NEW ISSUE Rating: Moody’s “Aa1”See RATING

In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law (i) assuming continuing compliance with certaincovenants and the accuracy of certain representations, interest on the Bonds is excluded from gross income for federal income taxpurposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the Bonds are exempt from all Ohio state and localtaxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the totalequity capital of financial institutions, and the net worth base of the corporate franchise tax. Interest on the Bonds may be subject tocertain federal taxes imposed only on certain corporations including the corporate alternative minimum tax on a portion of that interest.For a more complete discussion of the tax aspects, see TAX MATTERS.

$14,000,000CITY OF GROVE CITY, OHIO

GENERAL OBLIGATION (Limited Tax)LIBRARY CONSTRUCTION BONDS, SERIES 2015

Dated: Date of Issuance

The Bonds. The Bonds are unvoted general obligations of the City, issued to finance certain permanent improvements, asmore fully described under THE BONDS – AUTHORIZATION AND PURPOSE. Principal and interest on the Bonds,unless paid from other sources, are to be paid from the proceeds of the City’s levy of ad valorem property taxes, which taxesare within the ten-mill limitation imposed by Ohio law and within the four-mill limitation provided by the City’s Charter.

Book-Entry Only. The Bonds will be initially issued only as fully-registered bonds, one for each maturity, issuable under abook-entry system, registered initially in the name of The Depository Trust Company or its nominee (“DTC”). There will beno distribution of Bonds to the ultimate purchasers. The Bonds in certificated form as such will not be transferable orexchangeable, except for transfer to another nominee of DTC or as otherwise described in this Official Statement. SeeAppendix E.

Payment. Principal and interest will be payable to the registered owner (DTC), principal upon presentation and surrender atthe designated corporate trust office of The Huntington National Bank, in Columbus, Ohio (the “Bond Registrar”) andinterest transmitted by the Bond Registrar on each interest payment date (June 1 and December 1 of each year, beginningDecember 1, 2015) to the registered owner (DTC) as of the 15th day of the calendar month next preceding that interestpayment date.

PRINCIPAL MATURITY SCHEDULE(see inside cover)

Prior Redemption. Bonds maturing on or after December 1, 2026 are subject to optional redemption by the City prior tomaturity, beginning December 1, 2025, and Term Bonds are subject to mandatory redemption, as described in this OfficialStatement. See CERTAIN TERMS OF THE BONDS – Prior Redemption.

The Bonds are offered when, as and if issued, and accepted by Stifel, Nicolaus & Company, Incorporated (the“Underwriter”), subject to the opinion on certain legal matters relating to their issuance of Squire Patton Boggs (US) LLP,Bond Counsel to the City. PRISM Municipal Advisors, LLC has acted as Municipal Advisor to the City in connection withthe issuance of the Bonds. The Bonds are expected to be available for delivery to DTC or its agent on July 2, 2015.

This Official Statement has been prepared by the City in connection with its original offering for sale of the Bonds.The Cover includes certain information for quick reference only. It is not a summary of the Bond issue. Investors shouldread the entire Official Statement to obtain information as a basis for making informed investment judgments.

The date of this Official Statement is June 18, 2015, and the information herein speaks only as of that date.

PRINCIPAL MATURITY SCHEDULEON DECEMBER 1

$7,425,000 SERIAL BONDS

Year AmountInterest

Rate PriceCUSIP©(a)

No. 399532

2016 $300,000 1.500% 101.265% KP42017 300,000 1.500 101.309 KQ22018 300,000 1.500 100.665 KR02019 325,000 1.750 100.849 KS82020 325,000 2.000 101.285 KT62021 325,000 3.000 105.990 KU32022 325,000 4.000 111.886 KV12023 350,000 4.000 112.122 KW92024 365,000 4.000 111.887 KX72025 380,000 4.000 111.346 KY52026 395,000 3.000 99.615 KZ22027 405,000 4.000 107.218 LA62028 420,000 4.000 105.852 LB42029 440,000 4.000 104.953 LC22030 455,000 4.000 104.329 LD02031 475,000 4.000 103.798 LE82032 495,000 4.000 103.182 LF52033 515,000 3.500 96.953 LG32034 530,000 3.625 98.014 LH1

$2,970,000 3.875% TERM BONDS DUE 2039, Price 98.520% CUSIP©(a) No. 399532 LK4

$3,605,000 4.000% TERM BONDS DUE 2044, Price 98.972% CUSIP©(a) No. 399532 LJ7

____________________(a) Copyright 2015, CUSIP Global Services (see REGARDING THIS OFFICIAL STATEMENT).

CITY OF GROVE CITY, OHIO

CITY OFFICIALS

Richard L. “Ike” Stage, MayorCharles W. Boso, Jr., City AdministratorMichael A. Turner, Director of FinanceStephen J. Smith, Jr., Director of Law

City Council:

Steven M. BennettTed A. Berry, President

Jeffrey M. DavisMaria C. Klemack-McGraw

Laura Lanese

Tami K. Kelly, MMC, Clerk of Council

PROFESSIONAL SERVICES

Squire Patton Boggs (US) LLP, Bond Counsel

The Huntington National Bank, Bond Registrar

PRISM Municipal Advisors, LLC, Municipal Advisor

Stifel, Nicolaus & Company, Incorporated, Underwriter

(THIS PAGE IS INTENTIONALLY LEFT BLANK.)

REGARDING THIS OFFICIAL STATEMENT

This Official Statement does not constitute an offering of any security other than theoriginal offering of the Bonds identified on the Cover (as defined herein). No dealer, broker,sales person or other person has been authorized by the City to give any information or to makeany representation other than as contained in this Official Statement, and if given or made, suchother information or representation must not be relied upon as having been given or authorizedby the City. This Official Statement does not constitute an offer to sell or the solicitation of anoffer to buy, and there shall not be any sale of the Bonds by any person, in any jurisdiction inwhich it is unlawful to make that offer, solicitation or sale.

The information in this Official Statement is provided by the City in connection with theoriginal offering of the Bonds. Reliance should not be placed on any other information publiclyprovided, in any format including electronic, by the City for other purposes, including generalinformation provided to the public or to portions of the public. The information in this OfficialStatement is subject to change without notice. Neither the delivery of this Official Statement norany sale made under it shall, under any circumstances, give rise to any implication that there hasbeen no change in the affairs of the City since its date.

This Official Statement contains statements that the City believes may be “forward-looking statements.” Words such as “plan,” “estimate,” “project,” “budget,” “anticipate,”“expect,” “intend,” “believe” and similar terms are intended to identify forward-lookingstatements. The achievement of results or other expectations expressed or implied by suchforward-looking statements involves known and unknown risks, uncertainties and other factorsthat are difficult to predict, may be beyond the City’s control and could cause actual results,performance or achievements to be materially different from any results, performance orachievements expressed or implied by such forward-looking statements. The City undertakes noobligation, and does not plan, to issue any updates or revisions to such forward-lookingstatements.

UPON ISSUANCE, THE BONDS WILL NOT BE REGISTERED BY THE CITYUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIESLAW, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIESEXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANYOTHER FEDERAL, STATE OR OTHER GOVERNMENTAL ENTITY OR AGENCY WILLHAVE AT THE REQUEST OF THE CITY PASSED UPON THE ACCURACY ORADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED OR DISAPPROVED THEBONDS FOR SALE.

CUSIP is a registered trademark of the American Bankers Association. CUSIP GlobalServices is managed on behalf of the American Bankers Association by Standard & Poor’s.CUSIP data herein are provided by Standard & Poor’s, CUSIP Service Bureau, a division of TheMcGraw-Hill Companies, Inc. CUSIP numbers have been assigned by an independent companynot affiliated with the City and are included solely for the convenience of the holders of theBonds. The City, the Bond Counsel and the Underwriter are not responsible for the selection oruse of these CUSIP numbers and make no representation as to their correctness on the Bonds or

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the Cover or as indicated above. The CUSIP number for a specific maturity is subject to beingchanged after the issuance of the Bonds as a result of various subsequent actions and events.

The Ohio Municipal Advisory Council (“OMAC”) has requested that this paragraph beincluded in this Official Statement. Certain information contained in the Official Statement isattributed to OMAC. OMAC compiles information from official and other sources. OMACbelieves the information it compiles is accurate and reliable, but OMAC does not independentlyconfirm or verify the information and does not guaranty its accuracy. OMAC has not reviewedthis Official Statement to confirm that the information attributed to it is information provided byOMAC or for any other purpose.

In connection with this offering, the Underwriter may overallot or effect transactions thatstabilize or maintain the market price of the Bonds at a level above that which might otherwiseprevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.The Underwriter may offer and sell the Bonds to certain dealers and dealer banks and banksacting as agent at prices lower than the public offering prices stated on the Cover, which publicoffering prices may be changed from time to time by the Underwriter.

The Underwriter has provided the following sentence for inclusion in this OfficialStatement. The Underwriter has reviewed the information in this Official Statement inaccordance with, and as part of its responsibility to investors under the federal securities laws asapplied to the facts and circumstances of this transaction, but the Underwriter does not guarantythe accuracy or completeness of such information.

(THE REMAINING PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)

TABLE OF CONTENTSPage

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Introductory Statement................................................................................................................... 1The Bonds – Authorization and Purpose ....................................................................................... 3Certain Terms of the Bonds ........................................................................................................... 3

General; Book-Entry System ............................................................................................. 3Prior Redemption ............................................................................................................... 4

Mandatory Redemption ......................................................................................... 4Optional Redemption ............................................................................................. 4Selection of Bonds and Book-Entry Interests to be Redeemed ............................. 5Notice of Call for Redemption; Effect................................................................... 5

Security and Sources of Payment .................................................................................................. 6Basic Security .................................................................................................................... 6Additional Sources of Payment ......................................................................................... 6Enforcement of Rights and Remedies................................................................................ 7Bankruptcy......................................................................................................................... 7Refunding........................................................................................................................... 8

Litigation........................................................................................................................................ 8Opinion of Bond Counsel .............................................................................................................. 9Tax Matters .................................................................................................................................. 10

Risk of Future Legislative Changes and/or Court Decisions........................................... 11Original Issue Discount and Original Issue Premium...................................................... 12

Eligibility for Investment and as Public Money Security............................................................ 13Underwriting ................................................................................................................................ 13Rating .......................................................................................................................................... 14Transcript and Closing Certificates ............................................................................................. 14Continuing Disclosure Agreement............................................................................................... 14Municipal Advisor ....................................................................................................................... 15Bond Registrar ............................................................................................................................. 15The City ....................................................................................................................................... 15

General Information......................................................................................................... 15City Government.............................................................................................................. 17Employees........................................................................................................................ 19Retirement Expenses........................................................................................................ 20City Facilities; Insurance ................................................................................................. 21Economic and Demographic Information........................................................................ 22

Population ............................................................................................................ 22Industry and Commerce....................................................................................... 22

Economic Development................................................................................................... 22Employment and Income ..................................................................................... 24Housing and Building Permits ............................................................................. 27Utilities; Public Safety and Services.................................................................... 27

Economic Development Incentives ................................................................................. 28Joint Economic Development District ............................................................................. 28

Financial Matters ......................................................................................................................... 28Introduction...................................................................................................................... 28Budgeting, Property Tax Levy and Appropriations Procedures ...................................... 29Financial Reports and Audits........................................................................................... 30

TABLE OF CONTENTS(continued)

Page

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Investments ...................................................................................................................... 31Financial Outlook............................................................................................................. 31

General Fund................................................................................................................................ 32Ad Valorem Property Taxes ........................................................................................................ 32

Assessed Valuation .......................................................................................................... 32Overlapping Governmental Entities ................................................................................ 35Tax Rates ......................................................................................................................... 35

TAX TABLE A Overlapping Tax Rates ............................................................. 36TAX TABLE B City Tax Rates........................................................................... 37

Collections ....................................................................................................................... 38Special Assessments ........................................................................................................ 39Delinquencies................................................................................................................... 40

Municipal Income Tax................................................................................................................. 41State Local Government Funds.................................................................................................... 42Estate Taxes ................................................................................................................................. 42City Debt and Other Long-Term Obligations.............................................................................. 42

Security for General Obligation Debt; Bonds and BANs................................................ 43Statutory Direct Debt Limitations.................................................................................... 44Indirect Debt and Unvoted Property Tax Limitations ..................................................... 46Charter Millage Limitation .............................................................................................. 48Debt Outstanding ............................................................................................................. 48Bond Anticipation Notes.................................................................................................. 49Bond Retirement Fund..................................................................................................... 49Future Financings............................................................................................................. 49Long-Term Financial Obligations Other Than Bonds and Notes .................................... 49

Concluding Statement.................................................................................................................. 50

Debt TablesA: Principal Amounts of Outstanding Debt; Leeway for Additional

Debt Within Direct Debt Limitations ............................................................ DT-1B: Various City and Overlapping GO Debt Allocations (Principal

Amounts)........................................................................................................ DT-2C: Projected Debt Charges Requirements on City GO Debt.............................. DT-3D: Outstanding Bonds......................................................................................... DT-4

Appendix A: Comparative Cash-Basis Summary of General Fund Receipts and Expendituresfor Fiscal Years 2010 through 2014 and Budgeted Fiscal Year 2015

Appendix B: All-Funds Summaries for Fiscal Years 2013 and 2014 (Cash Basis)Appendix C: Basic Financial Statements from the City’s Financial Report for Fiscal Year 2013

(Audited)Appendix D: Proposed Text of Opinion of Bond CounselAppendix E: Book-Entry System; DTCAppendix F: Proposed Form of Continuing Disclosure AgreementAppendix G: Largest City Ad Valorem Property Tax Payers (Collection Years 2012-2013)

INTRODUCTORY STATEMENT

This Official Statement has been prepared by the City of Grove City, Ohio (the “City”),in connection with its original issuance and sale of the Bonds identified on the Cover (the“Bonds”). Certain information concerning the Bonds, including their authorization, purpose,terms and security and sources of payment and the City is provided in this Official Statement.

This Introductory Statement briefly describes certain information relating to the Bondsand supplements certain information on the Cover. It is not intended as a substitute for the moredetailed discussions in this Official Statement. Investors should read the entire OfficialStatement to obtain information as a basis for making informed investment judgments.

All financial and other information in this Official Statement has been provided by theCity from its records, except for information expressly attributed to other sources and except forcertain information on the Cover and under UNDERWRITING. The presentation ofinformation, including tables of receipts from taxes and other sources, is intended to show recenthistorical information, and is not intended to indicate future or continuing trends in the financialposition or other affairs of the City. No representation is made that past experience, as is shownby that financial and other information, will necessarily continue or otherwise be predictive offuture experience. See also REGARDING THIS OFFICIAL STATEMENT.

This Official Statement should be considered in its entirety and no one subject should beconsidered less important than another by reason of location in the text. Reference should bemade to laws, reports or documents referred to for more complete information regarding theircontents. References to provisions of Ohio law, including the Revised Code and the OhioConstitution, and of the City Charter (the “Charter”) are references to those current provisions.Those provisions may be amended, repealed or supplemented.

As used in this Official Statement:

“Beneficial Owner” means the owner of a book-entry interest in the Bonds, as definedin Appendix E.

“Council” means the City Council of the City.

“County” means the County of Franklin, Ohio.

“County Auditor” means the Auditor of the County.

“Cover” means the cover page and the inside cover page of this Official Statement.

“Debt charges” means the principal (including any mandatory sinking fund depositsand mandatory redemption payments) and interest payable on the obligations referredto as those payments come due and are payable; debt charges may also be referred toas “debt service.”

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“Fiscal Year” means the 12-month period ending December 31, and reference to aparticular Fiscal Year (such as “Fiscal Year 2015”) means the Fiscal Year ending onDecember 31 in that year.

“Revised Code” means the Ohio Revised Code.

“State” or “Ohio” means the State of Ohio.

“State Budget Act” means Amended Substitute House Bill No. 59, passed by theOhio General Assembly and signed by the Governor on June 30, 2013, providingState appropriations for its 2014-2015 biennium (the period from July 1, 2013through June 30, 2015) and enacting other statutory provisions.

The Bonds are issued by the City of Grove City, Ohio. They are authorized byChapter 133 of the Revised Code, the Charter and legislation passed by the Council. The Bondsare issued for the purpose of paying the costs of constructing a public library, together with allrelated appurtenances thereto. See THE BONDS – AUTHORIZATION AND PURPOSE.

The Bonds are unvoted general obligations of the City, the full faith and credit andgeneral property taxing power of which are pledged to the payment of debt charges. Unless paidfrom other sources, debt charges on the Bonds are to be paid from the proceeds of the City’s levyof ad valorem property taxes, which taxes are within the ten-mill limitation imposed by Ohio lawand the four-mill limitation imposed by the Charter. The City expects that the debt charges willbe paid from municipal income tax revenues. See THE BONDS – AUTHORIZATION ANDPURPOSE.

The Authorizing Legislation (see THE BONDS – AUTHORIZATION ANDPURPOSE) provides that the Bonds will be issued in the denomination of $5,000 or in wholemultiples of $5,000. The Bonds will be initially issued only as fully-registered bonds, one foreach maturity, issuable under a book-entry system and registered initially in the name of TheDepository Trust Company, New York, New York, or its nominee (DTC). See CERTAINTERMS OF THE BONDS – General; Book-Entry System and Appendix E.

Principal and interest will be payable to the registered owner (DTC). Principal will bepayable on presentation and surrender at the designated corporate trust office of the BondRegistrar. See BOND REGISTRAR. Interest will be transmitted by the Bond Registrar oneach interest payment date (June 1 and December 1, beginning December 1, 2015) to theregistered owner as of the 15th day of the calendar month next preceding that interest paymentdate.

The Bonds maturing on or after December 1, 2026 are subject to prior redemption on anydate, by and at the sole option of the City, in whole or in part as selected by the City (in wholemultiples of $5,000), on or after December 1, 2025, at a redemption price equal to 100% of theprincipal amount redeemed, plus interest accrued to the redemption date. Term Bonds aresubject to mandatory redemption, as described in this Official Statement. See CERTAINTERMS OF THE BONDS – Prior Redemption.

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The opinion as to the validity of the Bonds and the tax-exempt status of the interest onthe Bonds will be rendered by Squire Patton Boggs (US) LLP (“Bond Counsel”). SeeOPINION OF BOND COUNSEL, TAX MATTERS and Appendix D.

THE BONDS – AUTHORIZATION AND PURPOSE

The Bonds are to be issued pursuant to Chapter 133 of the Revised Code, the Charter andan ordinance passed by the Council, and a certificate of award provided for by that ordinance(collectively, the “Authorizing Legislation”).

The Bonds are being issued for the purpose of paying the costs of constructing a publiclibrary, together with all related appurtenances thereto (the “Project”).

Certain proceeds from the sale of the Bonds (which may include premium) will be usedby the Underwriter to provide for the payment of certain financing costs on behalf of the City.Any premium received by the City on the sale of the Bonds in excess of that necessary to paycosts of issuing the Bonds and any interest accrued on the Bonds will be deposited in the BondRetirement Fund. Moneys in that Fund are used to pay debt charges on City debt obligations.

CERTAIN TERMS OF THE BONDS

General; Book-Entry System

The Bonds will be dated the date of their issuance, will be payable in the principalamounts and on the dates and will bear interest (computed on the basis of a 360-day year andtwelve 30-day months) at the rates and be payable on the dates, at the place and in the manner,all as described on the Cover.

The Bond Registrar will act as the paying agent for the Bonds and keep all books andrecords necessary for registration, exchange and transfer of the Bonds. See BONDREGISTRAR.

The Bonds will be delivered in book-entry-only form and, when issued, registered in thename of The Depository Trust Company (“DTC”), New York, New York, or its nominee Cede &Co., which will act as securities depository for the Bonds. For discussion of the book-entrysystem and DTC and the replacement of Bonds in the event that the book-entry system isdiscontinued, see Appendix E.

(THIS SPACE INTENTIONALLY LEFT BLANK)

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Prior Redemption

The Bonds are subject to mandatory and optional redemption as follows.

Mandatory Redemption

The Bonds maturing on December 1, 2039 (the “2039 Term Bonds”) are subject tomandatory sinking fund redemption in part by lot pursuant to the terms of the mandatory sinkingfund redemption requirements of the Authorizing Legislation, at a redemption price equal to100% of the principal amount redeemed, plus interest accrued to the redemption date, onDecember 1 of the years shown in, and according to, the following schedule.

Year Amount

2035 $550,0002036 570,0002037 595,0002038 615,0002039(a) 640,000

____________________(a) The remaining principal balance is scheduled to be paid at the stated maturity of the 2039 Term Bonds.

The Bonds maturing on December 1, 2044 (the “2044 Term Bonds” and together with the2039 Term Bonds, the “Term Bonds”) are subject to mandatory sinking fund redemption in partby lot pursuant to the terms of the mandatory sinking fund redemption requirements of theAuthorizing Legislation, at a redemption price equal to 100% of the principal amount redeemed,plus interest accrued to the redemption date, on December 1 of the years shown in, and accordingto, the following schedule.

Year Amount

2040 $665,0002041 690,0002042 720,0002043 750,0002044(a) 780,000

____________________(a) The remaining principal balance is scheduled to be paid at the stated maturity of the 2044 Term Bonds.

Term Bonds redeemed by other than mandatory redemption, or purchased forcancellation, may be credited against the applicable mandatory redemption requirement for thecorresponding Term Bonds.

Optional Redemption

The Bonds maturing on or after December 1, 2026 are also subject to prior redemption,by and at the sole option of the City, in whole or in part as selected by the City (in whole

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multiples of $5,000), on any date on or after December 1, 2025, at a redemption price equal to100% of the principal amount redeemed, plus interest accrued to the redemption date.

Selection of Bonds and Book-Entry Interests to be Redeemed

If fewer than all outstanding Bonds are called for optional redemption at one time, theBonds to be called will be called as selected by, and selected in a manner as determined by, theCity.

If less than all of an outstanding Bond of one maturity under a book-entry system is to becalled for redemption (in the amount of $5,000 or any whole multiple), the Bond Registrar willgive notice of redemption only to DTC as registered owner. The selection of the book-entryinterests in that Bond to be redeemed is discussed below under CERTAIN TERMS OF THEBONDS – Prior Redemption – Notice of Call for Redemption; Effect.

If bond certificates are issued to the ultimate owners, and if fewer than all of the Bonds ofa single maturity are to be redeemed, the selection of Bonds (or portions of Bonds in the amountof $5,000 or any whole multiple) to be redeemed will be made by lot in a manner determined bythe Bond Registrar.

In the case of a partial redemption by lot when Bonds of denominations greater than$5,000 are then outstanding, each $5,000 unit of principal will be treated as if it were a separateBond of the denomination of $5,000.

Notice of Call for Redemption; Effect

The Bond Registrar is to cause notice of the call for redemption, identifying the Bonds orportions of Bonds to be redeemed, to be sent by first-class mail, at least 30 days prior to theredemption date, to the registered owner (initially, DTC) of each Bond to be redeemed at theaddress shown on the Register on the 15th day preceding that mailing. Any defect in the noticeor any failure to receive notice by mailing will not affect the validity of any proceedings for theredemption of any Bonds.

On the date designated for redemption, Bonds or portions of Bonds called for redemptionshall become due and payable. If the Bond Registrar then holds sufficient money for payment ofdebt charges payable on that redemption date, interest on each Bond (or portion of a Bond) socalled for redemption will cease to accrue on that date.

So long as all Bonds are held under a book-entry system by a securities depository (suchas DTC), a call notice is to be sent by the Bond Registrar only to the depository or its nominee.Selection of book-entry interests in the Bonds called, and giving notice of the call to the ownersof those interests called, is the sole responsibility of the depository and of its Direct Participantsand Indirect Participants. Any failure of the depository to advise any Direct Participant, or ofany Direct Participant or any Indirect Participant to notify the Beneficial Owners, of any suchnotice and in its content or effect will not affect the validity of any proceedings for theredemption of any Bonds or portions of Bonds. See Appendix E.

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SECURITY AND SOURCES OF PAYMENT

The Bonds will be unvoted general obligation debt of the City payable from the sourcesdescribed, subject to bankruptcy laws and other laws affecting creditors’ rights and to theexercise of judicial discretion.

Basic Security

The basic security for payment of the Bonds is the requirement that the City levyad valorem property taxes within the ten-mill limitation imposed by Ohio law and within thefour-mill limitation imposed by the Charter to pay debt charges on the Bonds. The Stateconstitution specifically prohibits a subdivision such as the City from incurring generalobligation indebtedness unless the authorizing legislation makes provision “for levying andcollecting annually by taxation an amount sufficient to pay” the debt charges on the bonds.(Ohio Constitution Article XII Section 11.)

The Ohio Supreme Court has stated:

“Section 11 of Article XII of the Constitution of Ohio imposes a mandatory dutyupon the State and its political subdivisions to pay the interest and principal oftheir indebtedness before provisions are to be made for current operatingexpenses.” State ex rel. Nat’l City Bank v. Bd. of Ed. of the Cleveland City SchoolDistrict, 52 Ohio St. 2d 81, 85 (1977).

Under State law, the levy for debt charges on unvoted general obligations of the City is tobe placed before and in preference to all other levies and for the full amount of those debtcharges. See the further discussions under AD VALOREM PROPERTY TAXES and CITYDEBT AND OTHER LONG-TERM OBLIGATIONS.

Ohio law requires the City to levy and collect that property tax to pay debt charges on theBonds as they come due, unless and to the extent those debt charges are paid from other sources,such as described below.

The Authorizing Legislation provides further security by making a pledge of the full faithand credit and the general property taxing power of the City for the payment of debt charges onthe Bonds as they come due. All funds of the City are included in that pledge, except thosespecifically limited to another use or prohibited from that use by the Ohio Constitution, or Ohioor federal law, or revenue bond trust agreements. Those exceptions include tax levies voted forspecific purposes or expressly pledged to certain obligations, special assessments pledged toparticular bonds or notes, and certain utility revenues and highway use receipts (limited by theOhio Constitution to highway-related purposes). A similar pledge is made in each ordinanceauthorizing voted or unvoted general obligation debt.

Additional Sources of Payment

The City has entered into a Development Agreement and a Lease/Purchase Agreementwith Southwest Public Library, a school district public library organized and existing underChapter 3375 of the Ohio Revised Code, which provide, among other terms, that the City will

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lease the Project to Southwest Public Library in consideration for annual lease payments of$300,000 (the “Annual Lease Payments”), and upon retirement of the Bonds, the City willconvey title in the Project to Southwest Public Library.

The Authorizing Legislation also contains specific covenants that, unless paid from othersources including but not limited to the Annual Lease Payments, debt charges will be paid frommunicipal income taxes, in accordance with Section 133.05(B)(7) of the Revised Code. SeeDebt Tables A and C. Those include covenants to appropriate annually from lawfully availablemunicipal income taxes, and to continue to levy and collect those income taxes, in amountsnecessary to meet the debt charges on the Bonds. See MUNICIPAL INCOME TAX.

As contemplated in the Authorizing Legislation, the City expects that the debt charges onthe Bonds will in fact be paid, to the extent available, from municipal income taxes of the City.

Enforcement of Rights and Remedies

In addition to the right of individual bondholders to sue upon their particular Bonds, Ohiolaw authorizes the holders of not less than 10% in principal amount of the outstanding Bonds,whether or not then due and payable or reduced to judgment, to bring mandamus or other actionsto enforce all contractual or other rights of the bondholders, including the right to require theCity to assess, levy, charge, collect and apply the unvoted property taxes and other pledgedreceipts to pay debt charges, and to perform its duties under law. Those bondholders may, in thecase of any default in payment of debt charges bring action to require the City to account as if itwere the trustee of an express trust for the bondholders or to enjoin any acts that may beunlawful or in violation of bondholder rights. See also Appendix E.

The State has pledged to and agreed with holders of securities such as the Bonds that

“…the State will not, by enacting any law or adopting any rule, repeal, revoke,repudiate, limit, alter, stay, suspend, or otherwise reduce, rescind, or impair thepower or duty of a subdivision to exercise, perform, carry out, and fulfill itsresponsibilities or covenants under this [Chapter 133, the State’s Uniform PublicSecurities Law] or legislation or agreements as to its Chapter 133. securities,including a credit enhancement facility, passed or entered into pursuant to thischapter, or repeal, revoke, repudiate, limit, alter, stay, suspend, or otherwisereduce, rescind, or impair the rights and remedies of any such holders fully toenforce such responsibilities, covenants, and agreements or to enforce the pledgeand agreement of the State contained in this division, or otherwise exercise anysovereign power materially impairing or materially inconsistent with theprovisions of such legislation, covenants, and agreements.” (Section 133.25(D) ofthe Ohio Revised Code.)

Bankruptcy

Federal and State laws provide procedures for the adjustment of indebtedness of politicalsubdivisions, such as the City. Chapter 9 of the U.S. Bankruptcy Code would permit the City tomake such an adjustment if (i) it were “insolvent” (i.e., the City was not paying its debt chargesas they came due or it was unable to pay those debt charges as they became due), (ii) it met

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certain other criteria (e.g., having negotiated in good faith with its creditors and failed to reachagreement or such negotiation was impractical because of time restrictions, the number ofcreditors or other reasons) and (iii) it were authorized under State law (by legislation or by agovernmental officer) to seek relief under Chapter 9. The State’s Uniform Public Securities Lawprovides that the City or any other subdivision must obtain the approval of the State TaxCommissioner in order to file a bankruptcy petition stating that it is insolvent and “that it desiresto effect a plan for the composition or adjustment of its debts and to take such furtherproceedings” under the Bankruptcy Code. That law also states:

“No taxing subdivision shall be permitted, in availing itself of such acts ofcongress [the Bankruptcy Code], to scale down, cut down, or reduce theprincipal sum of its securities, except that interest thereon may be reducedin whole or in part.”

The County may also initiate proceedings under the Bankruptcy Code. Because itcollects, distributes or otherwise provides revenues to the City, the City’s financial conditioncould be affected by such an action.

Refunding

State law authorizes the refunding and advance refunding of all or a portion of the Bonds.If the City places in escrow either money or direct obligations of, or obligations guaranteed as topayment by, the United States, or a combination of both, that with investment income thereonwill be sufficient for the payment of debt charges on the refunded Bonds, those Bonds will nolonger be considered to be outstanding. They will also not be considered in determining anydirect or indirect limitation on City indebtedness, and the levy of taxes to pay debt charges onthem will not be required. For this purpose, direct obligations of or obligations guaranteed bythe United States include rights to receive payments or portions of payments of the principal ofor interest or other investment income on (i) those U.S. obligations and (ii) other obligationsfully secured as to payment by those U.S. obligations and the interest or other investment incomeon those obligations.

LITIGATION

To the knowledge of the appropriate City officials, no litigation or administrative actionor proceeding is pending, restraining or enjoining, or seeking to restrain or enjoin, the issuanceand delivery of the Bonds, or the levy and collection of taxes to pay the debt charges on theBonds, or contesting or questioning the proceedings and authority under which the Bonds havebeen authorized and are to be issued, sold, signed or delivered, or the validity of the Bonds. Nopetitions for referendum with respect to the Authorizing Legislation or any other measureauthorizing the payment of or security for the Bonds, or the carrying out of the governmentpurposes to which the Bond proceeds are to be applied, and no petitions seeking to initiate anymeasure affecting the same or the proceedings therefor, have been filed. The City will deliver tothe Underwriter a certificate to that effect at the time of original delivery of the Bonds to theUnderwriter.

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The City is a party to various legal proceedings seeking damages or injunctive or otherrelief and generally incidental to its operations. These proceedings are unrelated to the Bonds orthe security for the Bonds, or the permanent improvements being financed. The ultimatedisposition of these proceedings is not now determinable, but will not, in the opinion of theDirector of Law, have a material adverse effect on the Bonds, the security for the Bonds, or thoseimprovements or the City’s operating revenues.

Under current Ohio law, City money, accounts and investments are not subject toattachment to satisfy tort judgments in State courts against the City.

See also THE CITY – City Facilities; Insurance.

OPINION OF BOND COUNSEL

Certain legal matters incident to the issuance of the Bonds and with regard to thetax-exempt status of the interest on the Bonds (see TAX MATTERS) are subject to the opinionof Squire Patton Boggs (US) LLP, Bond Counsel to the City. The signed legal opinion of BondCounsel, substantially in the form attached hereto as Appendix D, dated and premised on law ineffect on the date of issuance of the Bonds, will be delivered on the date of issuance of theBonds. The text of the opinion to be delivered may vary from the text as set forth inAppendix D if necessary to reflect facts and law on the date of delivery. The opinion will speakonly as of its date, and subsequent distribution of it by recirculation of this Official Statement orotherwise shall create no implication that Bond Counsel has reviewed or expresses any opinionconcerning any of the matters referred to in the opinion subsequent to its date.

The opinion of Bond Counsel and any other legal opinions and letters of counsel to bedelivered concurrently with the delivery of the Bonds express the professional judgment of theattorneys rendering the opinions or advice regarding the legal issues and other matters expresslyaddressed therein. By rendering a legal opinion or advice, the giver of such opinion or advicedoes not become an insurer or guarantor of the result indicated by that opinion, or the transactionon which the opinion or advice is rendered, or of the future performance of parties to thetransaction. Nor does the rendering of an opinion guarantee the outcome of any legal disputethat may arise out of the transaction.

Bond Counsel has assisted in drafting those portions of this Official Statement under thecaptions CERTAIN TERMS OF THE BONDS (excluding the information concerning thebook-entry system there and in Appendix E), SECURITY AND SOURCES OF PAYMENTand TAX MATTERS. Bond Counsel and others, including the Underwriter and the MunicipalAdvisor, have assisted the City with its preparation of certain other portions of this OfficialStatement. Bond Counsel and those other parties however, have not been engaged to, and willnot, independently confirm or verify that information or any other information provided by theCity or others, and will not express an opinion as to the accuracy, completeness or fairness ofany such information or any other reports, financial information, offering or disclosuredocuments or other information pertaining to the Bonds that may be prepared or made availableby the City or others to potential or actual purchasers of the Bonds, to owners of the Bonds,including Beneficial Owners, or to others.

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In addition to rendering its opinion, Bond Counsel will assist in the preparation of andadvise the City concerning documents for the bond transcript. The City has also retained thelegal services of that law firm from time to time as special counsel in connection with mattersthat do not relate to City financings. Squire Patton Boggs (US) LLP also has served as bondcounsel for one or more of the political subdivisions that the City territorially overlaps.

TAX MATTERS

In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel to the City, underexisting law: (i) interest on the Bonds is excluded from gross income for federal income taxpurposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), andis not an item of tax preference for purposes of the federal alternative minimum tax imposed onindividuals and corporations; and (ii) interest on, and any profit made on the sale, exchange orother disposition of, the Bonds are exempt from all Ohio state and local taxation, except theestate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied onthe basis of the total equity capital of financial institutions, and the net worth base of thecorporate franchise tax. Bond Counsel expresses no opinion as to any other tax consequencesregarding the Bonds.

