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Annual Information Statement
In connection with Bonds, Notes andCertificates of
This Annual Information Statement pertains to the operations of Hamilton County for thecalendar year 2015. (Where possible, 2016 data has been provided.)
In addition to providing information on an annual basis, the County of Hamiltonthat this Statement will be used, together with information to be specifically provided by theCounty for that purpose, in connection with the original offering and issuance by the County ofits bonds, notes and certificates of indebtedness.
Questions regarding information contained in this Annual Information Statement shouldbe directed to Jeff Aluotto, Interim138 East Court Street, Cincinnati, Ohio 45202 (513
The date of this A
County of Hamilton, Ohio
2016
Annual Information Statement
In connection with Bonds, Notes andCertificates of Indebtedness of the County
This Annual Information Statement pertains to the operations of Hamilton County for thecalendar year 2015. (Where possible, 2016 data has been provided.)
In addition to providing information on an annual basis, the County of Hamiltonthat this Statement will be used, together with information to be specifically provided by theCounty for that purpose, in connection with the original offering and issuance by the County ofits bonds, notes and certificates of indebtedness.
ions regarding information contained in this Annual Information Statement shouldInterim County Administrator, 603 County Administration Building,
138 East Court Street, Cincinnati, Ohio 45202 (513-946-4420).
The date of this Annual Information Statement is
August 15, 2016.
This Annual Information Statement pertains to the operations of Hamilton County for the
In addition to providing information on an annual basis, the County of Hamilton intendsthat this Statement will be used, together with information to be specifically provided by theCounty for that purpose, in connection with the original offering and issuance by the County of
ions regarding information contained in this Annual Information Statement shouldCounty Administrator, 603 County Administration Building,
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TABLE OF CONTENTSPage
INTRODUCTORY STATEMENT .............................................................................................................. 1
THE COUNTY ............................................................................................................................................. 2
County Government.................................................................................................................................. 2
General Government................................................................................................................................. 3
Administration of Justice System ............................................................................................................. 6
County-Owned Utilities ............................................................................................................................ 6
Financial Management.............................................................................................................................. 6
Permissive Taxes ...................................................................................................................................... 7
Management of County Facilities ............................................................................................................. 8
Personnel Administration.......................................................................................................................... 8
Collective Bargaining ............................................................................................................................... 8
County Services – Health and Public Assistance...................................................................................... 9
ECONOMIC INFORMATION .................................................................................................................. 12
General .................................................................................................................................................... 12
Economic Development.......................................................................................................................... 13
Government and Community Development Agencies ....................................................................... 13
Development Projects and Investments .............................................................................................. 16
Local Awards ...................................................................................................................................... 21
Transportation......................................................................................................................................... 22
Health...................................................................................................................................................... 23
Education ................................................................................................................................................ 24
Utilities.................................................................................................................................................... 25
Fire and Police Services.......................................................................................................................... 26
Print and Broadcast Media...................................................................................................................... 26
Culture and Recreation ........................................................................................................................... 26
Demographic Information....................................................................................................................... 29
Employment............................................................................................................................................ 30
Income and Housing Data....................................................................................................................... 32
Building Permits ..................................................................................................................................... 32
FINANCIAL MATTERS ........................................................................................................................... 33
Introduction............................................................................................................................................. 33
Budgeting, Tax Levy and Appropriations Procedure ............................................................................. 33
Financial Reports and Examinations of Accounts .................................................................................. 34
HHS Audit .............................................................................................................................................. 35
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INSURANCE.............................................................................................................................................. 35
INVESTMENT POLICIES OF THE COUNTY........................................................................................ 36
AD VALOREM TAXES ............................................................................................................................ 39
Assessed Valuation ................................................................................................................................. 39
Collection of Ad Valorem Property Taxes and Special Assessments..................................................... 46
Delinquency Procedures ......................................................................................................................... 48
OTHER MAJOR COUNTY REVENUE SOURCES................................................................................. 49
Sales Tax................................................................................................................................................. 49
Historic Sales Tax Collections................................................................................................................ 50
Seasonal Variance in Tax Distributions.................................................................................................. 51
Historical Sales Tax Collections by Category ........................................................................................ 52
Local Government Fund ......................................................................................................................... 52
Federal Funds.......................................................................................................................................... 53
Revenues From County Properties ......................................................................................................... 53
Casino Revenues..................................................................................................................................... 54
County General Fund.............................................................................................................................. 54
SECURITY AND SOURCES OF PAYMENT .......................................................................................... 55
Ad Valorem Property Tax Security ........................................................................................................ 55
Sources of Payment................................................................................................................................. 56
INVESTMENT CONSIDERATIONS ....................................................................................................... 56
Local Fiscal Emergency Legislation....................................................................................................... 57
THE METROPOLITAN SEWER DISTRICT (MSD) OF GREATER CINCINNATI ............................. 58
Formation and MSD Operating Agreement............................................................................................ 58
County-City Litigation............................................................................................................................ 60
Status of the MSD Operating Agreement ............................................................................................... 60
Management/Organization and County Oversight/Monitoring .............................................................. 61
Operations ............................................................................................................................................... 62
Treatment Plants ..................................................................................................................................... 63
Plant Performance................................................................................................................................... 65
MSD Recognition ................................................................................................................................... 65
Collection System ................................................................................................................................... 67
Environmental Compliance and Quality................................................................................................. 68
Overview............................................................................................................................................. 68
History of the Consent Decrees .......................................................................................................... 69
Current Status of the Consent Decrees................................................................................................ 73
Concepts Applicable to All Phases of the Final WWIP...................................................................... 76
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National Leadership by Hamilton County on Integrated Planning Issues .......................................... 79
Capital Improvement Program................................................................................................................ 80
Procedure to Establish Program.......................................................................................................... 80
Individual Projects .............................................................................................................................. 80
Historical Expenditures....................................................................................................................... 81
Capital Improvement Program 2015-2019.......................................................................................... 81
MSD Projected CIP Expenditures 2015-2019 .................................................................................... 82
Future Financings................................................................................................................................ 82
Customers and Billing............................................................................................................................. 83
Sewer Rates............................................................................................................................................. 84
Operating Budget .................................................................................................................................... 86
Summary of Historical Financial Information ........................................................................................ 87
Management Discussion of Results of Operations ................................................................................. 91
Overview 2011-2015 .......................................................................................................................... 91
Summaries by Year............................................................................................................................. 92
Employees............................................................................................................................................... 93
City Retirement Plan............................................................................................................................... 93
COUNTY DEBT AND OTHER LONG TERM OBLIGATIONS............................................................. 96
Statutory Direct Debt Limitations........................................................................................................... 96
Indirect Debt Limitations........................................................................................................................ 97
Overlapping Debt.................................................................................................................................... 98
Bond Anticipation Notes and Certificates of Indebtedness .................................................................... 99
Debt Currently Outstanding.................................................................................................................. 101
FUTURE FINANCINGS.......................................................................................................................... 107
LEASES AND CONTRACTS ................................................................................................................. 107
OHIO EMPLOYER’S CONTRIBUTION TO OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM.................................................................................................................................................................. 107
OTHER OBLIGATIONS ......................................................................................................................... 108
Sales Tax and Economic Development ................................................................................................ 108
LEGAL MATTERS.................................................................................................................................. 109
General .................................................................................................................................................. 109
Bond Counsel........................................................................................................................................ 110
RATINGS ................................................................................................................................................. 110
General .................................................................................................................................................. 110
Current Credit Ratings .......................................................................................................................... 111
CONTINUING DISCLOSURE................................................................................................................ 111
CONCLUDING STATEMENT ............................................................................................................... 111
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APPENDICES
APPENDIX A-1 Audited Financial Statements for Hamilton County, Ohio for the YearEnded December 31, 2014
APPENDIX A-2 Audited Financial Statements for Hamilton County, Ohio for the YearEnded December 31, 2015*
APPENDIX A-3 Audited Financial Statements for the Metropolitan Sewer District ofGreater Cincinnati for the Years Ended December 31, 2014 and 2015†
APPENDIX B Summary of 2015 Budget AppropriationsAPPENDIX C Financial StatementAPPENDIX D Ten Mill CertificateAPPENDIX E 2016 Tax Rate TableAPPENDIX F County Investment PolicyAPPENDIX G County Debt PolicyAPPENDIX H Authorizing Resolution
*Neither the unaudited nor the audited financial statements of the County for the year ended December 31, 2015are available at this time. It is expected that such audited financial statements will be released within the next twomonths.†The audited financial statements for the Metropolitan Sewer District of Greater Cincinnati for the year endedDecember 31, 2015 are not available at this time. It is expected that such audited financial statements will bereleased within the next two months.
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INTRODUCTORY STATEMENT
The “Annual Informational Statement in connection with Bonds, Notes and Certificatesof Indebtedness of the County of Hamilton, Ohio” (the “Annual Statement”), including theAppendices hereto, has been prepared by the County of Hamilton (the “County”) to provide, asof its date, financial and other information relating to the County. The County intends that thisAnnual Statement be used in conjunction with specific offering information to be provided bythe County which, taken together, would serve as the Official Statement for the original offeringand issuance by the County of specific issues of bonds, notes or certificates of indebtedness.Following the distribution of this Annual Statement and concurrently with the original offeringby the County of each particular issue of its bonds, notes or certificates of indebtedness, theCounty will distribute or make available the specific offering information relating to that issuealong with information updating or revising information contained in this Annual Statement.
The County has not bound itself contractually to furnish current information, in the formof a statement such as this or otherwise, on a continuing or regular basis and does not covenantto do so except for specific Continuing Disclosure Agreements entered into for specifictransactions (see “CONTINUING DISCLOSURE” herein). From time to time the County mayelect to provide such information to parties named on a mailing list maintained by the County forsuch purpose. Names may be entered on the mailing list by writing Jacqueline Panioto, CountyClerk, Board of County Commissioners, Room 603, Hamilton County Administration Building,138 East Court Street, Cincinnati, Ohio 45202.
All financial and other information presented herein has been provided by the Countyfrom its records, except for information expressly attributed to other sources. The presentationof information, including tables of receipts from taxes and other sources, is intended to showrecent historical information, and is not intended to indicate future or continuing trends in thefinancial position or other affairs of the County. No representation is made that pastexperience, as might be shown by such financial and other information, will necessarilycontinue in the future.
References herein to provisions of Ohio law, whether codified in the Ohio Revised Code(the “Revised Code”) or uncodified, or the Ohio Constitution, are references to such provisionsas they presently exist. Any of those provisions may from time to time be amended, repealed orsupplemented.
As used in this Annual Statement, “debt service” means principal (including mandatoryredemptions) of and interest on the obligations referred to, and “State” or “Ohio” means the Stateof Ohio.
Any addresses of or links to web sites, which may be contained herein, are given for theconvenience of the user only. The County has not participated in the preparation, compilation orselection of information on these websites, and therefore presents no warranties orrepresentations of the material contained therein. Further, the County assumes no responsibilityor liability for the contents there.
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Certain information contained in this Annual Statement is attributed to the OhioMunicipal Advisory Council (OMAC). OMAC compiles information from official and othersources. OMAC believes the information it compiles is accurate and reliable, but OMAC doesnot independently confirm or verify the information and does not guaranty its accuracy. OMAChas not reviewed this Annual Information Statement to confirm that the information attributed toit is information provided by OMAC or for any other purpose.
The County has made every effort to provide current information as of the date of thisAnnual Statement. However, in some cases updated information was not available as of suchdate and in those cases the most recent available information has been provided.
THE COUNTY
Hamilton County was named for the former Secretary of the Treasury, AlexanderHamilton, and was created by proclamation of Arthur St. Clair, Governor of the NorthwestTerritory, on January 2, 1790. The County was the second county formed in the State of Ohio,with Cincinnati as the county seat. The County is situated in the extreme southwestern cornerof the State and covers an area of 414 square miles. The County encompasses 37municipalities, including the City of Cincinnati (the “City”), 19 other cities, and 17 villages.The County is the third largest in the State in terms of population. Located on the Ohio River,Hamilton County forms the core of the Greater Metropolitan Area which also includes thecounties of Warren, Clermont, Butler and Brown in Ohio; Dearborn, Ohio and Franklincounties in Indiana; and Kenton, Campbell, Gallatin, Grant, Pendleton, Boone and Brackencounties across the river in Kentucky.
County Government
The County has only those powers, and powers incidental thereto, conferred upon it byOhio statutes. A three-member board of county commissioners (the “Commissioners”), elected atlarge in even-numbered years for four-year overlapping terms, is the primary legislative andexecutive body of the County.
In addition to three Commissioners, the eight other administrative officials of the Countylisted below, each of whom is independent within the limits of the state statutes affecting theparticular office, are elected for terms of four years each, with the County Auditor and oneCounty Commissioner elected in even-numbered non-presidential election years (e.g., 2014,2018), and the other County Commissioners and other County officers elected in eachpresidential election year. Common Pleas Judges, including Domestic Relations Judges, JuvenileCourt Judges, and the Probate Judge, are also elected on a County-wide basis. Municipal CourtJudges are elected two each from seven districts.
Board of County Commissioners
Name Assumed Office Present Term ExpiresChris Monzel, President January 2011 January 2019
Dennis Deters, Vice-President January 2016 January 2017Todd Portune January 2001 January 2017
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County Officials
Title NameAssumed
OfficePresent Term
Expires
County Auditor Dusty Rhodes March 1991 March 2019County Treasurer Robert A. Goering, Jr. February 1991 September 2017Clerk of Courts Tracy Winkler October 2011 January 2017County Engineer Theodore B. Hubbard January 2012 January 2017County Recorder Wayne Coates January 2009 January 2017County Sheriff Jim Neil January 2013 January 2017County Coroner Lakshmi Kode Sammarco March 2012 January 2017County Prosecuting Attorney Joseph T. Deters January 2005 January 2017
General Government
Of the offices which can be grouped under the category of general government, inaddition to the Commissioners, three elective offices are of particular pertinence.
The County Auditor (the “Auditor”) is elected to a four-year term and has the importanttask of assessing real property for taxing purposes. A complete physical on-site inspectionreappraisal must be conducted every six years. A triennial reappraisal must be conducted by theAuditor if ordered by the State Commissioner of Taxation. The Auditor is also the fiscal officerof the County, and no County contract may be made without the Auditor’s certification thatfunds are available for payment or are in the process of collection. In addition, no account maybe paid except by the Auditor’s warrant drawn upon the County Treasury. The Auditor isresponsible for the County payroll and has major accounting responsibilities.
The County Treasurer (the “Treasurer”) is required by state law to collect certain taxes,which are then distributed by the Auditor to various governmental units. The Treasurer is thedisbursing agent for expenditures authorized by the Commissioners and is also custodian of theCounty’s Bond Retirement Fund. The Treasurer must make daily reports showing receipts,payments and balances to the Auditor, and the Treasurer’s books of account must always balancewith those of the Auditor.
The County Engineer, required by law to be a registered professional engineer andsurveyor, serves as the civil engineer for the County and its officials. Primary responsibilitiesrelate to the construction, maintenance, and repair of the County’s roads, bridges, and drainagefacilities. The Commissioners take bids on and award contracts for the projects recommendedand approved by the Engineer. The County Engineer also prepares tax maps for the CountyAuditor.
In addition to these elected officials, the County Administrator is appointed by the Boardof County Commissioners and serves under the direction and supervision of the Board. TheCounty Administrator is the administrative head of the County and is responsible for enactingpolicies of the Board, supervising County affairs, preparing and submitting the fiscal budget, andkeeping the Board fully advised on the financial obligations of the County.
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There are a number of independent boards and commissions, which administer a largevariety of services within the County, including, among others, the Board of Elections, theVeterans Service Commission, Developmental Disabilities Services, and the Mental Health andRecovery Services Board.
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Clerk of CourtsTreasurer
Court of
AppealsSheriff
(x* zE las ot X-
Court of
Common PleasRecorder
1Prosecuting
Attorney
Domestic
Relations Court
•V A.
AfEngineer Juvenile Courta'Iton c5
Coroner Municipal Court
Elected
OfficialsAuditor Probate Court
Board of County Commissioners
rDepartments under the jurisdiction of the Board
.
County AdministratorEnvironmental
Services
County
Facilities
Human
Resources
Communications
CenterAppoints try I he Soircl
ILi 7County Administration
Job and Family Services (JFS} Planning and Development
County services for which the Board of County Commissioners is solely responsible
Metropolitan Sewer District
Paul Brown Stadium
Storm Drainage Appeals
Rural Zoning Commission
Taw Incentive Review Council
Tax Levy Review Committee
Board of Building Appeals
Board of Building Standards
Board of Zoning Appeals
Community Development Advisory
Committee
Dog Warden
Earthworks Appeals Board
Great American Ball Park
Hospital Commission
JFS Planning Commission
Local Corrections Planning Board
County services for which the Board of County Commissioners shore responsibility
OH-KV-IN Regional Council of
Governments
Port of Greater Cincinnati Development
AuthorityPublic Defender Commission
Public Library of Cincinnati and
Hamilton County
Regional planning Commission
River City Correctional FacilitySenior Services
Soil and Water Conservation District
Solid Waste Management District
Anuthwest Ohio Regional Transit
Authority
Stormwater Distnct Oversight Board
Veterans Service Commission
Board of Elections
Board of Revision
Orel n nail Area Geographic Information
System (CAGIS)
Cincinnati Metropolitan Housing Authority
Cincinnati Museum Center
Cincinnati loo and Botanical Gardens
Children's Trust Fund
County Law Enforcement Applied
Regionally (CLEAR)
Community Action Agency
Community Improvement Corporation
Convention Facilities Authority
Developmental Disabilities Services
Board
Elderly Services Program Advisory Council
Emergency Management Agency
Family and Children First council
Hamilton County Development Company
Hamilton County Public Health
Indigent Health Care
nformation Processing Acfvisory
Committee (IPAC)
Integrating Committee (District 2]
Kenton County Airport AdvisoryCommittee
Land Reutilization Corporation
Law Library Resources Board
Mental Health and Recovery Services
Board
Miami Valley Resource Conservation
and Development Council
Organization Chart Hamilton County's judges and other elected officials (grouped around the citi
zens at the top of the chart) function as independent administrators of their departments. The
Board of County Commissioners (BOCC), and the County Administrator as its representative>, have
direct jurisdiction over the seven areas beneath the Board. The BOCC also has sole responsibilityfor
the 16 other entities grouped in the next box and shares responsibility for the remaining 37 services
in the box at the bottom of the chart.
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Sheriff
Recorder
Prosecut ing ,Attorney
Engineer
Treasurer Clerk of Courts
COroner Municipal Court
Aud itor Probate Court
aoa<d of count~ Comm;"ion ....
o(r~~6olmJ
County Administrator Appoinu-d..., 11M! Ion
Count'y
County services for which the Board of County Comm Iss ioners is solely responsible
Soard of Building Appeals Soard of Building Standards Board of Zon ing Appea ls Community De~lopmen t Advisory
Committee Dog Warclen
Earthworks Appeals Board Great American Ba ll Park Hospital Commission JFS Plan ning Commission Local Corrections Planning Board
Metropo litan Sewer District Paul Brown Stadiu m Storm Drainage Appeals Rur .. ' Zoning Commission Tal( Incentive Review Council Till( Levy Review Committee
County services for whkh the Boord of Counry Commissioners shore responslbiliry
Board of Elections Board of Revision Cincin nati Area GeollrilphlC Information
System (CAGIS) Cindnnatl Metropolitan Housing jl,uthorlty Cloclnoall MUSeum Center Cincinnati Zoo and BoLilnlrnl Garde ns CMldren's Trust r und CoYnty law Enfor~ement Applied
Re&lo n;llly (CLEAR) Community Act ion Asency Communi ty I m~"oyement COf~ratl on
Convention Facillties Aothorltv Developmental Oisabi~lies 5ervlce5
.... 'd { lderfy Services J>l'Qgram Ad'o'iSOI"t' Counc il
Emerc~1lC'f Man~cement Agency Family ar\d Child ren First Counci l H.mllton county Development COrnpanv Hamilton County Public Health Ind igent Health call! IlIlorm.l loo ?focesslnll M~iSOr,l
Committee (IPAC ) lotegratlng Committee (Oislrlcll] Kenton County Airport Advisory
Commlnee L.ar\d Reutllization Corporatlon law library Re~urce!O Board Mental Health and Rec:over,l Sefwlces Bo,,. MiamI Valley Resource Con~tion
a nd ()ev,elopment Council
OH-KY-!N Regona! Council of Governments
Port of COrealer Oneil,n .. 1! Oevelo-pment AutnOfl ly
Public Defender Commission Public Library of CinciOJl .. tl a nd
Hamilton County RegIonal Planning Comminion River City CorrediOflal FiKil ity Senior SeNlce!O So li and Waler Conservat ion Di~t rict
Selid Waste Managemen t Dist rict Soulhwe'il 01'110 Regional T,an$ll
AutnOfIt¥ StOfmwaler ~trict Ove,si@ht Board Veterans Service Comml$slon
Organ ization Chart Hamilton County's judges and other elected officialS (grouped around the citizens at the top oj the chart) function as independent administrators 0/ their departments. The Boord of County Commissioners (BOCC), and the County Administrator as its representative, have direct jurisdiction over the seven areas beneath the Boord. The BOCC also ho.s safe respon.slbifity for the 16 other entities grouped in the next box and shares responsibility for the remaining 37 ser\lices in the box at the bottom of the chort
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Administration of Justice System
As a part of the administration of the County’s justice system, the County maintains theCommon Pleas Court, including the Domestic Relations, Probate and Juvenile Divisions and theMunicipal Court (collectively referred to as the “County Courts”). Except for personnel costs,the County also maintains the First District Court of Appeals for the State of Ohio. TheProsecuting Attorney is designated by Ohio law as the chief legal counsel for all County officers,boards, and agencies, including the Commissioners, the Auditor and the Treasurer.
