. §240.15c2- 12) ("Rule 15c2-12") that generally prohibit a broker, dealer or municipal securities dealer from purchasing or selling municipal securities, such as the Bonds, unless such broker, dealer or municipal securities dealer has reasonably determined that an issuer of municipal securities or an obligated person has undertaken in a written agreement or contract for the benefit of holders of such securities to provide certain annual financial information and operating data, notices of the occurrence of certain material events and notices of the failure to make a submission required by a continuing disclosure agreement to various information repositories; and

WHEREAS, the SEC has adopted amendments, effective July 1, 2009, to Rule 15c2-12 requiring that the annual financial information and operating data, notices of the occurrence of certain material events and notices of the failure to make a submission required by a continuing disclosure agreement be provided to the Municipal Securities Rulemaking Board (the "MSRB") and not to the various information repositories, and requiring that such information be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB; and

WHEREAS, the SEC has adopted amendments, effective December 1, 2010, to Rule 15c2-12 revising the list of events notice of the occurrence of which must be provided to the MSRB and revising the time for the filing of notices of the occurrence of these events; and

WHEREAS, on September 8, 2016, the Authority entered into a Bond Purchase Agreement (the "Bond Purchase Agreement") with NW Capital Markets Inc. (the "Underwriter") for the purchase of the Bonds; and

WHEREAS, the Local Unit is an "obligated person" with respect to the Bonds within the meaning of Rule 15c2-12 and, in order to enable a "participating underwriter" within the meaning of Rule 15c2-12 to purchase the Bonds, is therefore required to cause the delivery of the information described in this Agreement to the municipal securities marketplace for the period of time specified in this Agreement; and

WHEREAS, the execution and delivery of this Agreement have been duly authorized by the Authority, the Local Unit and the Dissemination Agent, respectively, and all conditions, acts and things necessary and required to exist, to have happened or to have been performed precedent to and in the execution and delivery of this Agreement, do exist, have happened and have been performed in regular form, time and manner; and

WHEREAS, the Authority, the Local Unit and the Dissemination Agent are entering into this Agreement for the benefit of the holders of the Bonds.

NOW, THEREFORE, for and in consideration of the promises and of the mutual representations, covenants and agreements herein set forth, the Authority, the Local Unit and the Dissemination Agent, each binding itself, its successors and assigns, do mutually promise, covenant and agree as follows:

-2- ARTICLE 1

DEFINITIONS

Section 1.1. Terms Defined in Recitals. All capitalized terms defined in the preambles hereof shall have the meanings set forth therein for all purposes of this Agreement.

Section 1.2. Additional Definitions. The following additional terms shall have the meanings specified below:

"Annual Financial Information" means the financial information or operating data with respect to the Authority and Local Unit for each fiscal year of the Authority and the Local Unit, respectively beginning with the fiscal year commencing July 1, 2016, for the Authority as set forth in Appendix A of the Final Official Statement, and beginning with the fiscal year commencing July 1, 2016, for the Local Unit as set forth in Appendix C of the Final Official Statement, each including Annual Financial Statements, if available, or unaudited financial statements.

"Annual Financial Statements" means annual financial statements of the Authority and Local Unit, respectively, prepared by a firm of certified public accountants in accordance with generally accepted accounting principles, consistently applied, as in effect from time to time; provided, however, that the Authority and the Local Unit each reserve the right to change the basis upon which its financial statements are prepared at any time and from time to time. Should the Authority or Local Unit exercise this right at any time, each shall provide Notice of any such modification to the MSRB via EMMA, as applicable, which Notice shall include a reference to the specific federal or State law or regulation requiring or permitting such accounting change and a description of such change.

"Bondholder" or any similar term, when used with reference to a Bond or Bonds, means any person who shall be the registered owner of any Outstanding Bond, including holders of beneficial interests in the Bonds.

"Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in the City of New York, in the State or in the city or cities in which the designated corporate trust office of the Dissemination Agent is located are authorized or required by law to close, or (c) a day on which the New York Stock Exchange is closed.

"Disclosure Event" means any event described in Section 2.2 of this Agreement.

"Disclosure Event Notice" means the notice to the MSRB, as provided in Section 2.2 of this Agreement.