The opinion on tax matters will be based on and will assume the accuracy of certainrepresentations and certifications, and continuing compliance with certain covenants, of the Citycontained in the transcript of proceedings and that are intended to evidence and assure theforegoing, including that the Bonds are and will remain obligations the interest on which isexcluded from gross income for federal income tax purposes. Bond Counsel will notindependently verify the accuracy of the City’s certifications and representations or thecontinuing compliance with the City’s covenants.

The opinion of Bond Counsel is based on current legal authority and covers certainmatters not directly addressed by such authority. It represents Bond Counsel’s legal judgment asto exclusion of interest on the Bonds from gross income for federal income tax purposes but isnot a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service(“IRS”) or any court. Bond Counsel expresses no opinion about (i) the effect of future changesin the Code and the applicable regulations under the Code or (ii) the interpretation and theenforcement of the Code or those regulations by the IRS.

The Code prescribes a number of qualifications and conditions for the interest on stateand local government obligations to be and to remain excluded from gross income for federalincome tax purposes, some of which require future or continued compliance after issuance of theobligations. Noncompliance with these requirements by the City may cause loss of such statusand result in the interest on the Bonds being included in gross income for federal income taxpurposes retroactively to the date of issuance of the Bonds. The City has covenanted to take theactions required of it for the interest on the Bonds to be and to remain excluded from grossincome for federal income tax purposes, and not to take any actions that would adversely affectthat exclusion. After the date of issuance of the Bonds, Bond Counsel will not undertake todetermine (or to so inform any person) whether any actions taken or not taken, or any eventsoccurring or not occurring, or any other matters coming to Bond Counsel’s attention, may

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adversely affect the exclusion from gross income for federal income tax purposes of interest onthe Bonds or the market value of the Bonds.

A portion of the interest on the Bonds earned by certain corporations may be subject to afederal corporate alternative minimum tax. In addition, interest on the Bonds may be subject to afederal branch profits tax imposed on certain foreign corporations doing business in the UnitedStates and to a federal tax imposed on excess net passive income of certain S corporations.Under the Code, the exclusion of interest from gross income for federal income tax purposesmay have certain adverse federal income tax consequences on items of income, deduction orcredit for certain taxpayers, including financial institutions, certain insurance companies,recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur orcontinue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwiseeligible for the earned income tax credit. The applicability and extent of these and other taxconsequences will depend upon the particular tax status or other tax items of the owner of theBonds. Bond Counsel will express no opinion regarding those consequences.

Payments of interest on tax-exempt obligations, including the Bonds, are generallysubject to IRS Form 1099-INT information reporting requirements. If a Bond owner is subject tobackup withholding under those requirements, then payments of interest will also be subject tobackup withholding. Those requirements do not affect the exclusion of such interest from grossincome for federal income tax purposes.

Bond Counsel’s engagement with respect to the Bonds ends with the issuance of theBonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or theowners of the Bonds regarding the tax status of interest thereon in the event of an auditexamination by the IRS. The IRS has a program to audit tax-exempt obligations to determinewhether the interest thereon is includible in gross income for federal income tax purposes. If theIRS does audit the Bonds, under current IRS procedures, the IRS will treat the City as thetaxpayer and the Beneficial Owners of the Bonds will have only limited rights, if any, to obtainand participate in judicial review of such audit. Any action of the IRS, including but not limitedto selection of the Bonds for audit, or the course or result of such audit, or an audit of otherobligations presenting similar tax issues, may affect the market value of the Bonds.

Prospective purchasers of the Bonds upon their original issuance at prices other than therespective prices indicated on the Cover, and prospective purchasers of the Bonds at other thantheir original issuance, should consult their own tax advisers regarding other tax considerationssuch as the consequences of market discount, as to all of which Bond Counsel expresses noopinion.

Risk of Future Legislative Changes and/or Court Decisions

Legislation affecting tax-exempt obligations is regularly considered by the United StatesCongress and may also be considered by the State legislature. Court proceedings may also befiled, the outcome of which could modify the tax treatment of obligations such as the Bonds.There can be no assurance that legislation enacted or proposed, or actions by a court, after thedate of issuance of the Bonds will not have an adverse effect on the tax status of interest or otherincome on the Bonds or the market value or marketability of the Bonds. These adverse effects

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could result, for example, from changes to federal or state income tax rates, changes in thestructure of federal or state income taxes (including replacement with another type of tax), orrepeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross incomefor federal or state income tax purposes for all or certain taxpayers.

For example, recent presidential and legislative proposals would eliminate, reduce orotherwise alter the tax benefits currently provided to certain owners of state and localgovernment bonds, including proposals that would result in additional federal income tax ontaxpayers that own tax-exempt obligations if their incomes exceed certain thresholds. Investorsin the Bonds should be aware that any such future legislative actions (including federal incometax reform) may retroactively change the treatment of all or a portion of the interest on the Bondsfor federal income tax purposes for all or certain taxpayers. In such event, the market value ofthe Bonds may be adversely affected and the ability of holders to sell their Bonds in thesecondary market may be reduced. The Bonds are not subject to special mandatory redemption,and the interest rates on the Bonds are not subject to adjustment in the event of any such change.

Investors should consult their own financial and tax advisers to analyze the importance ofthese risks.

Original Issue Discount and Original Issue Premium

Certain of the Bonds (“Discount Bonds”) as indicated on the Cover were offered and soldto the public at an original issue discount (“OID”). OID is the excess of the stated redemptionprice at maturity (the principal amount) over the “issue price” of a Discount Bond. The issueprice of a Discount Bond is the initial offering price to the public (other than to bond houses,brokers or similar persons acting in the capacity of underwriters or wholesalers) at which asubstantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering.For federal income tax purposes, OID accrues to the owner of a Discount Bond over the periodto maturity based on the constant yield method, compounded semiannually (or over a shorterpermitted compounding interval selected by the owner). The portion of OID that accrues duringthe period of ownership of a Discount Bond (i) is interest excluded from the owner’s grossincome for federal income tax purposes to the same extent, and subject to the sameconsiderations discussed above, as other interest on the Bonds, and (ii) is added to the owner’stax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or otherdisposition of that Discount Bond. The amount of OID that accrues each year to a corporateowner of a Discount Bond is taken into account in computing the corporation’s liability forfederal alternative minimum tax. A purchaser of a Discount Bond in the initial public offering atthe price for that Discount Bond stated on the Cover who holds that Discount Bond to maturitywill realize no gain or loss upon the retirement of that Discount Bond.

Certain of the Bonds (“Premium Bonds”) as indicated on the Cover were offered and soldto the public at a price in excess of their stated redemption price at maturity (the principalamount). That excess constitutes bond premium. For federal income tax purposes, bondpremium is amortized over the period to maturity of a Premium Bond, based on the yield tomaturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its statedmaturity, the amortization period and yield may be required to be determined on the basis of anearlier call date that results in the lowest yield on that Premium Bond), compounded

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semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond.For purposes of determining the owner’s gain or loss on the sale, redemption (includingredemption at maturity) or other disposition of a Premium Bond, the owner’s tax basis in thePremium Bond is reduced by the amount of bond premium that is amortized during the period ofownership. As a result, an owner may realize taxable gain for federal income tax purposes fromthe sale or other disposition of a Premium Bond for an amount equal to or less than the amountpaid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial publicoffering at the price for that Premium Bond stated on the Cover who holds that Premium Bond tomaturity (or, in the case of a callable Premium Bond, to its earlier call date that results in thelowest yield on that Premium Bond) will realize no gain or loss upon the retirement of thatPremium Bond.

Owners of Discount and Premium Bonds should consult their own tax advisers as tothe determination for federal income tax purposes of the amount of OID or bond premiumproperly accruable or amortizable in any period with respect to the Discount or PremiumBonds and as to other federal tax consequences and the treatment of OID and bond premiumfor purposes of state and local taxes on, or based on, income.

ELIGIBILITY FOR INVESTMENT AND AS PUBLIC MONEY SECURITY

To the extent that the matter as to the particular investor is governed by Ohio law, andsubject to any applicable limitations under other provisions of Ohio law, the Bonds are lawfulinvestments for banks, savings and loan associations, credit union share guaranty corporations,trust companies, trustees, fiduciaries, insurance companies (including domestic for life anddomestic not for life), trustees or other officers having charge of sinking and bond retirement orother funds of the State and State subdivisions and taxing districts, the Commissioners of theSinking Fund, the Administrator of Workers’ Compensation, and State retirement systems(Teachers, Public Employees, Public School Employees, and Police and Fire), notwithstandingany other provisions of the Revised Code or rules adopted pursuant to those provisions by anyState agency with respect to investments by them.

The Bonds are acceptable under Ohio law as security for the repayment of the deposit ofpublic money.

Beneficial Owners of the Bonds should make their own determination as to such mattersas legality of investment in or pledgability of book-entry interests.

UNDERWRITING

The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the“Underwriter”), at a price of $14,148,852.70, plus any interest accrued on the Bonds, resulting ina gross underwriting spread of $75,165.00 from the public offering prices of the Bonds set forthon the Cover (the “Offering Prices”). In its bond purchase agreement with the City, theUnderwriter has agreed to pay certain costs of issuance of the Bonds on behalf of the City. TheUnderwriter has provided the information in this Official Statement pertaining to the OfferingPrices and to the offering of the Bonds in the seventh paragraph of REGARDING THISOFFICIAL STATEMENT. As noted in that paragraph, the Underwriter may offer and sell the

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Bonds to certain dealers (including dealers depositing into investment trusts) and others at priceslower than the Offering Prices. The Offering Prices may be changed after the initial offering bythe Underwriter. The purchase of the Bonds by the Underwriter is subject to certain conditionsand requires that the Underwriter will purchase all of the Bonds, if any are purchased.

RATING

The Bonds have been rated “Aa1” by Moody’s Investors Service, Inc. The ratingassigned is shown on the Cover. No application for a rating has been made by the City to anyother rating service.

The rating reflects only the views of the rating service, and any explanation of themeaning or significance of the rating may only be obtained from the rating service. The Cityfurnished to the rating service certain information and materials, some of which may not havebeen included in this Official Statement, relating to the Bonds and the City. Generally, ratingservices base their ratings on such information and materials and on their own investigation,studies and assumptions.

There can be no assurance that a rating when assigned will continue for any given periodof time or that it will not be lowered or withdrawn entirely by a rating service if in its judgmentcircumstances so warrant. Any lowering or withdrawal of a rating may have an adverse effect onthe marketability or market value of the Bonds.

The City expects to furnish the rating service with information and materials that may berequested. The City, however, assumes no obligation to furnish requested information andmaterials, and may issue debt for which a rating is not requested. Failure to furnish requestedinformation and materials, or the issuance of debt for which a rating is not requested, may resultin the suspension or withdrawal of a rating on the Bonds.

TRANSCRIPT AND CLOSING CERTIFICATES

A complete transcript of proceedings and a certificate (described under LITIGATION)relating to litigation will be delivered by the City when the Bonds are delivered by the City to theUnderwriter. The City at that time will also provide to the Underwriter a certificate, signed bythe City officials who sign this Official Statement and addressed to the Underwriter, relating tothe accuracy and completeness of this Official Statement and to its being a “final officialstatement” in the judgment of the City for purposes of SEC Rule 15c2-12(b)(3).

CONTINUING DISCLOSURE AGREEMENT

The City has agreed, for the benefit of the holders and Beneficial Owners from time totime of the Bonds, in accordance with SEC Rule 15c2-12 (the “Rule”), to provide or cause to beprovided to the Municipal Securities Rulemaking Board such annual financial information andoperating data, audited financial statements and notices of the occurrence of certain events insuch manner as may be required for purposes of paragraph (b)(5)(i) of the Rule (the “ContinuingDisclosure Agreement”). See Appendix F for the proposed form of the Continuing DisclosureAgreement. The foregoing information, data and notices can be obtained from Michael A.

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Turner, Director of Finance, City of Grove City, Ohio (telephone (614) 277-3026; emailmturner@grovecityohio.gov).

The performance by the City of the Continuing Disclosure Agreement will be subject tothe annual appropriation by the City of any funds that may be necessary to perform it. TheContinuing Disclosure Agreement will remain in effect only for such period that the Bonds areoutstanding in accordance with their terms and the City remains an obligated person with respectto the Bonds within the meaning of the Rule.

Within the last five years, the City has complied in all material respects with priorcontinuing disclosure agreements entered into pursuant to the Rule. On August 30, 2013, theCity filed a Notice of Failure to Timely File Annual Information for $8,730,000 Pinnacle ClubDrive Construction and Improvement Bonds, Series 2006 and $7,585,000 S.R. 665 Constructionand Improvement Bonds, Series 2009. For both issues, fiscal years 2010 (due September 1,2011) and 2011 (due September 1, 2012) were not filed until September 27, 2011 andSeptember 19, 2012, respectively. Finally, the City’s Fiscal Year 2012 audited financialstatements, which were released on July 9, 2013, were filed on December 10, 2013. In its annualfinancial information filings for fiscal years ending December 31, 2012 and December 31, 2013,the City did not include the list of largest City ad valorem property tax payers in such filings (seeAppendix G).

MUNICIPAL ADVISOR

The City has retained PRISM Municipal Advisors, LLC, in Powell, Ohio (the “MunicipalAdvisor”), to provide financial advice in connection with the City’s issuance of the Bonds. TheMunicipal Advisor is not obligated to undertake, and has not undertaken to make, an independentverification or to assume responsibility for the accuracy, completeness or fairness of theinformation contained in this Official Statement. The Municipal Advisor is an independentadvisory firm and is not engaged in the business of underwriting, trading or distributingmunicipal securities or other public securities.

BOND REGISTRAR

The Huntington National Bank will act as bond registrar, paying agent, transfer agent andauthenticating agent for the Bonds (the “Bond Registrar”). The Bond Registrar will keep allbooks and records necessary for registration, exchange and transfer of the Bonds, in accordancewith the terms of agreements between it and the City. The Bond Registrar is a national bankingassociation. It has designated its Columbus, Ohio corporate trust office in connection with theBonds.

THE CITY

General Information

The City is located in the County in central Ohio, approximately seven miles southwestof the City of Columbus. It was incorporated as a village in 1852, and became a city in 1959.

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In the 2010 Census classifications, the City is placed in the Columbus MetropolitanStatistical Area (“MSA”), comprised of the counties of Delaware, Fairfield, Franklin, Licking,Madison, Morrow, Pickaway and Union.

The City’s 2010 population of 35,575 placed it as the 5th largest city in the County and35th largest in the State. See THE CITY – Economic and Demographic Information –Population.

The City’s area is approximately 17 square miles. Land use, as measured by the assessedvalue of real property, is presented in the following table.

Percent of AssessedValuation of Real Property

Residential 69.33%Commercial/Industrial 28.98Public Utility 1.52Agricultural 0.17Undeveloped (a)

____________________(a) Included in above categories.

Source: County Auditor.

The City is served by diversified transportation facilities, including I-270, along theCity’s northern corporate boundary, I-71, along the City’s easterly corporate boundary and I-70,just north of the City’s corporate boundary, providing convenience to motor freight service. Railservice is provided by the Indiana and Ohio Railroad, which leases and operates an existing CSXtrack. Passenger air service is provided by Port Columbus International Airport which isserviced by international, national and regional air carriers, and is located approximately15 miles northeast from the City. Air cargo services and limited passenger service is available atRickenbacker International Airport. Private air service is available at Bolton Field. Air freightservices are also available at Port Columbus. Public mass transit for the area is provided by theCentral Ohio Transit Authority.

Banking and financial services are provided to the City area by offices of commercialbanks and savings banks, all of which have their principal offices elsewhere.

One daily newspaper, The Columbus Dispatch, and one weekly newspaper, The GroveCity Record, serve the City. The City is within the broadcast area of eight television stations and27 AM and FM radio stations. Multichannel cable TV service, including educational,governmental and public access channels, is provided through several cable companies.

The educational systems and institutions discussed below operate independently of theCity government. The City is not involved in the operation or financial matters of anyeducational system or institution.

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Within commuting distance are several public and private two-year and four-yearcolleges and universities providing a wide range of educational facilities and opportunities.These include The Ohio State University, Capital University, Otterbein College, DenisonUniversity, Columbus State Community College, Ohio Dominican College, DeVry University,Columbus College of Art and Design and Franklin University.

Four major medical facilities, Mt. Carmel West, Grant Medical Center, RiversideMethodist Hospital and The Ohio State Medical Center are located just north of the City.Residents are also served by four other hospitals in the Columbus Metropolitan Area.

Mount Carmel Health Systems opened a 24-hour emergency facility in the City onJanuary 21, 2014. This facility is located on a 112-acre parcel along with medical officebuildings. On March 12, 2015, Mount Carmel Health Systems announced the decision to moveits inpatient hospital and 1,500 jobs to Grove City. The move, to take place in 2018, is part of a$355 million investment in Grove City to build a 210 bed hospital with seven floors of clinicalservices.

Grove City Parks and Recreation offers hundreds of classes, programs and events for allages and maintains three signature parks, a destination garden, a senior center, a family waterpark, a state-of-the-art skate park, eight playgrounds and numerous ball fields and bike paths.Additionally, a variety of adult and youth sports, a before-and-after-school childcare programand a preschool program exist to benefit the community.

The City is served by Southwest Public Library, which provides service for 127 squaremiles in the County, more than 23% of the County’s total land area. The Southwest PublicLibrary system currently has two facilities to provide for a service population of over 130,000.The Grove City location is located at 3359 Park Street in the City, and the Westland Arealocation is located in the Lincoln Village Plaza at 4740 West Broad Street in the City ofColumbus. The Grove City location has 16,000 square feet of public service space with another15,000 square feet devoted to technical and administrative services. The Westland Area locationhas 25,000 square feet of public service space.

As described above, Southwest Public Library has entered into various agreements withthe City to provide for the financing and construction of a new 48,000 square foot library to beconstructed within the City. The cost of constructing the new library will be paid for with aportion of the proceeds of the Bonds and is expected to open in 2016.

City Government

The City operates under and is governed by its Charter, adopted by the voters in 1958 andwhich has been and may be amended by the voters from time to time. The Charter provides for aStrong Mayor-Council-Administrative Assistant plan of government. The City is also subject tosome general laws applicable to all cities. Under the Ohio Constitution the City may exercise allpowers of local self-government, and police powers to the extent not in conflict with applicablegeneral laws.

Legislative authority is vested in a five-member Council, of whom one is elected at-largeserving a two-year term and four elected from wards, for four-year overlapping terms, with two

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members elected every two years. The presiding officer is the President, who is elected by theCouncil. The Council fixes compensation of City officials and employees, and enacts ordinancesand resolutions relating to the City services, tax levies, appropriating and borrowing money,licensing and regulating businesses and trades, and other municipal purposes. The Charterestablishes certain administrative departments; the Council may establish divisions of thosedepartments and may establish additional departments.

The City’s chief executive and administrative officer is the Mayor, who is elected by thevoters specifically to that office for a four-year term.

The Mayor appoints the Administrative Assistant (or as otherwise referred to herein asthe City Administrator), who is the chief administrator of the City and is responsible for the day-to-day operations, including the appointment, suspension and discharge of City employeeswithin the Charter provisions as well as subsequent ordinances and resolutions by the City.

The Mayor may veto any legislation passed by the Council. A veto may be overriddenby a four-fifths vote of all members of the Council.

All elected officials serve part-time. The current elected officials, and some of the majorappointed officials, are:

ELECTED

Office NameYears inOffice

YearsServicewith the

CityVocation inPrivate Life

Mayor Richard L. “Ike” Stage 7 19 Banking

Members ofCouncil:

Steven M. Bennett 5 11 InsuranceTed A. Berry(a) 9 9 Business DevelopmentJeffrey M. Davis 3 3 LobbyistMaria C. Klemack-McGraw 15 15 InterpreterLaura Lanese 1 1 Attorney

____________________(a) President of Council.

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APPOINTED

Office NameYears

in PositionYears Servicewith the City

City Administrator Charles W. Boso, Jr. 24 37Director of Finance Michael A. Turner 7 7Director of Law Stephen J. Smith, Jr. 7 7

The present terms of all elected officials expire on December 31, 2015, except the termsof Messrs. Bennett and Berry, which expire on December 31, 2017. All appointed officials serveat the pleasure of the Mayor.

Employees

The City has 144 full-time and 70 part-time employees. The number of full-timeemployees has increased by six since December 31, 2008. A statewide public employeecollective bargaining law applies generally to public employee relations and collectivebargaining.

Full-time employees are represented by the following bargaining units:

Bargaining Unit Agreement Duration Number ofEmployees

Fraternal Order of Police 01/01/13 through 12/31/15 60American Federation of State, County

and Municipal Employees04/21/13 through 04/21/16 21

Fraternal Order of Police (OLC) 01/01/15 through 12/31/17 13

The remaining full-time City employees have not elected to join a bargaining unit.

No new contracts are currently in negotiations. During the last five years, the City hasnot experienced any layoffs, salary freezes, furloughs or work stoppages.

The Council by ordinance establishes salaries, wages and other economic benefits forCity employees, the terms of which generally are the products of negotiations withrepresentatives of the employees or bargaining unit. Increases in economic benefits have beenprovided on an annual basis.

The City provides health care benefits through the Central Ohio Health Care Consortium,a shared risk pool that provides hospital, surgical and prescription drug coverage.

In the City’s judgment, its employee relations have been and are considered to beexcellent.

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Retirement Expenses

Present and retired employees of the City are covered under two statewide publicemployee retirement (including disability retirement) systems. The Ohio Police and Fire PensionFund (“OP&F”) covers uniformed members of the police and fire departments. All other eligibleCity employees are covered by the Ohio Public Employees Retirement System (“OPERS”).

In 2014, employees covered by OPERS contributed at a statutory rate of 10.00% ofearnable salary or compensation. As the employer, the City’s statutory contribution rate forthose employees was 14.00% of the same base. In 2014, employees covered by OP&Fcontributed at a statutory rate of 10.75% of earnable salary through July 1 and thereafter, at a rateof 11.50% of earnable salary. As the employer, the City’s statutory contribution rates, applied tothe same base, were 19.50% for police personnel. These employee and employer contributionrates are the maximums permitted under current State law.

For further information on these pension plans, see the Notes 10 and 11 to the BasicFinancial Statements included in Appendix C. Financial and other information for OPERS andOP&F can also be found on the respective website for each retirement system including itsComprehensive Annual Financial Report.

OPERS and OP&F are two of five statewide public employee retirement systems createdby and operating pursuant to Ohio law, all of which currently have unfunded actuarial accruedliabilities. The General Assembly has the power to amend the format of those systems and torevise rates and methods of contributions to be made by public employers and their employeesand eligibility criteria, benefits or benefit levels for employee members. On September 12, 2012,the General Assembly passed five separate pension reform bills intended to assist each of thefive retirement systems in addressing its unfunded actuarial accrued liabilities. The bills passedwith respect to OPERS and OP&F provide for (i) no change in the City contribution rates withrespect to its employees’ earnable salaries, (ii) no change in OPERS employee contribution rate,and (iii) an increase in the OP&F employee contribution rate from 10% to 12.25% in annualincrements of 0.75% beginning on July 2, 2013. With certain transition provisions applicable tocertain current employees, the bills increase minimum age and service requirements forretirement and disability benefits, revise the calculation of an employee’s final average salary onwhich pension benefits are based to include the five highest years (rather than the three highestyears), provide for OPERS pension benefits to be calculated on a lower, fixed formula, changeprovisions with respect to future cost–of-living adjustments to limit those adjustments to thelesser of any increase in the Consumer Price Index or three percent, and make other changes.The OP&F bill also authorizes the OP&F board to further adjust member contribution rates orfurther adjust age and service requirements after November 1, 2017, if, after an actuarialinvestigation, the board determines that an adjustment is appropriate.

The City’s current employer contributions to OPERS and OP&F, have been treated ascurrent expenses and included in the City’s operating expenditures, except to the extent paidfrom the proceeds of the “Police and Fire Pension” levy referred to under AD VALOREMPROPERTY TAXES – Tax Rates.

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Federal law requires City employees hired after March 31, 1986 to participate in thefederal Medicare program, which requires matching employer and employee contributions, eachbeing 1.45% of the wage base. Otherwise, City employees who are covered by a Stateretirement system are not currently covered under the federal Social Security Act. OPERS andOP&F are not subject to the funding and vesting requirements of the federal EmployeeRetirement Income Security Act of 1974.

City Facilities; Insurance

On October 1, 2009, the City established membership in the Central Ohio RiskManagement Association Self-Insurance Pool, Inc. (“CORMA”). CORMA was formed pursuantto Section 2744.081 of the Ohio Revised Code. Members of CORMA are the cities ofWesterville, Dublin, Upper Arlington, Pickerington, Grove City, Groveport, and Powell. Eachmember has two representatives on the Board of Trustees.

Membership in CORMA enables the City to take advantage of any economies to berealized from an insurance pool with other cities and also provides the City with more controlover claims than what is normally available with traditional insurance coverage. A third-partyclaims administrator investigates processes and advises the CORMA Treasurer/Board regardingpayment of claims.

As part of participating in CORMA, coverage is provided for umbrella liability coveragefor $15,000,000 per occurrence/$20,000,000 annual aggregate excess general liability,automobile liability, law enforcement liability, public officials and employment practicesliability and $386,222,918 limit for property claims for the pool. Coverage is provided on anannual aggregate basis for crime ($1,000,000 blanket public employee dishonesty, $500,000forgery/computer fraud, and $100,000 money and securities, with a $25,000 deductible for each).Coverage is provided for general liability ($1,000,000/$2,000,000), law enforcement liability($1,000,000/$1,000,000), public official liability ($1,000,000/$1,000,000), employment practicesliability ($1,000,000/$1,000,000) and automobile liability ($1,000,000). Pool retentions are$10,000 per loss for property and $600,000 aggregate for liability, with a $100,000 per loss self-insurance retention. A third-party broker, with expertise in public entity pools, markets theprogram, identifies coverage lines and limits, and recommends the best insurer and insurance forprocurement.

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Economic and Demographic Information

Population

Recent Census population has been:

Year City County MSA

1970 13,911 833,249 1,149,3721980 16,816 869,126 1,243,8271990 19,661 961,437 1,377,4192000 27,075 1,068,978 1,540,1572010 35,575 1,163,414 1,836,5362013(a) 37,490 1,212,263 1,967,066

____________________(a) U.S. Census Bureau estimate.

2010 Census figures show the following breakdown by age groups of the population ofthe City:

Under5 5-19 20-34 35-44 45-54 55-64 65+ Total

2,196 7,768 6,460 5,337 5,289 4,181 4,344 35,575

Educational attainment for the City’s and the County’s population (25 years or older) isset forth in the following table.

City County

Less than 9th Grade 513 (2.3%) 24,483 (3.2%)9th to 12th Grade (no diploma) 1,182 (5.3%) 54,321 (7.1%)High School graduate (includes GED) 6,111 (27.4%) 195,862 (25.6%)Some college, no degree 5,063 (22.7%) 160,668 (21.0%)Associate degree 1,807 (8.1%) 51,261 (6.7%)Bachelor degree 4,885 (21.9%) 179,030 (23.4%)Graduate or professional degree 2,743 (12.3%) 99,461 (13.0%)

Source: U.S. Census Bureau Selected Source Characteristics in the United States 2009-2013.

Industry and Commerce

Economic Development

The Columbus Metropolitan Area is characterized by its diverse economy and economicgrowth. A strong residential, commercial and industrial tax base, a very diverse labor force, and anunemployment rate below the State average have resulted in strong growth throughout theColumbus Metropolitan Area as well as in the City.

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Opportunities for residential, commercial and industrial development within the Cityhave been enhanced by major expansions of the City’s water distribution, sanitary sewer andstreet systems. One of the most significant infrastructure improvements is a revampedinterchange located at I-71 and S.R. 665. By using a single-point urban interchange design, thisproject will open up hundreds of acres for development serving as a gateway to RickenbackerInternational Airport located only minutes from the City. Rickenbacker International Airport is afirst-class cargo airport offering high-speed logistical movement of goods and serves as thearea’s only U.S. Foreign Trade Zone. With improved access to major interstate highways andarea airports, the new redesigned interchange is also valuable to existing companies such asFedEx and Tigerpoly Manufacturing.

These infrastructure improvements are a result of a comprehensive planning process thatcoordinates actions of the City administration and Council with area developers. The PinnacleClub of Grove City (“Pinnacle”), a 597-acre master planned residential community, is oneexample of the successful projects that have grown out of the City’s planning process andcoordination. Pinnacle began development in the spring of 2004, and it is expected, when fullydeveloped, to include approximately 1,600 homes with prices ranging from $250,000 to$1 million, all centered around the championship golf course designed by Lanny Watkins thatopened in September 2006. The total development cost of Pinnacle is expected to beapproximately $60 million. As of December 11, 2014, 802 occupancy permits had been issuedwithin the Pinnacle development.

Another development currently underway which highlights the City’s commitment tofurthering its public-private collaborations is the revitalization of the City’s Town Center.Because this area is considered the heart of the City, the planning process to update the TownCenter included months of public meetings and stakeholder interviews to solicit the opinions ofthe townspeople that would benefit from the improvements. The development is expected toinclude new streetscapes, small parks, improved pedestrian circulation, and a new parkingstructure. It also expected to include developing an adjacent property known as the “OldLumberyard site.” The current conceptual plan for this area provides for a mixed-use urbanneighborhood consisting of office space, retail and residential. The City views this revitalizationas a means to drive economic development in the downtown for decades to come.

Building permits with a construction value of over $660 million have been issued in theCity since January 2005. In that same time frame, the assessed valuation of the real estate taxbase has climbed from approximately $711 million to over $829 million. Approximately three-quarters of the current real estate base is residential property, while the majority of the remainderis commercial and industrial property. Agricultural activity in the City is negligible.

The City has experienced financial growth in recent years resulting from an increase inincome tax revenue generated by the City’s expanding employment base. The City has a highlydiverse employment base demonstrated by the businesses located there. The total work force ofthe City is estimated by the City to be approximately 24,000 workers.

To accommodate industrial and commercial growth, the City has cooperated with privateinvestors in the development of seven business and industrial parks: Grove City Industrial Park,a 100-acre park with one to 20-acre tracts available/sold near the intersection of I-71 and

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S.R. 665; Southpark, a 500-acre park with one to 120-acre tracts available/sold near theintersection of I-71 and I-270; Capital Park South, a 150-acre park with one to 30-acre tractsavailable at I-270 and S.R. 62; Southpointe, a 53-acre park with six major building sites underconstruction or development; Gateway Business Park, 114-acre park with four major buildingsites under construction or development at I-71 and S.R. 665; Gateway to the City Office Park, a35-acre park with five of its 16 platted sites currently under construction at I-71 and StringtownRoad; Gateway Business Park West, a 232-acre park that was platted in 1999.

Immediate access to I-71 and I-270 has resulted in the City’s development as a travelcenter offering over 1,200 guest rooms with gross sales exceeding $20 million per year. Agrowing list of restaurants complements the variety of accommodations to be found in the City.

Employment and Income

The following table shows comparative employment and unemployment statistics for theindicated periods.

Employed in Unemployment RateYear(a) City County MSA City County MSA State U.S.

2009 17,200 577,700 891,500 7.7% 8.3% 8.4% 10.2% 9.3%2010 17,200 570,900 881,100 8.3 8.8 8.9 10.1 9.62011 17,500 570,100 884,400 7.0 7.6 7.5 8.6 8.92012 18,000 581,100 901,500 5.7 6.2 6.2 7.2 8.12013 18,300 591,100 915,900 5.7 6.2 6.2 7.2 7.42014 18,600 607,400 938,400 4.3 4.5 4.6 5.6 6.22015Jan. 19,500 616,900 981,600 4.6 4.9 5.0 6.1 6.1Feb. 19,400 614,800 977,600 4.1 4.3 4.5 5.6 5.8Mar. 19,500 617,800 981,300 3.8 4.2 4.4 5.4 5.6Apr. 19,500 618,300 982,500 3.4 3.8 3.8 4.6 5.1

____________________(a) Not seasonally adjusted.

Source: Ohio Department of Job and Family Services – Bureau of Labor Market Information.

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Most City residents work outside the City. The following table lists the employers(private and public) having the largest work forces within the Central Ohio Area (as of July 11,2014):

EmployerNature of Activity

or Business

ApproximateNumber ofEmployees

The Ohio State University Higher Education 28,710State of Ohio State Government 23,692JP Morgan Chase & Co. Financial Services 20,475Ohio Health Healthcare 19,652Nationwide Mutual Insurance Co. Insurance 12,433Kroger Co. Grocery 11,068Mount Carmel Health System Healthcare 8,362Nationwide Children’s Hospital Healthcare 8,243Columbus City Schools Public Education 8,195Honda North America Inc. Auto Manufacturing 7,900McDonald’s Corp. Fast Food Restaurant 7,622L Brands, Inc. Retail 7,100Franklin County County Government 7,064Huntington Bancshares, Inc. Financial Services 5,500Cardinal Health Inc. Healthcare Products/Services 4,318Giant Eagle Inc. Grocery 3,820U.S. Postal Service Government 3,716American Electric Power Co., Inc. Electric Power 3,578DLA Land and Maritime Weapons Supplies 3,400PNC Financial Services Group Financial Services 3,000Excel, Inc. Contract Logistics 2,875Abercrombie & Fitch Co. Retail 2,650Express Scripts Pharmacy 2,650South-Western City School District Public Education 2,471Alliance Data Systems Corp. Marketing Services 2,374Discover Financial Services LLC Financial Services 2,082TS Tech Americas, Inc. Automobile Seat Manufacturer 2,078Abbott Laboratories/Abbott Nutrition Global Healthcare 2,055Fairfield Medical Center Healthcare 2,041State Farm Mutual Auto Insurance Co. Insurance 1,950

Source: Columbus Business First, July 2014.

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The median family and household incomes, as reported by the Census Bureau in its“2009-2013 American Community Survey 5-Year Estimates,” are set forth in the followingtable.

Median IncomeFamily Household

City $77,265 $66,299County 64,693 50,877State 61,371 48,308United States 64,719 53,046

According to the Ohio Department of Taxation, the average federal adjusted grossincome for residents within the Southwestern City School District (which overlaps the City)filing Ohio personal income tax returns for calendar year 2013 was $47,077, compared to theaverages of $70,888 for all Ohio school districts (for all tax returns filed, the 2013 State averagefor tax returns that indicated school districts was $57,001) and $62,190 for all school districts inthe County.

The income per household in the City and County is estimated to be distributed as setforth in the following table.