The Clerk of Courts keeps all official records of the Common Pleas and Municipal Courtsand serves as Clerk of the Court of Appeals. The office of Clerk of Courts operates on a systemof fees charged for services.
The County Sheriff is the chief law enforcement officer of the County and providescertain specialized services, among which are maintaining deputies to assist local lawenforcement officers to “preserve the public peace” (ORC 311.07). The Sheriff also operates theCounty corrections system and is responsible for its inmates, including persons detained for trialor transfer to other institutions. As an officer of the Court of Common Pleas, the Sheriff is incharge of the preparation and service of documents.
County-Owned Utilities
The Metropolitan Sewer District (MSD) operates seven major treatment plants whichcurrently have an aggregate design, dry weather capacity through both primary and secondarytreatment of 207 million gallons per day, and during 2015 treated an average of 197 milliongallons per day. In addition, MSD operates a number of smaller plants, processing 37,000gallons per day in 2015. MSD is a County Sewer District owned, governed and financed by theCounty, but operated by the City pursuant to an agreement between the two government entities.MSD has approximately 609 employees, with a 2015 payroll and related benefits of$43,642,016. A portion of this expense, principally related to project engineering, is capitalized.
Solid waste disposal is handled by various municipal and private firms in the County. Inlarge part, it is disposed of at privately-owned landfills. (See “ECONOMIC INFORMATION -Utilities” herein).
Financial Management
The Commissioners are responsible for providing and managing the funds used tosupport the various County activities. The Commissioners exercise their legislative powers inbudgeting, appropriating, levying taxes, issuing bonds and letting contracts for public works andservices to provide this financial management.
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Permissive Taxes
The Ohio Revised Code permits the County to levy a variety of permissive taxesincluding sales taxes, use taxes, motor vehicle license taxes, hotel lodging taxes, propertytransfer taxes, transit taxes, and liquor and cigarette taxes. These permissive taxes are subject toreferendum and repeal by voter initiative.
The County is permitted to levy up to a one percent (1%) sales tax on retail sales. Thesales tax may be levied for the purpose of providing additional revenue for County general fundpurposes, to support criminal and administrative justice services in the County or both. ThisCounty sales tax may be authorized by the Board of County Commissioners at any time inincrements of one-quarter percent (1/4%) up to the maximum of one percent (1%), but theauthorization of this sales tax is subject to voter referendum. The County is currently levying athree-quarters of one percent (3/4%) sales tax. This is comprised of a continuing one-half of onepercent (1/2%) sales tax and a one-quarter of one percent (1/4%) sales tax for five years directed atrestoration of the Cincinnati Museum Center, which became effective April 1, 2015.
The Ohio Revised Code also permits the County to levy an additional one-half of onepercent (1/2%) sales tax on retail sales, for several purposes, which include, but are notnecessarily limited to: financing a convention center, providing additional revenue for a countytransit authority, for general fund purposes, for permanent improvements under the jurisdictionof the Community Improvement Board, for the implementation of a 9-1-1 system or for themaintenance and operation of a detention facility. This additional one-half of one percent (1/2%)sales tax can be levied in one-quarter percent (1/4%) increments and is subject to voter approval,except when it is levied solely to provide additional general fund revenues, in which case it issubject to repeal by voter referendum. This additional one-half of one percent (1/2%) sales tax isin addition to the one percent (1%) County sales tax that may be levied without voter approvaldescribed above. The County is currently levying the additional one-half of one percent (1/2%)sales tax.
The County currently has in effect a motor vehicle license tax in the amount of $15.00per vehicle in addition to the $20 base tax set by the State of Ohio. The proceeds of the motorvehicle tax are required to be used for construction, maintenance and repair of streets andhighways. All fees collected are to pay costs of construction, reconstruction, maintenance andrepair of public highways and bridges and other statutory highway purposes. In addition, theCounty receives a portion of the tax on gasoline. A hotel lodging tax of six and one-half percent(6.5%) of gross room rentals is largely used to fund the expansion of two convention centers andoperations of the local convention and visitors bureau. Lodging tax funds are also distributed tolocal communities that do not collect their own lodging tax. The County is currently levying atwo mill real property transfer tax. A maximum of three mills is permissible.
The permissive transit sales tax at a rate not to exceed one half of one percent (1/2%) hasnot been utilized by the County.
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Management of County Facilities
The Commissioners have certain responsibilities for the management of most Countyfacilities, including various courts, correctional and administrative facilities and general Countygovernment facilities.
Personnel Administration
Personnel costs account for the largest share of the County’s general fund expenditures.The 2015 annual payroll for the County was $218.8 million and of that amount $110.9 millionwas payable from the general fund.
Collective Bargaining
The 2016 Hamilton County budget includes the equivalent of 4,681 full-time positionsacross all county funds (including grant funds).
Under the Ohio Collective Bargaining Law, public employees of the State and many localsubdivisions (including the County) have the right to organize, bargain collectively and haveunion representation. The employer must recognize and grant exclusive representation rights toan organization approved by the State Employment Relations Board (“SERB”). SERB approvalmay be granted either after fulfillment of the requirements listed in its regulations or by majorityapproval of the employees at a SERB supervised election. The employer has the right to insist onan election. Any agreements under the Collective Bargaining Law must be in writing, mustspecify a grievance procedure and cannot exceed three years in duration.
The Ohio Collective Bargaining Law designates those actions which constitute unfairlabor practices and prescribes procedures for their remedy. It also sets forth dispute resolutionprocedures for contract negotiation, including arbitration or other mutually agreeable methods. Ifan impasse persists after mediation procedures, then police, fire, correctional officers, and otherpublic safety employees must take the dispute to binding arbitration and do not have the right tostrike. All other employees have the right to strike after 10 days written notice.
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The County has labor agreements with the following employee unions:
Union Type of Personnel Covered
EmployeesCovered
DateContractExpires
AFSCME #1093 Planning & Development Field Operations 11 08/31/17
AFSCME#1768 Job & Family Services – Non-Supervisory 582 12/31/16
Benevolent Employees of HC Sheriff Dept – Non Management Employees 155 12/31/16Cincinnati Building Trades County Facilities – Building Trades 10 03/31/17Communications Officers of HC Communications Center – Communications
Officers67 12/31/18
Deputy Sheriffs Supervisors Sheriff Dept. - Corrections Supervisors 39 12/13/17FOP Sheriff Dept. - Corrections Officers 336 12/13/17FOP/OLC Sheriff Dept. - Captains 2 Initial
contractpending.
FOP/OLC Sheriff Dept-Enforcement Officers 294 12/31/17
FOP/OLC Sheriff Dept-Enforcement Supervisors 41 12/31/17
FOP/OLC Sheriff Dept. - Laundry/Maintenance/InformationClerks
12 08/31/18
IUOE#20 County Facilities Dept-Maintenance RepairWorkers
13 09/30/17
IUOE#20 County Facilities Dept-MaintenanceWorkers/HVAC Technicians
18 04/30/17
Teamsters Local 100 Engineer’s Office - Highway MaintenanceWorkers
55 Initialcontractpending.
County Services – Health and Public Assistance
The Department of Job and Family Services (JFS) is the agency administering thefollowing functions within the County: public assistance programs, children services, childsupport enforcement, and workforce development including one-stop operator. JFS is headed bya director, who is appointed by, and is responsible to, the three County Commissioners. The Joband Family Services Planning Committee advises the director and is comprised of localcommunity and business members appointed by the Commissioners.
The Family and Adult Assistance (FAA) Division deals with Temporary Assistance toNeedy Families (TANF), Medicaid, and food assistance, other financial relief programs, andsubsidized child care services. The Department's role in these programs includes thedetermination of the eligibility for these benefits.
The Children's Services Division, either directly or through agreements with othercommunity agencies, provides services such as protective services to abused children, adoption,foster and group care, and independent living services. This division also maintains a componentresponsible for the safety and self-sufficiency of older adults. The children’s services aspect isfunded, in part, by a 2.77 mill levy (See Tax Tables A and B herein). The Social Servicesprograms include the Federal Title XX program, State and Federal grant programs and locallyfunded projects.
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The Child Support Division is responsible for the collection and enforcement of childsupport orders on all Hamilton County court orders for support and provision of services underTitle IV-D of the Social Security Act. Services to custodial parents certified as IV-D are theestablishment of paternity and/or support, parent location and collection, modification andenforcement of court-ordered support.
The Social Services programs include the Federal Title XX program, State and Federalgrant programs and locally funded projects. JFS manages the direct delivery of such services asthe investigation of neglect and abuse of adults, child protective services, and employment andtraining programs. Additionally, JFS contracts for, monitors, and evaluates the provision of aspectrum of social services and day care services which are delivered by independent agenciesand individuals.
The Workforce Development programs include federally funded job-related services forrecipients of Temporary Assistance to Needy Families and food assistance. WorkforceInnovation and Opportunity Act (WIOA) funding supports a one-stop employment servicescenter for job-seekers and employers.
JFS is the largest department in County government with a total of 843 positions as ofDecember 31, 2015, and consumes the largest portion of the County budget. The department’s2015 personnel costs totaled $45.4 million. Other program and administrative costs accountedfor an additional $126.4 million for an agency expenditure total of $171.8 million. Most of thestate and federal funds received flow directly from the state government to public assistancerecipients, with the County performing various administrative tasks, such as eligibilitydetermination. Expenditures of the County’s own funds for the activities and programs of thedepartment are derived from the voted levies.
Hamilton County Development Disabilities Services (HCDDS) provides intensiveprograms, support and services to more than 7,000 children and adults with developmentaldisabilities, both directly and through service contracts with local organizations and agencies.Many individuals receive more than one service from the Agency. HCDDS directly operatestwo schools, four adult centers, and provides service coordination, monitoring, residentialplacement, quality assurance and early intervention services. HCDDS, through partnerships inthe community, funds numerous support services in the community, including residential,vocational training, other day services, family and individual support and clinical services.There are currently 485 full-time equivalent positions. It is funded through a 4.13 mill levyeffective through 2019, as well as Federal and State funds.
The Hamilton County Mental Health and Recovery Service Board is the county agencyresponsible for planning, funding and evaluating the effectiveness of community mental healthservices and alcohol and drug addiction services available to Hamilton County residents. TheBoard’s primary goals are to manage a system of care that provides prevention and treatmentservices with a commitment to positive outcomes while supporting children and their families inexpanding their development and use of existing community support networks. Prioritypopulations may include: adults who are severely mentally disabled (SMD), children who areseverely emotionally disabled (SED) as well as adults and/or youth who have substance abuseissues. Those individuals served may also be homeless, pregnant, IV drug abusers, involved in
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the criminal justice system, or be elderly. Secondary is the intent to provide alcohol, drug andmental health services, as resources allow, for those adults having less severe need. The mentalhealth system serves approximately 23,500 individuals through 37 local behavioral healthorganizations under contract to the Board. Funding sources include a 2.99 mill levy effectivethrough 2017, as well as Federal and State funds.
Another County public assistance organization is the Veterans Service Commission,which is staffed by eleven employees and funded by the County general fund. 2015 expenseswere approximately $1.27 million. The Commission provides financial assistance to veterans,active duty members of the Armed Forces of the United States, or the needy spouse, survivingspouse, dependent parent, minor child, or ward of a veteran or active duty member of the ArmedForces of the United States, who is a bona fide resident of the County. The Commission assistsin obtaining rights or benefits under any law of the United States or of this State.
The Public Defender Commission appoints the Public Defender, who operates the Officeof the Public Defender, pursuant to the policy direction of the appointing commission.
There are two health and hospitalization levies in the County. One levy, which will runthrough 2017 at the rate of 4.07 mills, provides health and hospitalization services for indigentCounty residents at University of Cincinnati Medical Center and Cincinnati Children’s HospitalMedical Center. In addition, there is a County-wide levy, which will run through 2019 at a rateof 0.34 mills, that provides family health and hospitalization services and treatment programsincluding Talbert House, Inc. Both levies also provide funding to support various Countyprograms which provide health services.
The Hamilton County General Health District has four major components: DistrictAdvisory Council, District Licensing Council, Board of Health, and Health Commissioner andStaff. The District Advisory Council consists of village mayors, presidents of township trustees,and the president of the County Commissioners. The District Advisory Council meets yearly toconduct business and select members to the Board of Health. The District Licensing Council iscomposed of industry representatives that are regulated and licensed by the Board of Health. TheDistrict Licensing Council meets at least annually to advise the Board of Health and staff onmatters dealing with license regulations and license fees. The licensing council makes oneappointment to the Board of Health. The five-member Board of Health is a public health policy-making body, which meets at least once per month. The Board of Health appoints the HealthCommissioner, who supervises staff in the Administration, Disease Prevention, EnvironmentalHealth, Epidemiology & Assessment, Health Promotion & Education, Nursing, Plumbing, WaterQuality and Waste Management Services divisions. The Health District is not controlled by theCounty Commissioners, but rather operates as a separate district pursuant to Chapter 3709 of theOhio Revised Code. The purpose of Hamilton County Public Health is to work with thecommunity to protect the public health and environment. By providing education, inspections,health care coordination, and data analysis it strives to assure that the citizens of HamiltonCounty are safe from disease, injury and contamination.
The Health District currently has 83 full time employees and four part-time employees,with 2015 personnel costs of approximately $5.7 million. Total revenues and resources for 2015were $9.9 million. Included in that amount are assessments of $755,433 from the 45 county
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jurisdictions that are served by the Health District. Additional funding is provided throughpermits and fees.
ECONOMIC INFORMATION
General
A transportation and industrial center since the early development of the territory west ofthe Appalachians, Hamilton County and the Cincinnati-Middletown Metropolitan StatisticalArea (the “Metropolitan Area”) have developed into major centers for insurance and financecompanies, wholesaling and retailing, e-commerce and emerging new economy companies,government installations, medical services, service industries, as well as manufacturing.
Centered in Hamilton County, the Metropolitan Area is a 15-county, three-state arealocated at the intersection of Ohio, Kentucky and Indiana and is comprised of a diverse businessecosystem. The Metropolitan Area, which is considered to have low costs of doing business andliving compared to other metropolitan areas in the U.S., has nationally ranked incubators andaccelerators, a global business center with headquarters of ten Fortune 500 companies and morethan 450 foreign-owned firms.
Among the Metropolitan Area’s more prominent manufacturing groups are transportationequipment, which includes aircraft engines and motor vehicle parts; food and kindred products;metal working and general industrial machinery; chemicals; fabricated metal products; andprinting and publishing. This diverse economic base continues to be a source of stability for thearea, protecting it from severe instability in the business cycle.
Total employment was estimated at 394,200 in Hamilton County in May 2016 by theOhio Department of Job and Family Services. The Metropolitan Area is within 600 miles of 50%of the nation’s purchasing power and 50% of the nation’s manufacturing establishments.
The corporate headquarters of numerous firms are located in the Metropolitan Area,including nine Fortune 500 corporations: The Kroger Company, Procter & Gamble, Macy’s Inc.,Fifth Third Bancorp, AK Steel, American Financial Group, Ashland, Inc., Western & SouthernFinancial Group, and Cincinnati Financial.
Direct capital investment in the region during 2015 was $1.22 billion. This capitalinvestment in economic development created 7,647 jobs and retained 8,206 jobs. Themanufacturing sector led investment growth with 34 percent of the total $1.2 billion of capitalinvestments, followed by the information services sector at 20 percent. Attraction of newbusiness accounted for 58 percent of growth, while expansion and retention investments made upthe other 42 percent. The manufacturing sector led job growth with 37 percent of allnew/retained jobs, followed by the information services sector at 17 percent and bio-health at 15percent1.
As of May 2016, the unemployment rate in Hamilton County was 4.1 percent, 0.5 pointsbetter than that of the State of Ohio and 0.4 points better that the nation as a whole. The
1 2015 Annual Report, http://redicincinnati.com
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Hamilton County unemployment rate decreased 0.4 percent from May 2015, while the State ofOhio decreased 0.2 percent, and the national rate decreased 0.8 percent from 5.3 to 4.5 percent.
The Metropolitan Area is a growing center for international business, with approximately1,000 firms engaged in international trade. Metropolitan Area companies generate sales ofapproximately $19.9 billion to customers outside the U.S. each year. Major export productsinclude jet engines, plastics, machinery, computer software, paper and consumer goods. Directlyimported products amount to over $2 billion annually. Over 450 Metropolitan Area firms arealso owned by foreign firms from Canada, Africa, Asia, Europe and South America.
Foreign Trade Zone (“FTZ”) status is also available in Greater Cincinnati and NorthernKentucky, providing firms with opportunities to reduce their international business costs throughduty, tax and operational savings. The Greater Cincinnati Foreign Trade-Zone, Inc. is the granteefor the FTZ program in the region. On their behalf, the program is managed by the Port ofGreater Cincinnati Development Authority. An FTZ is a restricted-access site that is treated forthe purposes of tariff laws and Customs entry procedures as being outside the Customs territoryof the United States. Foreign trade zone service area under FTZs 46 and 47 is located withineight counties located in Southwest Ohio and Northern Kentucky. FTZ 46 benefits six firms : GEAviation, Honda America Manufacturing, Milacron Inc., Standard Aero, Motion Technologies,Inc., and Festo Corporation. FTZ 47 benefits an additional five companies: GE Engine Services,Levi Strauss & Co., Marathon Petroleum, Trancy Logistics, and UPS Supply Chain Solutions.
The County is also the location of 20 major federal government installations representingthe Department of Labor, Department of Commerce, Social Security Administration, InternalRevenue Service, Occupational Safety and Health Administration, U.S. Bankruptcy Court, U.S.Attorney’s Office, Department of Human Services, Office of Secretary of Defense,Environmental Protective Services, Department of Energy, Federal Public Defenders Office,Federal Bureau of Investigation, Small Business Administration, Rail Road Retirement Service,Immigration Customs Enforcement, Federal Mediation Council, Drug EnforcementAdministration, National Park Service, and the Food & Drug Administration.
Economic Development
Government and Community Development Agencies
There are a variety of state and local programs available to assist with developmentwithin Hamilton County. In addition, several non-profit organizations exist to respond todevelopment needs throughout the County.
The Hamilton County Development Company (“HCDC”) is a private, non-profitcorporation established to promote economic development. It is the source for a wide array ofeconomic development programs including loans, tax incentives and assistance for new andexpanding businesses. During 2015 HCDC Economic Development Office facilitated $72 millionin new private business investments which will retain or create approximately 1,790 jobs. Inaddition, HCDC approved 38 SBA 504 loans for $23.7 million with a total project investment of$69 million. The HCDC Business Center, HCDC’s nationally recognized business incubator,
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welcomed 17 new clients to the program during 2015. The Business Center clients employed 243workers with an aggregate payroll of $10.5 million and total revenues of $24 million in 2015.
The Community Planning Division of the County’s Planning and DevelopmentDepartment provides expert planning services to member jurisdictions and fosters planning onmulti-jurisdictional issues related to transportation, land use and the environment in HamiltonCounty. Staff provides services, upon request, to 49 county municipalities that are members ofthe Commission and pay annual fees. Its services are tied to the annual work programs of theBoard of County Commissioners, the Hamilton County Regional Planning Commission, thePlanning Partnership, the First Suburbs Consortium of Southwest Ohio, and numerous otherboards and commissions that are working to improve Hamilton County.