"Dissemination Agent" means an entity acting in its capacity as Dissemination Agent under this Agreement, or any successor Dissemination Agent designated in writing by the Authority or the Local Unit that has filed a written acceptance of such designation.

"EMMA" means the Electronic Municipal Markets Access system maintained by the MSRB, which serves as the sole nationally recognized municipal securities information repository under Rule 15c2-12.

"Final Official Statement" means the final Official Statement of the Authority dated September 8, 2016 pertaining to the Bonds.

"MSRB" means the Municipal Securities Rulemaking Board, or any successor organization.

-3- "Notice" means written notice sent pursuant to the provisions of Section 4.4 of this Agreement via the United States Postal Service or through a private delivery service that provides evidence of delivery.

"State" means the State of New Jersey.

Section 1.3. Capitalized Terms Not Defined Herein. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Resolution.

Section 1.4. Interpretation. Words of masculine gender include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing persons include corporations, associations, partnerships (including limited partnerships), trusts, firms and other legal entities, including public bodies, as well as natural persons. Articles and Sections referred to by number mean the corresponding Articles and Sections of this Agreement. The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement as a whole unless otherwise expressly stated.

As the context shall require, all words importing the singular number shall include the plural number and vice versa; the disjunctive term "or" shall be interpreted conjunctively as required to insure that the Authority or the Local Unit performs any obligations mentioned in the passage in which such term appears.

-4- ARTICLE 2

CONTINUING DISCLOSURE COVENANTS AND REPRESENTATIONS

Section 2.1. Provisions of Annual Financial Information. (a) (i) Not later than 270 days after the end of each fiscal year of the Authority, the Authority shall provide Annual Financial Information to the Dissemination Agent for filing with the MSRB through EMMA.

(ii) In a timely manner, the Authority shall provide Notice to the the Dissemination Agent for filing with the MSRB in the event the Authority fails to provide Annual Financial Information on or before the date set forth in Section 2.1(a)(i).

(iii) In the event that the Authority does not provide Annual Financial Statements as part of its Annual Financial Information filing by the date set forth in Section 2.1(a)(i), the Authority shall provide unaudited financial statements to the Dissemination Agent for filing with the MSRB through EMMA, and thereafter shall provide audited financial statements to the Dissemination Agent for filing with MSRB through EMMA, when and if available.

(iv) Any or all of the items that must be included in the Annual Financial Information may be incorporated by reference from other documents, including official statements delivered in connection with other financings issued on behalf of the Authority or related public entities, that are available to the public on the MSRB's Internet website or filed with the SEC. If the document incorporated by reference is a final official statement, it must be available from the MSRB through EMMA. The Authority shall clearly identify each such other document so incorporated by reference in the Annual Financial Information

(b) (i) Not later than 270 days after the end of each fiscal year of the Local Unit, the Local Unit shall provide Annual Financial Information to the Dissemination Agent for filing with the MSRB through EMMA.

(ii) In a timely manner, the Local Unit shall provide Notice to the Dissemination Agent for filing with MSRB in the event the Local Unit fails to provide Annual Financial Information on or before the date set forth in Section 2.1(b)(i).

(iii) In the event that the Local Unit does not provide Annual Financial Statements as part of its Annual Financial Information filing by the date set forth in Section 2.1(b)(i), the Local Unit shall provide unaudited financial statements to the Dissemination Agent for filing with the MSRB through EMMA, and thereafter shall provide audited financial statements when and if available.

(iv) Any or all of the items that must be included in the Annual Financial Information may be incorporated by reference from other documents, including official statements delivered in connection with other financings issued on behalf of the Local Unit or related public entities, that are available to the public on the MSRB's Internet website or filed with the SEC. If the document incorporated by reference is a final official statement, it must be available from the MSRB through EMMA. The Local Unit shall clearly identify each such other document so incorporated by reference in the Annual Financial Information.

Section 2.2. Reporting of Disclosure Events. (a) The Authority shall provide in a timely manner not in excess of ten (10) Business Days after the occurrence of the event, to the Dissemination Agent for filing with the MSRB through EMMA, Notice of any of the following events with respect to the Bonds (each, a "Disclosure Event"):

(i) principal and interest payment delinquencies;

-5- (ii) non-payment related defaults, if material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on credit enhancements reflecting financial difficulties;

(v) substitution of credit or liquidity providers or their failure to perform;

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

(vii) modifications to the rights of Bondholders, if material;

(viii) Bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution or sale of property securing repayment of the Bonds, if material;

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar events of the Local Unit, which shall be considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Local Unit 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 Local Unit, 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 Local Unit;

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

(xiv) appointment of a successor or additional trustee, or the change of name of a trustee, if material.