Income and Benefits City County

Less than $10,000 489 (3.6%) 40,742 (8.7%)$10,000 to $14,999 353 (2.6%) 23,883 (5.1%)$15,000 to $24,999 1,072 (7.9% 49,171 (10.5%)$25,000 to $34,999 1,114 (8.2%) 50,107 (10.7%)$35,000 to $49,999 1,832 (13.5%) 66,498 (14.2%)$50,000 to $74,999 2,918 (21.5%) 86,166 (18.4%)$75,000 to $99,999 2,144 (15.8%) 55,259 (11.8%)$100,000 to $149,999 2,741 (20.2%) 57,132 (12.2%)$150,000 to $199,999 597 (4.4%) 20,605 (4.4%)$200,000 or more 312 (2.3%) 18,732 (4.0%)

Source: U.S. Census Bureau Selected Source Characteristics in the United States 2009-2013.

The U.S. Census Bureau also estimates that 8.7% of people in the City and 18.1% of thepeople in the County have incomes that fall below the poverty level.

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Housing and Building Permits

The following is U.S. Census Bureau information concerning housing in the City, withcomparative County and State statistics.

MedianValue of

Owner-OccupiedHomes(a)

%Constructed

Prior to1940(a)

Number ofHousing Units %

Change2000 2013

The City $160,100 2.5% 10,712 14,917 +39.25%County 150,800 11.5 471,016 529,924 +12.50State 130,800 21.1 4,783,051 5,124,221 +7.13____________________(a) Source: U.S. Census Bureau Selected Source Characteristics in the United States 2009-2013.

Ohio Department of Taxation figures for average sale prices of residential property in theCounty and the City are shown in the following table.

Year County City

2009 $151,000 $135,0002010 158,000 144,0002011 156,400 139,0002012 159,900 145,0002013 163,900 152,000

Source: Ohio Department of Taxation.

The number and value of all building permits (including commercial, industrial,residential and public, and both remodeling and new construction) issued by the City are shownin the following table.

Year Number Value

2009 188 $41,942,7282010 142 35,470,9882011 106 29,082,2312012 150 54,097,4092013 210 92,038,0042014 180 65,498,307

Utilities; Public Safety and Services

Water service within the City is provided by the City through a contact with the City ofColumbus and is purchased directly by the consumers. Sewage collection and disposal isprovided by the City of Columbus. Electricity is obtained from Columbus Southern Power, andnatural gas is supplied by Columbus Gas Systems. Fire protection is provided by Jackson

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Township. Solid waste collection is provided by Local Waste Services, and solid waste from theCity is sent to SWACO Franklin County Sanitary Landfill.

Economic Development Incentives

Tax abatements are temporary property tax exemptions designed to stimulate economicgrowth or promote other activities deemed by the State to be in the public interest. Under Ohiolaw, tax abatements may be granted for urban renewal projects, community redevelopmentcorporations, community reinvestment areas, property acquired by municipal corporationsengaged in urban redevelopment, enterprise zones, railroad property, and for any improvementsdeclared to serve a “public purpose” in municipalities, townships, and counties.

There are currently four community reinvestment areas, four tax increment financingdistricts, and one enterprise zone within the City, and the aggregate assessed valuation of theabated property in the City totals $129,270,200.

Joint Economic Development District

The City entered into a Joint Economic Development District (“JEDD”) contract withScioto Township located in the County of Pickaway, Ohio and the Village of Commercial Point,Ohio on February 1, 2014. This JEDD has been created pursuant to Ohio Revised CodeSections 715.72 through 715.81 to facilitate economic development, to create jobs andemployment opportunities and to improve the economic welfare of the people of SciotoTownship, the City, the Village of Commercial Point and the State of Ohio. A tax has beenlevied on all wages earned from all employees located in the JEDD on and after January 1, 2015.

FINANCIAL MATTERS

Introduction

The City’s Fiscal Year corresponds with the calendar year.

The main sources of City revenue have been and are property taxes, income taxes andState distributions and certain nontax revenues, as described below.

The Mayor, the Director of Finance, and the Council are responsible for the majorfinancial functions of the City.

Other important financial functions include general financial recommendations andplanning by the Mayor; budget preparation by the Mayor with the assistance of the Director ofFinance; and express approval of appropriations by the Council.

The Director of Finance is the City’s fiscal and chief accounting officer. In this role, thatofficer’s duties include keeping the books and accurate statements of all money received andexpended and of all taxes and assessments; at the end of each Fiscal Year, or more often ifrequested by the Mayor or Council, examining all accounts of City officers and departments; andensuring that the amount set aside for any appropriation is not overdrawn, or the amountappropriated for any one item of expense is not drawn upon for any other purpose, or a voucher

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is only paid if sufficient funds are in the City treasury to the credit of the fund on which thevoucher is drawn. The Director of Finance is responsible for receiving, maintaining custody ofand disbursing all City funds.

The Director of Finance has charge of the financial affairs of the City, including thekeeping and supervision of all City accounts and, the custody and disbursements of all City fundsand money. The Director of Finance is appointed by the Mayor.

For property taxation purposes, assessment of real property is by the County Auditorsubject to supervision by the State Tax Commissioner, and assessment of public utility andtangible personal property is by the State Tax Commissioner. Property taxes and assessmentsare billed and collected by County officials.

Budgeting, Property Tax Levy and Appropriations Procedures

Detailed provisions for budgeting, property tax levies and appropriations are made in theRevised Code, including a requirement that the City levy a property tax in a sufficient amount,with any other money available for the purpose, to pay the debt charges on securities payablefrom property taxes.

The law requires generally that a subdivision prepare, and then adopt after a publichearing, a tax budget approximately six months before the start of the next fiscal year. The taxbudget is then presented for review by the county budget commission, which is comprised of theCounty Auditor, Treasurer and Prosecuting Attorney. A County Budget Commission may,however, waive the requirement for a tax budget and require an alternative form of more limitedinformation required by the commission to perform its duties. The Franklin County BudgetCommission has waived the requirement permitting an alternative form of a tax budget from theCity and other subdivisions in the County.

The County Budget Commission then determines and approves levies for debt chargesoutside and inside the ten-mill limitation. The Revised Code provides that “if any debt charge isomitted from the budget, the commission shall include it therein.”

The County Budget Commission then certifies to each subdivision its action on the taxbudget together with the estimate by the county auditor of the tax rates outside and inside theten-mill limitation. Thereafter, and before the end of the then Fiscal Year, the taxing authority(the Council in the case of the City) approves the tax levies and certifies them to the countyauditor. The approved and certified tax rates are then reflected in the tax bills sent to propertyowners. Real property taxes are payable in two equal installments, the first usually in Februaryand the second in July.

The Council adopts by December 24, a permanent appropriation measure for that FiscalYear. Although called “permanent,” the annual appropriation measure may be, and often is,amended during the Fiscal Year. Annual appropriations may not exceed the County BudgetCommission’s official estimates of resources, and the County Auditor must certify that the City’sappropriation measures do not appropriate moneys in excess of the amounts set forth in thoseestimates.

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Financial Reports and Audits

The City maintains its accounts, appropriations and other fiscal records in accordancewith the procedures established and prescribed by the Ohio Auditor of State (the “StateAuditor”). The State Auditor is charged by law with the responsibility of inspecting andsupervising the accounts and records of each taxing subdivision and most public agencies andinstitutions.

City receipts and expenditures are compiled on a cash basis, pursuant to accountingprocedures prescribed by the State Auditor which are generally applicable to all Ohio politicalsubdivisions. The records of these cash receipts and expenditures are converted annually forreporting purposes to a modified accrual basis of accounting for governmental funds and anaccrual basis for proprietary funds. These accounting procedures conform to generally acceptedaccounting principles as prescribed by the Governmental Accounting Standards Board(“GASB”). Those principles, among other things, provide for a modified accrual basis ofaccounting for the general fund, all special revenue funds and the debt service (bond retirement)fund and for a full accrual basis of accounting for all other funds, and for the preparation for eachfund of balance sheets, statements of revenues and expenditures and statements showing changesin fund balances.

The City has issued a Comprehensive Annual Financial Report (“CAFR”), includingBasic Financial Statements (“Basic Financial Statements”), for each of the Fiscal Years 1989through 2013. The CAFRs through Fiscal Year 2013 were awarded the Government FinanceOfficers Association’s Certificate of Achievement for Excellence in Financial Reporting, whichis awarded to those governmental reporting agencies that comply with the GFOA reportingstandards. The City has not yet submitted its 2014 CAFR to GFOA for consideration.

Audits are made by the State Auditor, or by private auditing firms (CPAs) at the directionof that officer, pursuant to Ohio law and under certain federal program requirements. No otherindependent examination or audit of the City’s financial records is made.

The most recent audit (including compliance audit) of the City’s accounts was completedthrough Fiscal Year 2013. The Basic Financial Statements of the City for Fiscal Year 2013 areset forth as Appendix C; they have been audited by the State Auditor, as stated in their reportappearing in those statements. No material findings, citations or items for adjustment, ormaterial weaknesses in internal controls, were noted as part of the audit. An audit for FiscalYear 2014 has not yet commenced.

Annual financial reports are prepared by the City and are filed as required by law with theState Auditor after the close of each Fiscal Year.

See Appendix A for an unaudited comparative cash-basis summary, prepared by theCity, of General Fund receipts and expenditures for the last five Fiscal Years and budgeted forFiscal Year 2015. All funds receipts and expenditures for the two prior Fiscal Years are set forthin Appendix B. See Appendix C for the audited Basic Financial Statements for Fiscal Year2013, including the audit letter.

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The audited financial statements are public records, no consent to their inclusion isrequired, and no bring-down procedures have been undertaken by the State Auditor since theirdate.

Investments

Investments and deposits of City funds are governed by the Uniform Depository Law(Chapter 135 of the Revised Code) applicable to all subdivisions, and by the Charter andordinances. The Director of Finance is responsible for those investments and deposits. Underrecent and current practices, and the City’s adopted investment policy, in addition to depositsevidenced by interest-bearing certificates of deposit, investments are made in the StateTreasurer’s subdivision investment pools (STAR Ohio and STAR Plus), federal agencysecurities, and mutual funds consisting of federal or agency securities. See also Notes to theBasic Financial Statements in Appendix C.

The City does not invest in any securities that would be characterized as derivatives or inreverse repurchase agreements and purchases all investments with the intent to hold to maturity.

The weighted average maturity of the portfolio other than the City’s own bonds and notesis 748 days. The weighted average maturity of the entire portfolio is 748 days. The followingtable presents a summary of the City’s investment portfolio as of December 31, 2014.

Investments % of Portfolio

Federal Agency Securities $34,452,571 83.6%State Investment Pool (STAR Ohio) 1,151,111 2.8State Investment Pool (STAR Plus) 1,004,412 2.4Certificates of Deposit 804,000 2.0Cash and Government MM Funds 3,782,511 9.2

Total $41,194,605 100.0%

Financial Outlook

The City’s General Fund cash balance as of December 31 for each of the years 2010through 2014 and budgeted for 2015 are shown in Appendix A.

The State of Ohio has recently reduced the City’s allocation of the Local GovernmentFunds. This reduction is not anticipated to materially affect City finances, as it accounts for lessthan 2% of total general fund revenues. The State of Ohio has also eliminated the estate taxrevenue for local governments. Although City revenues from this source could be material inany specific year, it has been extremely unpredictable and has varied dramatically from year toyear. As a result, the City has not typically included estimates for such receipts in its budgetingprocess

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GENERAL FUND

The General Fund is the City’s main operating fund, from which most expenditures arepaid and into which most revenues are deposited. The General Fund receives money from manysources, but primarily from ad valorem property taxes and income taxes levied by the City andState local government distributions. Appendices A and B provide further informationregarding other revenue sources for the General Fund and other City funds.

AD VALOREM PROPERTY TAXES

Assessed Valuation

The following table shows the recent assessed valuations of property subject to advalorem taxes levied by the City.

CollectionYear Real(a)

TangiblePersonal(b)(c)(d)

PublicUtility(c)(d)

TotalAssessedValuation

2011 $865,680,370 $-0- $10,055,250 $875,735,6202012(e) 791,252,410 -0- 11,597,480 802,849,8902013 804,086,330 -0- 11,958,740 816,045,0702014 816,550,350 -0- 12,574,010 829,124,3602015(f) 842,558,610 -0- 13,134,290 855,687,890

____________________(a) Other than real property of railroads. The real property of public utilities, other than railroads, is assessed by the

County Auditor. Real property of railroads is assessed, together with tangible personal property of all public utilities,by the State Tax Commissioner.

(b) Other than public utility.(c) The State (i) reduced the valuation of tangible personal property of general businesses and railroads in increments

beginning in 2006 to zero in 2009 and (ii) reduced the valuation of tangible personal property of telecommunicationscompanies in increments beginning in 2007 to zero in 2011; see the discussion of those reductions and related Statemakeup payments below.

(d) Tangible personal property of all public utilities and real property of railroads; see footnotes (a) and (c).(e) Reflects sexennial reappraisal.(f) Reflects triennial update.

Source: County Auditor.

Taxes collected on “Real” in one calendar year are levied in the preceding calendar yearon assessed values as of January 1 of that preceding year. Taxes collected on “TangiblePersonal” in one calendar year were levied in the same calendar year on assessed values duringand at the close of the taxpayer’s most recent fiscal year that ended on or before December 31 ofthe preceding calendar year, and at the tax rates determined in the preceding year. “PublicUtility” (real and tangible personal) taxes collected in one calendar year are levied in thepreceding calendar year on assessed values determined as of December 31 of the second yearpreceding the tax collection year.

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Since January 1, 2000, 1,769 acres were annexed to the City and 20 acres are the subjectof pending annexations. The estimated assessed valuation of the pending annexations isminimal, based on the fact that the land is undeveloped at the present time.

Based on County Auditor records of assessed valuations for the 2015 collection year, thelargest City ad valorem property tax payers are:

Name of Taxpayer Nature of Business

TotalAssessedValuation

% ofTotal

AssessedValuation

Public UtilityOhio Power Company Electric Utility $10,032,400 1.17%Solid Waste Authority Waste 4,020,180 0.47Columbia Gas of Ohio, Inc. Gas Utility 3,032,750 0.35

Real EstateWal-Mart Stores, Inc. Retail Stores $10,964,350 1.28%Security Capital Warehouse 8,275,530 0.97Dugan Realty LLC Real Estate 7,367,510 0.86Parkway Centre East LLC Retail 7,236,780 0.85Beulah Park Gaming Recreation 5,444,430 0.64Plymouth 3500 Southwest Real Estate 5,388,950 0.63Exeter 3400 South Park Real Estate 5,387,170 0.63Midwest Southpark VIII Warehouse 4,587,800 0.54Prologis Logistics Warehouse 4,401,250 0.51Ohio Becknell Investors Real Estate 4,284,080 0.50Midwest Southpark VII Warehouse 3,920,000 0.46Gateway Lakes Acquisition Condominiums 3,875,850 0.45

All Others $767,468,860 89.69%

Total Assessed Value $855,687,890 100.00%

Pursuant to statutory requirements for sexennial reappraisals, in 2011 the County Auditoradjusted the true value of taxable real property to reflect current fair market values. Theseadjustments were first reflected in the 2011 duplicate (collection year 2012) and in the advalorem taxes distributed to the City in 2012 and thereafter. The County Auditor is required toadjust (but without individual appraisal of properties except in the sexennial reappraisal), and hasadjusted, taxable real property value triennially to reflect true values.

The “assessed valuation” of real property is fixed at 35% of true value and is determinedpursuant to rules of the State Tax Commissioner. An exception is that real property devotedexclusively to agricultural use is to be assessed at not more than 35% of its current agriculturaluse value. Real property devoted exclusively to forestry or timber growing is taxed at 50% ofthe local tax rate upon its assessed value.

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The taxation of all tangible personal property used in general businesses (excludingcertain public utility tangible personal property) was phased out over tax years 2006 to 2009.Previously, machinery and equipment and furniture and fixtures were generally taxed at 25% oftrue value, and inventory was taxed at 23%. The taxation of all tangible personal property usedby telephone, telegraph or interexchange telecommunications companies (“telecommunicationsproperty”) was phased out over tax years 2007 to 2011. Previously, telecommunicationsproperty was taxed at 25% or 46% of true value (depending on the type of equipment and whenit was placed into service).

To compensate for tax revenue losses as the tangible personal property taxes were phasedout, the State in 2006 commenced making distributions to taxing subdivisions (such as the City)from revenue generated by the State’s commercial activity tax. In 2011, the State revisedthresholds established for municipalities to qualify for those distributions, reducing oreliminating the amount of that reimbursement related to: (a) “current expense levies” to zero formost municipalities and (b) “non-current expense levies” to 50% in Fiscal Year 2012, and 25%thereafter, of the amount received with respect to such levies in Fiscal Year 2010.Reimbursements for taxes levied within the ten-mill limitation or pursuant to a municipal charterfor debt charges on unvoted general obligation debt are to continue through Fiscal Year 2017 atthe same amount as received in Fiscal Year 2010; thereafter no such reimbursement will bemade. The State’s reimbursement payment to the City for Fiscal Year 2013 was $89,225.22 andfor Fiscal Year 2014 was $89,225.22.

Public utility tangible personal property (with some exceptions) is currently assessed(depending on the type of property) from 25% to 88% of true value. Effective for collection year2002, the assessed valuation of electric utility production equipment was reduced from 100% andnatural gas utility property from 88% of true value, both to 25% of true value. The City has beenreceiving reimbursement payments from the State to compensate for tax revenue losses as aresult of those reductions. In 2011, the amount of those payments was reduced in generally thesame manner as described above for reimbursements from the commercial activity tax, exceptthat reimbursement payments related to unvoted debt levies would end after Fiscal Year 2016.The State’s reimbursement payment to the City for Fiscal Year 2013 was $5,422.90 and forFiscal Year 2014 was $5,422.90.

As indicated herein, the General Assembly has from time to time exercised its power torevise the laws applicable to the determination of assessed valuation of taxable property and theamount of receipts to be produced by ad valorem taxes levied on that property and may continueto make similar revisions.

Ohio law grants tax credits to offset increases in taxes resulting from increases in the truevalue of real property. Legislation classifies real property as between residential and agriculturalproperty and all other real property, and provides for tax reduction factors to be separatelycomputed for and applied to each class.

These tax credits apply only to certain voted levies on real property, and they do notapply to unvoted levies or to voted levies to provide a specified dollar amount or to pay debtcharges on general obligation debt. These credits are discussed further following Tax Table A.

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Overlapping Governmental Entities

The major political subdivisions or other governmental entities that overlap all or aportion of the territory of the City are listed below. The “(__%)” figure is that approximatepercentage of a recent assessed valuation of the overlapping entity that is located within the City.

The County (functions allocated to counties by Ohio law, such as elections, healthand human services and judicial). (3.25%)

Southwestern City School District (K-12 educational responsibilities). (35.16%)

Townships of Jackson (83.44%) and Pleasant 0.14% (limited functions allocated totownships by Ohio law).

Central Ohio Transit Authority (the RTA) (public mass transit). (3.12%)

Rickenbacker Port Authority (public port facilities). (3.25%)

Columbus-Franklin County Metropolitan Park District (park and recreation areas).(3.25%)

Southwest Public Library District (public library). (35.16%)

Solid Waste Authority of Central Ohio (miscellaneous). (3.10%)

Source: OMAC.

Each of these entities operates independently, with its own separate budget, taxing powerand sources of revenue. Only the County, townships, school district, and the RTA may, as maythe City, levy ad valorem property taxes within the ten-mill limitation (subject to availablestatutory allocation of the 10 mills) described under CITY DEBT AND OTHER LONG-TERM OBLIGATIONS – Indirect Debt and Unvoted Property Tax Limitations.

Tax Rates

All references to tax rates under this caption are in terms of stated rates in mills per $1.00of assessed valuation.

The Charter provides a four-mill limitation on the amount of taxes that may be levied to paydebt service on unvoted bonds and notes of the City and a three-mill limitation on taxes for currentoperating expenses, provided that taxes levied to pay the property owners’ portion of specialassessment bonds and notes are exempt from the foregoing limitations.

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The following are the rates at which the City and overlapping taxing subdivisions have inrecent years levied ad valorem property taxes in that area of the City having the highestoverlapping tax rate.

TAX TABLE AOverlapping Tax Rates

CollectionYear City County(a)

SchoolDistrict

JacksonTownship Total

2011 3.50 19.07 72.55 20.20 115.322012 3.50 19.07 73.55 20.20 116.322013 3.50 19.47 73.25 20.20 116.422014 3.50 19.47 73.25 20.20 116.422015 3.50 19.47 73.25 23.95 120.17

____________________

(a) Includes levies for the County Board of Developmental Disabilities, County Health District, County Office on Aging,

Parks District and Zoological Park.

Source: County Auditor.

Statutory procedures limit, by the application of tax credits, the amount realized by eachtaxing subdivision from real property taxation to the amount realized from those taxes in thepreceding year plus both:

the proceeds of any new taxes (other than renewals) approved by the electors,calculated to produce an amount equal to the amount that would have been realized ifthose taxes had been levied in the preceding year; and

amounts realized from new and existing taxes on the assessed valuation of realproperty added to the tax duplicate since the preceding year.

These procedures were instituted initially in 1976 to limit in part the effect of increasing propertyvalues on the growth of those property taxes.

The City’s property tax levies, that are inside the ten-mill limitation or as Charter taxrates, are exempt from those tax credit provisions. The tax credit provisions do not apply toamounts realized from taxes levied at whatever rate is required to produce a specified amount oran amount to pay debt charges, or from taxes levied inside the ten-mill limitation or anyapplicable charter tax rate limitation. To calculate the limited amount to be realized, a reductionfactor is applied to the stated rates of the levies subject to these tax credits. A resulting“effective tax rate” reflects the aggregate of those reductions, and is the rate based on which realproperty taxes are in fact collected. As an example, the total overlapping tax rate for the 2015tax collection year of 120.17 mills within the City (in the portion overlapping Southwestern CitySchool District) is reduced by reduction factors of 0.314367 for residential/agricultural propertyand 0.205896 for all other real property, which results in “effective tax rates” of 82.392611 millsfor residential and agricultural property and 95.427574 mills for all other real property. See TaxTable A.

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Residential and agricultural real property tax amounts paid by taxpayers generally havebeen further reduced by an additional 10% (12.5% in the case of owner-occupied residentialproperty); however, the State Budget Act eliminates such reductions for additional andreplacement levies approved at elections after its effective date and for other taxes (or increasesin taxes) not levied for tax year 2013. See AD VALOREM PROPERTY TAXES –Collections for a discussion of reimbursements by the State to taxing subdivisions for thesereductions and related changes made by the State Budget Act.

The following are the rates at which the City levied property taxes for the generalcategories of purposes for recent years, both outside and inside the Charter tax limitation. TheCity does not currently levy any taxes outside the ten-mill limitation.

TAX TABLE BCity Tax Rates

Inside the Limitation

CollectionYear Operating

Police andFire Pension Total

2011 0.70 1.30 2.002012 1.10 1.10 2.202013 1.10 1.10 2.202014 1.10 1.10 2.202015 0.70 1.50 2.20

See the discussion of the ten-mill limitation, and the priority of claim on that millage fordebt charges on unvoted general obligation debt, under CITY DEBT AND OTHER LONG-TERM OBLIGATIONS – Indirect Debt and Unvoted Property Tax Limitations.

Voted

Charter Limitation

CollectionYear Operating

DebtRetirement Total

2011 0.50 1.00 1.502012 0.10 1.20 1.302013 0.10 1.20 1.302014 0.10 1.20 1.302015 0.50 0.80 1.30

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Collections

The following are the amounts billed and collected for City ad valorem property taxes forthe tax collection years shown.

CollectionYear

CurrentBilled

CurrentCollected

Current% Collected

DelinquentCurrent Accumulated

Real and Public Utility Property

2010 $3,324,653 $2,960,613 89.05% $77,847 $22,9272011 3,438,149 3,095,879 90.04 74,965 35,4472012 3,209,281 2,684,509 83.65 61,884 24,1112013 3,249,110 3,021,265 92.99 64,901 29,7942014 2,933,591 2,924,074 99.67 60,796 27,609

Tangible Personal Property

2010 $2,219 $970 43.70% $0 $48,4512011 0 0 0.00 0 42,7632012 0 0 0.00 0 41,7002013 0 0 0.00 0 41,0032014 0 0 0.00 0 37,800

Source: County Auditor.

Included in the “Billed” and “Collected” figures above are payments made from Staterevenue sources under two statewide real property tax relief programs – the HomesteadExemption and the Property Tax Rollback Exemption. Homestead Exemptions have beenavailable for (i) persons 65 years of age or older, (ii) persons who are totally or permanentlydisabled and (iii) surviving spouses of persons who were totally or permanently disabled or 65years of age or older, and had applied and qualified for a reduction of property taxes in the yearof death, so long as the surviving spouses were not younger than 59 or older than 65 years of ageon the date of their deceased spouses’ deaths. The Homestead Exemption exempts $25,000 ofthe homestead’s market value from taxation, thereby reducing the property owner’s ad valoremproperty tax liability. The Property Tax Rollback Exemption applies to all non-businessproperties, and reduces each property owner’s ad valorem property tax liability by either 12.5%(for owner-occupied non-business properties) or 10% (for non-owner non-business occupiedproperties). Payments to taxing subdivisions have been made in amounts approximately equal tothe Homestead and Property Tax Rollback Exemptions granted. This State assistance reflectedin the City’s tax collections for 2014 was $102,079.43 for the elderly/disabled homesteadpayment and $452,387.74 for the rollback payment.

The State Budget Act makes the Homestead Exemption subject to means testingbeginning January 1, 2014, and eliminates the Property Tax Rollback Exemption and relatedreimbursements with respect to new or replacement tax levies approved at elections after its

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effective date and for other taxes (or increases in taxes) not levied for tax year 2013. SeeAD VALOREM PROPERTY TAXES – Tax Rates.

Real property taxes are payable in two installments, the first usually by February and thesecond in July.

Special Assessments

The City on occasion conducts residential and other street improvements, which caninclude paving, resurfacing, draining, planting shade trees and constructing curbs, sidewalks,storm sewers, sanitary sewers and water lines. The cost of these improvements is paid in partfrom special assessments levied against the property benefiting from those improvements; theremaining cost is paid by the.

Owners of benefiting properties may commence a street improvement project by filing apetition with Council requesting the improvement. Alternatively, Council, with a three-quartermajority, may by resolution declare the necessity for such an improvement. The specialassessment proceedings provide for notice to property owners and an opportunity for propertyowners to object to the special assessments. At the commencement of construction of theimprovement, bond anticipation notes are issued to pay the property owners’ portion of theproject cost. Following completion of the work and determination of final costs, the specialassessments are levied by Council against the benefiting property. Special assessments not paidwithin 30 days are certified to the County Auditor for collection over a period of time (usually 10to 20 years for most projects). Special assessments are billed by the County Auditor andcollected by the County Treasurer along with and at the same time as real property taxes. Thereal property taxes levied on any property against which special assessments have been leviedare not to be paid unless those special assessments are also paid.

Bonds are issued in anticipation of the collection of the special assessments to refund(together with any cash payments of special assessments) those notes. The special assessmentscertified for collection bear the same interest as the bonds. Under State law, those bonds are tobe paid from the anticipated special assessments, but they are also general obligations of theCity, payable from ad valorem property taxes to the extent not paid from those specialassessments. See CITY DEBT AND OTHER LONG-TERM OBLIGATIONS – StatutoryDirect Debt Limitations and – Indirect Debt and Unvoted Property Tax Limitations andDebt Tables A and B. The City has never been required to levy an ad valorem property tax fordebt charges on bonds issued in anticipation of the collection of special assessments becausespecial assessments have been collected as required and sufficient balances have been availablein the Bond Retirement Fund to cover any temporary shortfall.

(THIS SPACE INTENTIONALLY LEFT BLANK)

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The following are the amounts billed and collected for City special assessments for thetax collection years shown.

CollectionYear

CurrentBilled

CurrentCollected

Current% Collected

DelinquentCurrent Accumulated

2010 $1,161,568 $1,122,957 96.68% $44,295 $7772011 1,267,642 1,240,488 97.86 27,154 29,4982012 1,356,678 1,336,095 98.48 20,583 3,6412013 1,304,216 1,282,357 98.32 20,810 1,0492014 1,423,781 1,413,274 99.26 9,745 8,017

Source: County Auditor.

Delinquencies

The following is a general description of delinquency procedures under Ohio law, theimplementation of which may vary in practice among the counties. Under the Revised Code,taxes become a lien of the State on the first day of January, annually, and continue until thetaxes, including any penalties, interest or other charges, are paid. Real estate taxes and specialassessments that are not paid in the year they are due are to be certified by the county auditor’soffice as delinquent. Any amount of a previous tax bill not paid before new tax bills are mailedfor the next half of the year is considered delinquent and becomes subject to a 10% penalty. Alist of delinquent properties is compiled by the county auditor (the “delinquent land duplicate”).If delinquent taxes (and special assessments) are not paid within 60 days after a copy of thecounty auditor’s delinquent land duplicate is delivered to the county treasurer, then the countytreasurer is to enforce the lien of the State that attached on January 1 of the year the taxes firstbecame payable. Under State law, the county treasurer is to enforce the lien “in the same waymortgage liens are enforced,” that is, by an action in the court of common pleas for foreclosureand sale of the property in satisfaction of the delinquency. If the county treasurer fails to bringan action to enforce the lien, then the State Tax Commissioner is to do so. In addition, one yearafter certification of a delinquent land list, the county prosecuting attorney is authorized toinstitute foreclosure proceedings in the name of the county treasurer to foreclose the lien.

The property owner may arrange a payment plan with the county treasurer providing forpayments over a period not to exceed five years. If payments are made when due under the plan,no further interest will be assessed against delinquent balances covered by the plan; a default inany payment under the plan or in the payment of current taxes will invalidate the taxpayer’sparticipation in the plan. If a payment plan is not adhered to or if none is arranged, foreclosureproceedings may be initiated by the county. Mass foreclosure proceedings and sales arepermitted after three years’ delinquency. Proceeds from delinquent property foreclosure salesbecome part of and are distributed as current collections to the taxing subdivisions.

In recent years, the State legislature has enacted several programs with respect toforestalling the foreclosure process or the forfeiture of property due to tax delinquency that mayhave the effect of delaying or eliminating the collection of certain property taxes.Notwithstanding the delay or loss of the tax revenues from those properties, an issuer of general

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obligation notes or bonds, such as the City, remains obligated to pay the debt charges on thosenotes or bonds from the available revenues. See SECURITY AND SOURCES OFPAYMENT.

Of the 13,941 nonexempt parcels in the City for collection year 2014, the number ofdelinquent parcels was 207.

There is no one taxpayer that accounts for more than 5% of any of the delinquencies ofad valorem real property taxes or special assessments identified above for tax collection year2014.

MUNICIPAL INCOME TAX

Ohio law authorizes a city or village to levy a municipal income tax on both businessincome and employee wages and salaries at a rate of up to 1% without, and above that rate with,voter authorization. In 1983 City electors authorized an income tax at the rate of 2.0%. The City,pursuant to Council action and that voter authorization, currently levies the tax at the rate of 2.0%.

This tax on business income and individuals’ salaries and wages is collected andadministered by the Regional Income Tax Agency (RITA) on behalf of the City.

The tax is in effect for a continuing period of time. It could be reduced or terminated byaction of the Council, or by vote of the electors initiated by petition of 10.0% of the number ofelectors of the City who voted for governor at the next preceding election.

Income tax proceeds, after payment of collection expenses, have been allocated by theCouncil as follows: 100.0% to the General Fund.

Annual income tax receipts have been:

Year Receipts Tax Rate

2010 $17,047,009 2.0%2011 18,556,350 2.02012 19,085,048 2.02013 22,587,865 2.02014 21,756,638 2.02015(a) 22,300,000 2.0

____________________(a) Budgeted.

Residents are currently permitted as a credit against their City income tax liability amounts paid asmunicipal income tax at the rate of up to 2.0% on the same income to another municipalcorporation.

Two employers contributed more than 5% of the City income taxes received in 2014. Theircontribution represents 12% of those income tax revenues.

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Certain of the income subject to the City income tax is also subject to the State incometax.

STATE LOCAL GOVERNMENT FUNDS

Statutory state-level local government funds, comprised of designated State revenues, areanother source of revenue to the General Fund. Most are distributed to each county and thenallocated on a formula basis, or in some cases on an agreement basis, among the county andcities, villages and townships, and in some cases park districts, in the county. City receipts fromthose funds were and for 2015 are estimated to be as shown in the following table.

Year Receipts

2010 $1,102,0052011 1,096,0352012 766,2482013 586,4442014 573,495(a)

2015 (est.) 500,000____________________(a) Excludes amounts earmarked by the State for street purposes, amounting to $1,832,272 for 2014.

The amounts of and formula for distribution of these funds have been and may be revisedfrom time to time.

ESTATE TAXES

The State has distributed significant portions of the State estate tax to decedents’communities of residence. Due to the nature of this tax, the annual amounts received have variedsignificantly. The City received $654,895.98 and $41,213.34 from this source in 2013 and 2014,respectively. The City has credited these distributions to its General Fund. The State estate taxhas been eliminated for decedents dying on or after January 1, 2013; however, distributionsrelated to the estates of decedents dying before that date will continue until those estates aresettled.

CITY DEBT AND OTHER LONG-TERM OBLIGATIONS

The following describes the security for general obligation debt such as the Bonds,applicable debt and ad valorem property tax limitations, and outstanding and projected bond andnote indebtedness and certain other long-term financial obligations of the City.

As used in the discussions that follow, the term “BANs” refers to notes issued inanticipation of the issuance of general obligation bonds.

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As further described below, the Bonds are:

unvoted general obligations of the City, subject to the indirect debt and relatedproperty tax limitation (the ten-mill limitation and the Charter tax limitation), and

not subject to the direct debt limitations because they are exempt debt.

Revenue bonds issued by the City, such as industrial revenue bonds, have been excludedentirely from the following debt discussion and tables. The City is not aware of and has not beennotified of any condition of default under those bonds or the related financing documents.

The City is not, and to the knowledge of current City officials has not in at least the last25 years been in default in the payment of debt service on any of the bonds or notes on which theCity is obligor. The City, however, makes no representation as to the existence of a condition ofdefault resulting from a default by any private entity under any financing documents relating toindustrial development or hospital revenue bonds for which the City was the issuer.

Security for General Obligation Debt; Bonds and BANs

The following describes the security for City general obligation debt: bonds (such as theBonds) and bond anticipation notes (“BANs”).

Voted Bonds. The basic security for voted City general obligation bonds is theauthorization by the electors for the City to levy, and its levy pursuant to constitutional andstatutory requirements of, ad valorem taxes, without limitation as to rate or amount, on all realand tangible personal property subject to ad valorem taxation by the City. These taxes areoutside of the Charter tax limitation and are to be sufficient in amount to pay (to the extent notpaid from other sources) as they come due the debt charges on the voted bonds (subject tobankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization,moratorium and other laws relating to or affecting creditors’ rights, to the application ofequitable principles, to the exercise of judicial discretion, and to limitations on legal remediesagainst public entities). The City has no voted general obligation bonds outstanding.