In recent years, the work program of this division has been dominated by watershedbased planning linked to the Metropolitan Sewer District’s massive overhaul by removing stormwater from the sanitary sewer system to comply with a federal consent decree. The division hasprovided services to MSD and the County Commissioners to develop integrated watershedapproaches to save millions of dollars when compared to capital intensive (grey) solutionstypically used to address water quality issues. The focus on watershed approaches (greensolutions) is important to Hamilton County residents because the improvements can be leveragedto help improve the quality of life for homeowners and businesses by reducing floods,beautifying landscapes, and improving water quality.
Beyond this work, the division is focused on providing training to planning and zoningcommissioners and developing forums that bring in national speakers to highlight various issuesof sustainability (housing, community design, economic development, fiscal, etc.).
The Regional Economic Development Initiative (REDI) Cincinnati’s purpose is to retainand expand existing regional businesses and attract new businesses and investment from acrossthe globe. Led by a Board of Directors comprised of investors that represent leading business,governmental and civic organizations, REDI Cincinnati serves as the first point of contact forbusinesses locating or expanding in the Metropolitan Area. In 2015, REDI investedapproximately $1.22 billion on a total of 65 separate projects. Of this investment, 58% of thecapital funding went toward attracting new businesses, 38% was dedicated to expanding currentbusinesses, and 4% was utilized to retain current businesses. These projects helped to bring anadditional 7,647 new jobs and retain 8,206 current jobs in the region. REDI also met with over177 existing Metropolitan Area companies to help develop action plans for retention and futuregrowth.
The Port of Greater Cincinnati Development Authority (the “Port Authority”) is aneconomic development agency created to proactively seek and carry out projects that increasejobs, attract and retain residents and add to the region’s prosperity. It is governed by a board ofdirectors, made up of business and civic leaders, who serve voluntarily and are appointed inequal number by the City and Hamilton County. In Ohio, Port Authorities have broaddevelopment-related powers and ability to partner with property owners, communities,municipalities and non-profits. In its role as a public-sector partner in these collaborations, thePort Authority has been able to deliver vehicles for financing structures, obtain grants, serve asproperty owner, assist in regulatory approvals, and provide technical assistance.
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The Port Authority has an active public finance program that is grounded in commercialreal estate and redevelopment of complex sites for the purpose of stimulating private investmentand job-creating operations. A recent Port Authority financing project includes the 84.51°Centre, for which the Port Authority served as the conduit issuer for $36 million in firstmortgage loan bonds. The proceeds of the bonds were used exclusively for the construction ofthe parking garage.
The Port Authority also manages the Hamilton County Land Reutilization Corporation(Land Bank), which enables communities to return vacant, tax-foreclosed and underutilizedproperties to productive use. The Land Bank has obtained and administered $11 million statedemolition grant funding (2012-14), and $5 million in Neighborhood Initiative Program funding(2014-16) for the demolition of vacant and blighted homes in county neighborhoods.
Cincinnati Center City Development Corporation (3CDC) is a private, non-profitcorporation with a strategic focus to strengthen the core assets of downtown by revitalizing andconnecting the Fountain Square District, the Central Business District and Over-the-Rhine(OTR). Since 2004, 3CDC and its partners have invested more than $843 million in Cincinnati’sCentral Business District and Over-the-Rhine (OTR). Approximately $336 million of thatinvestment, or 40%, is from CEF, CNMF and tax credit equity. This includes the $48 millionoverhaul of Fountain Square and the $48 million renovation of Washington Park. In 2015,3CDC had nearly $517 million in its development pipeline (projects completing construction,initiating construction, or in the final stages of planning/design/financing). The organizationcompleted construction on 10 large projects, with a total value of $166 million, including The84.51° Centre, Union Hall, Taft’s Ale House, 1201 Walnut, City Gospel Mission, The HattonCenter for Women, The Barron Center for Men, The Globe Building, 15 W. 14th, and Phase VIcondo/mixed-use development. In addition, eight major projects with a total value of $351million are now under construction or in final stages of planning/design/financing. Theseprojects include 4th & Race, Music Hall, YMCA, Memorial Hall, Zeigler Park, 8th & Sycamore,Race Street Condos, and Empower MediaMarketing.
Founded in 1994, Downtown Cincinnati, Inc. (“DCI”) is a non-profit organization with amission to build a dynamic metropolitan center valued as the heart of the region. DCI supportsthis mission by providing unique services in three areas: safety and cleanliness, marketing andcommunications, and stakeholder services. DCI completed $522 million of investment inprojects in 2015, including the completion of the 84.51° building, the AT580 buildingrenovation, and the construction of the Cincinnati Streetcar. Almost $698 million in additionalprojects are currently under construction downtown, many expected to open in 2016: AbingtonFlats, Alumni Lofts, Broadway Square, Memorial Hall, the renovation of Music Hall, andZiegler Park will open their doors to more visitors, workers and residents of downtown in thecoming year.
CincyTech is a public-private seed-stage investor whose mission is to strengthen theregional economy by driving talent and capital into scalable technology companies in SouthwestOhio. In 2015, CincyTech’s portfolio companies created new jobs and raised capital at anaccelerated pace. It invested in its 59th startup and is one of the most active seed funds in theMidwest. As of Q2 2016, its portfolio companies employed 760 people, an increase of 143 jobs
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from Q2 2015. Total investment in its portfolio companies exceeded $689.5 million, up from$400 million.
The Minority Business Accelerator (MBA) was established in 2003 as the result of therecommendations of the Cincinnati Community Action Now Commission. The program isfocused on reducing disparity in the region’s business community by driving economic activityfor African-American and Hispanic-owned companies and increasing employment inunderemployed segments of the region. In 2015, MBA’s Goal Setters – large, complex, majority-owned corporations and organizations – have collectively spent $1 billion with local minorityfirms for the third consecutive year.
The Uptown Consortium is a regional center for health care and learning with a totalemployment impact of 84,000 jobs and infuses over $11.6 million into the local economy. TheUptown Consortium, Inc. was founded in 2004 as a non-profit community developmentorganization. UCI is comprised of five anchor institutions including four of the region’s top sixemployers—Cincinnati Children’s Hospital, UC Health, TriHealth, and the University ofCincinnati—and one of the region’s top tourist attractions, the Cincinnati Zoo & BotanicalGarden. UCI has made over $200 million in direct investments, inducing over $500 million indevelopment resulting in 332,000 sq. ft. of office and retail space and nearly 1,000 new housingunits.
The Cincinnati Convention and Visitors Bureau (CVB) is a driving economic enginewithin the Metropolitan Area, providing 27,500 hotel and motel rooms for major events andactivities that take place in the county. The downtown area is home to the Duke Energy Center, a750,000 square foot convention center that can accommodate 75% of the existing convention,conference and meeting market. In addition to the Duke Energy Center, Sharonville, innortheastern Hamilton County, is home to the recently renovated and expanded 65,000-square-foot Sharonville Convention Center. In 2015 conventions organized by the CVB generated $79million in hotel revenue, which increased from $68.2 million in 2014. Recent conventions ofsignificance include the 2015 Kroger Company national convention and the 2016 NAACPnational convention. In July 2016 CVB won first place in the MLB All-Star Game EmailCampaign.
Development Projects and Investments
Currently the largest economic development project in Hamilton County and the region isThe Banks riverfront development. The Banks will provide a mix of residential, retail,restaurant/entertainment, hotel and office development on approximately 18 acres of riverfrontland situated between Great American Ball Park to the east and Paul Brown Stadium to the west.Planned and constructed on the principle of flood resilience, The Banks infrastructure (primarilyparking garages and new street grid) creates a podium on which to build the mixed-useneighborhood and raise the development out of the flood plain. The central riverfrontredevelopment plans were recognized in 2013 with an American Planning Association Award ofExcellence in Implementation.
The Banks offers the potential to increase property tax revenues, increase income andsales tax receipts, create up to 1,800 residential units, and bring over 4,000 new jobs to the
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riverfront. To date, over $1.5 billion in local, state, and federal funding has been leveraged in theform of infrastructure, sports facilities, and transportation improvements.
The first phase of The Banks, completed in spring 2011, consists of 300 apartments,100,000 square feet of retail space, and a parking garage of over 3,300 spaces. Currently underconstruction, the second development phase includes 292 apartments, 20,000 square feet ofretail, and 338,000 square feet of office for the General Electric Global Shared Service Center,bringing 1,800 new jobs and added parking revenue and tax receipts to the region. A 165-roomAC Marriott boutique hotel broke ground in December of 2015 and is expected to open inMarch 2017. The Banks steering committee has approved a $29.3 million garage as the initialdevelopment of the third phase of the project. It will build 690 public parking spaces to becompleted in September 2016. Future phases, adding residential and commercial space as wellas parking infrastructure and greenspace, are in the planning, design and construction stages foranticipated completion in the next 10 years.
Private investment of $500-$600 million is anticipated in this development. A workinggroup—consisting of representatives of the City and County, and private development experts—oversee The Banks development. When completed, The Banks development is expected togenerate over $1 billion in annual economic impact.
Other recent and ongoing downtown Cincinnati developments include:
• Renovation of the historic Anna Louise Inn building and the surrounding Lytle Parkis expected to open in July 2017. A 106-room hotel will be a new addition to theMarriott’s Autograph Collection family.
• In 2016, a new 117-room Holiday Inn is set to open at Seventh and Broadway. Thiswill be the first new hotel building to open in downtown in nearly 30 years.
• A $70 million redevelopment of a historic downtown Cincinnati office building atFourth and Elm will convert it to a mix of office, hotel, residential and retail uses.Hudson Holdings acquired the building for $12 million in 2016 and plans to startwork within a year.
• A $36 million, 13-story mixed-use condo building at the southwest corner of Eighthand Main streets has received approval from the Cincinnati Historic ConservationBoard. Developers plan to launch pre-sales in the fall of 2016, prior to construction.
• A $77.3 million mixed-use development including an eight-story, 208-unit apartmentbuilding on top of a new, city-owned, 925-space parking garage is planned at Fourthand Race. Demolition of the current parking garage will begin in September 2016.3CDC will construct and operate 25,000 square feet of street-level retail/commercialspace.
• A $52 million project to add a 15-story, 130 apartment tower, 10,000 square feet ofstreet-level retail space and a new 500-space, city-owned parking garage near Eighthand Sycamore streets starting in 2015. The parking garage opened in August 2016.
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• Construction began in spring 2015 on the vacant AT580 building located at 580Walnut Street. This mixed use, $43.5 million project will convert the building into176 apartments, 48,000 square feet of restaurant space, and 181,000 square feet ofoffice space. Apartments are being filled as of August 2016.
• 84.51°, the renamed DunnhumbyUSA after acquisition by Kroger, is retaining itsNorth American headquarters in downtown Cincinnati in a new $140 millionbuilding. Opened in spring 2015, it includes 280,000 square feet of office space,1,000 parking spaces and 30,000 square feet of commercial space.
• Cincinnati’s first dual brand hotel opened in the spring of 2015 in 617 Vine St., theformer offices/printing operations of the Cincinnati Enquirer in Cincinnati’s CBDwith a total project investment of $30 million. The project created 35 permanent full-time jobs, 20 permanent part-time jobs, and 80 temporary construction jobs. The 144-room Hampton Inn opened March 27 and 105-room Homewood Suites opened April3 in the newly renovated 14-story building, which is on the National Register ofHistoric Places.
• Mabley Place, a 775-space parking garage and just over 8,000 square feet in retailspace opened in October 2014.
• The former Bartlett Building has been redeveloped into a 323-room luxuryRenaissance Hotel and opened in the summer of 2014.
Over-the-Rhine, a historic neighborhood just north of downtown has recently seen largeamounts of direct commercial investment and revitalization. Mercer Commons, a $55 milliondevelopment opened in the fall of 2015 and features 107 residential units, a 340 space parkinggarage, and over 15,000 square feet of commercial space. All residential units associated withthis development have already been purchased or leased. Recent announcements of newdevelopment in the neighborhood include a $28 million mixed use and grocery space at 16 WestCentral Parkway, a $25 million mixed use project at Liberty and Elm, and a $15 million officeand retail space at 15th and Vine, and a $21.9 million mixed used development at Race and Elderstreets. A $24 million project to convert the former building for Woodward High School and theSchool for the Creative and Performing Arts into 142 market-rate apartments will begin move-inin September 2016.
In the uptown area just north of downtown, U Square @ the Loop was completed in2013. This mixed-use development sits on 4.2 acres near the UC Campus and includes 161upscale market-rate apartments, 80,000 square feet of retail space and 40,000 square feet ofUniversity of Cincinnati office space in addition to over 700 parking spaces. Other nearbyprojects include: Gateway to Uptown ($75 million mixed-use development at the intersection ofthe Clifton Heights, Mount Auburn, and Corryville neighborhoods to break ground in 2016); theVerge (180 apartments, a 380-space parking garage and between 7,500 and 9,000 square feet ofretail on West McMillan Street anticipated to open by fall of 2016); 101 East Corry (123apartments, eight townhomes and a two-story parking garage opening in summer 2016); VP3(148 apartments and a 250-space parking garage in Corryville opened in 2016); and UniversityPlaza (a $24 million redevelopment with a new 65,000 square foot Kroger and a 15,000 square
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foot Walgreens store, under construction now). Construction has also begun in June 2015 on anew $15 million Fairfield Inn & Suites to be located in U Square.
East Price Hill’s Incline District, to the west of downtown, has seen reneweddevelopment interest recently. The Incline Public House restaurant (with an expansive deckoverlooking the city) opened in 2012, and the $5.9 million Warsaw Federal Incline Theateropened in June 2015. The latter development includes a 229-seat theater and its 100-spacepublic parking garage.
The development of lifestyle centers in the inner-ring suburb of Norwood (RookwoodPavilion, Rookwood Commons and Rookwood Exchange) displays the tremendous demand forretail in the mid-city area. Rookwood Pavilion opened in 1994 on a former brownfield site andwas quickly followed by an expansion in 2000 called Rookwood Commons. This mid-citylifestyle center features 321,000 square feet of open-air design with many well-known, high-endspecialty retailers and restaurants. Rookwood Exchange which began construction in April 2012,includes in its first phase a 123-room Courtyard by Marriot hotel, and 40,000 square feet ofrestaurants and retail space was completed in 2013. 2015 marked the addition of a 250,000-square-foot office and retail building, a parking garage, and 127 apartments. In 2016,construction began on a second hotel in the development. A $15 million, 118-room ResidenceInn by Marriott will be located on top of a new 140-space underground garage next to theCourtyard by Marriott. Construction should be complete in 2016.
Oakley Station, a redevelopment of 74 acres of former Cincinnati Milacron in the suburbof Oakley includes a completed 14 screen movie theater and will include over 300 apartments, a300,000 square foot office campus and 225,000 square feet of retail space. As of 2015, retail andbusiness tenants are taking occupancy and the residential developer is moving forward withplans to add 147 more apartments. In June 2015, the developer announced Anthem Blue Crossand Blue Shield to be the first office tenant, bringing approximately 400 jobs to the mixed usesite. The total estimated investment for the Anthem building is $14.8 million. The developmentwill also host the second largest Kroger grocery store in the nation.
Kenwood Collection in Sycamore Township is a $200 million mixed-use developmentadjacent to Kenwood Towne Center. The development will include 252,000 square feet of officespace and 310,000 square feet of retail space when complete. Purchased out of foreclosure in2012, development has been restarted with multiple office and retail tenants announced in thelast year including: Merrill Lynch (50,000 square feet), Quotient Technology Inc. (32,000square feet, 160 employees), New York Life (12,000 square feet, 150 employees), HauserInsurance Group (13,000 square feet, 100 employees), L.L. Bean retail (15,000 square feet, 100employees), and 365 by Whole Foods Market retail (30,000 square feet). Additional retail spaceshould be online in fall 2016.
Other commercial developments of note in the area include the following:
• A $50 million redevelopment MOU in the village of Silverton with Miller-ValentineGroup and Jeffrey R. Anderson Real Estate that will include luxury apartments, officespace, street-level retail and restaurants. The project would be the largestdevelopment in Silverton’s history.
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• Macy’s Credit and Customer Services will bring 175 new call center jobs to Deerfieldtownship and Springdale as part of a tax credit deal approved by the OhioDevelopment Services Agency in February 2016.
• As of June 2016, a Cincinnati online estate auction startup, Everything But TheHouse (EBTH) will hire 275+ employees to its distribution center in Blue Ash.
• Tata Consultancy Services plans to hire 300 additional employees in Sharonvillebetween 2016 and 2019 with its new 40,000 square feet of space for its growing ITservices.
• A new Hyatt Place Hotel connected to the Sharonville Convention Center is underconstruction. This $14 million project is expected to be complete in early 2017.
• A $13.5 million apartment project has been planned in Evanston by one ofCincinnati’s largest development companies, Towne Properties. The 92 unit market-rate apartment project is next to DeSales Flats in East Walnut Hills and constructionis planned to start summer of 2016.
• An $11 million mixed-use project in College Hill will include 53 apartments and5,000 square feet of retail space. The city estimates that 187 temporary constructionjobs will be created along with 15 full time jobs, with construction started July 2016.
• The Summit Park land development submitted a master plan to the City of Blue Ashin June 2016 to redevelop 108 acres of the former Blue Ash airport. The mixed-useproject will create new office space, high-end apartments, two hotels, more than 100single-family homes and neighborhood retail and restaurants.
• CDK Global digital marketing announced in October 2015 that it will relocate 1,000new jobs to 170,000 square feet of office space in the City of Norwood’s CentralParke development.
• Ford Motor Company announced in 2015 a commitment to invest $900 million in itsSharonville Facility. More than 1,600 people are employed at that plant.
• Christian Moerlein, MadTree, Rhinegeist, and Fifty West breweries committed during2015 to invest a total of $35 million in their Hamilton County facilities.
• Gorilla Glue Co. announced in January 2015 an addition of 110 new jobs to 200existing jobs as a part of a major expansion of its headquarters. The company willretain an annual payroll of $11.5 million in the city of Sharonville.
• Empower Media Marketing announced 40 new full-time positions in 2015, generating$2.8 million in additional annual payroll and retaining $9.3 million in existing payrollas part of its expansion in the City.
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• Aprecia Pharmaceuticals Co. announced in February 2015 an investment of $25million in an existing building in the city of Blue Ash, expanding its manufacturingoperations. 150 jobs will be created as part of the project, generating an estimated$13.5 million in additional annual payroll.
• Enable Injections invested $3.5 million in a 41,000 square foot building in the city ofEvandale in 2015. In addition to its company offices, the new facility will house spacefor research and product development, manufacturing, and distribution operations. 120new jobs with an average salary of $60,500 will be brought to the city.
• The Kroger Company announced a $46 million investment in improvements to adistribution facility, human resources center, and pharmacy call center all in the cityof Blue Ash in 2015. The investments will occur over the span of five years andcreate 649 new jobs.
• Cincinnati Belt and Transmission began demolition of a long vacant big box retailspace at 5500 Ridge Avenue in July 2015. The company is investing approximately$8.0 million in a new facility, which will bring 120 jobs and $10 million in payroll toColumbia Township.
Local Awards
• Cincinnati made the greatest leap of any metropolitan area in the 2016 KauffmanIndex of Growth Entrepreneurship, moving from #35 in 2015 to #16 in 2016.
• In April 2016 Cincinnati was rated the #1 destination nationwide for those who justfinished college by Smart Asset personal finance technology company. Three lifedimensions—cost of living, job market and fun factor of each city—were used todetermine rankings. Forbes Magazine also ranked Cincinnati in the top 20 cities foryoung people in 2016.
• In 2016 Cincinnati earned the title of “Best city for recreation” in the United States byWalletHub, ranking first with considerations for the number of music venues, acres ofparkland, park playgrounds, swimming pools, and number of bike rental facilities.
• In 2016 Cincinnati was ranked ninth in the nation by Motovo Blog’s “America’sSmartest Cities” and seventh in The Earth Day Network’s “Greenest Cities inAmerica.”
• In 2014, KPMG released a report that announced that Cincinnati is the second least-costly location to do business in the United States among the 31 largest metro areas.
• Ohio has finished in the top two states in Site Selection magazine’s Governor’s Cupfrom 2005 through 2015 for the most new or expanded private-sector capitalinvestments. Ohio ranked #1 in 2006-2009 and 2011. It also finished second in 2013and 2014 and third in 2015 in the new Governor’s Cup category of most qualifyingprojects per capita.
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• Inc. magazine named 20 Cincinnati area firms to its 2014 list of the 5000 fastest-growing private companies.