The foregoing Disclosure Events are quoted from Rule 15c2-12. Some of such Disclosure Events may not be applicable to the Bonds.

(b) The Local Unit shall provide in a timely manner not in excess of ten (10) Business Days after the occurrence of the event, to the Dissemination Agent for filing with the MSRB through EMMA, Notice of any of the following Disclosure Events with respect to the Bonds:

-6- (i) release, substitution or sale of property securing repayment of the Bonds, if material;

(ii) rating changes;

(iii) bankruptcy, insolvency, receivership or similar events of the Local Unit, which shall be considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Local Unit 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 Local Unit, 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 Local Unit;

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

Section 2.3. Documents to be Provided in Electronic Format and Accompanied by Identifying Information. The Dissemination Agent, Local Unit and the Authority agree, as applicable, that the Annual Financial Information, each Disclosure Event Notice and each Notice pursuant to Section 2.1 and 2.2 hereof shall be provided to the MSRB in an electronic format as prescribed by the MSRB, and that all documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB.

Section 2.4. Responsibilities, Duties, Immunities and Liabilities of Dissemination Agent.

(a) If the Authority or Local Unit has determined it necessary to report the occurrence of a Disclosure Event, the Authority, the Local Unit or the Dissemination Agent (if it has received notice from the Authority or Local Unit of a Disclosure Event) shall in a timely manner not in excess of ten (10) Business Days after the occurrence of the event, file a Disclosure Event Notice of such occurrence with the MSRB in an electronic format as prescribed by the MSRB. The obligations of the Authority, Local Unit and/or the Dissemination Agent to provide the Notices to the MSRB under this Agreement are in addition to, and not in substitution of, any of the obligations of the Trustee to provide notices of events of default to Bondholders under the Resolution. The Authority, Local Unit and/or the Dissemination Agent shall file a copy of each Disclosure Event Notice with the Authority, Local Unit and the Trustee, for informational purposes only.

(b) If the Annual Financial Information is received by it, the Dissemination Agent shall file a written report with the Authority and Local Unit, as applicable, certifying that the Annual Financial Information has been provided to the MSRB pursuant to this Agreement and stating the date it was provided to the MSRB.

-7- (c) The Dissemination Agent has no power to enforce performance of this Agreement on the part of either the Authority or the Local Unit. The Dissemination Agent shall not be responsible in any manner for the content of any Notice or report prepared by the Authority or the Local Unit pursuant to this Agreement.

(d) The provisions of the Resolution affecting the responsibilities, duties, immunities and liabilities of the Trustee are each hereby made applicable to this Agreement as if the duties of the Dissemination Agent hereunder were (solely for this purpose) set forth in the Resolution.

Section 2.5. Appointment, Removal and Resignation of Dissemination Agent.

(a) The Authority or the Local Unit 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 and appoint a successor Dissemination Agent, such discharge to be effective on the date of the appointment of a successor Dissemination Agent. The Authority and the Local Unit hereby appoint U.S. Bank National Association as Dissemination Agent for the Bonds, and U.S. Bank National Association hereby accepts such appointment.

(b) The Dissemination Agent shall have only such duties as are specifically set forth in this Agreement.

(c) The Dissemination Agent, or any successor thereto, may at any time resign and be discharged of its duties and obligations hereunder by giving not less than thirty (30) days written Notice to the Authority and the Local Unit. Such resignation shall take effect on the date specified in such Notice.

-8- ARTICLE 3

DEFAULTS AND REMEDIES

Section 3.1. Disclosure Default. The occurrence and continuation of a failure by the Authority or the Local Unit, as applicable, to observe, perform or comply with any covenant, condition or agreement on its part to be observed or performed in this Agreement, and such failure shall remain uncured for a period of thirty (30) days after written Notice thereof has been given to the Authority or the Local Unit, as applicable, by the Trustee or any Bondholder, shall constitute a disclosure default hereunder.