Unvoted Bonds. The basic security for unvoted City general obligation bonds is theCity’s ability to levy, and its levy pursuant to constitutional and statutory requirements of, advalorem taxes on all real and tangible personal property subject to ad valorem taxation by theCity, within the Charter tax limitation described below. These taxes are to be sufficient inamount to pay (to the extent not paid from other sources) as they come due the debt charges onunvoted general obligation bonds. The law provides that the levy necessary for debt charges haspriority over any levy for other purposes within that tax limitation; that priority may be subject tobankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization,moratorium and other laws relating to or affecting creditors’ rights, to the application ofequitable principles, to the exercise of judicial discretion, and to limitations on legal remediesagainst public entities. See the discussion under CITY DEBT AND OTHER LONG-TERMOBLIGATIONS – Indirect Debt and Unvoted Property Tax Limitations of the Charter taxlimitation, and the priority of claim on it for debt charges on unvoted general obligation debt ofthe City and all overlapping taxing subdivisions.

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BANs. While BANs are outstanding, Ohio law requires the levy of ad valorem propertytaxes in an amount not less than what would have been levied if bonds had been issued withoutthe prior issuance of the BANs. That levy need not actually be collected if payment in fact is tobe provided from other sources, such as the proceeds of the bonds anticipated or of renewalBANs. BANs, including renewal BANs, may be issued and outstanding from time to time up toa maximum period of 240 months from the date of issuance of the original notes (the maximummaturity for special assessment BANs is five years). Any period in excess of five years must bededucted from the permitted maximum maturity of the bonds anticipated. Portions of theprincipal amount of BANs outstanding for more than five years must be retired in amounts atleast equal to, and payable not later than, those principal maturities that would have beenrequired if the bonds had been issued at the expiration of the initial five-year period.

Statutory Direct Debt Limitations

The Revised Code provides two debt limitations on general obligation debt that aredirectly based on tax (assessed) valuation, applicable to all municipal corporations, including theCity.

The net principal amount of both voted and unvoted debt of the City, excluding“exempt debt” (discussed below), may not exceed 10½% of the total tax (assessed)valuation of all property in the City as listed and assessed for taxation.

The net principal amount of unvoted debt of the City, excluding exempt debt, may notexceed 5½% of that valuation, as discussed below.

These two limitations, which are referred to as the “direct debt limitations,” may be amendedfrom time to time by the General Assembly.

The City’s ability to incur unvoted debt (whether or not exempt from the direct debtlimitations) is also restricted by the indirect debt limitation discussed under CITY DEBT ANDOTHER LONG-TERM OBLIGATIONS – Indirect Debt and Unvoted Property TaxLimitations.

Certain debt (including the Bonds) that the City may issue is exempt from the direct debtlimitations (“exempt debt”). Exempt debt includes, among others, the following categories.

General obligation debt:

That is “self-supporting” debt (i.e., nontax revenues from the facility or categoryof facilities are sufficient to pay operating and maintenance expenses and relateddebt charges and other requirements) issued for facilities for city utility systems,airports, railroads, mass transit systems, parking, health care, solid waste, urbandevelopment, recreation, sports, convention, museum and other public attractions,natural resource exploration, development, recovery, use or sale, correctional andother related rehabilitation.

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To the extent debt charges are expected to be paid from tax increment financingpayments in lieu of taxes pledged to the payment of those debt charges (subject tocertain limitations).

For highway improvements if the municipality has covenanted to pay debtcharges and financing costs from distributions of motor vehicle license and fueltaxes.

Issued in anticipation of the levy or collection of special assessments.

To pay final judgments or court-approved settlements.

Securities issued to improve water or sanitary or storm water sewerage facilities tothe extent that another subdivision has agreed to pay to the City amounts equal todebt charges on those securities.

Unvoted general obligation bonds to the extent that debt charges will be met fromlawfully available municipal income taxes, to be applied to debt charges pursuant toordinance covenants.

Revenue debt and mortgage revenue bonds to finance municipal utilities.

Notes issued in anticipation of (i) the collection of current revenues (which have alatest maturity of the last day of the Fiscal Year in which issued) or (ii) the proceedsof a specific tax levy.

Notes issued for certain energy conservation improvements or certain emergencypurposes.

Debt issued in anticipation of the receipt of federal or State grants for permanentimprovements, or to evidence loans from the State capital improvements fund or Stateinfrastructure bank.

Voted debt for urban redevelopment purposes not in excess of 2% of the City’sassessed valuation.

Debt issued to make a single payment on certain accrued liability to the statewidePolice and Fire Pension Fund.

Debt issued for municipal educational and cultural facilities.

Debt issued for the acquisition of property for public use in excess of that needed fora public improvement.

Special obligation debt payable from nontax revenues.

BANs issued in anticipation of exempt bonds also are exempt debt.

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The City may incur debt for operating purposes, such as current tax revenue anticipationnotes or tax anticipation notes, only under certain limited statutory authority.

In the calculation of debt subject to the direct debt limitations, the amount in a city’sbond retirement fund allocable to the principal amount of nonexempt debt is deducted from grossnonexempt debt. Without consideration of amounts in the Bond Retirement Fund, and based onoutstanding debt and the Bonds and the current tax (assessed) valuation, the City’s voted andunvoted nonexempt debt capacities are:

Limitation

NonexemptDebt

Outstanding

AdditionalDebt Capacity

Within Limitation

10½% = $89,847,228 $-0- $89,847,2285½% = $47,062,834 $-0- $47,062,834

This is further detailed in Debt Table A.

Indirect Debt and Unvoted Property Tax Limitations

Voted general obligation debt may be issued by the City if authorized by vote of theelectors. Ad valorem taxes, without limitation as to amount or rate, to pay debt charges on votedbonds are authorized by the electors at the same time they authorize the issuance of the bonds.

General obligation debt also may be issued by the City without a vote of the electors.This unvoted debt may not be issued unless the ad valorem property tax for the payment of debtservice on those bonds (or the bonds in anticipation of which BANs are issued), and alloutstanding unvoted general obligation bonds (including bonds in anticipation of which BANsare issued) of the combination of overlapping taxing subdivisions including the City resulting inthe highest tax required for such debt charges, in any year is 10 mills or less per $1.00 ofassessed valuation. This indirect debt limitation, the product of what is commonly referred to asthe “ten-mill limitation,” is imposed by a combination of provisions of the Ohio Constitution andthe Revised Code. In addition, the Charter provides that not more than four mills may be leviedwithout a vote of the people to pay the interest on and principal of all general obligation notesand bonds of the City, provided that taxes levied to pay the property owners’ portion of specialassessment bond and notes shall be exempt from such limitation.

The ten-mill limitation is the maximum aggregate millage for all purposes that may belevied on any single piece of property by all overlapping taxing subdivisions without a vote ofthe electors. This 10 mills is allocated pursuant to a statutory formula among certain overlappingtaxing subdivisions in the County, including the City. Of the entire 10 mills, 9.60 is currentlybeing levied by the combination of the City and taxing subdivisions overlapping the City. Thecurrent allocation of the 10 mills (sometimes referred to as the “inside millage”) is as follows:2.20 City, 2.35 County, 3.85 School District and 1.20 Township. That allocation has remainedconstant for at least the last five years.

Present Ohio law requires the inside millage allocated to a taxing subdivision to be usedfirst for the payment of debt service on its unvoted general obligation debt, unless provision has

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been made for that payment from other sources, with the balance usable for other purposes. Tothe extent this inside millage is required for debt charges of a taxing subdivision (which mayexceed the formula allocation to that subdivision), the amount that would otherwise be availableto that subdivision for general fund purposes is reduced. Because the inside millage that mayactually be required to pay debt charges on a subdivision’s unvoted general obligation debt mayexceed the formula allocation of that millage to the subdivision, the excess reduces the amount ofinside millage available to overlapping subdivisions. In the case of the City, however, a lawapplicable to all Ohio cities and villages requires that any lawfully available receipts from amunicipal income tax or from voted property tax levies be allocated to pay debt service on Cityunvoted debt before the formula allocations of the inside millage to overlapping subdivision canbe invaded for that purpose.

In the case of BANs issued in anticipation of unvoted general obligation bonds, thehighest estimate of annual debt charges for the anticipated bonds is used to calculate the millagerequired.

Revenue bonds and notes and mortgage revenue bonds are not included in debt subject tothe indirect limitation since they are not general obligations of the City, and the full faith andcredit and property taxing power of the City is not pledged for their payment.

The indirect limitation applies to all outstanding unvoted general obligation debt even ifdebt charges on some of it is expected to be paid in fact from municipal income taxes, specialassessments, utility revenues or other sources.

The estimated highest requirement for debt charges in any year for all City debt subject tothe ten-mill limitation is estimated to be $1,998,916.25. That debt includes the Bonds andunvoted general obligation bonds outstanding. The payment of those annual debt charges wouldrequire a levy of an estimated 2.3360 mills based on current assessed valuation. Of thismaximum annual requirement, all is expected by the City to be paid from sources other than advalorem taxes, such as municipal income taxes, special assessments, and utility revenues (seeDebt Table C). If those other sources for any reason were not available, the debt charges couldnot be met from the amounts produced by the millage currently levied for all purposes by theCity within the ten-mill limitation, and therefore inside millage allocated to the overlappingsubdivisions might have to be preempted for those debt charges. (See the discussion of thispreemption, and of limitations on it, above under this caption.)

The total millage theoretically required by the City, the Southwestern City SchoolDistrict, Jackson Township, the County and the Solid Waste Authority (the only overlappingtaxing subdivisions that have issued unvoted debt) for debt charges on their outstanding unvotedgeneral obligation debt (including the Bonds) is estimated to be 3.9270 mills for the year of thehighest potential debt charges. There thus remains 6.073 mills within the ten-mill limitation thathas yet to be allocated to debt charges and that is available to the City and overlappingsubdivisions in connection with the issuance of additional unvoted general obligation debt.

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Charter Millage Limitation

Pursuant to the Charter, the City has imposed limitations on the amount of millageavailable to support unvoted indebtedness which are more restrictive than the ten-mill limitationimposed by general Ohio law. The aggregate amount of taxes that may be levied by the Councilwithout a vote of the people, on property assessed and listed for taxation according to value, shallnot exceed in any one year seven mills for each one dollar of assessed valuation, of which notmore than three mills may be levied for current operating expenses of the City and not more thanfour mills may be levied to pay the interest on and principal of all general obligation notes andbonds of the City, provided that taxes levied to pay the property owners’ portion of specialassessment bonds and notes shall be exempt from such seven mill limitation. Pursuant to theOhio Revised Code, the City’s Charter Millage limitation supersedes the ten-mill limitation thatwould otherwise apply to the City.

Based upon the maximum debt service schedule required for unvoted, general obligationbonds and notes heretofore issued and the Bonds, the highest debt service requirements in anyyear for all City unvoted, general obligation debt subject to the four-mill limitation is estimatedto be approximately $1,998,916.25. The payment of that amount of annual debt service wouldrequire a levy of approximately 2.3360 mills based on current assessed valuation. Thusapproximately 1.6616 mills remain free within the City’s four-mill limitation to support, basedupon the current assessed valuation of the City, the issuance of approximately $17,700,000 ofadditional 20-year general obligation bonds of the City assuming an interest rate of 5.0%.

The City currently levies 2.3 mills of the 3.0 mills authorized by the Charter for currentoperating expenses.

Debt Outstanding

The Debt Tables attached provide information concerning the City’s outstanding debtrepresented by bonds and notes, City and overlapping subdivisions general obligation debtallocations and projected debt charges on the City’s general obligation debt, including the Bonds.See Debt Tables.

The following table shows the principal amount of City general obligation debt (bondsand notes) outstanding as of December 31 in the years shown.

Of GO TotalYear Exempt Total Voted Unvoted

2010 $17,370,000 $17,370,000 $-0- $17,370,0002011 16,605,000 16,605,000 -0- 16,605,0002012 16,010,000 16,010,000 -0- 16,010,0002013 18,925,000 18,925,000 -0- 18,925,0002014 14,790,000 14,790,000 -0- 14,790,000

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Bond Anticipation Notes

None of the debt of the City is currently in the form of BANs. BANs may be retired atmaturity from the proceeds of the sale of renewal notes or of the bonds anticipated by the BANs,or available funds of the City, or a combination of these sources.

Bond Retirement Fund

The Bond Retirement Fund is the fund from which the City pays debt charges on itsgeneral obligation debt and into which money required to be applied to those payments isdeposited. See Appendix B for year-end balance, receipts and disbursements for the prior twoFiscal Years for this fund. The following table is an unaudited summary of Bond RetirementFund receipts and disbursements for prior Fiscal Years and projected for the current Fiscal Year.

Year Receipts DisbursementsDecember 31

Balance

2010 $1,015,713 $1,306,449 $892,4832011 1,053,114 1,271,498 674,0992012 2,525,248 2,532,499 666,8482013 1,634,579 882,154 1,419,2732014 1,358,772 795,634 1,982,4112015(a) 885,679 1,025,190 1,842,900

____________________(a) Estimated.

Future Financings

At this time, the City is giving consideration to several projects that may involve theissuance of general obligation or nontax revenue debt, but the City has not made anydetermination as to whether it will proceed with those projects or how much debt will be issued.

Long-Term Financial Obligations Other Than Bonds and Notes

The City has entered into loan agreements with the Ohio Water Development Authority(“OWDA”). The aggregate amount of principal due on these loans at December 31, 2014 was$2,646,415.19. The loan agreements and the amount of principal outstanding at December 31,2014 are shown in the following table.

Year ofAgreement Project Purpose

OutstandingAmount as of

December 31, 2014

AnnualPrincipal &

InterestPayment

FinalPayment

Year

2010 Water Tower $2,049,514.79 $173,269 20302010 Water Main 596,900.40 46,412 2031

- 50 -

These payments are required to be made from City water system revenues after paymentof operation and maintenance expenses of the system and from special assessments to be leviedfor water purposes. The loan agreement grants no security or property interest to OWDA in anyproperty of the City, and does not pledge the general credit of the City, or create a debt subject tothe direct or indirect debt limitations, or require the application of the general resources of theCity for repayment.

The City has entered into 16 loan agreements with the Ohio Public Works Commission.The aggregate amount of principal due on these loans at December 31, 2014 was $5,692,060.Final payment on the loans is in 2040.

The City has no other long-term debt obligations, other than the bonds and notesdescribed above.

See the discussion under THE CITY – Retirement Expenses of the City’s requiredannual payments for allocated accrued liability of the statewide pension fund for police and firepersonnel.

CONCLUDING STATEMENT

To the extent that any statements made in this Official Statement involve matters ofopinion or estimates, whether or not expressly stated to be such, they are made as such and not asrepresentations of fact or certainty and no representation is made that any of those statementshave been or will be realized. Information in this Official Statement has been derived by theCity from official and other sources and is believed by the City to be accurate and reliable.Information other than that obtained from official records of the City has not been independentlyconfirmed or verified by the City and its accuracy is not guaranteed.

Neither this Official Statement nor any statement that may have been or that may bemade orally or in writing is to be construed as or as part of a contract with the original purchasersor subsequent holders or Beneficial Owners of the Bonds.

This Official Statement has been prepared and delivered by the City and signed for andon behalf of the City by its officials identified below.

CITY OF GROVE CITY, OHIO

By /s/ Richard L. StageMayor

/s/ Michael A. TurnerDirector of Finance

DT-1

DEBT TABLE A

Principal Amounts of Outstanding Debt;Leeway for Additional Debt Within Direct Debt Limitations

A. Total debt including the Bonds: $42,335,000

B. Exempt debt:Category

Income Tax (GO)Tax Increment Financing (GO)TIF Revenue Bonds

Total exempt debt:

OutstandingPrincipal Amount

$21,875,0006,915,000

13,545,000

$42,335,000

C. Total nonexempt debt [A minus B]: $-0-

D. 5½% of tax (assessed) valuation(unvoted nonexempt debt limitation): $47,062,834

E. Total nonexempt limited tax bondsand notes outstanding:

Bonds (including the Bonds)Notes

$-0--0- $-0-

F. Debt leeway within 5½% unvoteddebt limitation [D minus E]: $47,062,834(a)

G. 10½% of tax (assessed) valuation(voted and unvoted debt limitation): $89,847,228

H. Total nonexempt bonds and notesoutstanding:

Bonds (including the Bonds)Notes

$-0--0- $-0-

I. Debt leeway within 10½% debtlimitation [G minus H]: $89,847,228(a)

____________________(a) Debt leeway in this table determined without considering money in the Bond Retirement Fund.

DT-2

DEBT TABLE B

Various City and OverlappingGO Debt Allocations (Principal Amounts)

Amount Per Capita(a)% of City’s CurrentAssessed Valuation(b)

City NonexemptGO Debt

$0 $0.00 0.00%

Total City GO Debt(exempt and nonexempt)

28,790,000 809.28 3.36

Highest Total OverlappingGO Debt(c)

105,663,218 2,970.15 12.35

____________________(a) Based on 2010 population of 35,575.

(b) The City’s current assessed valuation is $855,687,890.

(c) Includes, in addition to “Total City GO Debt,” allocations of total GO debt of overlapping debt issuing subdivisions(as of June 2015) resulting in the calculation of highest total overlapping debt based on percent of tax (assessed)valuation of territory of the subdivisions located within the City (% figures are resulting percent of total debt ofsubdivisions allocated to the City in this manner), as follows:

$ 7,485,725 County (3.25%);$ 66,134,198 Southwestern School District (35.16%); and$ 3,253,295 Solid Waste Authority of Central Ohio (3.10%).

Source of tax (assessed) valuation and confirmation of GO debt figures for overlapping subdivisions: OMAC.

DT-3

DEBT TABLE C

Projected Debt Charges Requirements on City GO Debt

Debt Charges on Portion of Total Anticipated to be Paid From

YearThe

BondsOutstanding

Bonds Total TIF PILOTs Income Tax

2015 $210,343.51 $880,751.88 $1,091,095.39 $428,865.00 $662,230.392016 808,212.50 1,190,703.75 1,998,916.25 565,630.00 1,433,286.252017 803,712.50 1,176,441.25 1,980,153.75 562,930.00 1,417,223.752018 799,212.50 1,174,626.25 1,973,838.75 560,840.00 1,412,998.752019 819,712.50 1,180,061.25 1,999,773.75 563,200.00 1,436,573.752020 814,025.00 1,180,186.25 1,994,211.25 564,800.00 1,429,411.252021 807,525.00 1,179,373.75 1,986,898.75 565,800.00 1,421,098.752022 797,775.00 1,182,623.75 1,980,398.75 566,200.00 1,414,198.752023 809,775.00 1,184,361.25 1,994,136.25 566,000.00 1,428,136.252024 810,775.00 1,184,623.75 1,995,398.75 570,200.00 1,425,198.752025 811,175.00 1,178,323.75 1,989,498.75 568,600.00 1,420,898.752026 810,975.00 1,195,636.25 2,006,611.25 571,400.00 1,435,211.252027 809,125.00 1,075,598.75 1,884,723.75 573,400.00 1,311,323.752028 807,925.00 1,077,228.75 1,885,153.75 579,600.00 1,305,553.752029 811,125.00 1,082,068.75 1,893,193.75 579,800.00 1,313,393.752030 808,525.00 1,084,893.75 1,893,418.75 584,200.00 1,309,218.752031 810,325.00 1,085,543.75 1,895,868.75 587,600.00 1,308,268.752032 811,325.00 499,443.75 1,310,768.75 0.00 1,310,768.752033 811,525.00 499,943.75 1,311,468.75 0.00 1,311,468.752034 808,500.00 499,443.75 1,307,943.75 0.00 1,307,943.752035 809,287.50 497,406.25 1,306,693.75 0.00 1,306,693.752036 807,975.00 499,343.75 1,307,318.75 0.00 1,307,318.752037 810,887.50 0.00 810,887.50 0.00 810,887.502038 807,831.26 0.00 807,831.26 0.00 807,831.262039 809,000.00 0.00 809,000.00 0.00 809,000.002040 809,200.00 0.00 809,200.00 0.00 809,200.002041 807,600.00 0.00 807,600.00 0.00 807,600.002042 810,000.00 0.00 810,000.00 0.00 810,000.002043 811,200.00 0.00 811,200.00 0.00 811,200.002044 811,200.00 0.00 811,200.00 0.00 811,200.00

DT-4

DEBT TABLE D

Outstanding Bonds

General Obligation Bonds

IssueDate of

IssuanceFinal

Maturity

OriginalPrincipalAmount

OutstandingPrincipalAmount

Pinnacle Drive Construction August 23, 2006 2031 $8,730,000 $6,915,000S.R. 665 Construction March 11, 2009 2036 7,585,000 6,715,000Various Purpose Refunding October 31, 2012 2026 1,395,000 1,160,000

The foregoing general obligation debt is reflected in Debt Tables A, B and C.

Tax Increment Financing Revenue Bonds

IssueDate of

IssuanceFinal

Maturity

OriginalPrincipalAmount

OutstandingPrincipalAmount

Economic Development November 28, 2006 2031 $16,290,000 $13,545,000

A-1

APPENDIX A

Comparative Cash-Basis Summary of General Fund Receiptsand Expenditures for Fiscal Years 2010 through 2014

and Budgeted Fiscal Year 2015

2010 2011 2012 2013 2014Budgeted

2015

BEGINNING BALANCE $21,116,504 $18,993,842 $23,920,365 $20,218,040 $20,534,890 $18,105,461

RECEIPTS:Property Taxes $1,048,879 $938,258 $841,662 $851,687 $889,585 882,000Municipal Income Taxes 17,047,009 18,556,350 19,085,048 22,587,865 21,756,638 22,305,016Hotel Taxes 428,966 466,792 533,211 544,167 620,352 530,000Inter-Governmental 6,752,637 2,568,388 2,945,340 3,644,193 1,176,346 1,150,300Charges for Service 104,846 20,731 45,966 3,038,681 5,237 13,000Licenses & Permits 935,664 899,840 992,703 1,126,113 1,192,958 1,198,000Fines & Forfeitures 326,883 371,518 412,878 346,841 315,227 319,000Special Assessments 51,290 1,327,214 68,632 78,760 (5,554) 68,000Interest 824,082 603,856 314,146 436,991 473,366 217,200Rent 29,901 33,582 14,901 43,390 15,625 4,000Contributions/Donations 205,045 172,575 3,803 12,415 3,600 1,200Sale of Fixed Assets 25,196 31,039 16,322 66,587 46,740 15,000Transfer In 0 0 0 292,738 0 0Miscellaneous 62,364 98,842 900,065 221,588 244,955 26,000

TOTAL REVENUES $27,842,762 $26,088,985 $26,174,677 $33,292,016 $26,735,075 $26,728,716

EXPENDITURES:City Council $148,044 $158,772 $159,482 $175,348 $162,009 $186,991Administration 371,032 330,053 397,332 411,441 424,133 463,580Finance 879,800 935,195 828,962 934,336 820,893 917,180Law 425,938 386,552 418,119 487,981 455,744 496,500Police 7,587,516 7,926,081 8,464,910 8,467,671 8,789,093 9,628,968Dispatcher 1,111,874 1,152,893 1,351,441 1,212,761 1,391,203 1,360,520Mayor’s Court 210,276 221,648 280,517 274,055 313,529 352,983Building 645,932 621,594 639,851 717,727 783,425 990,794Lands and Buildings 2,467,684 2,337,636 2,952,268 2,853,941 3,062,314 3,343,332Parks and Recreation 859,444 896,486 961,119 1,067,760 1,198,817 1,342,746Mechanic 302,076 376,976 386,717 194,718 164,532 260,199Health 250,783 260,240 277,849 278,461 278,222 347,085Information Technology 1,180,264 1,212,786 1,396,834 1,467,088 1,699,597 1,651,395Community Relations 179,522 228,782 216,559 271,810 227,908 251,509Human Resources 129,884 131,526 138,645 128,337 118,916 157,676Development 433,170 437,838 382,247 378,963 316,774 581,583General Government 4,848,163 2,756,107 3,224,545 3,122,782 2,478,720 1,760,313Transfers Out 7,934,022 791,297 7,399,605 10,529,986 6,478,675 3,117,700

TOTAL EXPENDITURES $29,965,424 $21,162,462 $29,877,002 $32,975,166 $29,164,504 $27,211,054

ENDING BALANCE $18,993,842 $23,920,365 $20,218,040 $20,534,890 $18,105,461 $17,623,123

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B-1-1

APPENDIX B-1

All-Funds Summary 2013(Cash Basis)

FundBeginningBalance Receipts Expenditures

EndingBalance

General Fund $20,218,039.93 $33,292,015.83 $32,975,166.10 $20,534,889.66Street Maintenance 1,358,072.79 1,441,554.52 1,771,559.63 1,028,067.68St. Highway 474,539.57 121,673.00 99,163.67 497,048.90Police Pension 981,354.04 901,548.75 1,144,608.46 738,294.33General Recreation 327,220.58 1,124,821.26 1,018,118.52 433,923.32City Permissive MVL 90,532.47 179,907.97 7,611.80 262,828.64County Permissive MVL 103,456.29 1,171,380.50 88,535.14 1,186,301.65Sr. Nutrition 4,123.80 16,153.00 18,374.74 1,902.06Drug Law Enforcement 518,805.81 78,907.65 142,058.50 455,654.96Dare Program 37,802.13 0.00 0.00 37,802.13Community Development 178,750.32 328,251.05 342,414.48 164,586.89Community Environment 184,745.88 65,083.00 53,044.74 196,784.14Law Enforcement Assistance 2,336.00 0.00 0.00 2,336.00Enforce & Ed 25,267.38 2,599.00 0.00 27,866.38Garden @ Gantz 890.00 0.00 0.00 890.00Court Computer 134,560.19 27,243.00 14,219.89 147,583.30Big Splash 51,875.31 217,491.84 267,010.90 2,356.25FEMA 0.00 16,725.00 16,725.00 0.00Senior Stage Fund 5,444.16 0.00 0.00 5,444.16Parks Donation Fund 25,905.16 5,620.10 0.00 31,525.26Rockford TIF Fund 321.97 143,363.24 142,625.02 1,060.19Debt Service 666,847.97 1,634,578.72 882,153.62 1,419,273.07Buckeye Center TIF 600,337.95 2,986,838.10 1,513,028.05 2,074,148.00Pinnacle TIF 2,139,545.07 2,104,015.45 1,774,931.06 2,468,629.46SR665 / I71 TIF 574,628.40 183,979.31 276,362.93 482,244.78Capital Improvement Fund 7,626,418.73 18,521,722.62 12,231,117.45 13,917,023.90Recreational Development 206,875.46 249,321.03 108,255.12 347,941.37BWC Self Insured Fund 92,265.77 120,800.00 159,378.53 53,687.24Water Fund 2,590,400.57 1,131,700.02 1,216,717.82 2,505,382.77Sewer Fund 1,701,438.69 1,221,660.18 1,214,754.98 1,708.343.89Deposit Trust 902,824.90 1,477,257.27 1,392,776.38 987,305.79Section 125 Cafeteria Plan 11,676.00 4,999.80 4,212.00 12,463.80Convention Bureau 24,485.83 272,083.82 260,000.00 36,569.65

TOTAL $41,861,789.12 $69,043,295.03 $59,134,924.53 $51,770,159.62

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B-2-1

APPENDIX B-2

All-Funds Summary 2014(Cash Basis)

FundBeginningBalance Receipts Expenditures

EndingBalance

General Fund $20,534,889.66 $26,735,075.37 $29,164,504.25 $18,105,460.78Street Maintenance 1,028,067.68 1,460,239.62 1,632,832.90 855,474.40St. Highway 497,048.90 135,059.63 148,929.72 483,178.81Police Pension 738,294.33 938,112.33 1,158,679.31 517,727.35General Recreation 433,923.32 1,205,284.88 1,072,260.38 566,947.82City Permissive MVL 262,828.64 186,126.36 22,162.00 426,793.00County Permissive MVL 1,186,301.65 97,263.95 938,724.80 344,840.80Sr. Nutrition 1,902.06 18,255.50 17,150.64 3,006.92Drug Law Enforcement 455,654.96 199,459.69 189,838.70 465,275.95Dare Program 37,802.13 0.00 21,734.20 16,067.93Community Development 164,586.89 334,124.38 275,808.03 222,903.24Community Environment 196,784.14 56,857.00 59,356.74 194,284.40Law Enforce. Assistance 2,336.00 4,800.00 148.00 6,988.00Enforce & Ed 27,866.38 2,254.00 0.00 30,120.38Garden @ Gantz 890.00 0.00 824.00 66.00Court Computer 147,583.30 21,979.00 61,241.32 108,320.98Big Splash 2,356.25 280,583.78 262,255.67 20,684.36Senior Stage Fund 5,444.16 0.00 5,272.00 172.16Parks Donation Fund 31,525.26 5,600.00 3,000.00 34,125.26Rockford TIF Fund 1,060.19 147,442.41 147,000.00 1,502.60Debt Service 1,419,273.07 1,358,772.27 795,634.28 1,982,411.06Buckeye Center TIF 2,074,148.00 3,070,420.10 2,960,893.13 2,183,674.97Pinnacle TIF 2,468,629.46 1,746,049.87 3,743,540.56 471,138.77SR665 / I71 TIF 482,244.78 236,106.39 646,258.16 72,093.01Capital Improvement Fund 13,917,023.90 6,569,899.02 12,317,906.65 8,169,016.27Recreational Development 347,941.37 144,149.88 90,423.80 401,667.45BWC Self Insured Fund 53,687.24 252,078.91 152,581.16 153,184.99Water Fund 2,505,382.77 582,814.70 907,882.53 2,180,314.94Sewer Fund 1,708,343.89 1,035,785.83 852,437.29 1,891,692.43Deposit Trust 987,305.79 1,422,011.02 1,387,439.89 1,021,876.92Section 125 Cafeteria Plan 12,463.80 4,615.20 4,999.80 12,079.20Convention Bureau 36,569.65 310,176.13 323,783.08 22,962.70

TOTAL $51,770,159.62 $48,561,397.22 $59,365,502.99 $40,966,053.85

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APPENDIX C

Basic Financial Statements fromthe City’s Financial Report for Fiscal Year 2013

(Audited)

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www.ohioauditor.gov

INDEPENDENT AUDITOR’S REPORT

City of Grove CityFranklin County4035 BroadwayGrove City, Ohio 43123

To the City Council:

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-typeactivities, each major fund, and the aggregate remaining fund information of City of Grove City, FranklinCounty, Ohio (the City), as of and for the year ended December 31, 2013, and the related notes to thefinancial statements, which collectively comprise the City’s basic financial statements as listed in the tableof contents.

Management’s Responsibility for the Financial Statements

Management is responsible for preparing and fairly presenting these financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes designing,implementing, and maintaining internal control relevant to preparing and fairly presenting financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to opine on these financial statements based on our audit. We audited in accordancewith auditing standards generally accepted in the United States of America and the financial auditstandards in the Comptroller General of the United States’ Government Auditing Standards. Thosestandards require us to plan and perform the audit to reasonably assure the financial statements are freefrom material misstatement.

An audit requires obtaining evidence about financial statement amounts and disclosures. The proceduresselected depend on our judgment, including assessing the risks of material financial statementmisstatement, whether due to fraud or error. In assessing those risks, we consider internal controlrelevant to the City's preparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not to the extent needed to opine on theeffectiveness of the City's internal control. Accordingly, we express no opinion. An audit also includesevaluating the appropriateness of management’s accounting policies and the reasonableness of theirsignificant accounting estimates, as well as our evaluation of the overall financial statement presentation.

We believe the audit evidence we obtained is sufficient and appropriate to support our audit opinions.

C-1

City of Grove CityFranklin CountyIndependent Auditor’s ReportPage 2

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, the business-type activities, each major fund,and the aggregate remaining fund information of City of Grove City, Franklin County, Ohio, as ofDecember 31, 2013, and the respective changes in financial position and, where applicable, cash flowsthereof and the respective budgetary comparisons for the General Fund and Police Pension Fund thereoffor the year then ended in accordance with the accounting principles generally accepted in the UnitedStates of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require this presentation toinclude Management’s discussion and analysis listed in the table of contents, to supplement the basicfinancial statements. Although this information is not part of the basic financial statements, theGovernmental Accounting Standards Board considers it essential for placing the basic financialstatements in an appropriate operational, economic, or historical context. We applied certain limitedprocedures to the required supplementary information in accordance with auditing standards generallyaccepted in the United States of America, consisting of inquiries of management about the methods ofpreparing the information and comparing the information for consistency with management’s responses toour inquiries, to the basic financial statements, and other knowledge we obtained during our audit of thebasic financial statements. We do not opine or provide any assurance on the information because thelimited procedures do not provide us with sufficient evidence to opine or provide any other assurance.

Supplementary and Other Information

Our audit was conducted to opine on the City’s basic financial statements taken as a whole.

The introductory section, the financial section’s combining statements, individual fund schedules and thestatistical section information present additional analysis and are not a required part of the basic financialstatements.

The statements and schedules are management’s responsibility, and derive from and relate directly to theunderlying accounting and other records used to prepare the basic financial statements. We subjectedthese statements and schedules to the auditing procedures we applied to the basic financial statements.We also applied certain additional procedures, including comparing and reconciling statements andschedules directly to the underlying accounting and other records used to prepare the basic financialstatements or to the basic financial statements themselves in accordance with auditing standardsgenerally accepted in the United States of America. In our opinion, these statements and schedules arefairly stated in all material respects in relation to the basic financial statements taken as a whole.

We did not subject the introductory section and statistical section information to the auditing proceduresapplied in the audit of the basic financial statements and, accordingly, we express no opinion or any otherassurance on them.

C-2

City of Grove CityFranklin CountyIndependent Auditor’s ReportPage 3

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 18, 2014,on our consideration of the City’s internal control over financial reporting and our tests of its compliancewith certain provisions of laws, regulations, contracts and grant agreements and other matters. Thatreport describes the scope of our internal control testing over financial reporting and compliance, and theresults of that testing, and does not opine on internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards inconsidering the City’s internal control over financial reporting and compliance.