Transportation
There are three airports that serve the Metropolitan Area. The Greater Cincinnati andNorthern Kentucky International Airport (“CVG”), located approximately 12 miles (15 minutes)from downtown Cincinnati in Northern Kentucky, offers more than 170 daily departures to 57non-stop cities. CVG is the ninth largest cargo airport in the nation and serves as one of DHL’sthree global super-hubs. DHL is investing $108 million at its CVG hub, driven by the rise in e-commerce. The project, which is expected to be completed in 2016, will add more capacity,more warehouse space and approximately 50 new jobs to its existing base of 2,300. LunkenAirport in Cincinnati and Cincinnati West Airport in Harrison accommodate private corporateflights and aircrafts.
The Metropolitan Area is an important freight rail center. Cincinnati is served by twomajor railroad systems: CSX Transportation and Norfolk Southern Corporation. The Indiana andOhio RR/RY also serve Southeast Indiana and Southwest Ohio. All have over 202 miles ofmainline trackage serving local industry and the region including the CSX Transportation’sQueensgate computerized yard. Amtrak also supplies passenger service to the area.
The Metropolitan Area is on the 15,000 mile Mississippi River inland waterway andintra-coastal canal system. The Ports of Cincinnati & Northern Kentucky is an inland portjurisdiction that includes 226.5 miles of commercially navigable waterways of the Ohio Riverand Licking River in Kentucky. The port boundary supports more than 70 active terminals,moving an estimated 48 million tons of cargo annually.2
Highways serving the Metropolitan Area include: U.S. Routes 22, 25, 27, 42, 50, 52 and127 and Interstates 71, 74, 75, 275 and 471 and numerous state routes. I-70, 60 miles to thenorth, links the east and west coasts. There are several state routes that run through the countysuch as OH 3, 4, 125, 126, 264, 561, and 562. The area’s highways carry over 900 interstatecommon motor freight carriers, with over 380 general freight trucking establishments and 44freight forwarders located in the Metropolitan Area.
The Brent Spence Bridge, which connects Southwestern Ohio with Northern Kentuckyalong Interstates 75-71, has nearly 170,000 vehicles and over four percent of the national GrossDomestic Product cross the bridge every day. Funding is currently being sought to replace thebridge.
Hamilton County is served by Southwest Ohio Regional Transit Authority (SORTA),which operates 348 Metro fixed-route buses, two trolley buses and 44 paratransit vehicles.SORTA connects downtown Cincinnati with its suburbs, driving over 11 million miles per year.Northern Kentucky suburbs are linked to the downtown area by buses owned and operated by theTransit Authority of Northern Kentucky. The farthest point in the Metropolitan Area can bereached by car from downtown in 45 minutes. Also serving Cincinnati are Greyhound Lines andTrailways Transportation.
2 www.cincinnatiport.org
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The City is currently constructing a streetcar system which will be comprised of a 3.6mile loop around the city’s inner core, connecting the Banks, Great American Ballpark,downtown and Findlay Market. Operations begin on September 9, 2016.
The Hamilton County Transportation Improvement District and the Ohio Department ofTransportation (ODOT), in cooperation with other local Eastern Corridor Project sponsors,including Clermont County, the City, SORTA/Metro and the Ohio- Kentucky-Indiana RegionalCouncil of Governments (OKI) are currently assessing the development of the Eastern Corridormulti-modal transportation project, which will use various forms of transportation(highway/rail/bus/bike) to improve connecting the east side to downtown Cincinnati. Thesetransportation improvements will provide regional access, support workforce development bylinking people to jobs with more transportation choices, and increase opportunities for newhousing development within the Metropolitan Area’s urbanized neighborhoods.
ODOT’s Thru the Valley redevelopment project involves a widening redesign for sevenmiles on I-75 with the intent to improve safety and ease congestion, increase regional mobility,and provide transportation solutions that are compatible with local land use plans. Constructionbegan in late 2014 and is scheduled to continue through 2020. The Mill Creek Expresswayproject, an extension of Thru the Valley to the south (from Paddock Road to the Western HillsViaduct), has begun construction, with a completion date estimated in 2024.
The interchange at I-71 and Martin Luther King is transformational to the Uptown area.The $80 million project will construct a new interchange at I-71 and Martin Luther King Drive toreduce travel time, simplify way-finding, and promote economic vitality in the Uptown area ofCincinnati. Work is expected to continue through 2017.
Health
There are a total of 22 acute care hospitals in the Metropolitan Area. Within HamiltonCounty, there are nine acute care facilities with emergency departments, including the VeteransAffairs Medical Center and the Cincinnati Children’s Hospital Medical Center. Also located inHamilton County are: Shriners Hospital for Children for pediatric burns; Summit BehavioralHealthcare mental health facility; and University Hospital.
Recently, the Cincinnati area has seen a number of new developments within thehealthcare industry:
• Mercy Health moved into its new $71 million headquarters in the Bond Hillneighborhood in the city of Cincinnati in April 2016. The 365,000 square footbuilding houses 1,050 employees as part of a larger office consolidation, representingan estimated $85 million in payroll.
• Tri-Health opened a new $25 million outpatient center in Kenwood in October 2015,and a $17 million rehab facility in Evanston is under construction.
• Christ Hospital’s new joint and spine center project opened in September 2015,replacing 60 patient beds, adding a floor of shelled bed space, 10 new operating
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rooms, two shelled operating rooms, physician offices, a remodeled main lobby, andother support areas. The project cost $280 million. Christ Hospital also opened a $50million outpatient center in May 2015 in Montgomery. It is a three-story facility thatwill offer a wide range of services including cardiovascular, orthopaedic and primarycare physician offices; a full-service imaging center; physical and occupationaltherapy; a wound healing center; and a testing center for diagnostic and pre-surgerylab work.
• In June 2015, Cincinnati Children’s Hospital Medical Center completed constructionof a 15-story, 445,000 square foot research tower. The $205 million clinical sciencesbuilding will house 1,500 doctors, scientists, and support staff. In the spring of 2016Children’s engaged construction and design firm to explore a $300-5000 millionexpansion of patient care facilities at its main campus in Avondale.
• UC Health completed construction of a $9.0 million medical office in ColumbiaTownship in September 2014. The 42,000 square foot facility will house 30 doctorsand 30 other staff members, including new primary care practices and surgicalservices.
Education
The Public Library of Cincinnati and Hamilton County serves 49 separate jurisdictionsthat are economically, educationally, and ethnically diverse. The library is one of the largest,oldest, and most heavily used in America circulating 18.7 million items, including 3.1 milliondigital downloads in 2015. The system has 40 branch libraries, and along with the Main Library,was the fifth busiest public library system in U.S. in 2015 according to the Public LibraryAssociation Data Service. For its service to the community, Cincinnati’s library was recognizedas one of only five libraries in the U.S. to receive the 2013 National Medal for Museum andLibrary Service. In 2015, the number of the Library’s registered cardholders reached over620,000.
In the Metropolitan Area, there are over 25 colleges and universities with a combinedenrollment of over 100,000. The University of Cincinnati has over 44,200 students while XavierUniversity has approximately 6,300 students. Over 23,700 students attend Miami University inOxford. Northern Kentucky University has an enrollment of over 15,100. Other colleges in thearea include Hebrew Union College, a graduate seminary for rabbinical studies; Thomas MoreCollege; Mount St. Joseph University; and the national headquarters of the Union Institute adultdistance learning center. In addition, there are many specialized institutions for vocational andtechnical training, including Cincinnati State Technical and Community College and the ArtAcademy of Cincinnati.
Many of the colleges and universities located in Cincinnati continue to invest ininitiatives to improve their campuses. The University of Cincinnati completed its $86 millionrenovation/expansion of Nippert Stadium in the fall of 2015 (with LEED silver certification); anew $5.8 structure at its Blue Ash campus is expected to be completed by the fall of 2017,providing new classrooms, faculty offices and a multi-purpose area for events and instruction; a$45 million renovation to Teachers/Dyer Halls and a $35 million renovation to Scioto Residence
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Hall were completed in 2016. The University of Cincinnati is also in the process of securingfunds for a new College of Business building that is anticipated to cost $135 million. The projectwill increase the classroom capacity to meet the increased level of enrollment in the College ofBusiness. The University of Cincinnati also announced plans to create a $16 million innovationcenter near the Martin Luther King interchange. This building will serve as a research acceleratorand provide office space for startup companies.
In fall 2014, University Station, a $54 million mixed-use development, opened andbrought new retail, office space and a 177-unit housing development adjacent to XavierUniversity’s campus. An $18 million transformation of Xavier University’s Alter Hall wascompleted in 2015. This LEED Gold rated project is the primary classroom space at XavierUniversity. Xavier University also announced plans for a major renovation of its Cintas Center,the campus’s 10,250 seat arena. The seven-year master plan includes a $25 million investment inadded space, technology upgrades, improved athletic equipment, and enhanced hospitality areas.
Public elementary and secondary education is provided by 23 independent schooldistricts, supplemented by a county vocational school district. In addition, there are a variety ofeducation options at parochial schools of various denominations, Montessori schools and privatenon-affiliated academies. The Roman Catholic Archdiocese of Cincinnati maintains a system of112 schools, among the largest private systems in the United States.
Utilities
The County’s electric and gas provider is Duke Energy, the nation’s largest utilitycompany. Duke Energy serves approximately 7.4 million electric customers and 525,000 gascustomers, of which over 1.65 million reside in Ohio, Kentucky, and Indiana. The company hasapproximately 50,200 megawatts of generating capability. Cincinnati is near the center of one ofthe nation’s largest concentrations of electrical power. The County is close to the coal mines ofOhio and the Appalachian states, and coal is barged on the Ohio River directly from these areas.The plants of Duke Energy are connected to those of other utility companies in the Ohio RiverValley and to a regional network of high voltage lines, providing an accessible source of reservecapacity.
Cincinnati Bell Telephone provides telecommunications services and advanced voice,data, internet, and entertainment services to business and residential customers in the region.Cincinnati Bell provided services for 522,700 voice lines in 2015, as well as 287,400 internetsubscribers, and 114,400 video subscribers.
Water is principally furnished by the municipally-owned utility of Cincinnati (GreaterCincinnati Water Works), although other municipalities serve area systems. Supplies consist ofsurface water and ground water. The Ohio River and the Miami Watershed provide an abundantwater supply.
The Metropolitan Sewer District of Greater Cincinnati (MSD), a County Sewer Districtunder Ohio law, is owned, governed and financed by the County, but its operation is handled bythe City under an agreement with the County. MSD operation is County-wide (see “TheMetropolitan Sewer District (MSD) of Greater Cincinnati”).
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Several municipal solid waste collection departments serve the Metropolitan Area.
Fire and Police Services
Fire protection in the County is provided by a blend of village, city, township and jointfire districts. These fire departments all have mutual aid agreements in place. The firedepartments in Hamilton County are a mix of full-time, part-time and volunteer firefighters.Many departments have 24-hour staffing but others staff differently based on community needand available funding.
Hamilton County’s 37 cities and villages provide their own police services, with theexception of Silverton, Lincoln Heights, and Arlington Heights, which receives patrol supportunder contract with the County Sheriff’s Office. The Sheriff’s Office also provides supplementalpatrol services to six of the 12 townships in Hamilton County.
The County Sheriff’s department consists of a Sheriff and 916 full-time employees. Theseemployees are found within three divisions: Court/Jail Services, Enforcement and SupportServices. In addition to enforcing the laws of the State of Ohio, preserving the peace, andprotecting life and property, the Sheriff’s divisions oversee County adult detention facilities,County court security, public auction of foreclosed and tax default properties, service ofindictments and warrants, extradition of fugitives traffic accident reports and citations, the sexualoffender registration and notification program, and the concealed weapons license program.
Print and Broadcast Media
The County has one daily newspaper of general circulation, the Cincinnati Enquirer.There are also more than 40 community newspapers in the county. Weekly publications includethe Cincinnati Business Courier, the Cincinnati Herald African-American newspaper, andCincinnati CityBeat arts and issues newspaper. Monthly and online publications includeCincinnati Magazine, Cincy: The Magazine for Business Professionals, Cincinnati Profile, andMovers & Makers Cincinnati. Six television stations are available in addition to cable television.Sixty AM and FM radio stations complement the area’s communication capabilities.
Culture and Recreation
Hamilton County has a thriving arts and culture scene that includes nationally recognizedcultural organizations and vibrant neighborhood arts districts. The Cincinnati SymphonyOrchestra, May Festival Chorus, and the Cincinnati Opera call the century-old Music Hall home.The Aronoff Center for the Arts hosts a wide range of productions including the Broadway Series,the Cincinnati Ballet and the Contemporary Dance Theater. Also available in the area areCincinnati Playhouse in the Park, Ensemble Theater Cincinnati, Cincinnati ShakespeareCompany, and the contemporary Know Theatre. Riverbend Music Center on the Ohio River is thesummer home of the Cincinnati Symphony Orchestra and Pops, and venue for many otherconcerts. The US Bank Arena and BB&T Arena at Northern Kentucky University host a varietyof events including college basketball, rodeo, circus and musical concerts. More than 20community-based arts centers throughout the region bring families and neighbors together for
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performances, arts learning, and more. Arts districts like Over-the-Rhine combine fine dining,galleries, and theaters that attract visitors and create economic vibrancy.
A $129 million renovation to Music Hall began in June 2016 with the building closure.Completion is anticipated in fall 2017.
Local museums include the Cincinnati Art Museum, the Contemporary Art Center, theTaft Museum of Art, the Krohn Conservatory, the Cincinnati Fire Museum, The NationalUnderground Railroad Freedom Center and the Museum Center at Union Terminal, whichincludes the Museum of Natural History and Science, the Cincinnati History Museum and theDuke Energy Children’s Museum. The area has higher education institutions in art and designincluding University of Cincinnati’s College-Conservatory of Music; UC College of Design, Art,Architecture and Planning; and the Art Academy of Cincinnati. The School for Creative andPerforming Arts is the only K-12 public arts school in the country. Per capita, the number ofemployees working in creative industries in Hamilton County is almost double the nationalaverage.
In November 2014, voters approved a quarter cent sales tax increase for five years that isanticipated to generate $175 million in order to help fund renovations to the Cincinnati UnionTerminal. This new sales tax began in April 2015. The total project is expected to costapproximately $212 million, with private donations and historic tax credits to fund the $37million not covered by sales tax proceeds. The project will address major structural needs of thebuilding, such as foundation repairs, electric repairs, and heating and air conditioning repairs.Construction began in July 2016.
Cincinnati is also well known for its festivals, including the famous OktoberfestZinzinnati (the world’s largest Oktoberfest outside of Munich, Germany), Summerfair, Riverfest,A Taste of Cincinnati, Midpoint Music Festival, the Cincinnati Fringe Festival, the Bunburymusic festival and the Cincinnati Flower Show. In 2012 Cincinnati became the first Americancity to host the World Choir Games.
Major league sports teams in the Metropolitan Area include the Cincinnati Reds of MajorLeague Baseball and the Cincinnati Bengals of the National Football League. County residentsalso enjoy the NCAA Division I sports programs of the University of Cincinnati, XavierUniversity, Northern Kentucky University, and Miami University. Some other professional sportteams include the Cincinnati Cyclones of the ECHL hockey league, FC Cincinnati of the UnitedSoccer League, and the Florence Freedom baseball team of the Independent Frontier League.Horse racing takes place at Turfway Park and the Belterra Park Gaming and Entertainment, andthe Kentucky Speedway offers motor racing that includes NASCAR Sprint Cup, NationwideSeries and Camping World Truck events. The region is also host to the Western & SouthernOpen professional tennis tournament. In July 2015, Cincinnati hosted Major League Baseball’sAll-Star Game.
A recent addition to Hamilton County’s recreational attractions is the Jack Casino.Opened in 2013, the two-story casino has 2,000 slot machines and 85 table games. The BelterraPark Gaming and Entertainment Center which opened May 1, 2014 offers 1,500 slot machines inaddition to betting on horse racing both at the facility and offsite.
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Other Hamilton County recreational attractions include Coney Island Amusement Parkand the OMNIMAX theater. In close proximity to the County are: Kings Island AmusementPark; Perfect North Slopes; Hollywood, Belterra and Grand Victoria casinos; and theTournament Players Club golf course at River’s Bend.
In addition to The Banks development described earlier in the economic developmentsection, the Ohio riverfront also features various gathering places such as Smale RiverfrontPark, Sawyer Point and Bicentennial Commons. The John & Phyllis Smale Riverfront Park is a45-acre park that includes the Schmidlapp Stage and Event Lawn, the Cincinnati Bike andVisitor’s Center and plenty of greenspaces. Other additions, such as a carousel and an adventureplayground, opened in 2015. The 22-acre Sawyer Point Park site is just east of Smale Park andfeatures a performance pavilion, eight outdoor tennis courts, three sand volleyball courts, aworld class playground, the Armelder Memorial Sprayground, the Serpentine Wall and thePublic Landing. Across the river in Kentucky, the Newport on the Levy entertainment complex,including the Newport Aquarium as well as numerous restaurants and retail stores, is located ona 15-acre site in Newport, Kentucky. It includes the first Hofbrauhaus brewery and restaurant inNorth America.
Great Parks of Hamilton County protects nearly 17,000 acres, including four conservationareas, making it the largest land owner in Hamilton County. Eighty percent of Great Parks ofHamilton County’s acres are dedicated to natural areas. These natural areas feature a picturesquecollection of natural habitats, from wetlands to prairies to mature forests. Seventeen developedparks offer a variety of recreation opportunities for area residents and include four lakes forfishing and boating, seven golf courses, and three campgrounds, dozens of playgrounds andpicnic areas and more than 70 miles of trails. Great Parks operates as a separate park districtunder the statutes of the Ohio Revised Code. The park district is funded by a 15-year, 1.0 milltax levy, along with 0.03 of inside millage, user fees, and motor vehicle permits. The currentlevy expires at the end of 2017, and the district has proposed a replacement 1.0 mill levy for theNovember 2016 ballot.
The Cincinnati Zoo and Botanical Garden, the nation’s second oldest and one of the topzoos in the country, is internationally known for its success in the protection and propagation ofendangered animals and plants. The zoo is consistently rated one of the top five zoos in thenation by Zagat Survey and attracts 1.5 million visitors a year. In 2015, the zoo received theCincinnati Business Courier 2015 Green Business Award for their efforts to promote greentechnology and energy efficiency. The zoo is supported, in part, by a voter-approved tax levy.
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Demographic Information
Hamilton County has witnessed the same suburban spread seen in many cities throughoutthe Midwest and Northeast which is represented by the decrease in population from 845,303 in2000 to a low of 800,362 in 2011 before a recent upswing to 807,598 in the 2015 U.S. Censusestimate. Despite this drop in census, Hamilton County, the City and local developmentorganizations continue to promote investment in and around the area to revitalize the region’score.
Population 1970 1980 1990 2000 2010 2015Hamilton County 925,944 873,224 866,228 845,303 802,374 807,598*
City of Cincinnati 452,524 385,457 364,040 331,285 296,943 298,550Cincinnati CSA 1,688,420 1,726,451 1,817,571 1,979,202 2,130,151 2,216,735*
______* Figure represents a population estimate for the Cincinnati-Middletown-Wilmington, OH-KY-IN Combined Statistical Area.Source: U.S. Census Bureau
Population of Incorporated Areas – 2015 Estimates
Addyston 931 Loveland* 9,757
Amberley 3,591 Madeira 8,976Arlington Heights 740 Mariemont 3,426Blue Ash 12,159 Milford* 29Cheviot 8,295 Montgomery 10,506Cincinnati 298,550 Mount Healthy 6,039Cleves 3,386 Newtown 2,664Deer Park 5,682 North Bend 860Elmwood Place 2,164 North College Hill 9,332Evendale 2,767 Norwood 19,915Fairfax 1,703 Reading 10,324Forest Park 18,676 St. Bernard 4,353Glendale 2,153 Sharonville* 11,381Golf Manor 3,583 Silverton 4,764Greenhills 3,593 Springdale 11,182Harrison City 10,666 Terrace Park 2,245Indian Hill 5,798 Woodlawn 3,292Lincoln Heights 3,357 Wyoming 8,411Lockland 3,426
TOTAL 518,676______*Figure includes only the number of people living in the County.