Section 3.2 Remedies on Default.

(a) The Trustee (at the request of the Underwriter or the holders of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds, after provision of indemnity in accordance with the Resolution) shall, or any Bondholder, for the equal benefit and protection of all Bondholders similarly situated, may, take whatever action at law or in equity against the Authority or the Local Unit, as applicable, and any of the officers, agents and employees of the Authority or the Local Unit, as applicable, necessary or desirable to enforce the specific performance and observance of any obligation, agreement or covenant of the Authority or the Local Unit, as applicable, under this Agreement and may compel the Authority or the Local Unit, as applicable, or any such officers, agents or employees, except for the Dissemination Agent, to perform and carry out their duties under this Agreement; provided, that no person or entity shall be entitled to recover monetary damages hereunder under any circumstances.

(b) In case the Trustee or any Bondholder shall have proceeded to enforce its rights under this Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or any Bondholder, as the case may be, then and in every such case the Authority, the Local Unit, the Trustee and any Bondholder, as the case may be, shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Authority, the Local Unit, the Trustee and any Bondholder shall continue as though no such proceeding had been taken.

(c) A default under this Agreement shall not be deemed an event of default under the Resolution, and the sole remedy under this Agreement in the event of any failure by the Authority or the Local Unit to comply with this Agreement shall be as set forth in Section 3.2(a) of this Agreement.

-9- ARTICLE 4

MISCELLANEOUS

Section 4.1. Purposes of this Agreement. This Agreement is being executed and delivered by the Authority, the Local Unit and the Dissemination Agent for the benefit of the Bondholders and in order to assist the Underwriter in complying with clause (b)(5) of Rule 15c2-12.

Section 4.2. Third-Party Beneficiaries. Each Bondholder is hereby recognized as being a third- party beneficiary hereunder and each may enforce, for the equal benefit and protection of all Bondholders similarly situated, any such right, remedy or claim conferred, given or granted hereunder in favor of the Trustee.

Section 4.3 Additional Information. Nothing in this Agreement shall be deemed to prevent the Authority or the Local Unit from (a) disseminating any other information, using the means of dissemination set forth in this Agreement or any other means of communication, or (b) including any other information in the Annual Financial Information or in any Disclosure Event Notice in addition to that which is specifically required by this Agreement. If the Authority or the Local Unit, as applicable, chooses to include any information in the Annual Financial Information or in any Disclosure Event Notice in addition to that which is specifically required by this Agreement, the Authority or the Local Unit, as applicable, shall have no obligation under this Agreement to update such information or to include it in any future Annual Financial Information or in any future Disclosure Event Notice. The Authority or the Local Unit, as applicable, shall reimburse the Dissemination Agent for any expenses incurred by the Dissemination Agent in providing such additional information pursuant to this Section 4.3.

Section 4.4. Notices. All Notices required to be given or authorized to be given by any party pursuant to this Agreement shall be in writing and shall be sent by registered or certified mail (as well as by facsimile, in the case of the Dissemination Agent or the Trustee) to:

In the case of the Authority: In the case of the Local Unit:

The Parkin Authority of the City of Trenton City of Trenton 16 East Hanover Street 319 East State Street Trenton, New Jersey 08608 Trenton, New Jersey 08608 Attention: Chairman Attention: Chief Financial Officer Phone: (609) 393-3469 Phone: (609) 989-3036

In the case of the Dissemination Agent or the Trustee, addressed to it at its designated corporate trust office at:

U.S. Bank National Association 21 South Street, 3rd Floor Morristown, NJ 07960 Phone: (973) 898-7168

Section 4.5. Assignment. This Agreement may not be assigned by any party without the written consent of the others and, as a condition to any such assignment, only upon the assumption in writing of all of the obligations imposed upon such party by this Agreement.

-10- Section 4.6. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatsoever.

Section 4.7. Execution of Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. All parties hereto may sign the same counterpart or each party hereto may sign a separate counterpart.

Section 4.8. Amendments, Changes and Modifications.

(a) Except as otherwise provided in this Agreement, subsequent to the initial issuance of the Bonds and prior to their payment in full (or provision for payment thereof having been made in accordance with the provisions of the Resolution), this Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Trustee.