Dave YostAuditor of StateColumbus, Ohio

June 18, 2014

C-3

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C-4

Governmental Business-TypeActivities Activities Total

Assets:Equity In Pooled Cash And Cash Equivalents $46,493,445 $4,213,716 $50,707,161Cash And Cash Equivalents With Fiscal Agents 176,928 0 176,928Cash And Cash Equivalents With Trustee 1,261,129 0 1,261,129Accrued Interest Receivable 150,962 0 150,962Accounts Receivable 22,795 76,714 99,509Municipal Income Taxes Receivable 6,560,785 0 6,560,785Due From Other Governments 1,693,728 0 1,693,728Prepaid Items 207,936 0 207,936Materials And Supplies Inventory 34,112 0 34,112Other Local Taxes Receivable 193,639 0 193,639Property Taxes Receivable 2,752,147 0 2,752,147Revenue In Lieu Of Taxes Receivable 3,460,441 0 3,460,441Special Assessments Receivable 2,606,588 0 2,606,588Loans Receivable 234,957 0 234,957Land And Construction In Progress 51,121,962 50,440 51,172,402Depreciable Capital Assets, Net 148,068,572 53,273,337 201,341,909

Total Assets 265,040,126 57,614,207 322,654,333

Deferred Outflows Of ResourcesDeferred Charge On Refunding 30,341 0 30,341

Liabilities:Accounts Payable 785,351 124,327 909,678Accrued Wages And Benefits Payable 357,791 9,601 367,392Contracts Payable 1,516,519 115 1,516,634Retainage Payable 92,208 0 92,208Due To Other Governments 311,252 4,830 316,082Claims Payable 1,646 0 1,646Accrued Interest Payable 144,889 0 144,889Notes Payable 3,600,000 0 3,600,000Long-Term Liabilities:

Due Within One Year 2,088,883 234,166 2,323,049Due In More Than One Year 34,601,782 3,045,311 37,647,093

Total Liabilities 43,500,321 3,418,350 46,918,671

Deferred Inflows Of ResourcesProperty Taxes 2,612,085 0 2,612,085Revenue In Lieu Of Taxes 3,460,441 0 3,460,441

Total Deferred Inflows Of Resources 6,072,526 0 6,072,526

Net Position:Net Investment In Capital Assets 160,689,457 50,096,009 210,785,466Restricted For:

Debt Service 10,341,339 0 10,341,339Transportation 3,940,384 0 3,940,384Security Of Persons And Property 1,070,174 0 1,070,174Other Purposes 196,957 0 196,957

Unrestricted 39,259,309 4,099,848 43,359,157

Total Net Position $215,497,620 $54,195,857 $269,693,477

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Net Position

December 31, 2013

C-5

Program RevenuesOperating Grants, Capital Grants,

Charges For Contributions ContributionsExpenses Services And Interest And Interest

Governmental Activities:Security Of Persons And Property $10,422,055 $571,728 $247,806 $0Public Health 296,632 14,903 1,250 0Leisure Time Activities 2,485,159 1,532,906 5,620 12,415Community Development 1,394,651 1,222,734 35,742 0Transportation 8,002,807 91,882 1,735,656 4,029,123General Government:

Primary Government 13,593,216 66,416 0 1,892,727Intergovernmental 317,549 0 0 0

Interest And Fiscal Charges 1,494,774 0 0 0

Total Governmental Activities 38,006,843 3,500,569 2,026,074 5,934,265

Business-Type Activities:Water 1,124,767 628,579 0 0Sewer 1,334,128 1,210,868 0 0

Total Business-Type Activities 2,458,895 1,839,447 0 0

Total Activities $40,465,738 $5,340,016 $2,026,074 $5,934,265

General Revenues:Property Taxes Levied For:

General PurposesPoliceDebt Service

Revenue In Lieu Of TaxesOther Local TaxesMunicipal Income Taxes Levied For General Purposes

Grants And Entitlements Not Restricted To Specific Programs

Interest

Miscellaneous

Total General Revenues

Transfers

Total General Revenues And Transfers

Change In Net Position

Net Position At Beginning Of Year

Net Position At End Of Year

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Activities

For The Year Ended December 31, 2013

C-6

Net (Expense) Revenue And Changes In Net Position

Governmental Business-TypeActivities Activities Total

($9,602,521) $0 ($9,602,521)(280,479) 0 (280,479)(934,218) 0 (934,218)(136,175) 0 (136,175)

(2,146,146) 0 (2,146,146)

(11,634,073) 0 (11,634,073)(317,549) 0 (317,549)

(1,494,774) 0 (1,494,774)

(26,545,935) 0 (26,545,935)

0 (496,188) (496,188)0 (123,260) (123,260)

0 (619,448) (619,448)

(26,545,935) (619,448) (27,165,383)

855,786 0 855,786808,395 0 808,395921,295 0 921,295

5,141,680 0 5,141,680829,400 0 829,400

24,245,125 0 24,245,125

884,553 0 884,553

15,131 0 15,131

545,492 11,781 557,273

34,246,857 11,781 34,258,638

(1,971,486) 1,971,486 0

32,275,371 1,983,267 34,258,638

5,729,436 1,363,819 7,093,255

209,768,184 52,832,038 262,600,222

$215,497,620 $54,195,857 $269,693,477

C-7

Police DebtGeneral Pension Service

Assets:

Equity In Pooled Cash And

Cash Equivalents $20,506,772 $738,289 $1,419,275

Cash And Cash Equivalents

With Fiscal Agents 0 0 0

Restricted Assets:

Cash And Cash Equivalents

With Trustee 0 0 0

Receivables:

Property Taxes 944,811 866,527 940,809

Other Local Taxes 177,088 0 0

Revenue In Lieu Of Taxes 0 0 0

Municipal Income Taxes 6,560,785 0 0

Accounts 19,287 0 0

Special Assessments 0 0 2,606,588

Accrued Interest 142,478 0 0

Due From Other Governments 603,618 51,195 55,850

Materials And Supplies Inventory 18,279 0 0

Loans Receivable 234,957 0 0

Prepaid Items 207,936 0 0

Total Assets $29,416,011 $1,656,011 $5,022,522

Liabilities:

Accounts Payable $607,598 $0 $0

Contracts Payable 89,115 0 0

Accrued Wages And Benefits Payable 330,999 0 0

Retainage Payable 0 0 0

Due To Other Governments 146,841 141,508 0

Accrued Interest Payable 0 0 73

Notes Payable 0 0 8,750

Total Liabilities 1,174,553 141,508 8,823

Deferred Inflows Of Resources

Property Taxes 896,680 820,599 894,806

Revenue In Lieu Of Taxes 0 0 0

Unavailable Revenue 5,438,480 97,123 2,708,441

Total Deferred Inflows Of Resources 6,335,160 917,722 3,603,247

Fund Balances:

Nonspendable 461,172 0 0

Restricted 0 596,781 1,410,452

Committed 0 0 0

Assigned 2,548,647 0 0

Unassigned 18,896,479 0 0

Total Fund Balances 21,906,298 596,781 1,410,452

Total Liabilities, Deferred InflowsOf Resources And Fund Balances $29,416,011 $1,656,011 $5,022,522

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Balance Sheet

Governmental Funds

December 31, 2013

C-8

NonmajorBuckeye Pinnacle Capital Governmental

Center TIF TIF Improvement Funds Total

$2,075,635 $2,468,628 $13,917,023 $5,314,136 $46,439,758

0 0 0 176,928 176,928

1,261,129 0 0 0 1,261,129

0 0 0 0 2,752,147

0 0 0 16,551 193,639

1,235,287 1,900,000 0 325,154 3,460,441

0 0 0 0 6,560,785

0 0 0 3,508 22,795

0 0 0 0 2,606,588

0 0 0 8,484 150,962

0 88,632 0 894,433 1,693,728

0 0 0 15,833 34,112

0 0 0 0 234,957

0 0 0 0 207,936

$4,572,051 $4,457,260 $13,917,023 $6,755,027 $65,795,905

$0 $2,000 $0 $175,753 $785,351

0 267,295 1,061,257 98,852 1,516,519

0 0 0 26,792 357,791

0 17,132 60,872 14,204 92,208

0 0 0 22,903 311,252

0 0 30,107 0 30,180

0 0 3,591,250 0 3,600,000

0 286,427 4,743,486 338,504 6,693,301

0 0 0 0 2,612,085

1,235,287 1,900,000 0 325,154 3,460,441

0 88,632 0 749,909 9,082,585

1,235,287 1,988,632 0 1,075,063 15,155,111

0 0 0 15,833 477,005

3,336,764 2,182,201 0 4,165,274 11,691,472

0 0 9,173,537 1,160,353 10,333,890

0 0 0 0 2,548,647

0 0 0 0 18,896,479

3,336,764 2,182,201 9,173,537 5,341,460 43,947,493

$4,572,051 $4,457,260 $13,917,023 $6,755,027 $65,795,905

C-9

Total Governmental Fund Balances $43,947,493

Amounts reported for governmental activities in the Statement of Net

Position are different because:

Capital Assests used in governmental activities are not financial

resources and therefore are not reported in the funds. These

assets consist of:

Land 47,093,226

Construction In Progress 4,028,736

Other Capital Assets 285,332,536

Accumulated Depreciation (137,263,964)

Total 199,190,534

The Internal Service Fund is used by management to charge the costs of

insurance to individual funds. The assets and liabilities of the Internal Service

Fund are included in governmental activities in the Statement of Net Position. 52,041

Other long-term assets are not available to pay for current-period

expenditures and therefore are reported as unavailable revenue in the funds:

Municipal Income Taxes 4,739,005

Delinquent Property Taxes 140,062

Other Local Taxes 111,622Due From Other Governments 1,379,019Special Assessments 2,606,588Interest 91,336

Accounts 14,953

Total 9,082,585

Deferred Outflows of Resources represent deferred charges on refundings

which do not provide current financial resources and therefore are not

reported in the funds. 30,341

In the Statement of Activities interest is accrued on outstanding bonds,

whereas in governmental funds, an interest expenditure is

reported when due. (114,709)

Some liabilities are not due and payable in the current period and

therefore are not reported in the funds. Those liabilities consist of:

Premium On Debt Issued (45,864)

General Obligation Bonds (15,325,000)

OPWC Loans (5,733,112)

Revenue Bonds (14,030,000)

Compensated Absences Payable (1,556,689)

Total (36,690,665)

Net Position Of Governmental Activities $215,497,620

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Reconciliation Of Total Governmental Fund Balances ToNet Position Of Governmental Activities

December 31, 2013

C-10

(THIS PAGE INTENTIONALLY LEFT BLANK)

C-11

Police DebtGeneral Pension Service

Revenues:Property Taxes $851,484 $802,598 $919,027Revenue In Lieu Of Taxes 0 0 0Municipal Income Taxes 20,271,084 0 0Other Local Taxes 552,644 0 0Intergovernmental 3,557,704 98,468 105,471Charges For Services 3,188,770 0 0Licenses And Permits 1,126,513 0 0Fines And Forfeitures 351,616 0 0Special Assessments 78,760 0 83,332Interest 8,516 0 0Rent 43,390 0 0Contributions And Donations 12,415 0 0Miscellaneous 503,285 483 0

Total Revenues 30,546,181 901,549 1,107,830

Expenditures:Current Operations And Maintenance:Security Of Persons And Property 8,535,411 1,176,215 0Public Health 278,257 0 0Leisure Time Activities 924,313 0 0Community Development 1,051,662 0 0Transportation 6,424 0 0General Government:Primary Government 9,378,024 0 18,111Intergovernmental 0 0 0

Capital Outlay 2,494,942 0 0Debt Service:Principal Retirement 0 0 651,999Interest And Fiscal Charges 0 0 212,116

Total Expenditures 22,669,033 1,176,215 882,226

Excess Of Revenues Over(Under) Expenditures 7,877,148 (274,666) 225,604

Other Financing Sources (Uses):Proceeds From Sale Of Capital Assets 66,587 0 0Proceeds Of OPWC Loans 0 0 0Transfers - In 12,947 0 518,000Transfers - Out (10,529,986) 0 0

Total Other Financing Sources (Uses) (10,450,452) 0 518,000

Net Change In Fund Balances (2,573,304) (274,666) 743,604

Fund Balances At Beginning Of Year 24,479,602 871,447 666,848

Fund Balances At End Of Year $21,906,298 $596,781 $1,410,452

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Revenues, Expenditures And Changes In Fund Balances

Governmental Funds

For The Year Ended December 31, 2013

C-12

NonmajorBuckeye Pinnacle Capital Governmental

Center TIF TIF Improvement Funds Total

$0 $0 $0 $0 $2,573,1092,986,838 1,845,732 0 309,110 5,141,680

0 0 0 0 20,271,0840 0 0 273,563 826,2070 258,283 868,499 2,029,352 6,917,7770 0 0 1,258,694 4,447,4640 0 0 308,205 1,434,7180 0 0 46,842 398,4580 0 0 0 162,092

23,296 0 0 533 32,3450 0 0 64,195 107,5850 0 0 39,030 51,4450 0 0 44,762 548,530

3,010,134 2,104,015 868,499 4,374,286 42,912,494

0 0 0 253,677 9,965,3030 0 0 18,375 296,6320 0 0 1,303,820 2,228,1330 0 0 370,084 1,421,7460 0 0 1,431,371 1,437,795

0 2,200 0 177,538 9,575,873290,815 26,734 0 0 317,549

0 1,454,551 11,590,341 829,176 16,369,010

460,000 260,000 0 87,500 1,459,499773,915 317,873 30,107 161,043 1,495,054

1,524,730 2,061,358 11,620,448 4,632,584 44,566,594

1,485,404 42,657 (10,751,949) (258,298) (1,654,100)

0 0 0 5,610 72,1970 0 2,675,421 0 2,675,4210 0 10,484,986 48,321 11,064,2540 0 (518,000) (16,725) (11,064,711)

0 0 12,642,407 37,206 2,747,161

1,485,404 42,657 1,890,458 (221,092) 1,093,061

1,851,360 2,139,544 7,283,079 5,562,552 42,854,432

$3,336,764 $2,182,201 $9,173,537 $5,341,460 $43,947,493

C-13

CITY OF GROVE CITY, OHIO

Reconciliation Of The Statement Of Revenues, Expenditures And Changes

In Fund Balances Of Governmental Funds To The Statement Of Activities

For The Year Ended December 31, 2013

Net Change In Fund Balances - Total Governmental Funds $1,093,061

Amounts reported for governmental activities in the Statement of Activities are different because:Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets

is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:Capital Outlay 13,390,701Depreciation (10,049,037)

Excess of Capital Outlay Over Depreciation Expense 3,341,664

Governmental funds only report the disposal of capital assets to the extent proceeds are received from the sale. In the

Statement of Activities, a gain or loss is reported for each sale.Proceeds From Sale Of Capital Assets (72,197)Loss On Disposal Of Capital Assets (219,584)

Total (291,781)

Some revenues that will not be collected for several months after the City's year-end are not considered"available" revenues and are therefore recorded as deferred inflows of resrouces in the governmentalfunds. Deferred inflows of resrouces changed by these amounts this year:

Municipal Income Taxes 3,974,041Property Taxes 12,367Other Local Taxes 3,193Intergovernmental (1,108,891)Special Assessments (83,332)Charges for Services 7,734Fines And Forfeitures 1,350Interest (11,191)

Total 2,795,271

The Internal Service Fund is used by management to charge the cost of insurance to individual funds.The net revenue (expense) is reported in the entity-wide Statement of Activities. (38,425)

Repayment of long-term obligations is reported as an expenditure in governmental funds, but the repayment reduces long-termliabilities in the Statement of Net Position. In the current year, these amounts consist of:

General Obligation Bond Payments 685,000Ohio Public Works Commission Loans Payments 314,499Revenue Bond Payments 460,000

Total 1,459,499

The issuance of long-term debt provides current financial resources to governmental funds, but in theStatement of Net Position, the debt is recorded as a liability.

Ohio Public Works Commission Loans (2,675,421)

Amortization of bond premiums and the deferred charge on the refunding of debt, as well as accrued interestpayable on the bonds are not reported in the funds, but are allocated as expenses over the life of the

debt in the Statement of Activities.Amortization Of Premium On Bonds 2,548Amortization Of Deferred Charge On Refunding (6,547)Net Decrease In Accrued Interest 4,279

Total 280

Some expenses reported in the Statement of Activities do not require the use of current financial resources andtherefore are not reported as expenditures in the governmental funds.

Decrease In Compensated Absences 45,288

Change In Net Position Of Governmental Activities $5,729,436

See Accompanying Notes To The Basic Financial Statements

C-14

VarianceOriginal Revised Budgetary PositiveBudget Budget Actual (Negative)

Revenues:Property Taxes $874,926 $874,926 $851,484 ($23,442)Municipal Income Taxes 17,253,876 18,360,000 22,587,865 4,227,865Other Local Taxes 522,100 480,000 544,167 64,167Intergovernmental 1,934,509 934,427 3,494,488 2,560,061Charges For Services 187,900 179,000 3,188,590 3,009,590Licenses And Permits 998,000 948,000 1,126,213 178,213Fines And Forfeitures 402,000 402,000 346,841 (55,159)Special Assessments 68,000 68,000 78,760 10,760Interest 357,108 357,108 426,900 69,792Rent 13,000 13,000 43,390 30,390Contributions And Donations 1,200 1,200 12,415 11,215Miscellaneous 36,092 36,050 510,368 474,318

Total Revenues 22,648,711 22,653,711 33,211,481 10,557,770

Expenditures:Current Operations And Maintenance:

Security Of Persons And Property 9,029,286 8,932,167 8,629,082 303,085Public Health 293,349 293,350 292,199 1,151Leisure Time Activities 1,035,629 1,031,005 969,899 61,106Community Development 1,401,298 1,363,439 1,204,685 158,754General Government 11,141,640 11,154,108 10,729,511 424,597

Capital Outlay 2,061,489 3,691,755 3,624,209 67,546

Total Expenditures 24,962,691 26,465,824 25,449,585 1,016,239

Excess Of Revenues Over(Under) Expenditures (2,313,980) (3,812,113) 7,761,896 11,574,009

Other Financing Sources (Uses):Proceeds From Sale Of Capital Assets 15,000 10,000 66,587 56,587Refund Of Prior Year Expenditure 0 0 1,004 1,004Transfers - In 0 0 12,947 12,947Transfers - Out (6,060,000) (10,529,986) (10,529,986) 0

Total Other Financing Sources (Uses) (6,045,000) (10,519,986) (10,449,448) 70,538

Net Change In Fund Balance (8,358,980) (14,332,099) (2,687,552) 11,644,547

Fund Balance At Beginning Of Year 18,075,764 18,075,764 18,075,764 0

Prior Year Encumbrances 2,070,640 2,070,640 2,070,640 0

Fund Balance At End Of Year $11,787,424 $5,814,305 $17,458,852 $11,644,547

See Accompanying Notes To The Basic Financial Statements

For The Year Ended December 31, 2013

(Non-GAAP Budgetary Basis)

CITY OF GROVE CITY, OHIO

General Fund

Statement Of Revenues, Expenditures And Changes In Fund Balance - Budget And Actual

C-15

Variance

Original Revised Budgetary Positive

Budget Budget Actual (Negative)

Revenues:Property Taxes $801,023 $801,023 $802,598 $1,575Intergovernmental 90,000 97,377 98,468 1,091Miscellaneous 30,228 22,851 483 (22,368)

Total Revenues 921,251 921,251 901,549 (19,702)

Expenditures:Current Operations And Maintenance:

Security Of Persons And Property 1,220,542 1,220,542 1,144,609 75,933

Net Change In Fund Balance (299,291) (299,291) (243,060) 56,231

Fund Balance At Beginning Of Year 980,807 980,807 980,807 0

Prior Year Encumbrances 542 542 542 0

Fund Balance At End Of Year $682,058 $682,058 $738,289 $56,231

See Accompanying Notes To The Basic Financial Statements

For The Year Ended December 31, 2013

(Non-GAAP Budgetary Basis)

Statement Of Revenues, Expenditures And Changes In Fund Balance - Budget And Actual

Police Pension Special Revenue Fund

CITY OF GROVE CITY, OHIO

C-16

Governmental

Activities

InternalWater Sewer Total Service Fund

Assets:Current Assets:Equity In Pooled Cash And Cash Equivalents $2,505,374 $1,708,342 $4,213,716 $53,687Accounts Receivable 38,688 38,026 76,714 0

Total Current Assets 2,544,062 1,746,368 4,290,430 53,687

Non-Current Assets:Land And Construction In Progress 40,440 10,000 50,440 0Depreciable Capital Assets, Net 26,166,797 27,106,540 53,273,337 0

Total Non-Current Assets 26,207,237 27,116,540 53,323,777 0

Total Assets 28,751,299 28,862,908 57,614,207 53,687

Liabilities:Current Liabilities:Accounts Payable 113,197 11,130 124,327 0Contracts Payable 115 0 115 0Accrued Wages And Benefits Payable 0 9,601 9,601 0Compensated Absences Payable 0 22,836 22,836 0Due To Other Governments 0 4,830 4,830 0Claims Payable 0 0 0 1,646OPWC Loans Payable 22,207 72,594 94,801 0OWDA Loans Payable 116,529 0 116,529 0

Total Current Liabilities 252,048 120,991 373,039 1,646

Long-Term Liabilities (Net Of Current Portion):Compensated Absences Payable 0 28,873 28,873 0OPWC Loans Payable 19,897 350,126 370,023 0OWDA Loans Payable 2,646,415 0 2,646,415 0

Total Long-Term Liabilities 2,666,312 378,999 3,045,311 0

Total Liabilities 2,918,360 499,990 3,418,350 1,646

Net Position:Net Investment In Capital Assets 23,402,189 26,693,820 50,096,009 0Unrestricted 2,430,750 1,669,098 4,099,848 52,041

Total Net Position $25,832,939 $28,362,918 $54,195,857 $52,041

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Fund Net Position

Proprietary Funds

December 31, 2013

C-17

Governmental

Activities

InternalWater Sewer Total Service Fund

Operating Revenues:Charges For Services $422,007 $489,080 $911,087 $120,800Tap-In Fees 206,572 721,788 928,360 0Miscellaneous 0 11,781 11,781 0

Total Operating Revenues 628,579 1,222,649 1,851,228 120,800

Operating Expenses:Personal Services 0 436,218 436,218 0Purchased Services 288,432 91,996 380,428 102,268Materials And Supplies 0 18,238 18,238 0Depreciation 741,724 772,829 1,514,553 0Claims 0 0 0 56,957Other Operating Expenses 1,050 0 1,050 0

Total Operating Expenses 1,031,206 1,319,281 2,350,487 159,225

Operating Loss (402,627) (96,632) (499,259) (38,425)

Non-Operating Expenses:Interest And Fiscal Charges (93,561) (14,847) (108,408) 0

Loss Before Transfers and Capital Contributions (496,188) (111,479) (607,667) (38,425)

Capital Contributions 1,451,941 519,088 1,971,029 0Transfers - In 0 457 457 0

Total Transfers and Capital Contributions 1,451,941 519,545 1,971,486 0

Change In Net Position 955,753 408,066 1,363,819 (38,425)

Net Position At Beginning Of Year 24,877,186 27,954,852 52,832,038 90,466

Net Position At End Of Year $25,832,939 $28,362,918 $54,195,857 $52,041

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Revenues, Expenses And Changes In Fund Net Position

Proprietary Funds

For The Year Ended December 31, 2013

C-18

CITY OF GROVE CITY, OHIO

Statement Of Cash FlowsProprietary Funds

For The Year Ended December 31, 2013

Governmental

ActivitiesInternal

Water Sewer Total Service FundIncreases (Decreases) In Cash And Cash Equivalents:

Cash Flows From Operating Activities:Cash Received From Customers $420,214 $487,634 $907,848 $120,800Cash Payments For Personal Services 0 (429,507) (429,507) 0Cash Payments To Suppliers For Goods And Services (183,226) (203,757) (386,983) (102,268)Cash Payments For Claims 0 0 0 (57,111)Other Operating Revenues 0 11,781 11,781 0Tap-In Fees 206,572 721,788 928,360 0

Net Cash Provided By (Used For) Operating Activities 443,560 587,939 1,031,499 (38,579)

Cash Flows From Noncapital Financing Activities:Transfers From Other Funds 0 457 457 0

Cash Flows From Capital And Related Financing Activities:Acquisition Of Capital Assets (315,540) (496,346) (811,886) 0Principal Paid On OPWC Loans (21,511) (70,297) (91,808) 0Principal Paid On OWDA Loans (97,966) 0 (97,966) 0Interest And Fiscal Charges Paid On OPWC Loans (2,504) (14,847) (17,351) 0Interest And Fiscal Charges Paid On OWDA Loans (91,057) 0 (91,057) 0

0Net Cash Used For Capital

And Related Financing Activities (528,578) (581,490) (1,110,068) 0

Net Increase (Decrease) In Cash And Cash Equivalents (85,018) 6,906 (78,112) (38,579)

Cash And Cash Equivalents At Beginning Of Year 2,590,392 1,701,436 4,291,828 92,266

Cash And Cash Equivalents At End Of Year $2,505,374 $1,708,342 $4,213,716 $53,687(Continued)

C-19

Governmental

ActivitiesInternal

Water Sewer Total Service FundReconciliation Of Operating Loss To Net CashProvided By (Used For) Operating Activities:

Operating Loss ($402,627) ($96,632) ($499,259) ($38,425)

Adjustments To Reconcile Operating Loss ToNet Cash Provided By (Used For) Operating Activities:Depreciation 741,724 772,829 1,514,553 0Changes In Assets And Liabilities:

Increase In Accounts Receivable (1,793) (1,446) (3,239) 0Increase In Accounts Payable 106,141 1,169 107,310 0Increase (Decrease) In Contracts Payable 115 (85,569) (85,454) 0Increase In Accrued Wages And Benefits Payable 0 1,774 1,774 0Increase In Compensated Absences Payable 0 3,912 3,912 0Decrease In Retainage Payable 0 (9,255) (9,255) 0Increase In Due To Other Governments 0 1,157 1,157 0Decrease In Claims Payable 0 0 0 (154)

Net Cash Provided By (Used For) Operating Activities $443,560 $587,939 $1,031,499 ($38,579)

Noncash Capital Financing Activities:

Assets Transferred From Governmental Funds $1,451,941 $519,088 $1,971,029 $0

See Accompanying Notes To The Basic Financial Statements

CITY OF GROVE CITY, OHIO

Statement Of Cash FlowsProprietary Funds

(Continued)

For The Year Ended December 31, 2013

C-20

Assets:Equity In Pooled Cash And Cash Equivalents $1,041,263Other Local Taxes Receivable 16,551

Total Assets $1,057,814

Liabilities:Due To Other Governments $16,551Undistributed Assets 41,493Deposits Held And Due To Others 999,770

Total Liabilities $1,057,814

See Accompanying Notes To The Basic Financial Statements

Agency Funds

December 31, 2013

CITY OF GROVE CITY, OHIO

Statement Of Fiduciary Assets and Liabilities

C-21

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013

NOTE 1 - DESCRIPTION OF THE CITY AND REPORTING ENTITY

The City of Grove City (the “City”) is a home-rule municipal corporation established under the laws ofthe State of Ohio that operates under its own Charter. The current Charter, which provides for a Mayor-Council-Administrator form of government, was adopted by the electorate November 4, 1958, becameeffective July 1, 1959, and was amended December 6, 1962, November 2, 1982, and again November 5,1985.

The legislative powers of the City are vested in a five member City Council, one of whom is elected at-large for a two-year term with the remaining members elected by ward for four-year overlapping terms,two elected each biennium. The Council sets the compensation guidelines for City officials andemployees, and enacts ordinances and resolutions relating to City services, tax levies, appropriations,indebtedness, licensing of regulated businesses and trades, and other municipal purposes.

The Mayor is the chief executive officer of the municipal corporation. Elected to a four-year term, theMayor holds authority to appoint the City Administrator and other Directors, including the Director ofFinance and the Director of Law.

The City Administrator holds a full-time professional position as chief administrative officer of the City,responsible for its daily operations.

THE REPORTING ENTITY

A reporting entity is comprised of the primary government, component units, and other organizations thatare included to ensure that the financial statements are not misleading. The primary government of theCity consists of all funds, departments, and activities which are not legally separate from the City. Theycomprise the City's legal entity, which provides various services including public safety, streetmaintenance, parks and recreation, senior services, and engineering. The City of Grove City is alsoresponsible for the construction, maintenance, and repairs associated with the water and sewer lines.Council and the Mayor have direct responsibility for these activities. The City of Columbus provideswater and sewer treatment services.

Component units are legally separate organizations for which the City is financially accountable. TheCity is financially accountable for an organization if the City appoints a voting majority of theorganization's governing board and (1) the City is able to significantly influence the programs or servicesperformed or provided by the organization; or (2) the City is legally entitled to or can otherwise access theorganization's resources; the City is legally obligated or has otherwise assumed the responsibility tofinance the deficits of, or provide financial support to, the organization; or the City is obligated for thedebt of the organization. Component units may also include organizations that are fiscally dependent onthe City, in that the City approves the organization’s budget, the issuance of its debt, or the levying of itstaxes and there is a potential for the organization to provide specific financial benefits to, or imposespecific financial burdens on the City. The City has no component units.

C-22

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

The City is associated with four organizations, two of which are defined as jointly governed organizationsand two as shared risk pools. See Notes 18 and 19. These organizations are as follows:

Jointly Governed Organizations:Grove City Area Community Improvement CorporationMid-Ohio Regional Planning Commission

Shared Risk PoolsCentral Ohio Risk Management Association Self-Insurance Pool, Inc.Central Ohio Health Care Consortium

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Grove City have been prepared in conformity with generallyaccepted accounting principles (GAAP) as applied to local governmental units. The GovernmentalAccounting Standards Board (GASB) is the accepted standard-setting body for establishing governmentalaccounting and financial reporting principles. The more significant of the City’s accounting policies aredescribed below.

BASIS OF PRESENTATION

The City’s basic financial statements consist of government-wide statements, including a Statement ofNet Position and a Statement of Activities, and fund financial statements, which provide a more detailedlevel of financial information.

GOVERNMENT-WIDE FINANCIAL STATEMENTS

The Statement of Net Position and the Statement of Activities display information about the City as awhole. These statements include the financial activities of the primary government, except for fiduciaryfunds. The Activity of the Internal Service Fund is eliminated to avoid “doubling up” revenues andexpenditures. The statements distinguish between those activities of the City that are governmental innature and those that are considered business-type activities.

The Statement of Net Position presents the financial condition of the governmental and business-typeactivities of the City at year-end. The Statement of Activities presents a comparison between directexpenses and program revenues for each program or function of the City’s governmental activities and forthe business-type activities of the City. Direct expenses are those that are specifically associated with aservice, program, or department and therefore clearly identifiable to a particular function. Programrevenues include charges paid by the recipient of the goods or services offered by the program, grants,and contributions that are restricted to meeting the operational or capital requirements of a particularprogram and interest earned on grants that is required to be used to support a particular program.Revenues which are not classified as program revenues are presented as general revenues of the City,with certain limited exceptions. The comparison of direct expenses with program revenues identifies theextent to which each governmental program or business segment is self-financing or draws from thegeneral revenues of the City.

C-23

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

FUND FINANCIAL STATEMENTS

During the year, the City segregates transactions related to certain City functions or activities in separatefunds in order to aid financial management and to demonstrate legal compliance. Fund financialstatements are designed to present financial information of the City at this more detailed level. The focusof governmental and enterprise fund financial statements is on major funds. Each major fund is presentedin a separate column. Nonmajor funds are aggregated and presented in a single column. The InternalService Fund is presented in a single column on the face of the proprietary fund statements. Fiduciaryfunds are reported by type.

FUND ACCOUNTING

The City uses funds to maintain its financial records during the year. A fund is defined as a fiscal andaccounting entity with a self-balancing set of accounts. There are three categories of funds utilized by theCity: governmental, proprietary, and fiduciary.

GOVERNMENTAL FUNDS

Governmental funds are those through which most governmental functions of the City are typicallyfinanced. Governmental fund reporting focuses on the sources, uses, and balances of current financialresources. Expendable assets are assigned to the various governmental funds according to the purpose forwhich they may or must be used. Current liabilities are assigned to the fund from which they will bepaid. The difference between governmental fund assets and deferred outflows of resources, andliabilities and deferred inflows of resources is reported as fund balance.

The following are the City's major governmental funds:

General Fund - This fund accounts for all unassigned financial resources except those required tobe accounted for in another fund. The General Fund balance is available to the City for anypurpose provided it is expended or transferred according to the general laws of Ohio and theCharter of the City.

Police Pension Special Revenue Fund - This fund accounts for and reports restricted propertytaxes levied for the payment of the employer's pension contributions.

Debt Service Fund - This fund accounts for and reports the resources that are restricted forpayment of principal and interest and fiscal charges on general obligation debt.

Buckeye Center TIF Debt Service Fund - This fund accounts for and reports the resources that arerestricted for payment of principal and interest and fiscal charges on the tax increment financingrevenue bonds and payments to other governmental entities per the agreement.

Pinnacle TIF Debt Service Fund - This fund accounts for and reports the resources that arerestricted for payment of principal and interest and fiscal charges on the bonds and payments toother governmental entities per the agreement.

C-24

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Capital Improvement Capital Projects Fund - This fund accounts for and reports variousconstruction and improvement projects within the City. These projects are financed fromcommitted local resources, bond proceeds and federal and State grants, including Ohio PublicWorks Commission grants and loans.

The other governmental funds of the City account for grants and other resources whose use is restricted orcommitted for a particular purpose.

PROPRIETARY FUNDS

Proprietary fund reporting focuses on the determination of operating income, changes in netposition, financial position and cash flows. Proprietary funds are classified as enterprise orinternal service, the City has two enterprise and one internal service fund.

Enterprise Funds - Enterprise funds may be used to account for any activity for which a fee ischarged to external users for goods or services. The following are the City’s major enterprisefunds:

Water Fund - This fund is used to account for and report the provision of water service tocertain residents and businesses within the City.

Sewer Fund - This fund is used to account for and report the provision of sanitary sewerservice to the residents and businesses of the City.

Internal Service Funds – Internal Service funds account for the financing of services provided byone department or agency to other departments or agencies of the City on a cost reimbursementbasis.

Bureau Of Workers’ Compensation Self-Insurance Fund - This fund is used to accountfor and report a self-insurance program for workers compensation claims.

FIDUCIARY FUNDS

Fiduciary fund reporting focuses on net position and changes in net position. The fiduciary fund categoryis split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds,and agency funds. The three types of trust funds should be used to report resources held and administeredby the City when it is acting in a fiduciary capacity for individuals, private organizations, or othergovernments. These funds are distinguished by the existence of a trust agreement that affects the degreeof management involvement and the length of time that the resources are held. Agency funds arecustodial in nature (assets equal liabilities) and do not involve measurement of results of operations. TheCity has four agency funds which are used to account for the distribution of mayor’s court fines,individuals and organizations for medical spending, money held for other governments, compliance withbuilding codes, and the distribution of hotel/motel tax to the Grove City Area Visitors and ConventionBureau.

C-25

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

MEASUREMENT FOCUS

Government-Wide Financial Statements

The government-wide financial statements are prepared using the economic resources measurementfocus. All assets and liabilities associated with the operation of the City are included on the Statement ofNet Position. The Statement of Activities presents increases (e.g., revenues) and decreases (e.g.,expenses) in total net position.