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Total Population in Unincorporated areas – 2015 Estimates
Anderson 43,738
Colerain 58,838Columbia 4,546Crosby 2,758Delhi 29,573Green 58,697Harrison 14,654Miami 15,899Springfield 36,490Sycamore 19,284Symmes 14,815Whitewater 5,473TOTAL 304,765
_______Source: Population Estimates Division, U.S. Census Bureau
Employment
The average employment and weekly earnings of workers in the Cincinnati-MiddletownMetropolitan Statistical Area (which includes Hamilton, Warren, Clermont and Brown Counties)are as follows:
NONAGRICULTURAL EMPLOYMENTAND AVERAGE WEEKLY EARNINGS
Cincinnati-Middletown Metropolitan Statistical Area(Includes the County)
EarningsEmployment
(000’s)Average Weekly
Earnings*
Manufacturing 113.3 $857.65Durable Goods 67.1 898.76Transportation Equipment 20.6 1,172.46Nondurable Goods 46.2 758.45Chemical Manufacturing 11.4 N/AService Industries 774.1 N/ATrade, Transportation, Utilities 207.8 N/AWholesale Trade 60.6 901.54Retail Trade 106.1 413.44Transportation, Warehousing, Utilities 41.1 N/AFinancial Activities 68.5 777.95Finance and Insurance 56.0 860.75Insurance, Carriers and Related Activities 27.3 958.67Health Care and Social Assistance 142.8 612.79
* 2015 State of Ohio averages.Source: Ohio Department of Job & Family Services, Labor Market Review, May 2016.
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Largest Employers in Cincinnati MSA
Name of Employer Nature of Business
Approximate Numberof Employees
Kroger Co. HQ – Retail 21,646University of Cincinnati Education 16,016
Cincinnati Children’s Hospital Health Care 14,944TriHealth Inc. Healthcare 11,800The Procter & Gamble Company HQ – Consumer Products 11,000UC Health Healthcare 10,000GE Aviation HQ - Aerospace 7,800Mercy Health Healthcare 7,500St. Elizabeth Healthcare Health Care 7,479Fifth Third Bancorp HQ – Financial Institution 6,882City of Cincinnati Municipal Government 6,530Christ Hospital Health Network Healthcare 5,300Archdiocese of Cincinnati Education 5,096Hamilton County Local Government 4,569Cincinnati Public Schools Education 4,500Macy’s Inc. HQ - Retailer 4,500Internal Revenue Service Federal Govt. - Taxation 4,413Miami University Education 4,188Fidelity Investments Financial Services 4,125Kings Island Amusement 4,000
_____Source: 2015-2016 Business Courier Book of Lists.
Unemployment Statistics
The following table lists the unemployment rates for Hamilton County, the State of Ohioand the United States for the past five years. The figures are expressed in percentages andrepresent the ratio of the total unemployed to the total labor force.
Year United States State of Ohio County2011 8.9% 8.6% 8.6%2012 8.1 7.2 7.02013 7.4 7.5 7.12014 6.2 5.7 5.32015 5.3 4.9 4.4
The chart below provides employment data for the County.
YearTotal Labor
ForceTotal
Employment UnemploymentPercent
Unemployed
2011 406,900 372,000 34,900 8.62012 400,000 371,900 28,100 7.02013 403,300 374,600 28,700 7.12014 404,100 382,500 21,600 5.32015 406,000 388,200 17,800 4.4
_____
Source: United States Department of Labor, Bureau of Labor Statistics; LAUS
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Income and Housing Data
The following shows the Median Household, Per Capita Income and Median Value ofOwner-Occupied Housing Units for 2014 for Hamilton County in comparison to the State ofOhio and the Nation:
Hamilton County State of Ohio United States
2014 Median Household Income $48,927 $48,849 $53,482
2014 Per Capita Income* $30,062 $26,520 $28,555
2014 Median Home Value* $143,000 $129,600 $175,700______Source: U.S. Census Bureau – 2010-2014 American Community Survey
Building Permits
The County issues building permits for the unincorporated areas as well as sevenmunicipalities which contract with the County for this service. The remaining 30 municipalitiesissue their own building permits. The chart below indicates the number of permits and theirestimated value for the County and its contracting municipalities, as well as the cities ofCincinnati, Montgomery, Blue Ash and Sharonville for the last five years.
County and Contracting Municipalities
Year No. Est. Value2011 9,777* $343,761,2022012 9,263* 330,981,5682013 10,619* 236,803,9982014 10,653* 300,389,0112015 13,219 340,112,069
Cincinnati Blue AshYear No. Est. Value No. Est. Value2011 9,288 $547,100,135 592 $30,777,8322012 9,084 403,222,553 672 37,097,8392013 9,811 557,724,994 666 60,918,2972014 9,087 771,788,699 683 56,331,1802015 9,753 631,022,076 679 104,773,179
Montgomery SharonvilleYear No. Est. Value No. Est. Value2011 253 $16,529,028 499 $23,981,052
2012 250 15,991,420 491 69,949,6412013 337 47,520,704 492 18,174,2142014 454 35,991,257 500 50,942,8332015 432 32,596,111 560 37,250,497
_____Source: Hamilton County Department of Planning and Development, Building Inspectors of respective cities.
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FINANCIAL MATTERS
Introduction
The County’s fiscal year corresponds with the calendar year.
The administrative functions of the County are performed by or under the supervision ofthe following:
1. Overall planning and development, the Board of County Commissioners.
2. Assessment of real and personal property, as well as financial controlfunctions, the County Auditor.
3. Inspection and supervision of the accounts and reports of the County asrequired by law, the State of Ohio Office of Auditor.
4. Public utility property assessment, the State of Ohio.
The County currently has no material sum of monies invested in banks or savings andloans that are not insured by FDIC or FSLIC.
Budgeting, Tax Levy and Appropriations Procedure
Detailed provisions for County budgeting, tax levies and appropriations are made in theRevised Code. The procedures involve collective review by County officials at several stages.
County budgeting for a fiscal year formally begins in July of the prior year with thepreparation and adoption of a tax budget for the fiscal year. With respect to payment of debtservice in the fiscal year, the tax budget must show the amounts required, the estimated receiptsfrom sources other than property taxes for payment, the net amount for which a property tax levymust be made, and the portions of that levy to be inside and outside the ten-mill tax ratelimitation (see “Indirect Debt Limitations, County Debt and Other Long Term Obligations”herein). The modified tax budget is then presented for review by the County Budget Commissioncomprised of the Auditor, Treasurer and Prosecuting Attorney of the County.
The County Budget Commission reviews the budget and, with respect to debt service,determines and approves levies for debt service inside and outside the ten-mill rate limitation.The law expressly provides that “if any debt charge is omitted from the budget, thecommission shall include it therein.” Upon approval of the modified tax budget, the CountyBudget Commission certifies the estimate by the County Auditor of the tax rates inside andoutside the ten-mill tax limitation. Thereafter and before the end of the then calendar year, theCommissioner of the Department of Tax Equalization approves the tax levies and certifiesthem to the proper officials. The tax rates are then reflected in the tax bills sent to propertyowners. Real property taxes are payable in two installments, the first usually in January and thesecond in June.
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The Commissioners adopted an appropriation for calendar year 2016 on December 16,2015. Annual appropriations may not exceed the County Budget Commission’s official estimatesof resources, and appropriation measures are to be certified by the County Auditor as notappropriating more moneys than set forth in those latest official estimates.
Financial Reports and Examinations of Accounts
Under current law, the County is required to prepare financial reports in accordance withgenerally accepted accounting principles, as applied to government units. The accountingprocedures prescribed by the State Auditor, applicable to all counties in Ohio, are the generallyaccepted government accounting principles as promulgated by the Governmental AccountingStandards Board (GASB), Codification of Governmental Accounting and Financial ReportingStandards, June 30, 2004, and the Industry Audit Guide of the American Institute of CertifiedPublic Accountants, entitled Audits of State and Local Governmental Units. Those publications,among other things, provide for the preparation of financial statements. The County’s basicfinancial statements consist of government-wide statements and fund financial statements.
1. The government-wide statements display information about the County asa whole. These statements include the financial activities of the primary government andits component unit. The statements distinguish between those activities of the County thatare governmental, which normally are supported by taxes and intergovernmentalrevenues, and those that are considered business-type activities, which rely to asignificant extent on fees and charges for support.
2. Fund financial statements are designed to present financial information ofthe County at a more detailed level that aligns with the function or activities related to thevarious financial transactions. The focus of governmental and enterprise fund financialstatements is on major funds. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. Separate financialstatements are provided for the agency funds, even though they are not included in thegovernment-wide statements. (Agency funds are custodial in nature, i.e., assets equalliabilities, and do not involve measurement of results of operations. These funds accountfor (1) assets held by the County as agent for other entities and (2) various taxes,assessments and state shared resources collected on behalf of other local governments.)
The County’s accounting system tracks financial activity by fund, and each fund is adistinct self-balancing accounting entity. For financial reporting, the modified accrual basis ofaccounting is followed for governmental funds. Revenues are recognized in the period whenmeasurable and available to meet obligations incurred during the year. The County definesavailable as meaning collectible within sixty (60) days of year-end. Governmental funds’expenditures are recognized when the related liability is expected to be liquidated withexpendable available financial resources, except interest on long-term debt, which is recordedwhen due.
Proprietary funds’ financial transactions are recorded on the accrual basis of accounting:revenues are recognized when earned and measurable, and expenses are recognized as incurred.Unbilled service charges receivable are recognized as revenue at year-end.
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The Auditor’s Finance Department is responsible for the auditing analysis of all purchaseorders and vouchers of the County. As these documents are received, they are carefullyexamined to ensure their legal nature, their use of proper accounts and the availability of fundingprior to payment.
HHS Audit
In November of 2010, the Hamilton County Job and Family Services received a copy of adraft report issued by the Department of Health & Human Services (“HHS”) Office of InspectorGeneral titled “Review of Ohio Department of Job and Family Services Claims for CostsReported by the Hamilton County Department of Job and Family Services.” The final reportrecommended that the Ohio Department of Job and Family Services (“ODJFS”) refundapproximately $59 million to the federal government, for county agency costs inappropriatelyclaimed through the administrative cost pools. The original finding amount of approximately$59 million has been reduced by the TANF portion of the finding. This had the effect ofreducing the claimed amount to approximately $35 million. The remaining portion of thefinding was appealed by ODJFS. In September 2015, the Hamilton County Prosecutor’s Office(“Prosecutor’s Office”) received notification from ODJFS that the decision of HHS had beenupheld by the Appeals Board. This had the effect of a finding against ODJFS in the approximateamount of $35 million plus interest. ODJFS then made a claim against Hamilton County for theamount of the finding plus interest.
Subsequent to Hamilton County being advised of the decision of the Appeals Board, theProsecutor’s Office commenced discussions with ODJFS to determine what portion of thefinding by HHS against the State of Ohio would be the responsibility of Hamilton County. TheProsecutor’s Office, with the approval of the Board of County Commissioners, was able tonegotiate and finalize a Settlement Agreement with ODJFS for the total amount of $22.5 millionwhich was paid in late April, 2016. This payment did not affect the County General Fund.
State statute requires an annual audit be performed by the State Auditor or by anindependent certified public accountant approved by the State Auditor. The Auditor of Stateperformed the audit for 2014. In addition to meeting the requirements of state statutes, the auditwas also designed to meet the requirements of the federal Single Audit Act of 1984 and therelated U.S. Office of Management and Budget’s Circular A-133. Generally accepted auditingstandards and the standards set forth in the General Accounting Office’s Government AuditingStandards are used by the auditors in conducting the engagements. The auditor’s report on thefinancial statements is included in the financial section of the audit report. The auditor’s reporton internal controls and compliance with applicable laws and regulations can be found in aseparately issued single audit report.
Audit reports issued on the County by the State Auditor are available for publicinspection following the completion of the audit and post-audit activities.
INSURANCE
Hamilton County uses several risk management techniques of “risk transfer” and“transfer of risk financing” to limit its financial exposure in those areas where the County has
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liability exposure. Hamilton County is self-funded for general, public officials and automobileliabilities. The County has established a reserve fund to pay potential court-ordered judgmentsand at December 31, 2015, this amounted to $956,000. The County also participates in aworkers’ compensation program administered through the Ohio Bureau of Workers’Compensation (OBWC). Separate insurance policies are procured for buildings and contents,and County-owned equipment.
As a general rule, Ohio law provides that political subdivisions such as the County havean immunity from liability in damages for injury, death, or loss to persons or property allegedlycaused by an act or omission of such political subdivisions or their employees in connection withgovernmental and proprietary functions, as defined in the Ohio statutes. This law has no effect onactions based on contract and any liability imposed by federal law or other federal cause of action.Pursuant to Ohio law, there are, however, five areas in which a county may be held liable for suchloss. These include the negligent operation of a motor vehicle on public roads, highways orstreets; negligent performance of proprietary functions; negligent failure to remove obstructionsfrom public roads or to keep public roads, highways, streets, sidewalks, bridges or public groundsopen, in repair, and free from nuisance; negligence of employees within or upon the grounds ofbuildings used in the performance of governmental functions which buildings have physicaldefects within or upon the grounds thereof, but excluding jails, juvenile detention workhouses andother detention facilities; and liability specifically imposed by law. Ohio law imposes a two-yearstatute of limitations, prohibits the garnishment or judicial sale of assets and funds of politicalsubdivisions and puts limits on the damages that may be recovered from such politicalsubdivisions. The political subdivision is also required to indemnify and defend its officers andemployees when the officer or employee was acting in good faith and within the scope of itsduties. No punitive or exemplary damages can be recovered, and any insurance benefits arededucted from any award against a political subdivision. Although there is no limitation withrespect to compensatory damages representing a person’s economic loss, there is a $250,000 perperson ceiling on the compensatory damage that represents a person’s noneconomic loss in casesother than wrongful death, in which case there is no maximum limitation.
INVESTMENT POLICIES OF THE COUNTY
The County is limited by Ohio law, ORC Chapter 135 and the Uniform Depository Acton its investments. Chapter 135 of the Ohio Revised Code sets forth the requirements andlimitations for investments of the state’s political subdivisions, including the County. UnderSection 135.35 of the Revised Code, the County Treasurer may invest its funds as follows:
Nothing in the classification of eligible securities and obligations set forth in (A) of thissection or in the classifications of eligible securities and obligations set forth in (B) through (I)of this section shall be construed to authorize any investment in stripped principal or interestobligations of such eligible securities and obligations.
(A) United States Treasury bills, notes, bonds, or any other obligation orsecurity issued by the United States Treasury or any other obligation guaranteed as toprincipal or interest by the United States.
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(B) Bonds, notes, debentures, or any other obligations or securities issued byany federal government agency or instrumentality, including but not limited to, theFederal National Mortgage Association, Federal Home Loan Bank, Federal Farm CreditBank, Federal Home Loan Mortgage Corporation, Government National MortgageAssociation, and Student Loan Marketing Association. All federal agency securities shallbe direct issuances of federal government agencies or instrumentalities.
(C) Time certificates of deposit or savings or deposit accounts, including, butnot limited to, passbook accounts, in any eligible institution mentioned in Section 135.32of the Revised Code.
(D) Bonds and other obligations of this state or the political subdivisions ofthis state, provided that such political subdivisions are located wholly or partly within thesame county as the investing authority.
(E) No-load money market mutual funds consisting exclusively of obligationsdescribed in (A) or (B) of this section and repurchase agreements secured by suchobligations, provided that investments in securities described in this division are madeonly through eligible institutions mentioned in Section 135.32 of the Revised Code.
(F) The Ohio subdivision’s fund as provided in Section 135.45 of the RevisedCode.
(G) Securities lending agreements with any eligible institution mentioned inSection 135.32 of the Revised Code that is a member of the Federal Reserve System,Federal Home Loan Bank, or with any recognized United States government securitiesdealer meeting the description in Section 135.35 of the Revised Code, under the terms ofwhich agreements the investing authority lends securities and the eligible institution ordealer agrees to simultaneously exchange either securities described in (A) or (B) of thissection or cash or both securities and cash, equal value for equal value.
(H) Up to twenty-five percent of the County’s total average portfolio in eitherof the following investments: Commercial paper notes issued by an entity as defined inSection 1705.01 of the Revised Code and that has assets exceeding $500 million dollarsto which notes all of the following apply:
(1) at least two nationally recognized rating agencies rank thecommercial paper in their highest classification;
(2) the aggregate value of the notes does not exceed ten percent of theaggregate value of the outstanding commercial paper of the issuingcorporation; and
(3) the notes mature not later than 270 days after purchase.
(I) Bankers acceptances of banks that are insured by the Federal DepositInsurance Corporation and to which both of the following apply:
(1) the obligations mature not later than 180 days after purchase; and
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(2) the obligations are eligible for purchase by the Federal ReserveSystem.
(J) Written repurchase agreements with any eligible institution mentioned inSection 135.32 of the Revised Code or any eligible securities dealer pursuant to Section135.35 of the Revised Code, under the terms of which agreement the investing authoritypurchases and the eligible institution or dealer agrees unconditionally to repurchase anyof the securities listed in sub-sections (B)(1) to (5) of Section 135.18 of the RevisedCode. The market value of securities subject to an overnight repurchase agreement mustexceed the principal value of the overnight repurchase agreement by at least two percent.
(K) Up to fifteen per cent of the County’s total average portfolio in notesissued by corporations that are incorporated under the laws of the United States and thatare operating within the United States, or by depository institutions that are doingbusiness under authority granted by the United States or any state and that are operatingwithin the United States, provided both of the following apply:
(1) The notes are rated in the second highest or higher category by atleast two nationally recognized standard rating services at the timeof purchase; and
(2) The notes mature not later than two years after purchase.
(L) No-load money market mutual funds rated in the highest category at thetime of purchase by at least one nationally recognized standard rating service andconsisting exclusively of obligations described in division (A)(1), or (2), or (6) of Section135.14.3 of the Revised Code.
(M) Debt interests rated at the time of purchase in the three highest categoriesby two nationally recognized standard rating services and issued by foreign nationsdiplomatically recognized by the United States government. All interest and principalshall be denominated and payable in United States funds. The investments made underthis section shall not exceed in the aggregate one per cent of a County’s total averageportfolio.
The County has never owned any derivative type investments, interest only investmentsor principal only investments. These are specifically ineligible investments under Section 135.35of the Revised Code. The County may not leverage the portfolio through the use of reverserepurchase agreements. These are specifically ineligible investments under Section 135.35 of theRevised Code.
The County values safety, liquidity and return, in that order. Interest earned by theCounty in 2015 totaled $4.6 million.
The investment policy of the County, as adopted by the Hamilton County Treasurer’sOffice and the Hamilton County Investment Advisory Committee, is attached hereto asAppendix F. All brokers, dealers and financial institutions initiating transactions with theinvestment authority by giving advice or making investment recommendations shall sign theCounty’s Investment Policy thereby acknowledging their agreement to abide by the Policy’s
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contents; those who execute transactions initiated by the investment authority, having read thePolicy’s contents, shall sign the Investment Policy thereby acknowledging their comprehensionand receipt.
AD VALOREM TAXES
Assessed Valuation
The following is the assessed valuation, for the most recent five years, of property subjectto ad valorem taxes levied by the County.
TaxYear
CollectionYear Real Estate (a)
Public UtilityPersonal
Property (b) Total
IncreaseOver
PreviousYear
2011* 2012 $17,525,408,160 $723,511,130 $18,248,919,290 (8.60)%2012 2013 17,377,546,480 773,714,490 18,151,260,970 (0.53)2013 2014 17,325,676,240 843,929,210 18,169,605,450 0.102014** 2015 17,357,886,980 909,653,090 18,267,540,070 0.542015 2016 17,421,109,730 927,265,920 18,348,375,650 0.44
_______*Physical reappraisal year**Statistical reappraisal yearSource: Hamilton County Auditor.(a)Real property taxes collected in a calendar year are levied in the preceding calendar year on assessed values as of January 1 of that precedingyear.(b)Public utility property taxes collected in a calendar year are levied in the preceding calendar year on assessed values determined as of December31 of the second year preceding the tax collection year.
The Tax Year 2015 (Collection Year 2016) real estate assessed valuation of$18,348,375,650 is comprised of the following types of property in the indicated amounts:
Type Assessed Valuation Percentage of Total
Commercial $3,694,211,080 20.13%Industrial 887,127,240 4.83Residential 12,773,715,310 69.62Agricultural 56,448,310 0.31Public Utility 936,873,710 5.11
Total $18,348,375,650 100.00%______Source: Hamilton County Auditor.