(b) Without the consent of any Bondholders, the Authority, the Local Unit and the Dissemination Agent may amend any provision of this Agreement if Bond Counsel to the Authority and Bond Counsel to the Local Unit issue opinions supporting a determination that:

(1) This Agreement, as amended, would have complied with the requirements of Rule 15c2-12 at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of Rule 15c2-12; and

(2) Such amendment does not materially impair the interests of the holders or beneficial owners of the Bonds.

(c) Upon entering into any amendment or modification required or permitted by this Agreement, the Authority or the Local Unit shall provide, or cause the Dissemination Agent to provide, to the MSRB through EMMA, Notice of any such amendment or modification.

(d) The Authority, the Local Unit and the Dissemination Agent shall be entitled to rely exclusively upon opinions of Bond Counsel to the Authority and Bond Counsel to the Local Unit when determining questions of materiality relating to any provision of this Agreement and Rule 15c2-12.

Section 4.9. Amendments Required by Rule 15c2-12. The Authority, the Local Unit and the Dissemination Agent each recognize that the provisions of this Agreement are intended to enable the Underwriter to comply with Rule 15c2-12. If, as a result of a change in Rule 15c2-12 or in the interpretation thereof, a change in this Agreement shall be permitted or necessary to assure continued compliance with Rule 15c2-12 and upon delivery by the Underwriter of an opinion of counsel nationally recognized as an expert in federal securities law acceptable to the Authority and the Local Unit to the effect that such amendments shall be permitted or necessary to assure continued compliance by the Underwriter with Rule 15c2-12 as so amended or interpreted, then the Authority, the Local Unit and the Dissemination Agent shall amend this Agreement to comply with and be bound by any such amendment hereto to the extent necessary or desirable to assure compliance with the provisions of Rule 15c2-12 and agree to provide written Notice of such amendment as required by Section 4.8(c) hereof.

Section 4.10. Governing Law. This Agreement shall be governed exclusively by and construed in accordance with the applicable laws of the State of New Jersey and the federal laws of the United States of America.

-11- Section 4.11. Termination of Authority's and Local Unit's Continuing Disclosure Obligations. The continuing obligation of the Authority and the Local Unit under Sections 2.1 and 2.2 hereof, as applicable, to provide the Annual Financial Information and any Disclosure Event Notice and to comply with the other requirements of this Agreement shall terminate if and when either (a) the Bonds are no longer Outstanding in accordance with the terms of the Resolution or (b) the Local Unit no longer remains an "obligated person" (as defined in Rule 15c2-12(f)(10)) with respect to the Bonds and, in either event, only after the Authority or the Local Unit provides, or causes the Dissemination Agent to provide, to the MSRB through EMMA, written Notice to such effect. This Agreement shall be in full force and effect from the date hereof and shall continue in effect so long as any Bonds remain Outstanding.

Section 4.12. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Authority, the Local Unit and the Dissemination Agent and their respective successors and assigns.

Section 4.13. No Personal Recourse. No personal recourse shall be had for any claim based on this Agreement against any member of the Authority or the Local Unit, or any officer or employee, past, present or future, or any successor body, as such, either directly or through the Authority, the Local Unit or any successor body, under any constitutional provision, statute or rule of law or by enforcement of any assessment or penalty or otherwise.

Section 4.14. Headings for Convenience Only. The descriptive headings in this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 4.15 Entire Agreement. This Agreement sets forth the entire understanding and agreement of the Authority, the Local Unit and the Dissemination Agent with respect to the matters herein contemplated, and no modification or amendment of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by the parties hereto.

-12- IN WITNESS WHEREOF, THE PARKING AUTHORITY OF THE CITY OF TRENTON, CITY OF TRENTON and U.S. BANK NATIONAL ASSOCIATION caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

PARKING AUTHOIRTY OF THE CITY OF TRENTON

By:______Andrew Worek Chairman

CITY OF TRENTON

By:______Janet Schoenhaar Chief Financial Officer

U.S. BANK NATIONAL ASSOCIATION, as Dissemination Agent

By:______Paul O’Brien Vice President

[Signature Page to Continuing Disclosure Agreement] [ THIS PAGE INTENTIONALLY LEFT BLANK ]