Fund Financial Statements

All governmental funds are accounted for using a flow of current financial resources measurement focus.With this measurement focus, only current assets and current liabilities generally are included on theBalance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances reports on thesources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses)of current financial resources. This approach differs from the manner in which the GovernmentalActivities of the government-wide financial statements are prepared. The governmental fund financialstatements therefore include a reconciliation with brief explanations to better identify the relationshipbetween the government-wide statements and the statements for governmental funds.

Like the government-wide statements, all proprietary funds are accounted for using a flow of economicresources measurement focus. All assets and all liabilities associated with the operation of these funds areincluded on the Statement of Fund Net Position. The Statement of Revenues, Expenses and Changes inFund Net Position presents increases (e.g., revenues) and decreases (e.g., expenses) in total net position.The Statement of Cash Flows provides information about how the City finances and meets the cash flowneeds of its proprietary activities.

BASIS OF ACCOUNTING

Basis of accounting determines when transactions are recorded in the financial records and reported onthe financial statements. Government-wide financial statements are prepared using the accrual basis ofaccounting; proprietary and agency funds also use the accrual basis of accounting. Governmental fundsuse the modified accrual basis of accounting. Differences in the accrual and modified accrual basis ofaccounting arise in the recognition of revenue, the recording of deferred outflows/inflows, and in thepresentation of expenses versus expenditures.

REVENUES - EXCHANGE AND NON-EXCHANGE TRANSACTIONS

Revenue resulting from exchange transactions, in which each party gives and receives essentially equalvalue, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis,revenue is recorded in the year in which the resources are measurable and become available.“Measurable” means the amount of the transaction can be determined and “available” means theresources will be collected within the current year or are expected to be collected soon enough thereafterto be used to pay liabilities of the current year. For the City, available means expected to be receivedwithin 31 days of year-end.

C-26

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Non-exchange transactions, in which the City receives value without directly giving equal value in return,include income taxes, property taxes, revenue in lieu of taxes, grants, entitlements, and donations. On anaccrual basis, revenue from income tax is recognized in the year in which the income is earned. Revenuefrom property taxes and revenue in lieu of taxes is recognized in the year for which the taxes are levied(See Note 7). Revenue from grants, entitlements and donations is recognized in the year in which alleligibility requirements have been satisfied. Eligibility requirements include timing requirements, whichspecify the year when the resources are required to be used or the year when use is first permitted,matching requirements, in which the City must provide local resources to be used for a specified purpose,and expenditure requirements, in which the resources are provided to the City on a reimbursement basis.On a modified accrual basis, revenue from non-exchange transactions must also be available before it canbe recognized.

Unearned revenue represents amounts under accrual and modified accrual basis of accounting for whichasset recognition criteria have been met, but for which revenue recognition criteria have not yet been metbecause such amounts have not yet been earned.

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES

In addition to assets, the statements of financial position will sometimes report a separate section fordeferred outflows of resources. Deferred outflows of resources represent a consumption of net positionthat applies to a future period and will not be recognized as an outflow of resources (expense/expenditure)until then. For the City, deferred outflows of resources include a deferred charge on refunding reported inthe government-wide Statement of Net Position. A deferred charge on refunding results from thedifference in the carrying value of refunded debt and its reacquisition price. This amount is deferred andamortized over the shorter life of the refunded or refunding debt.

In addition to liabilities, the statement of financial position reports a separate section for deferred inflowsof resources. Deferred inflows of resources represent an acquisition of net position that applies to a futureperiod and will not be recognized as an inflow of resources (revenue) until that time. For the City,deferred inflows of resources include property taxes, payment in lieu of taxes and unavailable revenue.Property taxes and revenue in lieu of taxes represent amounts for which there is an enforceable legalclaim as of December 31, 2013, but which were levied to finance 2014 operations. These amounts havebeen recorded as a deferred inflow on both the government-wide statement of net position and thegovernmental fund financial statements. Unavailable revenue is reported only on the governmental fundsBalance Sheet, and represents receivables which will not be collected within the available period. For theCity, unavailable revenue includes municipal income taxes, delinquent property taxes, other local taxes,intergovernmental grants, special assessments, interest and accounts receivable. These amounts aredeferred and recognized as an inflow of resources in the period the amounts become available.

EXPENSES/EXPENDITURES

On the accrual basis of accounting, expenses are recognized at the time they are incurred.

The measurement focus of governmental fund accounting is on decreases in net financial resources(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period inwhich the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation andamortization, are not recognized in governmental funds.

C-27

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

CASH AND CASH EQUIVALENTS

To improve cash management, cash received by the City is pooled. Monies for all funds, includingproprietary funds, are maintained in this pool. Individual fund integrity is maintained through the City’srecords. Interest in the pool is presented as “Equity In Pooled Cash And Cash Equivalents” on thefinancial statements. The City has permissive motor vehicle license money, which is held by the FranklinCounty Engineer as agent and distributed to the City for approved street projects. The balance in thisaccount is presented on the Balance Sheet as “Cash And Cash Equivalents With Fiscal Agents”. The Cityutilizes trustee accounts to hold monies for the payment of principal and interest and a reserve required bythe debt covenant relating to the Buckeye Center Tax Increment Financing Revenue Bonds. The balancein this account is presented on the Balance Sheet as “Restricted Assets: Cash And Cash Equivalents WithTrustee”.

During the year, investments were limited to Federal Home Loan Bank Consolidation Bonds, FederalHome Loan Bank Bonds, Federal Home Loan Mortgage Corporation Bonds, Federal Farm Credit BankBonds, Federal National Mortgage Association Notes, Federal National Mortgage Association Bonds,STAROhio, and Negotiable Certificates of Deposit. Except for nonparticipating investment contracts,investments are reported at fair value which is based on quoted market prices.

The City has invested funds in the State Treasury Asset Reserve of Ohio (STAROhio) during 2013.STAROhio is an investment pool managed by the State Treasurer’s Office which allows governmentswithin the State to pool their funds for investment purposes. STAROhio is not registered with the SEC asan investment company, but does operate in a manner consistent with Rule 2a7 of the InvestmentCompany Act of 1940. Investments in STAROhio are valued at STAROhio’s net asset value per sharewhich is the price the investment could be sold for on December 31, 2013.

Interest income and gains or losses on investments are distributed to the funds according to Ohioconstitutional and statutory requirements. Interest revenue and gains or losses on investments credited tothe General Fund during 2013 amounted to $8,516, which includes $5,524 assigned from other funds.

Investments with an original maturity of three months or less at the time of purchase and investments ofthe cash management pool are reported as cash equivalents on the financial statements.

RESTRICTED ASSETS

Assets are reported as restricted when limitations on their use change the nature or normal understandingof the availability of the asset. Such constraints are either externally imposed by creditors, contributors,grantors, or laws of other governments, or are imposed by law through constitutional provisions orenabling legislation. Restricted assets are for monies held in a trustee account relating to the taxincrement financing revenue bonds.

MATERIALS AND SUPPLIES INVENTORY

Inventories are presented at cost on a first-in, first-out basis and are expended/expensed when used.Inventory consists of expendable supplies held for consumption.

C-28

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

PREPAID ITEMS

Payments made to vendors for services that will benefit periods beyond December 31, 2013, are recordedas prepaid items using the consumption method. A current asset for the prepaid amount is recorded at thetime of the purchase and an expenditure/expense is reported in the year in which services are consumed.

CAPITAL ASSETS

General capital assets are capital assets that are associated with governmental activities. These assetsgenerally result from expenditures in governmental funds. These assets are reported in the GovernmentalActivities column of the government-wide Statement of Net Position but are not reported in the fundfinancial statements. Capital assets used by the enterprise funds are reported in both the Business-TypeActivities column of the government-wide Statement of Net Position and in the respective funds.

Capital assets are capitalized at cost (or estimated historical cost which is determined by indexing thecurrent replacement cost back to the year of acquisition) and updated for additions and deletions duringthe year. Donated capital assets are recorded at their fair market values on the date received. The Citymaintains a capitalization threshold of $5,000. Improvements are capitalized; the costs of normalmaintenance and repairs that do not add to the value of the asset or materially extend an asset’s life areexpensed. Interest incurred during the construction of proprietary fund capital assets is also capitalized.

All reported capital assets, except for land and construction in progress, are depreciated. Improvementsare depreciated over the remaining useful lives of the related capital assets. Useful lives for infrastructurewere estimated based on the City’s historical records of necessary improvements and replacements. Inthe case of the initial capitalization of general infrastructure assets, the City chose to include allinfrastructure items regardless of their acquisition date.

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

Governmental And

Business-Type

Activities

Estimated Lives

Buildings 50 years

Improvements Other Than Buildings 10 - 20 years

Machinery And Equipment 10 - 20 years

Furniture And Fixtures 10 - 20 years

Vehicles 3 -10 years

Computer Equipment 3 -10 years

Infrastructure 15 - 50 years

Description

The City’s infrastructure consists of curbs and gutters, sidewalks, streets, street lights, storm sewer lines,traffic signals, other infrastructure, water lines and sewer lines.

C-29

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

COMPENSATED ABSENCES

Vacation benefits and compensatory time are accrued as a liability as the benefits are earned if theemployees' rights to receive compensation are attributable to services already rendered and it is probablethat the City will compensate the employees for the benefits through paid time off or some other means.The City records a liability for all accumulated unused vacation time and compensatory time when earnedfor all employees with more than one year of service.

Sick leave benefits are accrued as a liability using the vesting method. The liability includes theemployees who are currently eligible to receive termination benefits and those that the City has identifiedas probable of receiving payment in the future. The amount is based on accumulated sick leave andemployees’ wage rates at year-end, taking into consideration any limits specified in the City’s terminationpolicy. The City records a liability for accumulated unused sick leave for employees and administratorsafter three years of service or an accumulation of more than 360 hours of sick leave.

ACCRUED LIABILITIES AND LONG-TERM OBLIGATIONS

All payables, accrued liabilities and long-term obligations are reported in the government-wide financialstatements. All payables, accrued liabilities, and long-term obligations payable from the proprietaryfunds are reported on the proprietary funds’ financial statements.

In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timelymanner and in full from current financial resources are reported as obligations of the funds. However,compensated absences that will be paid from governmental funds are reported as liabilities on the fundfinancial statements only to the extent that they are due for payment during the current year. Long-termloans and bonds are recognized as liabilities on the governmental fund financial statements when due.

FUND BALANCE

Fund balance is divided into five classifications based primarily on the extent to which the City is boundto observe constraints imposed upon the use of the resources in the governmental funds. Theclassifications are as follows:

Nonspendable - The nonspendable fund balance category includes amounts that cannot be spentbecause they are not in spendable form, or legally or contractually required to be maintainedintact. The “not in spendable form” criterion includes prepaid items and material and suppliesinventory that are not expected to be converted to cash. It also includes the long-term portion ofloans receivable.

Restricted – Fund balance is reported as restricted when constraints placed on the use of resourcesare either externally imposed by creditors (such as through debt covenants), grantors,contributors, or laws or regulations of other governments or is imposed by law throughconstitutional provisions or enabling legislation (City ordinances).

C-30

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandate payment ofresources (from external resource providers) and includes a legally enforceable requirement thatthose resources be used only for the specific purposes stipulated in the legislation. Legalenforceability means that the City can be compelled by an external party-such as citizens, publicinterest groups, or the judiciary to use resources created by enabling legislation only for thepurposes specified by the legislation.

Committed - The committed fund balance classification includes amounts that can be used onlyfor the specific purposes imposed by formal action (ordinance) of City Council. Thosecommitted amounts cannot be used for any other purpose unless City Council removes or changesthe specified use by taking the same type of action (ordinance) it employed to previously committhose amounts. In contrast to fund balance that is restricted by enabling legislation, committedfund balance classification may be redeployed for other purposes with appropriate due process.Constraints imposed on the use of committed amounts are imposed by City Council, separatefrom the authorization to raise the underlying revenue; therefore, compliance with theseconstraints are not considered to be legally enforceable. Committed fund balance alsoincorporates contractual obligations to the extent that existing resources in the fund have beenspecifically committed for use in satisfying those contractual requirements.

Assigned - Amounts in the assigned fund balance classification are intended to be used by theCity for specific purposes but do not meet the criteria to be classified as restricted or committed.In governmental funds, other than the General Fund, assigned fund balance represents theremaining amount that is not restricted or committed. In the General Fund, assigned amountsrepresent intended uses established by the City Council or a City official delegated that authorityby City Charter or ordinance or by State statute. State statute authorizes the finance director toassign fund balance for purchases on order provided such amounts have been lawfullyappropriated.

Unassigned - Unassigned fund balance is the residual classification for the General Fund andincludes all spendable amounts not contained in the other classifications. In other governmentalfunds, the unassigned classification is used only to report a deficit fund balance.

The City applies restricted resources first when expenditures are incurred for purposes for which eitherrestricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, withinunrestricted fund balance, committed amounts are reduced first followed by assigned, and thenunassigned amounts when expenditures are incurred for purposes for which amounts in any of theunrestricted fund balance classifications could be used.

NET POSITION

Net position represents the difference between all other elements in a statement of financial position. Netinvestment in capital assets consists of capital assets, net of accumulated depreciation, reduced by theoutstanding balances of any borrowing used for the acquisition, construction or improvement of thoseassets. A portion of certain governmental long-term liabilities is not related to governmental activitiesbecause, although the entire debt is being paid from governmental activities, part of the proceeds wereused to purchase assets used in the business-type activities. The unrelated portion of these liabilities isincluded in the calculation of unrestricted net position. Net position is reported as restricted when there

C-31

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

are limitations imposed on its use either through external restrictions imposed by creditors, grantors orlaws or regulations of other governments. Net position restricted for other purposes includes resourcesrestricted for computerization of the mayor’s court and neighborhood stabilization.

The City applies restricted resources when an expense is incurred for purposes for which both restrictedand unrestricted net position are available.

BUDGETS AND BUDGETARY ACCOUNTING

All funds other than agency funds are legally required to be budgeted and appropriated. The majordocuments prepared are the tax budget, the certificate of estimated resources, and the appropriationordinance, all of which are prepared on the budgetary basis of accounting. The tax budget demonstrates aneed for existing or increased tax rates. The certificate of estimated resources establishes a limit on theamount Council may appropriate. The appropriation ordinance is Council’s authorization to spendresources and sets annual limits on expenditures plus encumbrances at the level of control selected byCouncil. The legal level of control has been established by Council at the fund, department, personalservices and all other objects level for all funds.

The certificate of estimated resources may be amended during the year if projected increases or decreasesin revenue are identified by the Finance Director. The amounts reported as the original budgeted amountson the budgetary statements reflect the amounts on the certificate of estimated resources when the originalappropriations were adopted. The amounts set forth in the financial statements as final budgeted amountsrepresent estimates from the amended certificate in effect at the time final appropriations were passed byCouncil.

The appropriation ordinance is subject to amendment throughout the year with the restriction thatappropriations cannot exceed estimated resources. The amounts reported as the original budgetedamounts reflect the first appropriation ordinance for that fund that covered the entire year, includingamounts automatically carried forward from prior years. The amounts reported as the revised budgetedamounts represent the final appropriation amounts passed by Council during the year, including allsupplemental appropriations.

INTERNAL ACTIVITY

Transfers between governmental and business-type activities on the government-wide financialstatements are reported in the same manner as general revenues. Transfers between governmentalactivities are eliminated on the government wide financial statements.

Internal allocations of overhead expenses from one function to another or within the same function areeliminated on the Statement of Activities. Payments for interfund services provided and used are noteliminated.

C-32

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Exchange transactions between funds are reported as revenues in the seller funds and asexpenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without arequirement for repayment are reported as interfund transfers. Interfund transfers are reported as otherfinancing sources/uses in governmental funds and after non-operating revenues/expenses in proprietaryfunds. Repayments from funds responsible for particular expenditures/expenses to the funds that initiallypaid for them are not presented on the financial statements.

BOND PREMIUM

On the government-wide financial statements and in the enterprise funds, bond premiums are deferredand amortized over the term of the bonds using the straight-line (bonds outstanding) method, whichapproximates the effective interest method. Bond premiums are presented as additions to the face amountof bonds payable.

On the governmental fund financial statements, bond premiums are recognized in the period when thedebt is issued.

DEFERRED CHARGE ON REFUNDING

On the government-wide financial statements, the difference between the reacquisition price (fundsrequired to refund the old debt) and the net carrying amount of the old debt is deferred and amortized as acomponent of interest expense. This deferred amount is amortized over the life of the old or new debt,whichever is shorter, using the effective interest method and is presented as deferred outflow of resourceson the Statement of Net Position.

OPERATING REVENUES AND EXPENSES

Operating revenues are those revenues that are generated directly from the primary activity of theproprietary funds. For the City, these revenues are charges for services for sewer and water utilityservices and self-insurance program. Operating expenses are the necessary costs incurred to provide theservice that is the primary activity of the fund. Revenues and expenses that do not meet these definitionsare reported as non-operating.

ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect the amounts reported in the financialstatements and accompanying notes. Actual results may differ from those estimates.

C-33

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NOTE 3 - CHANGE IN ACCOUNTING PRINCIPLES

For 2013, the City implemented Governmental Accounting Standard Board (GASB) Statement No. 61,“The Financial Reporting Entity: Omnibus; an amendment of GASB Statements No. 14 and No. 34.”This Statement modifies existing requirements for the assessment of potential component units indetermining what should be included in the financial reporting entity, and financial reporting entitydisplay and disclosure requirements. The implementation of this statement did not result in any change inthe City’s financial statements.

NOTE 4 - BUDGETARY BASIS OF ACCOUNTING

While reporting financial position, results of operations and changes in fund balance on the basis ofgenerally accepted accounting principles (GAAP), the budgetary basis, as provided by law, is based uponaccounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. TheStatement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAPBudgetary Basis) is presented for the General Fund and the Police Pension Special Revenue Fund on thebudgetary basis to provide a meaningful comparison of actual results with the budget.

The major differences between the budget basis and the GAAP basis are that:

(a) Revenues are recorded when received in cash (budget basis) as opposed to when susceptible toaccrual (GAAP basis).

(b) Expenditures are recorded when paid in cash (budget basis) as opposed to when the liability isincurred (GAAP basis).

(c) Encumbrances are treated as expenditures (budget basis) rather than restricted, committed, orassigned fund balance (GAAP basis).

(d) Unrecorded cash represents amounts received but not included as revenue on the budget basisoperating statements. These amounts are included as revenue on the GAAP basis operatingstatements.

(e) Investments are reported at fair value (GAAP basis) rather than at cost (budget basis).

C-34

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

The adjustments necessary to convert the results of operations for the year on the GAAP basis to thebudget basis for the General Fund and the Police Pension Special Revenue Fund are as follows:

Police

General Pension

GAAP Basis ($2,573,304) ($274,666)

Increases (Decreases) Due To:

Revenue Accruals 2,235,563 0

Expenditure Accruals 295,498 31,606

Encumbrances Outstanding

At Year-End (Budget Basis) (3,076,050) 0

Change In Fair Value Of Investments - 2012 284,029 0

Unrecorded Cash - 2012 118,585 0

Change In Fair Value Of Investments - 2013 119,539 0

Unrecorded Cash - 2013 (91,412) 0

Budget Basis ($2,687,552) ($243,060)

Net Change In Fund Balance

NOTE 5 - DEPOSITS AND INVESTMENTS

The City is a charter City and has adopted an investment policy through City ordinance. The City haselected to follow the provisions of State statute. State statutes classify monies held by the City into threecategories, active deposits, inactive deposits, and interim deposits.

Active deposits are public deposits determined to be necessary to meet current demands upon the City’sTreasury. Active monies must be maintained either as cash in the City Treasury, in commercial accountspayable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or inmoney market deposit accounts.

Inactive deposits are public deposits that the Council has identified as not required for use within thecurrent five year period of designation of depositories. Inactive deposits must either be evidenced bycertificates of deposit maturing not later than the end of the current period of designation of depositories,or by savings or deposit accounts including, but not limited to, passbook accounts.

Interim deposits are deposits of interim monies. Interim monies are those monies which are not neededfor immediate use but which will be needed before the end of the current period of designation ofdepositories. Interim deposits must be evidenced by time certificates of deposit maturing not more thanone year from the date of deposit, or by savings or deposit accounts, including passbook accounts.

C-35

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Interim monies held by the City may be deposited or invested in the following securities:

1. United States Treasury bills, bonds notes, or any other obligation or security issued by theUnited States Treasury, or any other obligation guaranteed as to principal and interest bythe United States;

2. Bonds, notes, debentures, or any other obligations or securities issued by any federalgovernment agency or instrumentality, including, but not limited to, Federal NationalMortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, FederalHome Loan Mortgage Corporation, Government National Mortgage Association, andStudent Loan Marketing Association. All federal agency securities shall be directissuances of federal government agencies or instrumentalities;

3. No-load money market mutual funds consisting exclusively of obligations described in(1) or (2) and repurchase agreements secured by such obligations, provided thatinvestments in securities described in this division are made only through eligibleinstitutions;

4. Time certificates of deposit or savings or deposit accounts including, but not limited to,passbook accounts;

5. Bonds and other obligations of the State of Ohio;

6. The State Treasurer's investment pool (STAR Ohio);

7. Certain bankers’ acceptances and commercial paper notes for a period not to exceed onehundred eighty days in an amount not to exceed 25 percent of the interim moniesavailable for investment at any one time if training requirements have been met; and

8. Written repurchase agreements in the securities described in (1) or (2) provided themarket value of the securities subject to the repurchase agreement must exceed theprincipal value of the agreement by at least two percent and be marked to market daily,and the term of the agreement must not exceed thirty days.

Investments in stripped principal or interest obligations, reverse repurchase agreements and derivativesare prohibited. The issuance of taxable notes for the purpose of arbitrage, the use of leverage and shortselling are also prohibited.

Investments may only be made through specified dealers and institutions. Payment for investments maybe made only upon delivery of the securities representing the investments to the treasurer or, if thesecurities are not represented by a certificate, upon receipt of confirmation of transfer from the custodian.

C-36

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

The City may also invest any monies not required to be used for a period of six months or more in thefollowing:

1. Bonds of the State of Ohio;

2. Bonds of any municipal corporation, village, county, township, or other political subdivisionof this State, as to which there is no default of principal, interest, or coupons; and,

3. Obligations of the City.

INVESTMENTS

As of December 31, 2013, the City had the following investments:

Standard

Percentage & Poor's/

Of Total Moody's

Fair Value Less Than 1 1 - 5 Investments Ratings Call Date

Federal Home Loan Bank

Consolidation Bonds $502,245 $502,245 $0 N/A Aaa -----

Federal Home Loan 1/5/14 to

Bank Bonds 11,507,814 687,329 10,820,485 24.02 Aaa 8/8/2014

Federal Home Loan Mortgage 2/24/13 to

Corporation Bonds 8,805,746 500,395 8,305,351 18.38 Aaa 6/12/2015

Federal Farm Credit 1/5/14 to

Bank Bonds 7,773,773 800,680 6,973,093 16.23 Aaa 8/27/2014

Federal National Mortgage

Association Notes 1,431,213 0 1,431,213 N/A Aaa 2/28/2014

Federal National Mortgage 2/8/14 to

Association Bonds 12,147,291 0 12,147,291 25.36 Aaa 7/10/2014

STAROhio 4,786,635 4,786,635 0 N/A AAAm -----

Negotiable Certificates

Of Deposit 948,488 223,512 724,976 N/A ----- -----Totals $47,903,205 $7,500,796 $40,402,409

Investment Maturities (In Years)

INTEREST RATE RISK

As a means of limiting its exposure to fair value losses caused by rising interest rates, the City’sinvestment policy requires that, to the extent possible, investments will match anticipated cash flowrequirements. No investment shall be made unless the Finance Director, at the time of making theinvestment, reasonably expects it can be held to its maturity. Unless matched to a specific obligation ordebt of the City, the City will not directly invest in securities maturing more than five years from the dateof investment.

C-37

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

CUSTODIAL CREDIT RISK

For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, theCity will not be able to recover the value of its investments or collateral securities that are in thepossession of an outside party. The investments listed in the table above, with the exception ofSTAROhio, are exposed to custodial credit risk in that they are uninsured, unregistered, and held by thecounterparty’s trust department or agent but not in the City’s name. The City has no policy for custodialcredit risk beyond the requirements of State statute.

CREDIT RISK

Ohio law requires that STAROhio maintain the highest rating provided by at least one nationallyrecognized standard rating service. The City’s investment policy limits investments to those authorizedby State statute which restricts investments to those that are highly rated or issued by United StatesGovernment sponsored enterprises. See the table above for the investment ratings.

CONCENTRATION OF CREDIT RISK

The City places a limit on the amount it may invest in any one financial institution. The aggregateinvestments with any one financial institution will at no time exceed 25 percent of the investmentportfolio and funds invested in STAROhio or any financial institution in which the City is using as itsprimary bank for active deposits shall not exceed 40 percent of the investment portfolio. The percentagethat each investment represents of total investments is listed in the above table.

NOTE 6 - MUNICIPAL INCOME TAX

The City levies and collects an income tax of two percent on all income earned within the City as well ason incomes of residents earned outside the City. In the latter case, the City allows a credit of 100 percentof the tax paid to another municipality, not to exceed the amount owed. Employers within the City arerequired to withhold income tax on employee earnings and remit the tax to the City at least quarterly.Corporations and other individual taxpayers are also required to pay their estimated tax at least quarterlyand file a final return annually. The City utilizes the Regional Income Tax Agency (RITA) for thecollection of income taxes on its behalf.

NOTE 7 - PROPERTY TAX

Property taxes include amounts levied against all real and public utility property located in the City.Property tax revenue received during 2013 for real and public utility property taxes represents collectionsof 2012 taxes.

2013 real property taxes were levied after October 1, 2013, on the assessed value as of January 1, 2013,the lien date. Assessed values are established by State law at 35 percent of appraised market value. 2013real property taxes are collected in and intended to finance 2014.

C-38

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Real property taxes are payable annually or semi-annually. If paid annually, payment is due December31; if paid semi-annually, the first payment is due December 31, with the remainder payable by June 20.Under certain circumstances, State statute permits later payment dates to be established.

Public utility tangible personal property currently is assessed at varying percentages of true value; publicutility real property is assessed at 35 percent of true value. 2013 public utility property taxes whichbecame a lien December 31, 2012, are levied after October 1, 2013, and are collected in 2014 with realproperty taxes.

The full tax rate for all City operations for the year ended December 31, 2013, was $3.50 per $1,000 ofassessed value. The assessed values of real property and public utility tangible property upon which 2013property tax receipts were based are as follows:

Category Assessed Value

Real Property

Residential/Agricultural $576,221,580

Commercial/Industrial/Public Utility 240,328,770

Public Utility Personal 12,574,010

Total Property Taxes $829,124,360

The County Treasurer collects property taxes on behalf of all taxing districts in the county, including theCity. The County Auditor periodically remits to the City its portion of the taxes collected. Property taxesreceivable represents real and public utility property taxes and outstanding delinquencies which weremeasurable as of December 31, 2013, and for which there was an enforceable legal claim. In thegovernmental funds, the portion of the receivable not levied to finance 2013 operations is offset todeferred inflows of resources – property taxes. On the accrual basis, collectible delinquent property taxeshave been recorded as a receivable and revenue, while on the modified accrual basis the revenue has beenreported as deferred inflows of resources – unavailable revenue.

NOTE 8 - RECEIVABLES

Receivables at December 31, 2013 consisted of property taxes, other local taxes, revenue in lieu of taxes,municipal income taxes, accounts, special assessments, interest on investments, due from othergovernments arising from grants, entitlements or shared revenues and loans. All receivables areconsidered fully collectible and will be received within one year with the exception of property taxes,revenue in lieu of taxes, income taxes, special assessments and loans. Water and sewer chargesreceivable which, if delinquent, may be certified and collected as a special assessment, are subject toforeclosure for nonpayment. Property taxes and income taxes, although ultimately collectible, includesome portion of delinquents that will not be collected within one year. Special assessments expected tobe collected in more than one year for the City amount to $2,606,588. The City had $2,909 in delinquentspecial assessments at December 31, 2013. Revenue in lieu of taxes will be received over the designatedperiod established by the agreements.

C-39

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Loans receivable represent low-interest loans to stimulate new economic development by creating and/orexpanding investment and employment in the Grove City Town Center. Loans will bear interest at aminimum rate of three percent. The loans are to be repaid over a period of five to 20 years. $10,398 ofthe $234,957 is expected to be received within the next year.

A summary of the principal items of due from other governments follows:

Amount

Governmental Activities:

Local Government $306,505

Liquor Permits 42,896

Cigarette Tax 1,350

911 Wireless 21,667

Bulletproof Vest Grant 4,390

DUI Taskforce Grant 1,483

Drug Enforcement Agency Grant 4,063

Ohio Department of Transportation Grant 48,729

Stop Wage Grant 535

Department of Public Safety 70

Jackson Township 39,750

Village Of Urbancrest 896

Fines And Forfeitures 952

Homestead And Rollback 260,895

Estate Tax 67,729

Pari-Mutual Tax 7,749

Gasoline Tax 618,990

Motor Vehicle License Tax 128,518

Permissive Motor Vehicle License Tax 136,561

Total Due From Other Governments $1,693,728

REVENUE IN LIEU OF TAXES

In 2002, the City entered into the Buckeye Center Tax Increment Financing Agreement between the Cityand Stringtown Partners North, Stringtown Partners South, and Lucas State Street Stringtown Limited, forthe purpose of constructing the Parkway Center North and South retail center. To encourage theseimprovements, the companies and home owners were granted a 100 percent, 30 year exemption frompaying any property taxes on the new construction; however, revenue in lieu of taxes are paid to the Cityin an amount equal to the real property taxes that otherwise would have been due in that year. Thesepayments are being used to finance public infrastructure improvements. Additional payments are made tothe South-Western City School District since they are impacted by the exemption.

C-40

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

In 2004, the City entered into the Pinnacle Tax Increment Financing Agreement between the City andPinnacle Development Company, Ltd., and M/I Homes of Central Ohio for the purpose of constructing agolf course community consisting of a golf course, single-family homes and attached and detachedresidential condominiums. To encourage these improvements, the companies and home owners weregranted a 100 percent, 30 year exemption from paying any property taxes on the new construction;however, revenue in lieu of taxes are paid to the City in an amount equal to the real property taxes thatotherwise would have been due in that year. These payments are being used to finance publicinfrastructure improvements. Per the tax increment financing agreement, service payments are made tothe South-Western City School District directly from Franklin County. Jackson Township will bereimbursed through capital assets additions, purchased by the City.

In 2006, the City entered into the Rockford Homes Tax Increment Financing Agreement between the Cityand Rockford Home Builders for the purpose of constructing single-family homes. In the agreement, thedeveloper agreed to pay for the infrastructure cost and will be reimbursed by the City from the RockfordTIF Special Revenue Fund. Per the tax increment financing agreement, service payments are made to theSouth-Western City School District directly from Franklin County.

In 2007, the City created the SR665/I71 Municipal Public Improvement Tax Increment Financing Districtfor the continued commercial development of SR665/I71 corridor of the City. This agreement is for 30years and allows 100 percent exemption on improvements in the TIF district; however, revenue in lieu oftaxes are paid to the City in an amount equal to the real property taxes that otherwise would have beendue in that year. These payments are being used to finance public infrastructure improvements. Per thetax increment financing agreement, service payments are made to the South-Western City School Districtdirectly from Franklin County. A separate agreement was signed with Jackson Township; however;depending upon where the infrastructure improvements are made and location of the parcel in the TIFdistrict depends upon how much the Township is to be reimbursed.

NOTE 9 - CAPITAL ASSETS

Capital assets activity for the year ended December 31, 2013, was as follows:

Balance At Balance At12/31/2012 Additions Deletions 12/31/2013

Governmental ActivitiesCapital Assets, Not Being Depreciated:

Land $45,279,114 $1,814,112 $0 $47,093,226Construction In Progress 4,774,944 8,426,795 (9,173,003) 4,028,736

Total Capital Assets, Not BeingDepreciated $50,054,058 $10,240,907 ($9,173,003) $51,121,962

(Continued)

C-41

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Balance At Balance At12/31/2012 Additions Deletions 12/31/2013

Governmental ActivitiesDepreciable Capital Assets:

Buildings $6,628,382 $0 $0 $6,628,382Improvements Other Than Buildings 4,946,203 71,277 0 5,017,480Machinery And Equipment 4,868,178 449,225 (65,996) 5,251,407Furniture And Fixtures 264,941 47,547 0 312,488Vehicles 3,107,489 379,748 (155,652) 3,331,585Computer Equipment 3,110,127 54,713 0 3,164,840Infrastructure:

Curbs And Gutters 21,128,349 1,544,457 0 22,672,806Sidewalks 7,578,880 999,355 0 8,578,235Streets 179,822,251 6,541,231 (2,703,392) 183,660,090Storm Sewer Lines 30,099,731 814,900 0 30,914,631Other Infrastructure 14,380,248 1,420,344 0 15,800,592

Total Depreciable Capital Assets 275,934,779 12,322,797 (2,925,040) 285,332,536Less Accumulated Depreciation:

Buildings (3,499,299) (93,812) 0 (3,593,111)Improvements Other Than Buildings (2,738,044) (158,057) 0 (2,896,101)Machinery and Equipment (3,058,934) (415,279) 65,996 (3,408,217)Furniture and Fixtures (174,508) (27,695) 0 (202,203)Vehicles (1,716,339) (278,526) 109,661 (1,885,204)Computer Equipment (2,272,592) (319,928) 0 (2,592,520)Infrastructure:

Curbs And Gutters (14,435,730) (1,078,169) 0 (15,513,899)Sidewalks (4,611,906) (447,925) 0 (5,059,831)Streets (86,513,189) (6,125,883) 2,457,602 (90,181,470)Storm Sewer Lines (7,974,463) (604,107) 0 (8,578,570)Other Infrastructure (2,853,182) (499,656) 0 (3,352,838)

Total Accumulated Depreciation (129,848,186) (10,049,037) 2,633,259 (137,263,964)Depreciable Capital Assets, Net 146,086,593 2,273,760 (291,781) 148,068,572Governmental Activities Capital

Assets, Net $196,140,651 $12,514,667 ($9,464,784) $199,190,534

Depreciation expense was charged to governmental programs as follows:

Security Of Persons And Property $494,905

Leisure Time Activities 243,315

Community Development 7,964

Transportation 6,344,831

General Government 2,958,022

Total Depreciation Expense $10,049,037

C-42

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Balance At Balance At

12/31/2012 Additions Deletions 12/31/2013Business-Type Activities

Capital Assets, Not Being Depreciated:Land $23,000 $0 $0 $23,000

Construction In Progress 90,968 224,158 (287,686) 27,440Total Capital Assets, Not Being

Depreciated 113,968 224,158 (287,686) 50,440Depreciable Capital Assets:

Buildings 868,211 0 0 868,211Improvements Other Than Buildings 562,217 288,100 0 850,317

Machinery And Equipment 129,830 0 0 129,830Vehicles 117,454 0 0 117,454

Computer Equipment 7,235 0 0 7,235Infrastructure:

Water Lines 33,657,685 1,451,941 0 35,109,626

Sewer Lines 38,411,651 1,106,402 0 39,518,053Total Depreciable Capital Assets 73,754,283 2,846,443 0 76,600,726

Less Accumulated Depreciation:Buildings (176,323) (16,764) 0 (193,087)

Improvements Other Than Buildings (513,333) (14,933) 0 (528,266)Machinery And Equipment (99,006) (5,162) 0 (104,168)

Vehicles (94,128) (5,693) 0 (99,821)Computer Equipment (7,235) 0 0 (7,235)

Infrastructure:Water Lines (9,208,543) (710,749) 0 (9,919,292)

Sewer Lines (11,714,268) (761,252) 0 (12,475,520)Total Accumulated Depreciation (21,812,836) (1,514,553) 0 (23,327,389)

Depreciable Capital Assets, Net 51,941,447 1,331,890 0 53,273,337Business-Type Activities Capital

Assets, Net $52,055,415 $1,556,048 ($287,686) $53,323,777

For the year ended December 31, 2013, the City’s governmental funds transferred assets to enterprisewater and sewer funds. The value of the transferred governmental assets to the water and sewer fundswas $1,451,941 and $519,088, respectively.