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Approximate 2015 land use in the County is as follows:
LAND USE PARCELSAREA INACRES
AVG.PARCEL
SIZE
PERCENTOF
TOTAL
AGRICULTURE 1,548 24,345.1 15.7 9.94%
COMMERCIAL/OFFICE 19,513 12,682.0 0.5 5.18%
Commercial 12,844 9,677.4 0.8 3.95%
Office 4,922 2,807.5 0.6 1.15%
Mixed Use 1,747 197.1 0.1 0.08%
SINGLE FAMILYRESIDENTIAL 238,001 95,186.7 2.3 38.86%
Single Family 237,801 94,349.9 0.4 38.52%
Mobile Home 200 836.8 4.2 0.34%
MULTI-FAMILY RESIDENTIAL 28,270 9,257.4 5.3 3.78%
Two Family 14,343 2,077.0 1.8 0.85%
Multi Family 13,676 6,434.5 0.5 2.63%
Congregate Housing 251 745.9 3.0 0.30%
INDUSTRIAL 9,648 15,569.0 1.8 6.36%
Heavy Industrial 3,742 9,145.9 2.4 3.73%
Light Industrial 5,906 6,423.1 1.1 2.62%
PUBLIC/INSTITUTIONAL 43,413 42,309.7 1.1 17.27%
Educational 2,608 4,155.7 1.6 1.70%
Public Service 30,841 28,983.1 0.9 11.83%
Institutional 7,235 6,360.9 0.9 2.60%
Public Utility 2,729 2,810.0 1.0 1.15%
PARKS & RECREATION 1,961 13,708.3 7.0 5.60%
VACANT 46,034 25,899.2 0.6 10.57%
NOT AVAILABLE 8,305 5974.0 0.7 2.44%
COUNTY TOTAL 396,693 244,931.5 3.9 100.00%______Prepared by the Hamilton County Planning and Development.Source: Hamilton County Auditor via Cincinnati Area Geographic Information System.
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The ten largest ad valorem property taxpayers with respect to property for the 2015 taxyear, are:
CompanyTotal Assessed
ValuationPercentage of Total County
Assessed Valuation1. Duke Energy Ohio Inc. $906,248,500 4.94%2. City of Cincinnati 105,078,200 0.57%3. Procter & Gamble Co. 78,149,290 0.43%4. The Christ Hospital 41,789,170 0.23%5. Fifth Third Bank 34,727,330 0.19%6. Dayton Power & Light Co. 29,532,580 0.16%7. Rookwood Commons LLC 26,936,180 0.15%8. Carew Realty Inc. 26,113,270 0.14%9. Columbia Development 20,039,070 0.11%10. Rookwood Pavilion LLC 18,475,660 0.10%
Total $1,287,089,250 7.01%
All Remaining Value $17,061,286,400 92.99%
Total Assessed Value $18,348,375,650 100.00%_____
Source: County Auditor’s Office.
During 2011, Hamilton County experienced the statutory sexennial, on-site reappraisal ofreal property, whereby the true value of real property was adjusted to reflect current marketvalues as of January l, 2011. The laws of the State of Ohio presently require that the CountyAuditor reassess real property at any time it is determined that the true or taxable value thereofhas changed, and in the third calendar year following the year in which a sexennial reappraisal iscompleted if ordered by the State Commissioner of Taxation (the “Commissioner”). (Thesereappraisals impact the following year’s collections, in 2012 and 2015.)
Pursuant to law, the taxable value of real property is that percent of true value in money,or the current agricultural use value in the case of agricultural land, established by rule of theCommissioner, not to exceed thirty-five percent (35%). Under existing rules of theCommissioner, real property is assessed at not more than 35% of true value, or 35% of currentagricultural use value as determined by the County Auditor pursuant to rules of theCommissioner. If declared by the property owner and deemed to qualify as “forest land” underSection 5713.22 of the Revised Code, certain real property is taxed at fifty percent (50%) of thelocal tax rate upon its true value.
Given the standard assessment base determined under the provisions noted above, theRevised Code provides for a three-phase tax reduction of real property taxes, with respect totaxes other than taxes levied at a rate required to produce a specified amount of tax money (i.e.,for payment of debt charges), taxes levied inside the ten-mill limitation, or taxes authorized by amunicipal charter. The tax reduction is accomplished through the following procedures:
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(1) The Commissioner must determine annually by what percent (the “TaxReduction Factor”) the sums that would otherwise be levied by a tax against real propertywould have to be reduced to equal the amount that would be levied if the full rate thereofwere imposed against the total taxable value of real property in the district in thepreceding tax year, plus the total taxable value of all improvements added to the tax listsince the preceding tax year. Thereafter, the County Auditor must reduce the sum to belevied by the tax against each parcel of real property in the district by the Tax ReductionFactor certified by the Commissioner. However, if said reduction could cause the totaltaxes charged and payable for current expenses prior to the statutory ten percentreduction, discussed hereinafter, to be less than two percent of the taxable value of allreal property subject to taxation, the Commissioner, upon notification thereof by theCounty Auditor, must adjust the Tax Reduction Factor as required by law.
(2) The County Auditor must reduce the sums remaining thereafter to belevied against parcels of real property by ten percent. The taxes remaining after suchreduction constitute the real and public utility property taxes charged and payable, andthe manufactured home tax charged and payable, on each property and shall be theamounts certified to the County Treasurer for collection.
(3) The application of the homestead exemption.
While the aforesaid tax reductions shall not affect the determination of the principalamount of notes that may be issued in anticipation of any tax levies or the amount of notes forany planned improvements, should funds for payment of debt charges on notes payable fromtaxes so reduced be insufficient for such purpose, the reduction of taxes shall be adjusted to theextent necessary to provide sufficient funds from real property taxes.
Failure of the County Auditor to supply to the Commissioner the information required todetermine the Tax Reduction Factor may result in substantial withholding of state revenues to thelocal government until such time as the County Auditor has fulfilled the requirement.
The assessed valuation of tangible personal property depends on the type and age of thetangible personal property. The following paragraphs describe recent changes to the assessmentof tangible personal property enacted by the Ohio General Assembly.
Beginning in 2006, taxation affecting three classes of tangible personal property used inbusiness changed. Tangible personal property taxes on (i) manufacturing equipment, (ii)furniture and fixtures and (iii) inventory was phased-out over a four year period, ending in 2009.A portion of the commercial activities tax (the “CAT tax”) replaced the tax on business tangiblepersonal property. As part of the CAT tax, gross rents and royalties from tangible personalproperty, as well as gross receipts from the sale of tangible personal property (among severalother categories of receipts) is credited to the State’s general revenue fund and to reimburseschool districts and other local taxing units for the phase-out of taxes on business tangiblepersonal property. These payments are commonly referred to as “replacement payments.”
The application of the CAT tax to certain types of business receipts has been the subjectof litigation. On September 17, 2009, the Ohio Supreme Court held that the CAT tax is not an
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excise tax “upon the sale or purchase of food” and does not violate the State’s constitutionalprohibitions against such a tax. On July 26, 2011, an Ohio appellate court held that the CAT tax“is not a tax upon motor vehicle fuel” and, thus, upheld the constitutionality of the application ofthe CAT tax to gross receipts from the sales of motor fuels. The Ohio Supreme Court hasreversed the appellate court and declared that the allocation to non-highway purposes of revenuederived from the application of Ohio’s CAT tax to gross receipts from the sale of motor vehiclefuel violates the Ohio Constitution. The Court determined the decision would be prospective andthat such revenue would be held until properly appropriated by the General Assembly.
The division of CAT tax revenue among these sources was scheduled to be phased-out in2018, with the State’s general fund receiving 100% of the CAT tax revenues thereafter.Amended Substitute H.B. 153 of the 129th General Assembly (“H.B. 153”) has generallyaccelerated the phase-out and reduces the reimbursement payments, depending on the type oflevy and the financial resources of each particular school district or other taxing unit.
Generally, H.B. 153 accelerated the phase-down of the reimbursement amounts for fixed-rate levies by means of a formula based on a school district’s or taxing unit’s reliance on suchreimbursements as a percentage of its total budget (or “total resources”), rather than by a fixedfractional reduction of reimbursement amounts through 2019, as provided under prior law. Forexample, under this formula for reimbursement, certain thresholds for fixed-rate levy lossreimbursement (which, in some cases, apply to current expense fixed-rate levies) have beenestablished for school districts (2% for fiscal year 2012 and 4% for fiscal year 2013 andthereafter) and for other taxing units (4% for fiscal year 2012 and 6% for fiscal year 2013 andthereafter). If a school district or other taxing unit does not receive reimbursement (also referredto as an “allocation”) for fixed-rate levy loss in an amount equal to these respective minimumthresholds, then the school district or other taxing unit receives no reimbursement. At the end offiscal year 2013, fixed-rate levy loss reimbursements were either reduced or terminated.Reimbursement for fixed-rate levies other than current expense levies were reduced by 50% forschool districts by 2013 and 75% for municipalities by 2013. Reimbursement will continue to bepaid for fixed-sum and unvoted debt levy losses although the phase-out period has generallybeen accelerated. Fixed-sum levy losses and losses on unvoted debt levies will be calculated in amanner similar to the manner in which losses for fixed-rate levies are calculated.
Beginning with tax year 2006, the percentages used to determine the assessed value ofelectric company personal property used in the production of electricity were reduced to 24% oftrue value; taxable transmission and distribution property are assessed at 85% of true value (50%of true value for rural electric companies). The State is to reimburse school districts and otherlocal taxing districts for a portion of the revenues lost due to this reduction in tax valuation withproceeds of a kilowatt-hour excise tax imposed on electricity consumers as well as natural gasdistribution tax revenue (the “Utility Taxes”). The reimbursement paid to school districts andother taxing units as a result of the lower Utility Taxes are commonly referred to as “replacementpayments.” Prior to the passage of H.B. 153, qualifying levy reimbursements to school districtswere scheduled to be distributed, in full, through 2016 (or, for fixed-rate levies, thereimbursement period could end prior to 2016 if increases in a school district’s state aidexceeded its fixed-rate reimbursement measured against 2002 levels) with no furtherreimbursements thereafter for losses resulting from the reduction in tax valuation against utilityproperty. Reimbursements for such losses to other taxing units were scheduled to be made
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through 2017 on a declining basis after 2006. H.B. 153 changes the manner in whichreplacement payments are made to school districts and local taxing units
Generally, reimbursement for fixed-rate levy loss is calculated by determining thedifference between personal property taxes due using the higher assessed rates under a pre-determined prior year (which prior year varies depending on whether the property is electric orgas) and taxes due using lower rates under the new law. Similar to determining reimbursementamounts for business tangible personal property losses, H.B. 153 provides a methodology fordetermining reimbursement amounts for fixed-rate levies by means of a formula based on aschool district’s or taxing unit’s reliance on such reimbursements as a percentage of its totalbudget (or “total resources”). For example, under this formula for reimbursement, certainthresholds for fixed-rate levy loss reimbursement (which, in some cases, apply to currentexpense fixed-rate levies) have been established for school districts (2% for fiscal year 2012and 4% for fiscal year 2013 and thereafter) and for other taxing units (4% for fiscal year 2012and 6% for fiscal year 2013 and thereafter). If a school district or other taxing unit does notreceive reimbursement (also referred to as an “allocation”) for fixed-rate levy loss in an amountequal to these respective minimum thresholds, then the school district or other taxing unitreceives no reimbursement. By the end of fiscal year 2013, fixed-rate levy loss reimbursementswere either reduced or terminated. Reimbursement for fixed-rate levies other than currentexpense levies were reduced by 50% for school districts by 2013 and 75% for municipalities by2013. Reimbursement will continue to be paid for fixed-sum and unvoted debt levy losses withreimbursement for all but 1/4 of a mill per dollar. Fixed-sum levy losses and losses on unvoteddebt levies will be calculated in a manner similar to the manner in which losses for fixed-ratelevies are calculated.
For additional information regarding expected changes to reimbursement amounts, pleasereference the following website: http://www.tax.ohio.gov/personal property/phaseout.aspx.
The General Assembly has from time to time exercised its power to revise the lawsapplicable to the determination of assessed valuation of taxable property and the amount ofreceipts to be produced by ad valorem taxes levied on that property, and may continue to makesimilar revisions.
Ohio law provides for numerous tax exemptions for real and personal property tostimulate economic development.
Ohio law provides for tax credits to offset increases in tax resulting from increases in thetrue value of real property. Legislation classifies real property as between residential andagricultural property and all other real property, and provides for tax reduction factors to beseparately computed for and applied to each class. These tax credits apply only to certain votedlevies on real property and do not apply to unvoted levies or to voted levies to provide aspecified dollar amount or to pay debt charges on general obligation debt.
Under statutory procedures, the amount realized by each taxing subdivision from realproperty taxation (other than amounts realized from taxes levied at a rate required to produce aspecified amount, such as for debt service charges or emergency school levies, and taxes leviedinside the ten-mill limitation or, in the case of municipalities, any applicable charter tax rate
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limitation) is limited to the amount realized from real property taxes in the preceding year plus:(i) any new taxes (other than renewals) approved by the electorate but calculated to produce anamount equal to what would have been realized if levied in the preceding year and (ii) amountsrealized from new and existing taxes on real property added to the tax duplicate since thepreceding year. To accomplish this, the Tax Reduction Factor is applied to the stated rates oftaxes subject to this reduction levied by the County and its underlying subdivisions. Theresulting effective tax rate reflects the aggregate of those reductions and therefore the effectiverate at which real property taxes are levied.
See Appendix E for the County Tax Rate Table for all County subdivisions for tax year2015 (collection year 2016).
Tax Table A sets forth the rates, in mills per $1.00 of assessed valuation, at which theCounty levied 2015 ad valorem property taxes (for collection in 2016) for the general categoriesof purposes with proper Reduction Factors.
Tax Table A*
Name of Tax Levy Voted UnvotedFull Tax
Rate
EffectiveResidential/Agricultural
Rate
EffectiveCommercial/
IndustrialRate
General Fund x 2.26 2.26 2.26University of Cincinnati Hospital x 4.07 1.70 2.72County Police Information Center x 0.54 0.17 0.30Developmental Disabilities Services x 4.13 3.94 4.13Community Mental Health x 2.99 1.64 2.33Support of Children Services x 2.77 1.88 2.70Recreational/Zoological Purposes x 0.46 0.35 0.45Senior Services x 1.29 1.00 1.26Family Treatment & Services x 0.34 0.34 0.34Total 18.85 13.28 16.49
______* See Appendix E of the Annual Statement (2015 Tax Rate Table) for the effective number of mills levied on each dollar of property listed fortaxation within the County.Source: County Budget Commission.
For a discussion of the ten-mill unvoted tax limitation, and the priority of claim thereonfor debt service on unvoted general obligation debt of the County and all underlying taxingsubdivisions, see the discussion herein of “Indirect Debt Limitations.”
The following table presents certain information concerning the County’s voted and advalorem tax levies stated in mills per $1.00 of assessed valuation (except such levies for votedbond issues):
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Tax Table B
FirstAuthorized
CurrentMillage Rate Purpose
FirstCollection
Year
LastCollection
Year
05-03-66 4.07 Health-Hospitalization Servicesincluding University Hospital
201512017
11-03-81 2.77 Children Services 201212016
11-07-67 0.54 Police Information Center 19832Continuing
11-05-74 4.13 Developmental Disabilities Services 201512019
11-09-80 2.99 Community Mental Health 201312017
11-03-92 1.29 Senior Services 201312017
11-02-82 0.46 Zoological Parks and Facilities 201412018
11-03-09 0.34 Family Treatment & Services 201512019
________
1 Renewal2 Renewal and increaseSource: County Budget Commission.
Collection of Ad Valorem Property Taxes and Special Assessments
The following are the amounts billed and collected for County ad valorem taxes,including the total amount billed and collected for the underlying, subdivisions of the Countyand the amounts attributable to the County, on the tax duplicates, and the special assessmentsbilled and collected, for the indicated tax collection years. “Billed” amounts include the currentcharges, plus the respective current and delinquent additions, less the respective current anddelinquent abatements.
Real Estate and Public Utility
County and Underlying Subdivisions
CollectionYear
Current DelinquentBilled Collected % Billed Collected %
2011 $1,396,161,244 $1,325,708,082 94.95% $126,315,720 $60,248,215 47.70%2012 1,362,651,479 1,300,435,821 95.43 117,141,972 60,029,892 51.242013 1,310,216,398 1,264,576,389 96.52 95,993,283 43,865,927 45.702014 1,335,298,696 1,291,320,920 96.71 79,469,708 42,566,360 53.562015 1,354,839,439 1,303,838,020 96.23 79,023,914 39,576,988 50.08
County
CollectionYear
Current DelinquentBilled Collected % Billed Collected %
2011 $269,901,539 $252,177,671 93.43% $23,031,728 $11,297,992 49.05%2012 258,680,233 242,471,175 93.73 20,673,734 11,218,173 52.262013 260,889,847 252,048,232 96.61 18,329,086 8,516,656 46.472014 262,546,004 252,152,100 96.04 15,031,820 8,252,965 54.902015 261,800,887 253,810,047 96.95 14,700,657 7,477,900 50.87
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Special Assessments
County and Underlying Subdivisions
CollectionYear
Current DelinquentBilled Collected % Billed Collected %
2011 13,001,008 10,063,045 77.40 6,384,806 1,251,608 19.602012 13,807,616 11,328,540 82.04 7,427,631 1,309,577 17.632013 13,987,381 11,814,212 84.46 7,753,471 1,670,374 21.542014 14,117,966 12,011,414 85.08 6,948,055 1,556,455 22.402015 17,670,840 12,778,068 72.31 6,712,075 1,617,062 24.09
County
CollectionYear
Current DelinquentBilled Collected % Billed Collected %
2011 3,878,825 3,685,945 95.03 506,664 171,829 33.912012 3,851,596 3,679,828 95.54 542,904 126,404 23.282013 3,932,655 3,716,193 94.50 583,522 123,011 21.082014 3,750,808 3,618,567 96.47 607,392 138,328 22.772015 3,747,040 3,594,677 95.93 626,819 132.606 21.16
Pursuant to Ohio law, the current and delinquent taxes and special assessments are billedand collected by County officials for the County and other taxing or assessing subdivisions in theCounty.
Included in the above figures for ad valorem property taxes Levied and Collected arecertain real property tax relief payments made by Ohio from State revenue sources; suchpayments are not made with respect to special assessments. “Homestead” exemptions are madeavailable for the elderly and handicapped (Amended Substitute H.B. 59 of the 130th GeneralAssembly (“H.B. 59”) imposed income limitations on the Homestead exemption but preservedthe credit of those who received the credit for tax year 2013 along with those who lived in amanufactured home and is receiving the credit in 2015). Ohio law provides for the payment totaxing subdivisions from State funds of an amount equaling approximately 10% (12 1/2% withrespect to owner occupied residential property) of ad valorem real property taxes levied, therebyreducing the tax obligation of any real property owner in any given year by an equivalentpercentage (H.B. 59 removed these reductions for new property tax levies approved at electionsheld on or after September 29, 2013 but preserved the rollback for existing levies and renewal ofexisting levies). As an indication of the extent of such State assistance as applied to the County’stax collections, the elderly/handicapped homestead payment and the “rollback” payment madeby Ohio for 2015 totaled $25.13 million. This figure represents only the County’s share of saidpayments. Similar payments are also made to many of the underlying subdivisions within theCounty.
The following table indicates the property tax revenues of the County’s General Fund(including homestead, rollback and personal property tax exemption payments reimbursed by theState of Ohio prior to the deduction), exclusive of any other County Fund:
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YearReal
Property
% ChangeOver Prior
YearPersonalProperty*
% ChangeOver Prior
Year Total
% ChangeOver Prior
Year
2011 $44,499,306 0.16% $1,918,109 (52.27)% $46,417,415 (4.19)%2012 40,397,625 (9.22)2013 40,613,856 0.542014 41,023,041 1.012015 41,269,383 0.60
_____Source: County Auditor.*Personal Property tax collections were eliminated after 2011, and residual collections after that date are immaterial.
Delinquency Procedures
Taxes for real and utility property for the fiscal year 2014 became a lien on January 1,2015. Taxes for tangible personal property for the fiscal year 2014 became a lien on January 1,2014.
The time for payment of real property taxes is January 31 and June 20 as per OhioRevised Code 323.17. In the case of emergencies, extensions may be granted by the Departmentof Taxation of Ohio. When such extensions are made, taxes become delinquent at the expirationof the extended period. The tangible personal property tax has been phased out in Ohioeffectively at the end of 2008. However, telecommunication companies were required to reporttheir value in fiscal years 2009 and 2010. 2010 was the final year for reporting current tangiblepersonal property value. Delinquencies will continue to be billed for the next several years.
Discounts are not given for prepayment. Penalties and interest for delinquent realproperty taxes are as follows:
1. 10% penalty on current taxes if first half current taxes are not received byfirst half due date.
2. 10% penalty on all current taxes unpaid as of the final date for payment ofsecond half.
3. If the full amount of taxes due at either of the due dates is paid within tendays after such time, the County Treasurer shall waive the collection of and the CountyAuditor shall remit one-half of the 10% penalty.