APPENDIX G

FORM OF LEGAL OPINION OF BOND COUNSEL

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September __, 2016

Parking Authority of the City of Trenton Trenton, New Jersey

Dear Authority Members:

We have acted as bond counsel to the Parking Authority of the City of Trenton, in the County of Mercer, New Jersey (“Authority”), a public body corporate and politic organized and existing under and by virtue of the laws of the State of New Jersey (the "State"), in connection with the authorization, sale and issuance of $3,735,000 principal amount of Parking Revenue Refunding Bonds (City Guaranteed) Series 2016A (Federally Taxable) (the “2016 Series A Bonds”) and $16,965,000 principal amount of Parking Revenue and Refunding Bonds (City Guaranteed) Series 2016B (the “2016 Series B Bonds” and, together with the 2016 Series A Bonds, the “Bonds”), consisting of $16,250,000 Parking Revenue Refunding Bonds (City Guaranteed) Series 2016 and $715,000 Parking Revenue Bonds (City Guaranteed) Series 2016.

The Bonds are being issued pursuant to the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948 of the State, as amended and supplemented (the "Act"), and a resolution of the Authority duly adopted June 15, 1999 entitled "Resolution Authorizing The Issuance Of Parking Revenue Bonds Of The Parking Authority Of The City of Trenton, In The County Of Mercer, New Jersey" (the "General Bond Resolution"), as amended and supplemented, including by a supplemental bond resolution adopted by the Authority on July 28, 2016 entitled “Supplemental Bond Resolution of the Parking Authority of the City of Trenton Supplementing the General Bond Resolution and Providing for the Issuance of Not to Exceed an Aggregate $20,000,000 Parking Revenue Refunding Bonds (City Guaranteed) and $750,000 Parking Revenue Bonds (City Guaranteed) and Determining Various Other Matters Related Thereto” (the “Supplemental Bond Resolution, and together with the General Bond Resolution, the “Bond Resolution”) and by Certificate of the Chairman of the Authority dated the date of sale of the Bonds (the "Award Certificate" and, together with the Bond Resolution, the "Resolution"). All capitalized terms which are used herein and are not defined herein shall have the meanings ascribed to such terms in the Resolution.

As the basis for the opinions that are set forth below, we have examined such matters of law, including the Act, such documents and such other statutes, resolutions, certificates and records of the Authority as we have considered necessary in order to enable us to express the opinions hereinafter set forth. As to matters of fact, we have relied upon the representations of the Authority, and, where we have deemed appropriate, representations or certifications of public officials. Further, in expressing such opinions, we have relied upon the genuineness, truthfulness and completeness of the resolutions, documents, certificates and records referred to above.

Based upon and subject to the foregoing, we are of the opinion that:

1. The Authority has been duly created and is validly existing under the provisions of the Constitution and statutes of the State of New Jersey, including the Act.

September __, 2016 Page 2

2. The Authority had and has the right and power under the Act to adopt the Bond Resolution and to execute the Award Certificate, and to authorize the issuance of the Bonds, and the Bond Resolution has been duly adopted by the Authority, the Award Certificate has been duly executed by the Chairman, and each is presently in full force and effect and is valid and binding upon the Authority and is enforceable in accordance with its terms, except insofar as the enforcement thereof may be limited by any applicable bankruptcy, moratorium or similar laws relating to the enforcement of creditors' rights, and no other authorization for the Resolution is required.

3. The Bonds have been duly authorized and issued by the Authority in accordance with law and in accordance with the terms of the Resolution, and are valid, binding, direct and general obligations of the Authority, are payable out of the Revenues of the Authority, and are enforceable in accordance with their terms and the terms of the Act and the Resolution, except insofar as the enforcement thereof may be limited by any applicable bankruptcy, moratorium or similar laws relating to the enforcement of creditors' rights. The Bonds are not a debt or liability of the State of New Jersey or of any county or municipality, except by the City to the extent provided in the Guaranty.

4. The Authority has covenanted to comply with any continuing requirements that may be necessary to preserve the exclusion from gross income for purposes of federal income taxation of interest on the 2016 Series B Bonds under the Internal Revenue Code of 1986, as amended (the "Code"). Failure to comply with certain requirements of the Code could cause interest on the 2016 Series B Bonds to be includable in gross income for federal income tax purposes retroactive to the date of issuance of the 2016 Series B Bonds. In our opinion, assuming continuing compliance by each of the Authority with its covenants, under current law, interest on the 2016 Series B Bonds is not includable in gross income for federal income tax purposes and is not an item of tax preference under Section 57 of the Code for purposes of computing the federal alternative minimum tax.