NOTE 10 - DEFINED BENEFIT PENSION PLANS

OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM

Plan Description – The City participates in the Ohio Public Employees Retirement System (OPERS).OPERS administers three separate pension plans. The Traditional Pension Plan is a cost-sharing,multiple-employer defined benefit pension plan. The Member-Directed Plan is a defined contributionplan in which the member invests both member and employer contributions (employer contributions vestover five years at 20 percent per year). Under the Member-Directed Plan, members accumulateretirement assets equal to the value of the member and vested employer contributions plus any investmentearnings. The Combined Plan is a cost-sharing, multiple-employer defined benefit pension plan. Under

C-43

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

the Combined Plan, OPERS invests employer contributions to provide a formula retirement benefitsimilar in nature to, but less than, the Traditional Pension Plan benefit. Member contributions, theinvestment of which is self-directed by the members, accumulate retirement assets in a manner similar tothe Member-Directed Plan.

OPERS provides retirement, disability, survivor and death benefits, and annual cost-of-living adjustmentsto members of the Traditional Pension and Combined Plans. Members of the Member-Directed Plan donot qualify for ancillary benefits. Authority to establish and amend benefits is provided by Chapter 145of the Ohio Revised Code. OPERS issues a stand-alone financial report. Interested parties may obtain acopy by visiting https://www.opers.org/investments/cafr.shtml, by writing to OPERS, 277 East TownStreet, Columbus, Ohio 43215-4642, or by calling 614-222-5601 or 800-222-7377.

Funding Policy – The Ohio Revised Code provides statutory authority for member and employercontributions and currently limits the employer contribution to a rate not to exceed 14 percent of coveredpayroll for State and local employer units. Member contribution rates, as set forth in the Ohio RevisedCode, are not to exceed 10 percent of covered payroll for members in State and local divisions. For theyear ended December 31, 2013, members in State and local divisions contributed 10 percent of coveredpayroll. For 2013, member and employer contribution rates were consistent across all three plans.

The City’s 2013 contribution rate was 14.0 percent. The portion of employer contributions used to fundpension benefits is net of post-employment health care benefits. For 2013, the portion of employercontribution allocated to health care was 1.0 percent for members in the Traditional Plan and theCombined Plan. Effective January 1, 2014, the portion of employer contributions allocated to health careincreased to 2.0 percent. Employer contribution rates are actuarially determined.

The City’s required contributions for pension obligations to the Traditional Pension and Combined Plansfor the years ended December 31, 2013, 2012, and 2011 were $575,691, $553,152, and $553,600,respectively. For 2013, 90.57 percent has been contributed with the balance being reported as anintergovernmental payable. The full amount has been contributed for 2012 and 2011. Contributions tothe Member-Directed Plan for 2013 were $25,312 made by the City and $18,080 made by plan members.

OHIO POLICE AND FIRE PENSION FUND

Plan Description – The City contributes to the Ohio Police and Fire Pension Fund (OP&F), a cost-sharingmultiple-employer defined benefit pension plan. OP&F provides retirement and disability benefits,annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefitprovisions are established by the Ohio State Legislature and are codified in Chapter 742 of the OhioRevised Code. OP&F issues a publicly available financial report that includes financial information andrequired supplementary information for the plan. That report may be obtained by writing to OP&F, 140East Town Street, Columbus, Ohio 43215-5164.

C-44

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Funding Policy – Employer and employee contribution rates are set by the Ohio Revised Code. FromJanuary 1, 2013, thru July 1, 2013, plan members were required to contribute 10 percent of their annualcovered salary. From July 2, 2013, thru December 31, 2013, plan members were required to contribute10.75 percent of their annual covered salary. Throughout 2013, employers were required to contribute19.5 percent and 24 percent respectively for police officers and firefighters.

The OP&F Pension Fund is authorized by the Ohio Revised Code to allocate a portion of the employercontributions to retiree health care benefits. For January 1, 2013, thru May 31, 2013, the portion ofemployer contributions used to fund pension benefits was 14.81 percent of covered payroll for policeofficers. For June 1, 2013, thru December 31, 2013, the portion of employer contributions used to fundpension benefits was 16.65 percent of covered payroll for police officers. The City’s contributions toOP&F for police were $1,017,915 for the year ended December 31, 2013, $716,999 for the year endedDecember 31, 2012, and $697,205 for the year ended December 31, 2011, respectively. For 2013, 87.04percent for police has been contributed with the balance for police being report as an intergovernmentalpayable. The full amount has been contributed for 2012 and 2011.

NOTE 11 - POST-EMPLOYMENT BENEFITS

OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM

Plan Description – Ohio Public Employees Retirement System (OPERS) administers three separatepension plans: The Traditional Pension Plan—a cost-sharing, multiple-employer defined benefit pensionplan; the Member-Directed Plan—a defined contribution plan; and the Combined Plan—a cost-sharing,multiple-employer defined benefit pension plan that has elements of both a defined benefit and definedcontribution plan.

OPERS maintains a cost-sharing multiple-employer defined benefit post-employment health care plan forqualifying members of both the Traditional Pension and the Combined Plans. Members of the Member-Directed Plan do not qualify for ancillary benefits, including post-employment health care coverage. Theplan includes a medical plan, prescription drug program and Medicare Part B premium reimbursement.

In order to qualify for post-employment health care coverage, age-and-service retirees under theTraditional Pension and Combined Plans must have 10 or more years of qualifying Ohio service credit.Health care coverage for disability benefit recipients and qualified survivor benefit recipients is available.The Ohio Revised Code permits, but does not mandate, OPERS to provide health care benefits to itseligible members and beneficiaries. Authority to establish and amend benefits is provided in Chapter 145of the Ohio Revised Code.

Disclosures for the health care plan are presented separately in the OPERS financial report which may beobtained by visiting https://www.opers.org/investments/cafr.shtml, by writing to OPERS, 277 East TownStreet, Columbus, Ohio 43215-4642, or by calling 614-222-5601 or 800-222-7377.

C-45

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Funding Policy – The post-employment health care plan was established under, and is administrated inaccordance with, Internal Revenue Code 401(h). The Ohio Revised Code provides the statutory authorityrequiring public employers to fund post-retirement health care through contributions to OPERS. Aportion of each employer’s contribution to OPERS is set aside for the funding of post-retirement healthcare.

Employer contribution rates are expressed as a percentage of the covered payroll of active members. In2013, state and local employers contributed at a rate of 14.0 percent of covered payroll. This is themaximum employer contribution rates permitted by the Ohio Revised Code.

Each year, the OPERS Retirement Board determines the portion of the employer contribution rate thatwill be set aside for funding of post-employment health care benefits. For 2013, the portion of employercontributions allocated to health care for members in the Traditional Plan and the Combined Plan was 1.0percent. Effective January 1, 2014, the portion of employer contributions allocated to healthcare wasraised to 2.0 percent for both plans, as recommended by the OPERS Actuary.

The OPERS Retirement Board is also authorized to establish rules for the payment of a portion of thehealth care benefits provided, by the retiree or their surviving beneficiaries. Payment amounts varydepending on the number of covered dependents and the coverage selected. Active members do not makecontributions to the post-employment health care plan.

The City’s contributions allocated to fund post-employment health care benefits for the years endedDecember 31, 2013, 2012, and 2011 were $230,276, $221,261, and $221,440, respectively. For 2013,90.57 percent has been contributed with the balance being reported as an intergovernmental payable. Thefull amount has been contributed for 2012 and 2011.

Changes to the health care plan were adopted by the OPERS Board of Trustees on September 19, 2012,with a transition plan commencing January 1, 2014. With the recent passage of pension legislation underSB 343 and the approved health care changes, OPERS expects to be able to consistently allocate 4.0percent of the employer contributions toward the health care fund after the end of the transition period.

OHIO POLICE AND FIRE PENSION FUND

Plan Description – The City contributes to the Ohio Police and Fire Pension Fund (OP&F) sponsoredhealth care program, a cost-sharing multiple-employer defined post-employment health care planadministered by OP&F. OP&F provides health care benefits including coverage for medical, prescriptiondrugs, dental, vision, Medicare Part B Premium and long-term care to retirees, qualifying benefitrecipients and their eligible dependents.

C-46

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

OP&F provides access to post-retirement health care coverage for any person who receives or is eligibleto receive a monthly service, disability, or survivor benefit check or is a spouse or eligible dependentchild of such person. The health care coverage provided by OP&F meets the definition of an Other Post-Employment Benefit (OPEB) as described in GASB Statement No. 45.

The Ohio Revised Code allows, but does not mandate OP&F to provide OPEB benefits. Authority for theOP&F Board of Trustees to provide health care coverage to eligible participants and to establish andamend benefits is codified in Chapter 742 of the Ohio Revised Code.

OP&F issues a publicly available financial report that includes financial information and requiredsupplementary information for the plan. That report may be obtained by writing to OP&F, 140 EastTown Street, Columbus, Ohio 43215-5164. That report is also available of OP&F’s website at www.op-f.org.

Funding Policy – The Ohio Revised Code provides for contribution requirements of the participatingemployers and of plan members to the OP&F defined benefit pension plan. Participating employers arerequired by Ohio Revised Code to contribute to the pension plan at rates expressed as percentages of thepayroll of active pension plan members, currently, 19.5 percent and 24.0 percent of covered payroll forpolice and fire employers, respectively. Active members do not make contributions to the OPEB Plan.

OP&F maintains funds for health care in two separate accounts. One for health care benefits under anIRS Code Section 115 trust and one for Medicare Part B reimbursements administrated as an InternalRevenue Code 401(h) account, both of which are within the defined benefit pension plan, under theauthority granted by the Ohio Revised Code to the OP&F Board of Trustees.

The Board of Trustees is authorized to allocate a portion of the total employer contributions made into thepension plan to the Section 115 trust and the Section 401(h) account as the employer contribution forretiree health care benefits. For January 1, 2013, thru May 31, 2013, the employer contribution allocatedto the health care plan was 4.69 percent of covered payroll. For June 1, 2013, thru December 31, 2013,the employer contribution allocated to the health care plan was 2.85 percent of covered payroll. Theamount of employer contributions allocated to the health care plan each year is subject to the Trustees’primary responsibility to ensure that pension benefits are adequately funded and is limited by theprovisions of Sections 115 and 401(h).

The OP&F Board of Trustees also is authorized to establish requirements for contributions to the healthcare plan by retirees and their eligible dependents, or their surviving beneficiaries. Payment amountsvary depending on the number of covered dependents and the coverage selected.

C-47

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

The City’s contributions to OP&F which were allocated to fund post-employment health care benefits forpolice were $174,238 for the year ended December 31, 2013, $379,588 for the year ended December 31,2012, and $369,108 for the year ended December 31, 2011. For 2013, 87.04 percent has been contributedfor police with the balance for police being report as an intergovernmental payable. The full amount hasbeen contributed for 2012 and 2011.

NOTE 12 - EMPLOYEE BENEFITS

COMPENSATED ABSENCES

Vacation leave is earned at rates which vary depending upon length of service and are credited to theemployees on a bi-weekly basis. Current policy allows the unused balance to be accrued at levels whichdepend upon years of service. City employees are paid for earned, unused vacation leave at the time oftermination of employment.

Sick leave is earned at the rate of four and six-tenths hours for every 80 hours worked and can beaccumulated without limit. Each employee with the City is paid at one-half of the portion that exceeds360 hours of the employees’ earned unused sick leave upon termination from the City or the full balancemay be transferred to another governmental agency. In the event that an employee dies as the result ofinjuries sustained on the job, his or her estate will be paid the total allowable amount of all earned unusedsick leave.

HEALTH CARE BENEFITS

The City provides health care benefits through the Central Ohio Health Care Consortium (the “Pool”), ashared risk pool that provides basic hospital, surgical and prescription drug coverage. See Note 19 forfurther information.

DEFERRED COMPENSATION

City employees may participate in the Ohio Public Employees Deferred Compensation Plan. This planwas created in accordance with Internal Revenue Code Section 457. Participation is on a voluntarypayroll deduction basis. The plan permits deferral of compensation until future years. According to theplan, the deferred compensation is not available until termination, retirement, death, or an unforeseeableemergency.

C-48

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NOTE 13 - OUTSTANDING DEBT AND OTHER LONG-TERM OBLIGATIONS

BONDED DEBT AND OTHER LONG-TERM OBLIGATIONS

Bonded debt and other long-term obligations payable activity for the year ended December 31, 2013, wasas follows:

Balance Balance Due WithinTypes / Issues 12/31/12 Issued Retired 12/31/13 One Year

Business-Type ActivitiesOhio Public Works Commission(OPWC) Loans1994 - 3.50% Columbus StreetReconstruction $128,422 $18,535 $0 $9,107 $9,428 $9,428

1995 - 3.00% Kingston AvenueReconstruction $200,624 45,080 0 12,404 32,676 12,779

1995 - 3.50% Grant RunInterceptor Phase II $537,324 124,577 0 34,063 90,514 35,265

1999 - 3.00% Marsh RunGravity Sewer $703,276 368,440 0 36,234 332,206 37,329

Total OPWC Loans 556,632 0 91,808 464,824 94,801

Ohio Water DevelopmentAuthority (OWDA) Loans2010 - 3.89% Big Run/FryerPark Water Storage Tank$2,600,000 2,213,560 0 73,163 2,140,397 90,883

2011 - 3.37% Haughn RoadWater Main $671,338 647,350 0 24,803 622,547 25,646

Total OWDA Loans 2,860,910 0 97,966 2,762,944 116,529

Other Long-Term ObligationsCompensated Absences 47,797 22,953 19,041 51,709 22,836

Total Business-Type Activities $3,465,339 $22,953 $208,815 $3,279,477 $234,166

C-49

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Balance Balance Due WithinTypes / Issues 12/31/12 Issued Retired 12/31/13 One Year

Governmental ActivitiesGeneral Obligation Bonds2004 - 1.9% - 3.5% GeneralObligation Refunding Bonds$1,360,000 $170,000 $0 $170,000 $0 $0

2006 - Pinnacle Club DriveConstruction And ImprovementBondsSerial Bonds 4.0% - 5.25%$4,225,000 2,945,000 0 260,000 2,685,000 275,000

Term Bonds 4.0%$4,505,000 4,505,000 0 0 4,505,000 0

Premium On Bonds 48,412 0 2,548 45,864 02009 - SR 665 Construction And

Improvements BondsSerial Bonds 2.5% - 4.375%$3,155,000 2,640,000 0 175,000 2,465,000 180,000

Term Bonds 4.5% - 5.125%$4,430,000 4,430,000 0 0 4,430,000 0

2012 - 2.75% Various PurposeRefunding Bonds $1,395,000 1,320,000 0 80,000 1,240,000 80,000

Total General ObligationBonds Payable 16,058,412 0 687,548 15,370,864 535,000

Ohio Public Works Commission

(OPWC) Loans

1997 - 0.00% Hoover Road/

SR 665 Realignment

$351,546 92,515 0 18,502 74,013 18,502

1998 - 0.00% Haughn Road

Widening $446,773 126,019 0 22,911 103,108 22,911

1999 - 0.00% Broadway

$409,887 153,712 0 20,494 133,218 20,494

1999 - 0.00% Hoover Road/

Buckeye Ranch/

Orders Road $518,378 $181,431 $0 $25,919 $155,512 $25,919(Continued)

C-50

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Balance Balance Due WithinTypes / Issues 12/31/12 Issued Retired 12/31/13 One Year

Governmental Activities

Ohio Public Works Commission

2000 - 0.00% Hoover Road/

Old Stringtown To

Sonora Drive $745,578 $316,870 $0 $37,279 $279,591 $37,279

2001 - 0.00% Broadway

$456,181 202,048 0 36,737 165,311 36,737

2004 - 0.00% Hoover Road/

Milligan Road To Orders Road

$720,000 447,365 0 35,789 411,576 35,789

2005 - 0.00% Demorest Road/

Big Run Road $543,017 366,536 0 27,151 339,385 27,151

2005 - 0.00% Stringtown Road/

Interstate 71 To McDowell

Road $1,235,678 583,134 0 40,216 542,918 40,216

2008 - 0.00% Old Stringtown

Road Reconstruction $678,014 559,360 0 33,901 525,459 33,901

2009 - 0.00% Grove City

Road Reconstruction $390,000 343,200 0 15,600 327,600 15,600

2013 - 0.00% Holton/Hoover

Interchange Improvements $180,632 0 180,632 0 180,632 3,676

2013 - 0.00% Stringtown Road

Reconstruction Phase II

$2,494,789 0 2,494,789 0 2,494,789 46,200

Total OPWC Loans 3,372,190 2,675,421 314,499 5,733,112 364,375

Tax Increment FinancingRevenue Bonds

2006 - 5.13% - 5.38% BuckeyeCenter TIF Revenue Bonds$16,290,000 14,490,000 0 460,000 14,030,000 485,000

Other Long-Term ObligationsCompensated Absences 1,601,977 740,060 785,348 1,556,689 704,508

Total Governmental Activities $35,522,579 $3,415,481 $2,247,395 $36,690,665 $2,088,883

The City's overall legal debt margin was $73,143,510, with an unvoted debt margin of $31,687,292 atDecember 31, 2013.

C-51

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Annual debt service requirements to maturity for governmental long-term obligations are:

Year Principal Interest Principal Interest2014 $455,000 $222,630 $80,000 $432,9742015 485,000 200,730 80,000 430,7742016 500,000 177,130 85,000 428,5742017 510,000 150,205 90,000 426,2372018 530,000 130,865 90,000 423,7612019-2023 1,885,000 355,562 1,630,000 2,036,0452024-2028 270,000 114,812 3,795,000 1,531,6002029-2033 515,000 20,600 2,970,000 746,2952034-2038 0 0 1,355,000 141,194Totals $5,150,000 $1,372,534 $10,175,000 $6,597,454

Governmental ActivitiesGeneral Obligation Bonds

Serial Bonds Term Bonds

OPWC LoansYear Principal Principal Interest

2014 $364,375 $485,000 $750,2872015 414,252 510,000 725,4312016 414,251 535,000 699,2942017 414,252 565,000 671,8752018 365,934 595,000 841,5062019-2023 1,411,905 3,480,000 2,692,8752024-2028 1,008,582 4,525,000 1,650,9322029-2033 593,712 3,335,000 364,6932034-2038 514,362 0 02039-2041 231,487 0 0Totals $5,733,112 $14,030,000 $8,396,893

Revenue BondsGovernmental Activities

C-52

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Annual debt service requirements to maturity for OPWC and OWDA loans for business-type activitiesare:

Year Principal Interest Principal Interest Principal Interest

2014 $116,529 $103,152 $22,207 $1,133 $72,594 $12,550

2015 120,971 98,710 13,165 499 74,968 10,177

2016 125,582 94,099 6,732 101 58,356 7,726

2017 130,369 89,312 0 0 40,817 6,200

2018 135,340 84,341 0 0 42,050 4,966

2019-2023 758,174 340,231 0 0 133,935 7,118

2024-2028 914,279 214,126 0 0 0 0

2029-2033 461,700 24,073 0 0 0 0Totals $2,762,944 $1,048,044 $42,104 $1,733 $422,720 $48,737

Business-Type Activities

Water OWDA Loans Water OPWC Loans Sewer OPWC Loans

OHIO PUBLIC WORKS COMMISSION (OPWC) LOANS

The OPWC loans consist of money owed to the Ohio Public Works Commission for various constructionprojects within the City. These consist of 15 or 20 year general obligation loans payable. The liability forthe Water and Sewer Funds is recorded in the fund and government-wide financial statements. Theliabilities for the governmental funds are not recorded on the fund financial statements, but are recordedon the government-wide financial statements. The loans will be repaid from the Water and SewerEnterprise Funds and the Debt Service Fund.

OHIO WATER DEVELOPMENT AUTHORITY (OWDA) LOANS

The OWDA loan consists of money owed to the Ohio Water Development Authority for the Big Run/Fryer Park Water Storage Tank and the Haughn Road Water Main projects. The loans will be repaidfrom the Water Enterprise Fund.

GENERAL OBLIGATION BONDS

The City issues general obligation bonds to provide funds for the acquisition and construction of majorcapital facilities and refinancing of bond anticipation notes. General obligation bonds are directobligations and pledge the full faith and credit of the City for repayment. These bonds are generallyissued as 20 year serial bonds with equal amounts of principal maturing each year and are paid withproperty taxes from the Debt Service Fund.

C-53

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

On August 23, 2006, the City issued $8,730,000 in general obligation bonds for the purpose of retiring thePinnacle Club Drive Construction and Improvement Notes. Of these bonds, $4,225,000, are serial bondsand $4,505,000 are term bonds. The bonds were issued for a 25 year period with final maturity inDecember 2031. The serial bonds mature from December 1, 2007 to December 1, 2020 and on December1, 2029. The bonds will be retired from the Pinnacle TIF Debt Service Fund.

The $4,505,000 term bonds maturing on December 1, 2021 to December 1, 2028 and December 1, 2030and December 1, 2031 are subject to a mandatory sinking fund redemption at a redemption price of 100percent of the principal amount plus accrued interest to the date of redemption, on December 1, in theyears and in the respective amounts as follows:

Year Amount

2021 $365,000

2022 380,000

2023 395,000

2024 415,000

2025 430,000

2026 450,000

2027 470,000

2028 495,000

2030 540,000

2031 565,000$4,505,000

On March 11, 2009, the City issued $7,585,000 in general obligation bonds for the purpose of retiring theState Route 665 Construction and Improvement Bond Anticipation Notes, Series 2008. Of these bonds,$3,155,000 are serial bonds and $4,430,000 are term bonds. The bonds were issued for a 27 year periodwith final maturity in December 2036. The serial bonds mature from December 1, 2010 to December 1,2024. The bonds will be retired from the Debt Service Fund.

The $4,430,000 term bonds maturing on December 1, 2025 to December 1, 2036 are subject to amandatory sinking fund redemption at a redemption price of 100 percent of the principal amount plusaccrued interest to the date of redemption, on December 1, in the years and in the respective amounts asfollows:

C-54

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Year Amount

2025 $280,000

2026 300,000

2027 310,000

2028 320,000

2029 340,0002030 355,000

2031 370,000

2032 390,000

2033 410,000

2034 430,000

2035 450,000

2036 475,000$4,430,000

On October 31, 2012, the City issued $1,395,000 in various purpose refunding bonds for the purpose ofadvance refunding the 2001 various purpose bonds. All bonds are term bonds issued for a 15 yearperiod, with final maturity on December 1, 2026. The term bonds are not subject to optional redemptionprior to maturity. The redemption date for the bonds is December 1, 2012, and each December 1,thereafter at 100% of the principal amount thereof plus accrued interest to date of redemption.

TAX INCREMENT FINANCING REVENUE BONDS

On November 28, 2006, the City issued $16,290,000 in tax increment financing term revenue bonds forthe purpose of retiring the 2006 Street and Infrastructure Construction Notes and the 2005 BuckeyeParkway Construction and Improvement Notes. The Series 2006 Revenue Bonds are special obligationsof the City and do not constitute general obligations or pledge the faith and credit of the City but arepayable from revenue in lieu of taxes. The bonds were issued for a 25 year period with final maturity inDecember 2031.

The City has pledged future revenue in lieu of taxes to repay the revenue bonds in the Buckeye CenterTIF Debt Service Fund. The debt is payable solely from revenues and are payable through 2031.Revenue in lieu of taxes were projected to produce 148.36 percent of the debt service requirements overthe life of the bonds. The total principal and interest remaining to be paid on the bonds is $22,426,893.Principal and interest paid for the current year and revenue in lieu of taxes were $1,233,915 and$2,986,838, respectively.

The term bonds, issued at $16,290,000, maturing on December 1, 2008 to December 1, 2031 are subjectto a mandatory sinking fund redemption at a redemption price of 100 percent of the principal amount plusaccrued interest to the date of redemption, on December 1 in each of the years 2008 through 2031.

C-55

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Year Amount

2014 $485,000

2015 510,000

2016 535,000

2017 565,0002018 595,0002019 625,0002020 660,0002021 695,0002022 730,0002023 770,0002024 815,0002025 855,0002026 905,0002027 950,0002028 1,000,0002029 1,055,0002030 1,110,0002031 1,170,000

$14,030,000

MULTIFAMILY HOUSING MORTGAGE REVENUE BONDS

The City has one outstanding issue of multifamily housing mortgage revenue bonds in the aggregateprincipal amount of $9,750,000 at December 31, 2013 for facilities used by private corporations or otherentities. The City is not obligated in any way to pay debt charges on the bonds from any of its funds, andtherefore they have been excluded entirely from the City’s debt presentation. There has not been, andcurrently is not any condition of default under the bonds or the related financing documents.

COMPENSATED ABSENCES

Compensated absences will be paid from the General, Street Maintenance, General Recreation,Community Development, Big Splash, and Sewer Funds.

NOTE 14 - SHORT-TERM OBLIGATION

A summary of the short-term notes transactions for the year ended December 31, 2013 follows:

Balance Balance

Types/Issues 12/31/12 Issued Retired 12/31/13

2013 - 1.0% North Meadows Drive

Notes $3,600,000 $0 $3,600,000 $0 $3,600,000

On February 14, 2013, the City issued North Meadows Drive Capital Improvement Notes at an interestrate of one percent. The notes were issued for the purpose of paying for the costs of improving andextending North Meadows Drive. The notes will mature on February 27, 2014.

C-56

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NOTE 15 - SIGNIFICANT COMMITMENTS

CONTRACTUAL COMMITMENTS

The City has entered into various contracts for the construction and acquisition of capital assets. AtDecember 31, 2013, the significant outstanding construction commitments are as follows:

Contract Amount Balance AtProject Amount Expended 12/31/13North Meadows Drive Extension, Part 2 $5,144,552 $2,080,082 $3,064,470Demorest Park Site Improvements 693,805 590,825 102,980Southwest Boulevard Intersection Improvements 1,194,955 202,174 992,781Buckeye Parkway Street Lighting Improvements 242,148 83,905 158,243Broadway Intersection Improvements, Phase I 639,135 403,082 236,053Fryer Park Sanitary Sewer Improvements 325,503 159,361 166,142Fryer Park Restrooms 368,391 49,335 319,056Broadway and US62 Gateway Landscape

Enhancements 427,948 219,750 208,198Totals $9,036,437 $3,788,514 $5,247,923

ENCUMBRANCES

Encumbrances are commitments related to unperformed contracts for goods and services. Encumbrancesaccounting is utilized to the extent necessary to assure effective budgetary control and accountability andto facilitate effective cash planning and control. At year end, the amount of encumbrances expected to behonored upon performance by the vendor in the next fiscal year were as follows:

Governmental Funds:General $3,076,050Debt Service 15,704Buckey Center TIF 14,373Pinnacle TIF 1,580,956Capital Improvement 10,566,367Nonmajor Governmental Funds 2,031,878

Total Governmental Funds 17,285,328

Proprietary Funds:Water 338,298Sewer 107,645

Total Proprietary Funds 445,943

Internal Service Fund 28,638

Total $17,759,909

C-57

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NOTE 16 - RISK MANAGEMENT

CENTRAL OHIO RISK MANAGEMENT ASSOCIATION

The City is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets;errors and omissions; injuries to employees; and natural disasters. On October 1, 2009, the Cityestablished membership in the Central Ohio Risk Management Association Self-Insurance Pool, Inc.(CORMA). CORMA was formed pursuant to Section 2744.081 of the Ohio Revised Code. Members ofCORMA are the cities of Westerville, Dublin, Upper Arlington, Pickerington, Grove City, Groveport, andPowell. Each member has two representatives on the Board of Trustees.

Membership in CORMA enables the City to take advantage of any economies to be realized from aninsurance pool with other cities and also provides the City with more control over claims than what isnormally available with traditional insurance coverage. A third-party claims administrator investigates,processes and advises the CORMA Treasurer/Board regarding payment of claims.

As part of participating in CORMA, coverage is provided for umbrella liability coverage for $15,000,000per occurrence/$20,000,000 annual aggregate excess general liability, automobile liability, lawenforcement liability, public officials and employment practices liability and $386,222,918 limit forproperty claims for the pool. Coverage is provided on an annual aggregate basis for crime ($1,000,000blanket public employee dishonesty, $500,000 forgery/computer fraud, and $100,000 money andsecurities, with a $25,000 deductible for each). Coverage is provided for general liability($1,000,000/$2,000,000), law enforcement liability ($1,000,000/$1,000,000), public official liability($1,000,000/$1,000,000), employment practices liability ($1,000,000/$1,000,000) and automobileliability ($1,000,000). Pool retentions are $10,000 per loss for property and $600,000 aggregate forliability, with a $100,000 per loss self-insurance retention. A third-party broker, with expertise in publicentity pools, markets the program, identifies coverage lines and limits, and recommends the best insurerand insurance for procurement.

Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of thepast three years. There has been no significant change in coverage from last year.

WORKERS’ COMPENSATION SELF-INSURANCE FUND

In October 2012, the City was approved for self-insured status by the Bureau of Workers’ Compensationand began to administer its own workers’ compensation program (the program). The City has establisheda workers’ compensation self-insured internal service fund to account for assets set aside for claimsettlements and related liabilities associated with the program. Liabilities of the fund are reported whenan employee injury has occurred, it is probable that a claim will be filed under the program, and theamount of the claim can be reasonably estimated. The City utilizes the services of CompensationSolutions Inc., the third party administrator, to review, process and pay employee Claims.

The claims liability of $1,646 reported in the fund at December 31, 2013, is based on actual costs and therequirements of GASB statement No. 30 which requires that a liability for unpaid claims costs, includeestimates of costs relating to incurred but not reported claims be reported. Estimates were calculatedbased upon an independent actuarial evaluation of claims payable. This estimate was not effected byincremental claim adjustment expenses and does not include other allocated or unallocated claimadjustment expenses.

C-58

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

Changes in claims activity for the year as follows:

Balance at Balance atBeginning of Current Fiscal Claims End ofFiscal Year Year Claims Payments Fiscal Year

2012 $0 $67,414 $65,614 $1,8002013 1,800 56,957 57,111 1,646

NOTE 17 - INTERFUND ACTIVITY

Transfers made during the year ended December 31, 2013 were as follows:

Capital Nonmajor

General Improvement Governmental

Fund Fund Funds Total

General Fund $0 $0 $12,947 $12,947

Debt Service Fund 0 518,000 0 518,000

Capital Improvement Fund 10,484,986 0 0 10,484,986

Nonmajor Governmental Funds 45,000 0 3,321 48,321

Sewer Fund 0 0 457 457Totals $10,529,986 $518,000 $16,725 $11,064,711

Transfers From

Transfers from the General Fund represent subsidy monies for operations of the Capital ImprovementCapital Projects Fund, Street Maintenance and Repair, State Highway, and Big Splash Special RevenueFunds. The Capital Improvement Fund transferred monies to the Debt Service fund to move unspentproceeds from two older projects. The FEMA fund made transfers to Nonmajor Governmental Funds andthe Sewer Enterprise Fund for reimbursement of expenditures as a result of wind damage throughout theCity.

NOTE 18 - JOINTLY GOVERNED ORGANIZATIONS

GROVE CITY AREA COMMUNITY IMPROVEMENT CORPORATION

The Grove City Area Community Improvement Corporation (CIC) was created as a not-for-profitcorporation under Sections 1724.01 et. seq., Ohio Revised Code. The CIC is governed by a 14 memberBoard of Trustees, six of which are elected or appointed officials of the City, one representative ofJackson Township, one representative of South-Western City Schools, one representative of the Chamberof Commerce, and five are volunteer citizens. The Board exercises total control over the operation of theCIC including budgeting, appropriating, contracting and designating management. Each member’sdegree of control is limited to representation on the Board. The City did not make any contributions to theCIC. The sole purpose of the CIC is to advance, encourage, and promote the industrial, economic,commercial and civic development of Grove City, Ohio.

C-59

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

MID-OHIO REGIONAL PLANNING COMMISSION

The City is a participant in the Mid-Ohio Regional Planning Commission (MORPC), a jointly governedorganization. MORPC is composed of 84 representatives appointed by member governments who makeup the Commission, the policy-making body of MORPC, and the oversight board. MORPC is a voluntaryassociation of local governments in central and south central Ohio and a regional planning agency whosemembership includes 44 political subdivisions in and around Delaware, Fairfield, Fayette, Franklin,Knox, Licking, Madison, Marion, Morrow, Pickaway, Ross, and Union counties, Ohio. The purpose ofthe organization is to improve the quality of life for member communities by improving housingconditions, to promote and support livability/sustainability measures as a means of addressing regionalgrowth challenges, and to administer and facilitate the availability of regional environmentalinfrastructure program funding to the full advantage of MORPC’s members. The Commission exercisestotal control over the operation of the MORPC including budgeting, appropriating, contracting anddesignating management. Each member’s degree of control is limited to representation on theCommission.

NOTE 19 - SHARED RISK POOLS

CENTRAL OHIO RISK MANAGEMENT ASSOCIATION SELF-INSURANCE POOL, INC.

On October 1, 2009, the City established membership in the Central Ohio Risk Management Association(CORMA) Self-Insurance Pool, Inc., a not for profit risk sharing pool, for the purpose of obtainingreduced rates on traditional liability insurance coverage. CORMA was formed pursuant to Section2744.081 of the Ohio Revised Code. Members of CORMA are the Cities of Westerville, Dublin, UpperArlington, Pickerington, Grove City, Groveport, and Powell. Each member has two representatives onthe Board of Trustees. This Board establishes its own budget, hires and fires personnel and determinesannual rates for its members.