4. On the first day of the month following the last day the second half taxesare due, interest in the amount determined by the Tax Commissioner of the State ofOhio shall be charged against all delinquent taxes other than the current years taxes.The charge shall be for interest that accrued during the period that began on thepreceding first day of December and ended on the last day of the month that includedthe last date such second half could be paid without penalty.
5. On the first day of December, the interest shall be charged against alldelinquent taxes. The charge shall be for interest that accrued during the period that
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began on the first day of the month following the last date prescribed for the paymentof the second installment of taxes in the current year and ended on the immediatelypreceding last day of November.
There is no one taxpayer that accounts for any significant percentage of any of thedelinquencies identified above.
The following is a general description of delinquency procedures under Ohio law. Theimplementation of these procedures may vary in practice among Ohio counties.
If real estate taxes and special assessments are not paid in the year in which they are due,they are certified by the County Auditor’s office as delinquent. A list of delinquent properties isthen to be published in a newspaper of general circulation in the County. If the delinquent taxesand special assessments are not paid within one year after such certification, the properties arethen to be certified as delinquent to the County Prosecuting Attorney. If the property owner sorequests, a payment plan is arranged with the County Treasurer. If such payment plan is notadhered to or if none is arranged, foreclosure proceedings may be initiated by the County. Ohiolaw also provides for notice by publication and mass foreclosure proceedings and sales afterthree years’ delinquency.
The County Treasurer’s office employs a notification procedure and proceedings inCommon Pleas Court to collect delinquent tangible personal property taxes.
Proceeds from the foreclosure sales of delinquent property become part of the currentcollection and are distributed as current collections to the taxing subdivisions in the County, or,if applicable to special assessments, are remitted to the subdivisions that levied suchassessments.
OTHER MAJOR COUNTY REVENUE SOURCES
Described under this caption are major sources of revenue for the County in addition toad valorem taxes. See Appendix A for further information regarding other sources of revenue forthe general fund and other funds.
Sales Tax
Under Ohio law, the County may levy a one per cent (1%) piggyback sales tax onpermissible types of sales made within the County. The County is currently levying a three-quarters of one percent (3/4%) sales tax. This is comprised of a continuing one-half of one percent(1/2%) sales tax and a one-quarter of one percent (1/4%) sales tax for five years directed atrestoration of the Cincinnati Museum Center, which became effective April 1, 2015. In addition tothe three-quarters of one percent (3/4%) sales tax in place, the County levied an additional one-halfof one percent (1/2%) sales tax at the March 19, 1996 election (upon approval by voter referendum)and is currently levying a one percent (1%) permissive sales tax. The additional one-half of onepercent (1/2%) sales tax revenue approved in 1996 is intended to support debt service and otherexpenses on stadium projects in the County and provide property tax relief.
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Historic Sales Tax Collections
The following tables demonstrate historical sales tax collections based on the twoseparate components of the sales tax and total collections.
Total Sales Tax Collections
YearTaxRate
Sales TaxCollections
% Variance FromPrior Year
2011 1% $130,099,771 4.62%2012 1 133,305,110 2.462013 1 139,280,582 4.482014 1 148,287,459 6.472015 1 155,962,255 5.18
_____Source: County Auditor.
Separate One-Half of One Percent Sales Tax Collections
Year
OriginalTaxRate
OriginalSales Tax
Collections
% IncreaseOver
Prior YearAdditional
Tax
Additional1/2% Sales
Tax Collections
% VarianceFrom
Prior Year2011 0.5% $65,055,734 4.62% 0.5% $65,044,038 4.62%
2012 0.5 66,662,835 2.47 0.5 66,642,275 2.462013 0.5 69,643,868 4.47 0.5 69,636,714 4.492014 0.5 74,146,221 6.46 0.5 74,141,238 6.472015 0.5 77,981,582 5.18 0.5 77,980,673 5.18
_____Source: County Auditor
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Seasonal Variance in Tax Distributions
The following chart shows seasonal variations in County’s Sales Tax Receipts which areprimarily the result of seasonal variations in the underlying retail activity. The figures representthe General Fund receipts for the Additional One-Half of One Percent Sales Tax for the yearsindicated:
2011 2012 2013 2014 2015January $5,116,857 $5,168,216 $5,367,653 $5,564,548 $6,099,753February 5,307,483 5,324,509 5,517,589 5,778,727 6,240,222March 6,754,912 7,162,789 7,228,505 7,453,200 7,914,413April 4,842,617 4,280,512 5,106,813 5,414,253 5,591,987May 5,062,098 4,994,551 5,126,664 5,443,453 5,920,244June 5,708,736 5,680,584 6,271,284 6,364,709 6,884,327July 4,848,988 5,297,235 5,777,711 5,968,151 6,177,096August 5,373,402 5,467,607 5,919,641 6,086,170 6,715,452September 6,052,468 6,629,800 6,585,117 6,926,162 7,165,281October 5,478,668 5,475,868 5,097,195 6,216,415 6,374,439November 4,997,043 5,600,078 5,704,138 6,335,758 6,496,972December 5,512,492 5,581,085 5,941,558 6,594,674 6,401,396TOTALS $65,055,764 $66,662,835 $69,643,868 $74,146,221 $77,981,582
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Historical Sales Tax Collections by Category
The following table shows the Sales Tax collections by category in the County* for each year as reportedby State Department of Taxation.
Category 2011 2012 2013 2014 2015Finance, Real Estate,Management andAdministrative Services
$13,459,216 $14,366,335 $15,808,909 $18,866,526 $27,172,673
Information/Telecom 9,985,877 10,310,793 11,476,455 11,698,761 13,372,276General MerchandiseStores
11,683,124 11,978,074 11,871,749 7,870,172 6,369,305
Miscellaneous StoreRetailers
16,380,197 16,221,878 12,334,186 24,010,969 38,694,635
Building Material andGarden Equipment &Supplies
8,765,114 9,373,852 8,444,734 7,506,992 8,565,464
Food, Health andClothing
24,274,554 25,844,398 26,297,492 23,305,850 26,047,705
Motor Vehicle and PartsDealers
14,578,391 15,483,872 16,193,716 22,776,936 21,031,029
Furniture andAppliances
6,946,164 6,699,046 7,196,607 6,699,332 7,694,342
Other 24,158,542 23,817,628 29,246,299 27,546,150 33,864,695TOTAL $130,231,179 $134,095,877 $138,870,148 $150,281,687 $182,812,124_________
*These Sales Tax collections represent the full one percent and one-quarter percent levied for the County, including a partial-year collections(April-December 2015) for the Museum Center Sales enacted during 2015. These figures do not tie to the “Total Sales Tax Collections” tableprovided earlier in this section (“OTHER MAJOR COUNTY REVENUE SOURCES – Historic Sales Tax Collections”) because these figures donot account for the lag between receipt of Sales Tax by the State and payment of the Sales Tax by the State to the County.
Local Government Fund
The Ohio local government fund was created by statute and is comprised of designatedState revenues which are distributed to each county and then allocated among the county andcities, villages and townships located in the county on the basis of statutory formulas. Localgovernment fund receipts by the County in recent years are outlined below:
YearTotal Receivedfor Distribution
Amount Retainedby the County
% Retainedby the County
2011 53,141,999 21,533,062 40.52012 36,460,551 14,735,401 40.42013 27,591,450 11,171,423 40.52014 26,972,008 10,922,828 40.52015 29,611,388 11,945,974 40.3
_____Source: County Auditor
With the 2012-13 biennium budget, the State replaced the formula for distributing theLocal Government Fund (LGF) with an appropriation. The budget utilized the FY 2011distribution and appropriated 75 percent of that amount to the political subdivisions in FY 2012and 50 percent of that amount in FY 2013.
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As part of the law changes adopted with the FY12-13 budget, the “percentage ofrevenue” funding approach went back into effect in fiscal year 2014 for the LGF. Each monththe fund will receive 1.66 percent of state general revenue fund tax revenue received during theprevious month. The new LGF funding percentage took effect beginning with the August 2013distributions.
Federal Funds
The County receives federal funds for a variety of major and non-major federal programs.Total federal assistance, as reported on the County’s Schedule of Expenditures of FederalAwards, was $100.2 million in 2015*.
The majority of the federal funds received by the County were in the form of grants andMedicaid reimbursements from the following agencies:
U.S. Department of Health and Human Services
2011 99,070,578
2012 54,309,2322013 77,545,4622014 77,272,9902015 76,364,001*
U.S. Department of Labor
2011 5,706,221
2012 5,612,5192013 5,417,4232014 5,834,4012015 5,861,784
________*The 2015 financial statement audit has not been finalized.Source: County Auditor’s Office.
Revenues From County Properties
The County received the following amounts in rental payments from the leasing of spacein various County buildings during the last five years:
Rental Receipts
Year Amount2011 2,914,0002012 568,0002013 294,0002014 286,0002015 151,000
_____Source: County Auditor’s Office.
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Casino Revenues
In November 2009, Ohio voters approved casino gambling in Ohio. The casinos inCleveland and Toledo opened in May 2012. The casino in Columbus opened in October 2012and the casino in Cincinnati opened in February 2013. A casino tax is imposed on licensedcasino operators on gross casino revenue at the rate of 33%. Fifty-one percent (51%) of those taxrevenues are deposited into the gross casino revenue county fund (the “County Fund”) and thendistributed to the 88 counties in Ohio on a quarterly basis in proportion to the population of eachcounty at the time of distribution. If the largest city in a county had a population greater than80,000 in the 2000 census, then 50% of the county’s distribution from the County Fund will goto that city. The revenues are distributed on or before the end of the month following eachcalendar quarter.
In addition, five percent (5%) of the casino tax revenues are deposited into the grosscasino revenue host city fund and distributed to the host cities of Cincinnati, Columbus,Cleveland and Toledo on a quarterly basis based on the gross casino revenue generated by eachhost city.
The following table reflects the gross casino revenues and distributions from the CountyFund to Hamilton County and the City for fiscal years 2012-2015 (distributions lag one quarterbehind respective gross revenues and fund receipts):
Year
GrossCasino
Revenues
CountyFund
Receipts
HamiltonCounty
Distributions
City ofCincinnati
Distributions2012 $338,234,500 $ 56,924,866 $1,046,537 $1,046,537
2013 825,807,925 138,983,473 4,537,648 4,537,6482014 810,517,909 136,410,164 4,827,395 4,827,3952015 812,320,350 136,105,709 4,673,265 4,673,265
Additional casino tax revenue information can be found on the Ohio Department ofTaxation website at: http://www.tax.ohio.gov/gross_casino_revenue.aspx
County General Fund
The following table shows the County’s General Fund unaudited year-end cash balancefor the last five years:
Year General Fund Balance2011 $56,036,6782012 52,281,6512013 52,796,1332014 55,391,9742015 63,027,970
Source: County Auditor’s Office.
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SECURITY AND SOURCES OF PAYMENTFOR COUNTY GENERAL OBLIGATION BONDS AND NOTES
Ad Valorem Property Tax Security
The basic security for the unvoted general obligation debt of the County is the County’sability to levy, and its pledge to levy, an ad valorem tax on all the taxable property in theCounty within the ten-mill limitation, imposed by the Ohio Constitution and laws, for theCounty and overlapping political subdivisions (described in detail under “Indirect DebtLimitations”), in sufficient amount to pay, as the same becomes due, the principal of andinterest on the outstanding unvoted general obligation bonds, bond anticipation notes andcertificates of indebtedness of the County and the overlapping subdivisions. The laws of theState of Ohio require that the levy for debt service has priority over any levy for currentexpenses within such ten-mill limitation.
Chapter 9 of the Federal Bankruptcy Code, contains provisions relating to theadjustment of debts of a State’s political subdivisions, public agencies and instrumentalities(“eligible entity”), such as the County. Under such Code and in certain circumstances describedtherein, an eligible entity may be authorized to initiate Chapter 9 proceedings without priornotice to or consent of its creditors, which proceedings may result in material and adversemodification or alternation of the rights of its secured and unsecured creditors, includingholders of its bonds and notes.
Chapter 9 of the Bankruptcy Code further protects holders of municipal revenue bonds byproviding that special revenues acquired by the eligible entity after the commencement ofbankruptcy proceedings remain subject to any lien resulting from any security agreement enteredinto by the eligible entity before commencement of the proceedings.
Section 133.36 of the Ohio Revised Code permits a political subdivision, such as theCounty, for the purpose of enabling such subdivision to take advantage of the provisions of theBankruptcy Code, and for that purpose only, and upon approval of the State Tax Commissioner,to file a petition stating that the subdivision is insolvent or unable to meet its debts as theymature, and that it desires to effect a plan for the composition or readjustment of its debts, and totake such further proceedings as are set forth in the Bankruptcy Code as they relate to suchsubdivision. The taxing authority of such subdivision may, upon like approval of the State TaxCommissioner, refund its outstanding securities, whether matured or unmatured, and exchangerefunding bonds for the securities being refunded. In its order approving such refunding, theState Tax Commissioner shall fix the maturities of the bonds to be issued, which shall not exceedthirty years. No taxing subdivision is permitted, in availing itself of the provisions of theBankruptcy Code, to scale down, cut down or reduce the principal sum of its securities exceptthat interest thereon may be reduced in whole or in part.
The basic security for the voted general obligation debt of the County is the authorizationof the electors of the County to levy ad valorem taxes on all real and personal property in theCounty subject to ad valorem taxation by the County. The tax is to be in sufficient amount to pay(to the extent not paid from other sources), as it becomes due the debt service on the voted
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bonds, subject to the 3%, l1/2%, 21/2% limitation discussed in “County Debt and Other Long-Term Obligations” below affecting creditors’ rights.
Ohio law requires the levy during the period in which general obligation bondanticipation notes run of ad valorem property taxes in an amount not less than that which wouldhave been levied if bonds had been issued without the prior issue of the notes. Such levy neednot actually be collected if payment in fact is to be provided from other sources (see “BondAnticipation Notes, County Debt and Other Long Term Obligations” herein).
Sources of Payment
In addition to the basic ad valorem property tax security described above, each resolutionauthorizing the issuance of the County’s general obligation bonds or notes issued in anticipationthereof must, under Ohio law, provide further security by making a pledge of the full faith, creditand revenues of the County for the payment of debt service on such bonds or notes as the samebecome due. Included in such general pledge are all funds of the County, except thosespecifically limited to another use or prohibited from use for such debt service by the OhioConstitution, or Ohio or federal law, or revenue bond trust agreements, such as tax levies votedfor specific purposes, taxes levied for debt service on voted general obligation bond issues, andcertain utility revenues. As discussed herein, only voted general obligations are payable fromunlimited ad valorem property taxes.
The County expects that the debt service on certain unvoted general obligation debt of theCounty will in fact be paid from sources other than the ad valorem property tax, such as utilityrevenues and special assessments. Should these other revenues for any reason becomeinsufficient to pay debt service on the bonds described above, and on any notes issued inanticipation thereof, the County, under Ohio law, is required to levy and collect the above-described ad valorem taxes to pay such debt service.
In addition, pursuant to Section 133.08 of the Revised Code, the County may issuerevenue bonds payable solely from the revenues of a given utility, airport, stadium, or otherenterprise permitted by the statute for which the bonds were issued. These special obligationbonds are not supported by the underlying taxing power of the County.
INVESTMENT CONSIDERATIONS
All obligations of the County are subject to changes in value due to changes in thecondition of the tax-exempt bond market and/or changes in the financial position of the County.
Prospective purchasers of the County’s obligations may need to consult their own taxadvisors prior to any purchase as to the impact of the Internal Revenue Code of 1986, asamended, upon their acquisition, holding or disposition.
For a further description of the risks associated with the purchase of particular issues ofbonds, notes or certificates of indebtedness of the County, please refer to the InvestmentConsiderations section in the Official Statement for the specific issue.
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In general, where the County expects to refund a note issue or certificates of indebtednesswith an issue of bonds or renewal notes or certificates, and where unfavorable market conditionsare combined with an interest ceiling, the County could experience difficulty in receiving anybids for the refunding or renewal issue.
Local Fiscal Emergency Legislation
Chapter 118 of the Revised Code of Ohio (hereinafter in this section of this AnnualStatement the “Act”) provides methods for dealing with fiscal emergencies of municipalcorporations, counties and townships in Ohio. The Act applies only to those municipalcorporations, counties and townships which are determined to have circumstances that constitutethe existence of a fiscal watch or a fiscal emergency condition and therefore a fiscal watch or afiscal emergency pursuant to Sections 118.021, 118.022, 118.03 and 118.04 of the Revised Code,as set forth in the Act.
Section 118.022 of the Ohio Revised Code sets forth a series of conditions that constitutegrounds for a fiscal watch. If a fiscal watch is determined to exist, the municipality, county ortownship is provided technical and support services by the State Auditor’s Office to restorefinancial stability. If the fiscal watch conditions are not remedied, the municipality, county ortownship will remain under fiscal watch or be reclassified to a fiscal emergency.
Section 118.03 of the Ohio Revised Code sets forth a series of circumstances that aredefined “fiscal emergency conditions.” If a fiscal emergency condition is determined to exist, themunicipality, county or township is subjected to state oversight through a seven-memberFinancial Planning and Supervision Commission (hereinafter in this section of this AnnualStatement the “Commission”). The Commission is assisted by certified public accountantsdesignated as the Financial Supervisor to be engaged by the Commission. The Auditor of Statemay also be required to assist the Commission.
A municipal corporation, county or township subject to the Act because of the existenceof a fiscal emergency must develop and submit a detailed financial plan for the approval orrejection of the Commission. Among other matters, the financial plan must show the actions tobe taken by such a municipal corporation, county or township to eliminate existing fiscalemergency conditions, avoid future fiscal emergency conditions, and to restore such amunicipality’s, county’s or township’s ability to market long-term debt obligations under statelaws generally applicable to Ohio political subdivisions.
The Commission must approve the amount and purpose of any issue of debt obligations.The Commission, or when authorized by the Commission, the Financial Supervisor, among otherpowers, shall require the municipal corporation, county or township to establish monthly levelsof expenditures and encumbrances consistent with the financial plan and shall monitor suchmonthly levels and require justification to substantiate any departure from an approved level.The Commission must disapprove the issuance of debt obligations if the issuance would impedethe purposes of the financial plan or be inconsistent with the financial plan or the Act; debt limitswould be exceeded; the ability of overlapping subdivisions to issue unvoted full faith and creditdebt obligations would be impaired; and their issuance be likely to lead to the reallocation ofminimum levies of other political subdivisions. Expenditures may not be made contrary to an
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approved financial plan. Expenditures may not be made contrary to a proposed financial planafter it is submitted to the Commission and before it is approved or disapproved; and if it isdisapproved, no expenditures may be made which are inconsistent with the reasons given fordisapproval.
The Act provides, among other requirements and provisions, that a municipality, countyor township subject to such Act must develop an effective financial accounting and reportingsystem; budgets, appropriations and expenditures are to be consistent with the purposes of thefinancial plan; permits the issuance of Local Government Fund Notes, payable solely from sucha municipal corporation’s, county’s or township’s share of the local government fund pursuant torestrictions imposed by such Act; such a municipal corporation, county or township may includecertain covenants in its debt obligations, including a state pledge not to repeal such Act; andpermits the municipality to issue current revenue notes and advanced tax payment notes pursuantto the authorization and subject to the restrictions of such Act.
The County Auditor has reviewed the applicable portions of the Act and has reviewedrecords pertaining to the County’s circumstances with respect to the Act. The County Auditor,based upon his understanding of the Act, is of the opinion that, with respect to the County, nocircumstances or conditions exist that will cause a fiscal emergency condition to be determinedunder the Act.
THE METROPOLITAN SEWER DISTRICT (MSD) OF GREATER CINCINNATI
Formation and MSD Operating Agreement
MSD is a county sewer district established pursuant to Chapter 6117 of the Ohio RevisedCode. MSD collects and treats wastewater through the operation of the Sewer System. TheSewer System is operated pursuant to the authority of the Revised Code. The Revised Codespecifically authorizes the formation of joint sewer districts, agreements between counties andmunicipal corporations providing for sewage treatment, the establishment of sewage rates andassessments by the Board, and the borrowing of money to pay the cost of constructing,maintaining, and repairing sewer systems.
Prior to 1968, the County and the City maintained separate sewage operations. TheCounty Sewer District was formed in the 1920s and became known as Hamilton County SewerDistrict No. 1 in 1955. The City consolidated its sewer system into Hamilton County SewerDistrict No. 1 in 1968. As part of the consolidation, the City granted the sole and exclusive useof all sanitary and combined sewers and sewage treatment facilities to the County. Throughresolution, the County accepted the consolidation of the City’s sewer system into HamiltonCounty Sewer District No. 1. Thereafter, the County renamed Hamilton County Sewer DistrictNo. 1 to MSD.