5. Under current law, interest on the Bonds and any gain on the sale thereof are not includable as gross income under the New Jersey Gross Income Tax Act.

We note, in connection with the opinions expressed herein, that the enforceability of rights or remedies with respect to the Bonds, the Resolution and the agreements contained therein are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, and by equitable principals, whether considered at law or in equity.

The above opinions are limited to and based upon the laws and judicial decisions of the State and the federal laws and judicial decisions of the United States of America as of the date hereof, and are subject to any amendment, repeal or other modification of the applicable laws or judicial decisions that served as the basis for our opinions or to any laws or judicial decisions hereafter enacted or rendered.

This opinion is being delivered to you at your request. Our engagement by you with respect to the opinions expressed herein does not require, and shall not be construed to constitute, a continuing obligation on our part to notify or otherwise inform you or the reliance parties hereof, if any, of the amendment, repeal or other modification of the applicable laws or September __, 2016 Page 3

judicial decisions that served as the basis for this opinion letter or of laws or judicial decisions hereafter enacted or rendered which impact on this opinion letter.

Very truly yours

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APPENDIX H

SPECIMEN BOND INSURANCE POLICY

[ THIS PAGE INTENTIONALLY LEFT BLANK ] MUNICIPAL BOND INSURANCE POLICY

ISSUER: Policy No: -N

BONDS: $ in aggregate principal amount of Effective Date: Premium: $

ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the Page 2 of 2 Policy No. -N

United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

AGM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to AGM and shall not be deemed received until received by both and (b) all payments required to be made by AGM under this Policy may be made directly by AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Insurer's Fiscal Agent is the agent of AGM only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of AGM to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy.

This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer.

ASSURED GUARANTY MUNICIPAL CORP.

By Authorized Officer

A subsidiary of Assured Guaranty Municipal Holdings Inc. 1633 Broadway, New York, N.Y. 10019 (212) 974-0100

Form 500NY (5/90)

APPENDIX I

DESCRIPTION OF BONDS TO BE REFUNDED

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Bonds to be Refunded

Parking Authority of the City of Trenton, Parking Revenue Refunding Bonds (City Guaranteed), Series 2006 (Federally Taxable)

Maturity Date Redemption Redemption (October 1) Principal Amount Interest Rate Date Price CUSIP 1 2026 $1,680,000 5.400% 10/27/2016 100.00% 895164FG1 2033 1,905,000 5.500 10/27/2016 100.00 895164FH9

Parking Authority of the City of Trenton, Parking Revenue Refunding Bonds (City Guaranteed), Series 2013A

Maturity Date Redemption Redemption (April 1) Principal Amount Interest Rate Date Price CUSIP 1 2017 $ 930,000 4.000% 10/27/2016 100.00% 895164GX3 2018 970,000 4.000 10/27/2016 100.00 895164GY1 2019 1,005,000 4.000 10/27/2016 100.00 895164GZ8 2020 1,050,000 4.000 10/27/2016 100.00 895164HA2 2021 1,090,000 4.000 10/27/2016 100.00 895164HB0 2022 1,130,000 4.000 10/27/2016 100.00 895164HC8 2023 1,180,000 2.750 10/27/2016 100.00 895164HD6 2024 1,210,000 3.000 10/27/2016 100.00 895164HE4 2025 1,250,000 3.000 10/27/2016 100.00 895164HF1 2026 1,290,000 3.000 10/27/2016 100.00 895164HG9 2027 1,325,000 3.125 10/27/2016 100.00 895164HH7 2028 1,365,000 3.250 10/27/2016 100.00 895164HJ3 2029 1,405,000 3.250 10/27/2016 100.00 895164HK0 2030 1,455,000 3.375 10/27/2016 100.00 895164HL8

1 The CUSIP numbers are being provided solely for the convenience of the holders of the respective bonds, and the Authority does not make any representation with respect to such numbers or undertake any responsibility for their accuracy.

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