CENTRAL OHIO HEALTH CARE CONSORTIUM

On January 1, 1992, the City joined the Central Ohio Health Care Consortium (the “Pool”), a risk-sharingpool, which provides employee health care benefits for all full-time employees who wish to participate inthe Pool. The Pool consists of ten political subdivisions who pool risk for basic hospital, surgical, andprescription drug coverage. The members originally entered into an irrevocable agreement to remainmembers of the Pool for a minimum of three years. This agreement was renewed for an additional threeyears on January 1, 2010. The Pool is governed by a Board of Directors consisting of one directorappointed by each member. The Board elects a chairman, a vice chairman and a secretary. The Board isresponsible for its own financial matters and the Pool maintains its own books of account. Budgeting andfinancing of the Pool is subject to the approval of the Board. The City has no explicit and measurableequity interest in the Pool. The City has no ongoing financial responsibility other than the three yearminimum membership. The City pays monthly contributions to the Consortium, which are used to coverclaims and administrative costs, and to purchase excess loss insurance for the plan. The Pool has enteredinto an agreement for individual and aggregate excess loss coverage with a commercial insurance carrier.The individual excess loss coverage has been structured to indemnify the Pool for medical claims paid foran individual in excess of $175,000 per claim per year, with an individual lifetime maximum of$2,250,000. The aggregate excess loss coverage has been structured to indemnify the Pool for aggregateclaims paid in excess of $12,540,899 to a maximum of $1,000,000 annually. In the event that the losses

C-60

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

of the Pool in any year exceeds amounts paid to the Pool, together with all stop-loss, reinsurance, andother coverage then in effect, then the payment of all uncovered losses shall revert to and be the soleobligation of the political subdivision against which the claim was made. In the event that an entityshould withdraw from the plan, the withdrawing member is required to either reimburse the Pool for anyclaims paid on its behalf or the member must pay the claims directly.

NOTE 20 – FUND BALANCES

Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned basedprimarily on the extent to which the City is bound to observe constraints imposed upon the use of theresources in the governmental funds. The constraints placed on fund balance for the major governmentalfunds and all other governmental funds are presented below:

Police Debt BuckeyeFund Balances General Pension Service Center TIF

Nonspendable

Materials And Supplies Inventory $18,279 $0 $0 $0

Loans Receivable 234,957 0 0 0

Prepaids 207,936 0 0 0

Total Nonspendable 461,172 0 0 0

Restricted For

Police Pension 0 596,781 0 0

Debt Service 0 0 1,410,452 3,336,764

Road Maintenance And Repair 0 0 0 0

Police Programs 0 0 0 0

Recreational Activities 0 0 0 0

Total Restricted 0 596,781 1,410,452 3,336,764

Committed To

Capital Improvements 0 0 0 0

Recreational Improvements 0 0 0 0

Community Development And

Improvements 0 0 0 0

Road Improvements 0 0 0 0

DARE Program 0 0 0 0

Recreational Activities 0 0 0 0

Total Committed 0 0 0 0

Assigned To

Purchases On Order 2,548,647 0 0 0

Unassigned 18,896,479 0 0 0

Total Fund Balances $21,906,298 $596,781 $1,410,452 $3,336,764

(Continued)

C-61

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NonmajorPinnacle Capital Governmental

Fund Balances TIF Improvement Funds Total

Nonspendable

Materials And Supplies Inventory $0 $0 $15,833 $34,112

Loans Receivable 0 0 0 234,957

Prepaids 0 0 0 207,936

Total Nonspendable 0 0 15,833 477,005

Restricted For

Police Pension 0 0 0 596,781

Debt Service 2,182,201 0 473,994 7,403,411Road Maintenance And Repair 0 0 3,129,292 3,129,292Police Programs 0 0 525,019 525,019Recreational Activities 0 0 36,969 36,969

Total Restricted 2,182,201 0 4,165,274 11,691,472

Committed To

Capital Improvements 0 9,173,537 0 9,173,537

Recreational Improvements 0 0 344,495 344,495

Community Development And

Improvements 0 0 377,997 377,997

DARE Program 0 0 37,804 37,804Recreational Activities 0 0 400,057 400,057

Total Committed 0 9,173,537 1,160,353 10,333,890

Assigned To

Purchases on Order 0 0 0 2,548,647

Unassigned 0 0 0 18,896,479

Total Fund Balances $2,182,201 $9,173,537 $5,341,460 $43,947,493

C-62

CITY OF GROVE CITY, OHIO

Notes To The Basic Financial Statements

For The Year Ended December 31, 2013(Continued)

NOTE 21 - CONTINGENT LIABILITIES

LITIGATION

The City is not party to any legal proceedings.

FEDERAL AND STATE GRANTS

For the period January 1, 2013, to December 31, 2013, the City received federal and State grants forspecific purposes that are subject to review and audit by the grantor agencies or their designees. Suchaudits could lead to a request for reimbursement to the grantor agency for expenditures disallowed underthe terms of the grant. Based on prior experience, the City believes such disallowance, if any, would beimmaterial.

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(THIS PAGE INTENTIONALLY LEFT BLANK)

C-64

www.ohioauditor.gov

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

REQUIRED BY GOVERNMENT AUDITING STANDARDS

City of Grove CityFranklin County4035 BroadwayGrove City, Ohio 43123

To the City Council:

We have audited, in accordance with auditing standards generally accepted in the United States and theComptroller General of the United States’ Government Auditing Standards, the financial statements ofthe governmental activities, the business-type activities, each major fund, and the aggregate remainingfund information of the City of Grove City, Franklin County, Ohio (the City), as of and for the year endedDecember 31, 2013, and the related notes to the financial statements, which collectively comprise theCity’s basic financial statements and have issued our report thereon dated June 18, 2014.

Internal Control Over Financial Reporting

As part of our financial statement audit, we considered the City’s internal control over financial reporting(internal control) to determine the audit procedures appropriate in the circumstances to the extentnecessary to support our opinions on the financial statements, but not to the extent necessary to opine onthe effectiveness of the City’s internal control. Accordingly, we have not opined on it.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, when performing their assigned functions, to prevent, or detect and timelycorrect misstatements. A material weakness is a deficiency, or combination of internal controldeficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timelycorrect a material misstatement of the City’s financial statements. A significant deficiency is a deficiency,or a combination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of thissection and was not designed to identify all internal control deficiencies that might be materialweaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies ininternal control that we consider material weaknesses. However, unidentified material weaknesses mayexist.

Compliance and Other Matters

As part of reasonably assuring whether the City’s financial statements are free of material misstatement,we tested its compliance with certain provisions of laws, regulations, contracts, and grant agreements,noncompliance with which could directly and materially affect the determination of financial statementamounts. However, opining on compliance with those provisions was not an objective of our audit andaccordingly, we do not express an opinion. The results of our tests disclosed no instances ofnoncompliance or other matters we must report under Government Auditing Standards.

C-65

City of Grove CityFranklin CountyIndependent Auditor’s Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Required by Government Auditing StandardsPage 2

Purpose of this Report

This report only describes the scope of our internal control and compliance testing and our testing results,and does not opine on the effectiveness of the City’s internal control or on compliance. This report is anintegral part of an audit performed under Government Auditing Standards in considering the City’sinternal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Dave YostAuditor of StateColumbus, Ohio

June 18, 2014

C-66

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APPENDIX D

Proposed Text of Opinion of Bond Counsel

We have served as bond counsel to our client the City of Grove City, Ohio (the “City”) andnot as counsel to any other person in connection with the issuance by the City of its $14,000,000Library Construction Bonds, Series 2015 (the “Bonds”), dated the date of this letter and issued forthe purpose of paying the costs of constructing a public library, together with all relatedappurtenances thereto. In our capacity as bond counsel, we have examined the transcript ofproceedings relating to the issuance of the Bonds, a conformed copy of the signed and authenticatedBond of the first maturity and such other documents, matters and law as we deem necessary torender the opinions set forth in this letter.

Based on that examination and subject to the limitations stated below, we are of the opinionthat under existing law:

1. The Bonds constitute valid and binding general obligations of the City, and theprincipal of and interest on the Bonds, unless paid from other sources, are to be paidfrom the proceeds of the levy of ad valorem taxes, within the four-mill limitationprovided by the Charter of the City, on all property subject to ad valorem taxeslevied by the City.

2. Interest on the Bonds is excluded from gross income for federal income tax purposesunder Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”)and is not an item of tax preference for purposes of the federal alternative minimumtax imposed on individuals and corporations; however, portions of the interest on theBonds earned by certain corporations may be subject to a corporate alternativeminimum tax. Interest on, and any profit made on the sale, exchange or otherdisposition of, the Bonds are exempt from all Ohio state and local taxation, exceptthe estate tax, the domestic insurance company tax, the dealers in intangibles tax, thetax levied on the basis of the total equity capital of financial institutions, and the networth base of the corporate franchise tax. We express no opinion as to any other taxconsequences regarding the Bonds.

The opinions stated above are based on an analysis of existing laws, regulations, rulings andcourt decisions and cover certain matters not directly addressed by such authorities. In rendering allsuch opinions, we assume, without independent verification, and rely upon (i) the accuracy of thefactual matters represented, warranted or certified in the proceedings and documents we haveexamined and (ii) the due and legal authorization, execution and delivery of those documents by,and the valid, binding and enforceable nature of those documents upon, any parties other than theCity.

In rendering those opinions with respect to the treatment of the interest on the Bonds underthe federal tax laws, we further assume and rely upon compliance with the covenants in theproceedings and documents we have examined, including those of the City. Failure to comply with

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certain of those covenants subsequent to issuance of the Bonds may cause interest on the Bonds tobe included in gross income for federal income tax purposes retroactively to their date of issuance.

The rights of the owners of the Bonds and the enforceability of the Bonds are subject tobankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization,moratorium and other laws relating to or affecting creditors’ rights, to the application of equitableprinciples, to the exercise of judicial discretion, and to limitations on legal remedies against publicentities.

The opinions rendered in this letter are stated only as of this date, and no other opinion shallbe implied or inferred as a result of anything contained in or omitted from this letter. Ourengagement as bond counsel with respect to the Bonds has concluded on this date.

Respectfully submitted,

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APPENDIX E

Book-Entry System; DTC

Book-Entry System

The information set forth in the following numbered paragraphs is based on informationprovided by The Depository Trust Company in its “Sample Offering Document LanguageDescribing DTC and Book-Entry-Only Issuance” (June 2013). As such, the City believes it to bereliable, but the City takes no responsibility for the accuracy or completeness of thatinformation. It has been adapted to the Bond issue by substituting “Bonds” for “Securities,”“City” for “Issuer” and “Bond Registrar” for “registrar” and by the addition of the italicizedlanguage set forth in the text. See also the additional information following those numberedparagraphs.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securitiesdepository for the Bonds. The Bonds will be issued as fully-registered securities registered in thename of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by anauthorized representative of DTC. One fully-registered Bond certificate will be issued for eachmaturity of the Bonds, each in the aggregate principal amount of such maturity, and will bedeposited with DTC.

2. DTC, the world’s largest securities depository, is a limited-purpose trust companyorganized under the New York Banking Law, a “banking organization” within the meaning ofthe 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. equityissues, corporate and municipal debt issues, and money market instruments (from over 100countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitatesthe post-trade settlement among Direct Participants of sales and other securities transactions indeposited securities, through electronic computerized book-entry transfers and pledges betweenDirect Participants’ accounts. This eliminates the need for physical movement of securitiescertificates. 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 whollyowned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is theholding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of itsregulated 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 corporationsthat clear through or maintain a custodial relationship with a Direct Participant, either directly orindirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTCRules applicable to its Participants are on file with the Securities and Exchange Commission.More information about DTC can be found at www.dtcc.com. (This internet site is included forreference only, and the information in this internet site is not incorporated by reference in thisOfficial Statement.)

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3. Purchases of Bonds under the DTC system must be made by or through DirectParticipants, which will receive a credit for the Bonds on DTC’s records. The ownership interestof each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on theDirect and Indirect Participants’ records. Beneficial Owners will not receive writtenconfirmation from DTC of their purchase. Beneficial Owners are, however, expected to receivewritten confirmations providing details of the transaction, as well as periodic statements of theirholdings, from the Direct or Indirect Participant through which the Beneficial Owner entered intothe transaction. Transfers of ownership interests in the Bonds are to be accomplished by entriesmade on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests in Bonds,except in the event that use of the book-entry system for the Bonds is discontinued.

4. To facilitate subsequent transfers, all Bonds deposited by Direct Participants withDTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other nameas may be requested by an authorized representative of DTC. The deposit of Bonds with DTCand their registration in the name of Cede & Co. or such other DTC nominee do not effect anychange in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of theBonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts suchBonds are credited, which may or may not be the Beneficial Owners. The Direct and IndirectParticipants will remain responsible for keeping account of their holdings on behalf of theircustomers.

5. Conveyance of notices and other communications by DTC to Direct Participants,by Direct Participants to Indirect Participants, and by Direct Participants and IndirectParticipants to Beneficial Owners will be governed by arrangements among them, subject to anystatutory or regulatory requirements as may be in effect from time to time. Beneficial Owners ofBonds may wish to take certain steps to augment the transmission to them of notices ofsignificant events with respect to the Bonds, such as redemptions, tenders, defaults and proposedamendments to the Bond documents. For example, Beneficial Owners of Bonds may wish toascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmitnotices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide theirnames and addresses to the Bond Registrar and request that copies of notices be provideddirectly to them.

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

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or votewith respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMIProcedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon aspossible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or votingrights to those Direct Participants to whose accounts the Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions and dividends (debt charges payments) on theBonds will be made to Cede & Co., or such other nominee as may be requested by an authorized

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representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’sreceipt of funds and corresponding detail information from the City or the Bond Registrar, on thepayable date in accordance with their respective holdings shown on DTC’s records. Paymentsby Participants to Beneficial Owners will be governed by standing instructions and customarypractices, as is the case with securities held for the accounts of customers in bearer form orregistered in “street name,” and will be the responsibility of such Participant and not of DTC, theBond Registrar, or the City, subject to any statutory or regulatory requirements as may be ineffect from time to time. Payment of redemption proceeds, distributions and dividends (debtcharges) to Cede & Co. (or such other nominee as may be requested by an authorizedrepresentative of DTC) is the responsibility of the City or the Bond Registrar, disbursement ofsuch payments to Direct Participants will be the responsibility of DTC, and disbursement of suchpayments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. (Not Applicable to the Bonds.)

10. DTC may discontinue providing its services as depository with respect to theBonds at any time by giving reasonable notice to the City or the Bond Registrar. Under suchcircumstances, in the event that a successor depository is not obtained, Bond certificates arerequired to be printed (or otherwise produced) and delivered.

11. The City may decide to discontinue use of the system of book-entry-only transfersthrough DTC (or a successor securities depository). In that event, Bond certificates will beprinted (or otherwise produced) and delivered to DTC. (See also Revision of Book-EntrySystem; Replacement Bonds.)

12. The information above in this section concerning DTC and DTC’s book-entrysystem has been obtained from sources that the City believes to be reliable, but the City takes noresponsibility for the accuracy thereof.

Direct Participants and Indirect Participants may impose service charges on BeneficialOwners in certain cases. Purchasers of book-entry interests should discuss that possibilitywith their brokers.

The City and the Bond Registrar have no role in the purchases, transfers or sales of book-entry interests. The rights of Beneficial Owners to transfer or pledge their interests, and themanner of transferring or pledging those interests, may be subject to applicable state law.Beneficial Owners may want to discuss with their legal advisors the manner of transferring orpledging their book-entry interests.

The City and the Bond Registrar have no responsibility or liability for any aspects of therecords or notices relating to, or payments made on account of, beneficial ownership, or formaintaining, supervising or reviewing any records relating to that ownership.

The City and the Bond Registrar cannot and do not give any assurances that DTC, DirectParticipants, Indirect Participants or others will distribute to the Beneficial Owners payments ofdebt charges on the Bonds made to DTC as the registered owner, or redemption, if any, or othernotices, or that they will do so on a timely basis, or that DTC, Direct Participants or IndirectParticipants will serve or act in a manner described in this Official Statement.

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For all purposes under the Bond proceedings (except the Continuing DisclosureAgreement under which others as well as DTC may be considered an owner or holder of theBonds, see Continuing Disclosure Agreement), DTC will be and will be considered by the Cityand the Bond Registrar to be the owner or holder of the Bonds.

Beneficial Owners will not receive or have the right to receive physical delivery ofBonds, and, except to the extent they may have rights as Beneficial Owners or holders under theContinuing Disclosure Agreement, will not be or be considered by the City and the BondRegistrar to be, and will not have any rights as, owners or holders of Bonds under the Bondproceedings.

Reference herein to “DTC” includes when applicable any successor securities depositoryand the nominee of the depository.

Revision of Book-Entry System; Replacement Bonds

The Bond proceedings provide for issuance of fully-registered Bonds (ReplacementBonds) directly to owners of Bonds other than DTC only in the event that DTC (or a successorsecurities depository) determines not to continue to act as securities depository for the Bonds.Upon occurrence of this event, the City may in its discretion attempt to have established asecurities depository book-entry relationship with another securities depository. If the City doesnot do so, or is unable to do so, and after the Bond Registrar has made provision for notificationof the Beneficial Owners of the Bonds by appropriate notice to DTC, the City and the BondRegistrar will authenticate and deliver Replacement Bonds of any one maturity, in authorizeddenominations, to or at the direction of any persons requesting such issuance, and, if the event isnot the result of City action or inaction, at the expense (including legal and other costs) of thoserequesting.

Debt charges on Replacement Bonds will be payable when due without deduction for theservices of the Bond Registrar as paying agent. Principal of and any premium on ReplacementBonds will be payable when due to the registered owner upon presentation and surrender at thedesignated corporate trust office of the Bond Registrar. Interest on Replacement Bonds will bepayable on the interest payment date by the Bond Registrar by transmittal to the registered ownerof record on the Bond Register as of the 15th day of the calendar month next preceding theinterest payment date. Replacement Bonds will be exchangeable for other Replacement Bondsof authorized denominations, and transferable, at the designated corporate trust office of theBond Registrar without charge (except taxes or governmental fees). Exchange or transfer ofthen-redeemable Replacement Bonds is not required to be made: (i) between the 15th daypreceding the mailing of notice of redemption of Replacement Bonds and the date of thatmailing, or (ii) of a particular Replacement Bond selected for redemption (in whole or part).

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APPENDIX F

Proposed Form of Continuing Disclosure Agreement

CONTINUING DISCLOSURE AGREEMENT

This CONTINUING DISCLOSURE AGREEMENT, dated July 2, 2015 (the “Agreement”), ismade, signed and delivered by the City of Grove City, Ohio (the “City”), a municipal corporationand political subdivision duly organized and existing under the Constitution and laws of the Stateof Ohio and its Charter, for the benefit of the Holders and Beneficial Owners (as defined herein)from time to time of the City’s $14,000,000 Library Construction Bonds, Series 2015 (the“Bonds”), authorized by Ordinance No. C-22-15 passed by the City Council of the City onApril 20, 2015 (the “Bond Ordinance”).

RECITAL

The City, by passage of the Bond Ordinance, has determined to issue the Bonds toprovide funds for City purposes, and Stifel, Nicolaus & Company, Incorporated (the“Participating Underwriter”) has agreed to provide those funds to the City by purchasing theBonds. As a condition to the purchase of the Bonds from the City and the sale of Bonds toHolders and Beneficial Owners, the Participating Underwriter is required to reasonablydetermine that the City has undertaken, in a written agreement for the benefit of Holders andBeneficial Owners of the Bonds, to provide certain information in accordance with the Rule (asdefined herein).

NOW, THEREFORE, in accordance with the Bond Ordinance, the City covenants andagrees as set forth in this Continuing Disclosure Agreement.

Section 1. Purpose of Continuing Disclosure Agreement. This Agreement is beingentered into, signed and delivered for the benefit of the Holders and Beneficial Owners of theBonds and in order to assist the Participating Underwriter of the Bonds in complying withRule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission (SEC) pursuant tothe Securities Exchange Act of 1934, as may be amended from time to time (the “Rule”).

Section 2. Definitions. In addition to the definitions set forth above, the followingcapitalized terms shall have the following meanings in this Agreement, unless the context clearlyotherwise requires. Reference to “Sections” shall mean sections of this Agreement.

“Annual Filing” means any Annual Information Filing provided by the City pursuant to,and as described in, Sections 3 and 4.

“Audited Financial Statements” means the audited basic financial statements of the City,prepared in conformity with generally accepted accounting principles.

“Beneficial Owner” means any person that (a) has the power, directly or indirectly, tovote or consent with respect to, or to dispose of ownership of, any Bonds (including persons

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holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as theowner of any Bonds for federal income tax purposes.

“EMMA” means the Electronic Municipal Market Access system of the MSRB;information regarding submissions to EMMA is available at http://emma.msrb.org.

“Filing Date” means the last day of the ninth month following the end of each FiscalYear (or the next succeeding business day if that day is not a business day), beginningSeptember 30, 2016.

“Fiscal Year” means the 12-month period beginning on January 1 of each year or suchother 12-month period as the City shall adopt as its fiscal year.

“Holder” means, with respect to the Bonds, the person in whose name a Bond isregistered in accordance with the Bond Ordinance.

“MSRB” means the Municipal Securities Rulemaking Board.

“Obligated Person” means, any person, including the issuer of municipal securities (suchas the Bonds), who is generally committed by contract or other arrangement to support paymentof all or part of the obligations on the municipal securities being sold in an offering document(such as the Official Statement); the City is the only Obligated Person for the Bonds.

“Official Statement” means the Official Statement for the Bonds dated June 18, 2015.

“Participating Underwriter” means any of the original underwriters of the Bondsrequired to comply with the Rule in connection with offering of the Bonds.

“Specified Events” means any of the events with respect to the Bonds as set forth inSection 5(a).

“State” means the State of Ohio.

Section 3. Provision of Annual Information.

(a) The City shall provide (or cause to be provided) not later than the Filing Date tothe MSRB an Annual Filing, which is consistent with the requirements of Section 4. The AnnualFiling shall be submitted in an electronic format and contain such identifying information as isprescribed by the MSRB, and may be submitted as a single document or as separate documentscomprising a package, and may cross-reference other information as provided in Section 4;provided that the Audited Financial Statements of the City may be submitted separately from thebalance of the Annual Filing and later than the Filing Date if they are not available by that date.If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for aSpecified Event under Section 5.

(b) If the City is unable to provide to the MSRB an Annual Filing by the Filing Date,the City shall, in a timely manner, send a notice to the MSRB in an electronic format asprescribed by the MSRB.

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Section 4. Content of Annual Filing. The City’s Annual Filing shall contain or includeby reference the following:

(a) Financial information and operating data of the type included in the OfficialStatement under the captions: AD VALOREM PROPERTY TAXES – Collections and –Delinquencies, together with information as to aggregate assessed valuation of the City andoverlapping and City tax rates; MUNICIPAL INCOME TAX; STATE LOCALGOVERNMENT FUNDS; CITY DEBT AND OTHER LONG-TERM OBLIGATIONS,including Debt Tables, as applicable; and Appendices A and B.

(b) The Audited Financial Statements of the City utilizing generally acceptedaccounting principles applicable to governmental units as described in the Official Statement,except as may be modified from time to time and described in such financial statements.

The foregoing shall not obligate the City to prepare or update projections of any financialinformation or operating data.

Any or all of the items listed above may be included by specific reference to otherdocuments, including annual informational statements of the City or official statements of debtissues of the City or related public entities, which have been submitted to the MSRB or theSecurities and Exchange Commission. The City shall clearly identify each such other documentso included by reference.

Section 5. Reporting Specified Events.

(a) The City shall provide to the MSRB, in an electronic format and containing suchidentifying information as is prescribed by the MSRB and in a timely manner but not later thanten business days after the occurrence of the event, notice of any of the following events withrespect to the Bonds, as specified by the Rule:

(1) Principal and interest payment delinquencies;

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

(3) Unscheduled draws on debt service reserves reflecting financialdifficulties; (a)

(4) Unscheduled draws on credit enhancements reflecting financialdifficulties; (a)

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

(6) (Issuance of) Adverse tax opinions, the issuance by the Internal RevenueService of proposed or final determinations of taxability, Notices ofProposed Issue (IRS Form 5701-TEB) or other material notices ordeterminations with respect to the tax status of the security (i.e., theBonds), or other material events affecting the tax status of the security;

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

(8) Bond calls, if material, and tender offers; (b)

(9) Defeasances;

(10) Release, substitution, or sale of property securing repayment of thesecurities, if material; (c)

(11) Rating changes;

(12) Bankruptcy, insolvency, receivership or similar event of the ObligatedPerson; Note: For the purposes of the event identified in thissubparagraph, the event is considered to occur when any of the followingoccur: the appointment of a receiver, fiscal agent or similar officer for anObligated Person in a proceeding under the U.S. Bankruptcy Code or inany other proceeding under state or federal law in which a court orgovernmental authority has assumed jurisdiction over substantially all ofthe assets or business of the Obligated Person, or if such jurisdiction hasbeen assumed by leaving the existing governmental body and officials orofficers in possession but subject to the supervision and orders of a courtor governmental authority, or the entry of an order confirming a plan ofreorganization, arrangement or liquidation by a court or governmentalauthority having supervision or jurisdiction over substantially all of theassets or business of the Obligated Person.

(13) The consummation of a merger, consolidation, or acquisition involving anObligated Person or the sale of all or substantially all of the assets of theObligated Person, other than in the ordinary course of business, the entryinto a definitive agreement to undertake such an action or the terminationof a definitive agreement relating to any such actions, other than pursuantto its terms, if material; and

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

Note:(a) The City has not obtained or provided, and does not expect to obtain or

provide, any debt service reserves, credit enhancements or credit orliquidity providers for the Bonds.

(b) Any scheduled redemption of Bonds pursuant to mandatory sinking fundredemption requirements does not constitute a specified event within themeaning of the Rule.

(c) Repayment of the Bonds is not secured by a lien on any property capableof release or sale or for which other property may be substituted.

For the Specified Events described in Section 5(a) (2), (6, as applicable), (7), (8, asapplicable), (10), (13) and (14), the City acknowledges that it must make a determination

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whether such Specified Event is material under applicable federal securities laws in order todetermine whether a filing is required.

Section 6. Amendments. The City reserves the right to amend this Agreement, andnoncompliance with any provision of this Agreement may be waived, as may be necessary orappropriate to (a) achieve its compliance with any applicable federal securities law or rule,(b) cure any ambiguity, inconsistency or formal defect or omission and (c) address any change incircumstances arising from a change in legal requirements, change in law or change in theidentity, nature or status of the City or type of business conducted by the City. Any suchamendment or waiver shall not be effective unless the Agreement (as amended or taking intoaccount such waiver) would have materially complied with the requirements of the Rule at thetime of the primary offering of the Bonds, after taking into account any applicable amendmentsto or official interpretations of the Rule, as well as any change in circumstances, and until theCity shall have received either (i) a written opinion of bond counsel or other qualifiedindependent special counsel selected by the City that the amendment or waiver would notmaterially impair the interests of Holders of at least a majority of the principal amount of theBonds then outstanding. An Annual Filing containing any revised operating data or financialinformation shall explain, in narrative form, the reasons for any such amendment or waiver andthe impact of the change on the type of operating data or financial information being provided.If the amendment relates to the accounting principles to be followed in preparing AuditedFinancial Statements, (A) the City shall provide notice of such change in the same manner as fora Specified Event under Section 5 and (B) the Annual Filing for the year in which the change ismade should present a comparison (in narrative form and also, if feasible, in quantitative form)between the financial statements or information as prepared on the basis of the new accountingprinciples and those prepared on the basis of the former accounting principles.

Section 7. Additional Information. Nothing in this Agreement shall be deemed toprevent the City from disseminating any other information, using the means of dissemination setforth in this Agreement or providing any other means of communication, or including any otherinformation in any Annual Filing or providing notice of the occurrence of an event, in addition tothat which is required by this Agreement. If the City chooses to include any information in anydocument or notice of occurrence of an event in addition to that which is specifically required bythis Agreement, the City shall have no obligation under this Agreement to update suchinformation or include it in any future Annual Filing or notice of occurrence of a SpecifiedEvent.

Section 8. Remedy for Breach. This Agreement shall be solely for the benefit of theHolders and Beneficial Owners from time to time of the Bonds. The exclusive remedy for anybreach of the Agreement by the City shall be limited, to the extent permitted by law, to a right ofHolders and Beneficial Owners to institute and maintain, or to cause to be instituted andmaintained, such proceedings as may be authorized at law or in equity to obtain the specificperformance by the City of its obligations under this Agreement in a court in Franklin County,Ohio. Any such proceedings shall be instituted and maintained only in accordance withSection 133.25(B)(4)(b) or (C)(1) of the Revised Code (or any like or comparable successorprovisions); provided that any Holder or Beneficial Owner may exercise individually any suchright to require the City to specifically perform its obligation to provide or cause to be provided apertinent filing if such a filing is due and has not been made. Any Beneficial Owner seeking to

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require the City to comply with this Agreement shall first provide at least 30 days’ prior writtennotice to the City of the City’s failure, giving reasonable detail of such failure, following whichnotice the City shall have 30 days to comply. A default under this Agreement shall not bedeemed an event of default under the Bond Ordinance, and the sole remedy under thisAgreement in the event of any failure of the City to comply with this Agreement shall be anaction to compel performance. No person or entity shall be entitled to recover monetarydamages under this Agreement.

Section 9. Appropriation. The performance by the City of its obligations under thisAgreement shall be subject to the availability of funds and their annual appropriation to meetcosts that the City would be required to incur to perform those obligations. The City shallprovide notice to the MSRB in the same manner as for a Specified Event under Section 5 of thefailure to appropriate funds to meet costs to perform the obligations under this Agreement.

Section 10. Termination. The obligations of the City under the Agreement shall remainin effect only for such period that the Bonds are outstanding in accordance with their terms andthe City remains an Obligated Person with respect to the Bonds within the meaning of the Rule.The obligation of the City to provide the information and notices of the events described aboveshall terminate, if and when the City no longer remains such an Obligated Person. If any person,other than the City, becomes an Obligated Person relating to the Bonds, the City shall use its bestefforts to require such Obligated Person to comply with all provisions of the Rule applicable tosuch Obligated Person.

Section 11. Dissemination Agent. The City may, from time to time, appoint or engagea dissemination agent to assist it in carrying out its obligations under this Agreement, and maydischarge any such agent, with or without appointing a successor dissemination agent.

Section 12. Beneficiaries. This Agreement shall inure solely to the benefit of the City,any dissemination agent, the Participating Underwriter and Holders and Beneficial Owners fromtime to time of the Bonds, and shall create no rights in any other person or entity.

Section 13. Recordkeeping. The City shall maintain records of all Annual Filings andnotices of Specified Events and other events including the content of such disclosure, the namesof the entities with whom such disclosures were filed and the date of filing such disclosure.

Section 14. Governing Law. This Agreement shall be governed by the laws of theState.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK – SIGNATURE PAGE TO FOLLOW)

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IN WITNESS WHEREOF, the City has caused this Continuing Disclosure Agreement tobe duly signed and delivered to the Participating Underwriter, as part of the Bond proceedingsand in connection with the original delivery of the Bonds to the Participating Underwriter, on itsbehalf by its officials signing below, all as of the date set forth above, and the Holders andBeneficial Owners from time to time of the Bonds shall be deemed to have accepted thisAgreement made in accordance with the Rule.

CITY OF GROVE CITY, OHIO

By:

Title: Mayor

By:

Title: Director of Finance

Approved as to form and correctness:

By:

Title: Director of Law

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FISCAL OFFICER’S CERTIFICATE – CONTINUING DISCLOSURE AGREEMENT

As fiscal officer of the City of Grove City, Ohio, I certify that the money required to meetthe obligations of the City under the Agreement made by the City in accordance with the Rule, asset forth in the Bond Ordinance and the attached Continuing Disclosure Agreement, duringFiscal Year 2015, has been lawfully appropriated by the City for those purposes and is in theCity treasury or in the process of collection to the credit of an appropriate fund, free from anyprevious encumbrances. This Certificate is given in compliance with Sections 5705.41 and5705.44 of the Revised Code.

Dated: July 2, 2015Director of FinanceCity of Grove City, Ohio

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APPENDIX G

Largest City Ad Valorem Property Tax Payers (Collection Years 2012-2013)

Based on County Auditor records of assessed valuations for the 2013 collection year, thelargest City ad valorem property tax payers were:

Name of Taxpayer

TotalAssessedValuation

% ofTotal

AssessedValuation

Ohio Power Company $9,606,730 1.18%Columbia Gas of Ohio, Inc. 2,287,550 0.28Solid Waste Authority of Central Ohio 2,201,190 0.27

Industrial Southpark $13,531,470 1.66%Wal-Mart Stores, Inc. 10,964,350 1.34Parkway Centre East LLC 8,431,160 1.03Security Capital 8,275,530 1.01Crossroads Ohio LLC 5,947,210 0.73Beulah Park Gaming 5,444,430 0.67Sun Life Assurance 5,388,950 0.66Prologis Logistics 5,377,750 0.66Dugan Realty LLC 5,250,740 0.64Target Corp. 4,102,460 0.50Gateway Lakes Acquisition 3,875,850 0.47DDRM Derby Square LLC 3,641,870 0.45Buckeye Grove Shopping 3,469,730 0.43Regency Arms Apartments 3,445,830 0.42TOSOH SMD Inc. 3,414,650 0.42Santa Fe Bayfront Venture 3,169,260 0.39Services Development Corp. 3,109,690 0.38Groves Apartments Ltd. 2,758,000 0.34Inn At Grove City LLC 2,590,000 0.32Rockford Homes, Inc. 2,325,690 0.28Manheim Services Corp. 2,194,090 0.27HG Acquisition LLC 2,179,530 0.27

All Others $693,061,360 84.93%

Total Assessed Value $816,045,070 100.00%

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Based on County Auditor records of assessed valuations for the 2012 collection year, thelargest City ad valorem property tax payers were:

Name of Taxpayer

TotalAssessedValuation

% ofTotal

AssessedValuation

Columbus Southern Power $9,456,530 1.18%

Wal-Mart Stores, Inc. $10,964,350 1.37%Industrial Southpark 9,409,000 1.17Security Capital 6,100,420 0.76Santa Fe Bayfront Venture 5,922,010 0.74Beulah Park Gaming 5,444,430 0.68Sun Life Assurance 5,388,950 0.67Dugan Realty LLC 5,250,740 0.65Parkway Centre East LLC 4,149,430 0.52Target Corp. 4,102,460 0.51DDRM Derby Square LLC 3,956,880 0.49

All Others $732,704,690 91.26%

Total Assessed Value $802,849,890 100.00%

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