On April 10, 1968, the County and City entered an agreement (the “MSD OperatingAgreement”) regarding the City’s service, for a 50-year term, as the County’s agent andoperator of MSD. The MSD Operating Agreement established, in part, the respectiveresponsibilities and duties of the City and the County with respect to the operation and
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governance of MSD. Pursuant to the MSD Operating Agreement, the County retained authorityand control of the Sewer System including, but not limited to, the sole authority to establishsewer service charges, adopt rules and regulations and approve capital improvement programs.The County designated the City as its sole managing agent for the operation of the SewerSystem, subject to the control and direction of the Board as provided in the MSD OperatingAgreement. Subject to the retained authority of the County, the City agreed to undertake themanagement and operation of MSD for and on behalf of the County for a period of 50 yearscommencing May 1, 1968 and expiring April 30, 2018. The County agreed to maintain SewerSystem service charges and revenues at rates that would at all times be sufficient to pay thereasonable expenses of operation and maintenance of the Sewer System and the debt servicecharges on all then existing and future indebtedness of the City and County related to the SewerSystem. The County also transferred all of its then existing sewer system related personalproperty, equipment, and vehicles to the City so that the City could operate the Sewer System.The City agreed to plan, design and supervise the construction of all sewers and sewagetreatment facilities, maintain and operate all sanitary and combined sewers and all sewagepumping and treatment facilities and generally operate the Sewer System. As part of theconsolidation, and in connection with the execution of the MSD Agreement, the City grantedthe sole and exclusive use of all sanitary and combined sewers and sewage treatment facilitiesto the County. The City maintains that it retained legal title to such facilities.
Following consolidation of the City’s sewer system into Hamilton County Sewer DistrictNo. 1, now named MSD, 19 other communities passed legislation, which the County acceptedvia resolution in 1968, to consolidate their sewer systems into MSD, the County Sewer District.During this time, the County also assumed the City’s contractual obligations to provide sewagetreatment to 23 separate municipalities located within Hamilton County, including communitiessuch as Norwood, Indian Hill, Montgomery, Blue Ash, Wyoming and Reading. MSD ispresently comprised of all municipalities and townships (unincorporated areas of the County)within the County, except the Villages of Glendale and Terrace Park and the City of Harrison,plus minor sections of Warren, Clermont and Butler Counties. The Ohio Administrative Coderequires that all households that have sanitary sewers available to them must be connected tosuch sanitary sewers. This requirement is administered by Hamilton County Public Health, notby MSD. Portions of the County are not sewered, primarily its western area. Many developedportions of the unsewered area utilize household treatment systems, usually septic tanks oraerobic treatment systems. Development and population density is low in portions of theunsewered areas. The City of Loveland, through ordinance accepted by County resolution,consolidated its sewer system into MSD, the County Sewer District.
In March of 2010 the City and the County executed the 2010 amendment to the MSDOperating Agreement allowing MSD to expend funds for storm sewer facilities that constituteprevention or replacement facilities under the Ohio Revised Code and setting forth theprocedures to be followed in making such expenditures. MSD must determine that these stormsewer facilities are a cost effective measure to assist in compliance with the Consent Decrees (ashereafter described).
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County-City Litigation
The County filed its petition to enjoin violation of the Consent Decree on May 5, 2014,the City (and, separately, the Sierra Club) filed responses in opposition on May 30, 2014, andthe County filed its reply on June 9, 2014. The Petition was filed, by agreement of the Countyand City, with the U.S. District Court pursuant to the Consent Decree’s dispute resolutionprovisions. The underlying issue was the City’s intended use of three City procurementordinances, which the Court named “Local Hire”, “Responsible Bidder”, and “LocalPreference” (collectively, “City Ordinances”), all of which established new or differentrequirements from existing state law or County procurement rules, regulations and/orresolutions. After passage of the City Ordinances, the City bid contracts for MSD projects withrequirements to comply with the City Ordinances. County and City elected officials negotiatedfor several months but failed to resolve the dispute.
On June 26, 2014, U.S. District Magistrate Judge Litkovitz issued an Order granting theCounty’s Petition to Enjoin Violation of the Consent Decrees (“Petition”) and “enjoined the Cityfrom using” certain City procurement ordinances “in the procurement of contracts for ConsentDecree projects.” The Court further ordered the City “to follow the County’s rules, regulations,and resolutions and Ohio state law in procuring Consent Decree sewer projects both within andoutside of the City boundaries.” Regarding the MSD Operating Agreement, the Court held “theMSD Agreement creates a principal-agency relationship pursuant to which the City’s authorityas agent is specifically limited and is subject to the direction and control of the County asprincipal.” Applying this further, the Court held that “under the plain terms of the MSDAgreement providing that the County maintains authority and control over MSD, as well as theprovisions of Ohio law and MSD regulations incorporated therein, the City must adhere to theCounty’s rules and regulations, as well as the County’s resolutions, for procuring ConsentDecree projects.”
The Order held that the City’s application of the City Ordinances violated the ConsentDecree’s mandate to “use sound management, operational, and maintenance practices...toimplement all the requirements of this Consent Decree” and “to achieve expeditiousimplementation of the provisions” of the Consent Decree. The Court stated that “the City mustapply County rules and regulations and state law in procuring contracts for MSD Consent Decreesewer projects.” The Court’s Order identified two Consent Decree projects at issue, althoughthere are other Consent Decree projects, and non-Consent Decree projects, which are anticipatedto be impacted. The two Consent Decree projects have been bid in a manner that complies withCounty rules and regulations and state law. The City did not appeal the Order. Administrativeand legal representatives of the County and City have met and the City is revising its MSD-related procurement documents and procedures to comply with County rules and regulations andstate law. The full impact of the City Ordinances and the Order will not be known until afterprojects are bid and construction begins.
Status of the MSD Operating Agreement
The MSD Operating Agreement, through which the City serves as the County’s agentand operator of MSD, expires in 2018. The County and City are evaluating post-2018 options.Among other considerations, the County is discussing the next phase of operation of MSD with
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MSD customers and with the municipalities and townships that have consolidated into MSD,including the City. Multiple options are being considered. One consideration is the continuationof the MSD Operating Agreement beyond 2018; however, if the County and the City do notagree to an extension, and no alternate action is taken, there may be adverse consequences. If analternate operating structure is adopted by the County under its statutory authority following theexpiration of the MSD Operating Agreement, and if the City is not involved, the followingissues may exist:
• Legal title to various assets used as part of MSD’s operations;• Staffing MSD operations;• Provision for other administrative services (finance, human resources); and• Provision for billing and collection.
The County cannot predict the likelihood that any of these issues will materialize or themagnitude of the negative impact, if any, on the operations or financial condition of MSD,including the ability to pay debt service on the Bonds, if any of them materialize.
The County covenanted in the Trust Agreement securing the Bonds issued for MSDprojects not to sell, lease or otherwise dispose of the Sewer System until the Bonds are paid ordefeased except as otherwise permitted in the Trust Agreement or the MSD OperatingAgreement. The MSD Operating Agreement has no specific provisions regarding disposition ofthe Sewer System. The County and the City, in its capacity as the County’s agent, are parties tothe Global Decree (see “Environmental Compliance and Quality - History of the ConsentDecrees”). The requirements imposed under the Global Decree extend beyond the 2018expiration of the MSD Operating Agreement.
Management/Organization and County Oversight/Monitoring
The City’s Department of Sewers is responsible for the planning, and operation of MSD.The City’s Water Department is operated as the Greater Cincinnati Water Works (“GCWW”).The City implemented a joint management of some aspects of MSD and GCWW. However, theCity recently made the decision to suspend that arrangement. The City is now in the process of“decoupling” the joint management and the City has indicated that decoupling would becompleted by the end of the year. The County is evaluating whether the joint management processultimately provided the financial and other benefits discussed at the outset of the process.
The head of the Department of Sewers is the Executive Director of MSD and is primarilyresponsible for the administration of the entire Sewer System, including: design, construction,repair, maintenance and operation of all sewers and sewage treatment facilities. The Departmentof Sewers administers MSD through the Office of the Director and eight operating divisions:Industrial Waste, Information Technology, Project and Business Development, Project Delivery,Wastewater Administration, Wastewater Collection, Watershed Operations and WastewaterTreatment. Additionally, the Department of Sewers also provides management andadministrative services to the City of Cincinnati Stormwater Management Utility. This Utility isfunded separately by a storm drainage service charge based on each individual property’scontribution of stormwater runoff to the system. This drainage service charge provides foreffective management, operation, maintenance, and capital needs for the existing stormwater
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system within the City. It also provides for administration, operation, maintenance, and capitalneeds for the existing flood control system that protects portions of the City.
The Office of the Director is primarily responsible for coordinating the overalloperation of MSD; implementing the requirements of the Consent Decrees; district memberand city-county relations; proposing legislation; contractual obligations management, policyimplementation, and policy recommendation. This Division also houses the Finance Section,which is responsible for accounting and budgeting; the Safety and Regulatory Compliancesection; and the Procurement functions. The Information Technology Division is responsiblefor the administration and support of the Department of Sewer’s business system technologies,computer operations, and network infrastructure. The Project and Business DevelopmentDivision is responsible for the extension of service permits; the development of rules andregulations; maintaining all sewer records; planning, evaluation, and development of projects;development, management, and implementation of MSD’s Capital Improvement Program. TheProject Delivery Division is responsible for acquisition of easements and property; and projectmanagement of individual projects through final design, construction, completion, andacceptance of the project with the goal of project completion on time and within budget. TheWastewater Administration Division is responsible for all personnel matters. The WastewaterCollection Division is responsible for inspection, maintenance, repair and rehabilitation of thewastewater collection system including all combined sewers, sanitary sewers, combined seweroutlets and appurtenances. The Watershed Operations Division is primarily responsible for thefuture operations of the wet weather systems that are being constructed through the federallymandated Wet Weather Improvement Program. This Division also maintains the budget for thefederally mandated Sewer Backup Program. The Wastewater Treatment Division has theresponsibility for operating and maintaining all wastewater treatment plants, package treatmentplants and pumping stations and performing all actual treatment of sewage.
Because the City operates MSD and the Sewer System for the County, the ExecutiveDirector of MSD is appointed by the City Manager of the City. All other supervisory personnelare either appointed by the City Manager or selected pursuant to the civil service rules applicableto City employees. MSD believes that there is adequate management available in the event of theunanticipated loss of principal supervisory personnel.
In 2010 the County contracted with Plante & Moran, PLLC (“Monitor”) to perform amonitoring function on the County’s behalf. The Monitor is paid approximately $1.5 million peryear and its role is to monitor program costs and schedule, assess and report on organizationalrisk and risk management alternatives, and review project management and implementationmechanisms for all MSD operations, including Consent Decree activities. The Monitorsubcontracts with Hatch Mott MacDonald to fill the engineering role in the monitoring process.
Operations
The Sewer System service area covers approximately 290 square miles and encompassesall or part of four counties in southwestern Ohio. It provides wastewater removal and treatmentthrough over 200,000 residential, commercial, and industrial sewer connections and operates andmaintains over 3,000 miles of sanitary and combined sewers, seven major wastewater treatmentplants, two package treatment plants, 99 pump stations and 10 major pumping stations.
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Since the 1968 consolidations into the Hamilton County Sewer District, now namedMSD, various small portions of Butler, Clermont and Warren Counties have also been includedwithin the Sewer System, as well as the municipalities of North Bend, Cleves and Loveland.With completion of the Taylor Creek treatment plant, it is possible that areas in the Taylor Creekdrainage basin could join the System in the future.
Treatment Plants
The major treatment plants currently have an aggregate design, dry weather capacitythrough both primary and secondary treatment of 207 million gallons per day and during 2015treated an average of 197 million gallons per day. Over 71 billion gallons of wastewater weretreated in 2015. The largest plant operated by MSD is the Mill Creek Wastewater TreatmentPlant. MSD operates six other major treatment plants -- Indian Creek, Little Miami, MuddyCreek, Sycamore, Polk Run, and Taylor Creek.
The sewage treatment facilities are maintained and operated by state certified operators.A detailed training program is in effect to assist plant operators in preparation for the statecertification examinations. Separate programs are also in effect for maintenance and safety.Generally, the contracts for the purchase of major equipment require the manufacturer to provideextensive training to the operation and maintenance supervisors who operate and maintain theequipment.
Certain key facts concerning the major treatment plants and their recent operations can besummarized as follows:
MSD Treatment Plants
PlantYear First Placed
in Service
Design Capacity (mgd) throughboth Primary and
Secondary Treatment1
Mill Creek 1959 130.02
Little Miami 1953 38.0Muddy Creek 1961 15.0Sycamore 1958 10.0Polk Run 1970 8.0Taylor Creek 1997 5.5Indian Creek (as a major plant) 1995 1.5
_____________
1 Reflects plants designed capacity to treat wastewater in dry weather.2 The Mill Creek Plant has a wet weather hydraulic capacity of 360 mgd through primary and 240 mgd through secondary.
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MSD Treatment Plants2015 Flow Report
PlantTotal Flow
MG
DailyAverage
FlowMGD
Total TonsBOD/CBOD
Removed
Avg. TonsBOD/CBOD
RemovedPer Day
Total TonsSuspended
SolidsRemoved
Avg. TonsSuspended
SolidsRemovedPer Day
Mill Creek 41,662 115 35,068 96 41,547 114Little Miami 10,596 29 2,479 7 5,603 15Muddy Creek 5,005 14 1,972 5 1,918 5Sycamore 2,583 7 1,121 3 1,777 5Polk Run 1,527 4 1,434 4 3,108 9Taylor Creek 989 3 1,189 3 2,039 44.2Indian Creek 325 1 216 0.6 223 0.65
All Plants 62,687 173 43,479 118.6 56,209 192.85
The Mill Creek Wastewater Treatment Plant serves an extremely large drainage basin ofapproximately 139 square miles including the industrialized Mill Creek Valley and the City’sdowntown business district. In addition to servicing the major industrial areas, it serves apopulation somewhat less than 400,000. Many of the sewers within this drainage basin arecombined sewers conveying both sanitary waste and stormwater. The Mill Creek WastewaterTreatment Plant treats approximately 69% of total treated flow of the Sewer System.
The Little Miami Wastewater Treatment Plant serves a large drainage basin ofapproximately 56 square miles in the eastern part of the City and the County with an estimatedpopulation of 154,000. The Little Miami Wastewater Treatment Plant treats approximately 15%of total treated flow of the Sewer System.
The Muddy Creek Wastewater Treatment Plant serves a drainage basin in the westernpart of City and the County of approximately 25 square miles with an estimated population of85,000. The Muddy Creek Plant treats approximately 7% of total treated flow of the SewerSystem.
The Sycamore Wastewater Treatment Plant serves a drainage basin in the northeast partof the County of approximately 19 square miles with an estimated population of 28,000. TheSycamore Wastewater Treatment Plant treats approximately 4% of total treated flow of theSewer System.
The Polk Run Wastewater Treatment Plant serves a drainage basin in the northeast part ofthe County and small parts of Warren and Clermont Counties of approximately 14 square mileswith an estimated population of 28,000. The Polk Run Wastewater Treatment Plant treatsapproximately 2% of total treated flow of the Sewer System.
The Taylor Creek Wastewater Treatment Plant serves a drainage basin in westernHamilton County of approximately 32 square miles with an estimated population of 26,000. TheTaylor Creek Wastewater Treatment Plant treats approximately 1.4% of the total treated flow theSewer System.
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The Indian Creek Wastewater Treatment Plant serves a drainage basin in westernHamilton County of approximately 3.6 square miles with an estimated population of 12,000. TheIndian Creek Wastewater Treatment Plant treats approximately 0.45% of the total treated flowthe Sewer System.
MSD operates a number of smaller extended aeration wastewater treatment plants, 99pump stations and 10 major pumping stations located throughout the County. The smallerwastewater treatment plants serve residential subdivisions with a minor amount of flow fromcommercial establishments and range in capacity from 50,000 to 65,000 gallons per day.
Plant Performance
The flow to the Mill Creek, Little Miami and Muddy Creek wastewater treatment plants(which treat approximately 92% of total treated flow of the Sewer System) comes throughcombined and sanitary sewers and thus is subject to wide variations during wet weather. Theamount of wet weather flow has a major effect on the quality of effluent being discharged intothe Ohio River. In wet weather, not only are there more combined sewer overflows which bypassthe treatment system entirely, but the performance of the plants also tends to be reduced, thuslowering effluent quality.
Each major treatment plant’s average performance during 2015 as reported by MSD andfiled with applicable regulatory authorities is summarized as follows:
SUSPENDED SOLIDSDATA(1) BOD/CBOD(1)
TOTALKJELDAHL(1)
NITROGEN FECAL/E. COLIFORM (3)(4)
Plant
NPDESPermit
Limits(2)
MonthlyAverageResults
NPDES PermitLimits(2)
MonthlyAverageResults
NPDESPermit
Limits(2)
MonthlyAverageResults
NPDES PermitMonthlyAverageResultsLimits(2)
Mill Creek 30 11 25 6 None 5 200(S) 1,000(W) 66Little
Miami 30 7 25 4 None 1 200(S) 1,000(W) 28MuddyCreek 23 4 16 4 None 1 200(S) 1,000(W) 34
Sycamore 13 46 10 2 None 2 126(S) --- 10Polk Run 12(S)30(W) 5 8(S)25(W) 3 None 2 126(S) --- 19
TaylorCreek 17 4 14 4
None3 1,000(S) --- 83
IndianCreek 20 2 16 2
None-- 200(S) 1,000(W) 5
_______
(1) Values are in milligrams per liter.
(2) NPDES permit limitations are the 30 day average limits. Limits designated by (S) are applicable only in summer months (May through
October) and limits designated by (W) are applicable only in winter months (November through April).
(3) Applicable at the Sycamore, Polk Run, and Taylor Creek plants only during warm weather.
(4) All fecal coliform data is stated in geometric means.
MSD Recognition
MSD is recognized locally and nationally for its commitment to protect public health andthe environment, and its efforts to implement sustainable water reclamation and watershed
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management practices. MSD and Hamilton County are members of the National Association ofClean Water Agencies (NACWA), formerly the Association of Metropolitan Sewage Agencies(AMSA). The following is a list of MSD’s numerous awards:
• In 2008 the Taylor Creek Plant received the Water Environment Federation’s BurkeAward for Active and Effective Safety Programs.
• More recently in the past five years, Gold Awards symbolizing zero NPDES permitviolations during the year were awarded to Indian Creek for 2011 to 2014; the MuddyCreek Plant for 2011 to 2014; the Polk Run Plant for 2013 and 2014; and the MillCreek Plant for 2014.
• In the past five years, NACWA Silver Awards for less than five NPDES violationswere given to the Little Miami Plant for 2011, 2013, and 2015; the Mill Creek Plantfor 2013 and 2015; the Polk Run Plant for 2011; and the Sycamore Plant for 2014.
• Taylor Creek Wastewater Treatment Plant received the NACWA Platinum Award forseventeen years of zero NPDES permit violations during the years 1998-2014. MuddyCreek and Indian Creek received Platinum Awards in 2015 for five years of zeroNPDES permit violations for the years 2011 to 2015.
• In 2011 MSD also received recognition for sustaining successful managementchallenges, receiving the Excellence in Management Award.
• In 2012 Polk Run, Sycamore, and Mill Creek wastewater treatment plants receivedthe Plant Safety award by the Ohio Water Environment Association (OWEA).
• Two City of Cincinnati Seasongood Innovation Awards were received by MSD forthe Student Intern Academy as well as for the Eco- Friendly Ault Park Storm WaterDiversion.
• 2012, American Water Works Association honored MSD with a Diversity Award forefforts to create a diverse work environment.
• In 2012 MSD received the National Environment Education Award for demonstratingeffort to inform local stakeholders about Lick Run solutions.
• In 2012, the Society of Marketing and Professional Services named MSD the Clientof the Year. This award gave recognition for marketing efforts made during projectGroundwork.
• The 2013 Stormwater Association Award was received for the sustainable watershedsolution for Lower Mill Creek.
• MSD received the 2013 Best Emerging Maintenance Reliability Program Award fromUptime Magazine.
• In 2013 the Water Environment Research Federation awarded MSD for its 20 yearsof commitment to water quality.
• In 2013, NACWA recognized MSD for the REC8 website and App through theNational Environment Achievement Award.
• In 2014, MSD was featured in Uptime Magazine’s “Best Emerging MaintenanceReliability” program.
• MSD was honored to be the 2014 U.S Water Prize winner for its response to greeninfrastructure strategies to reduce water pollution.
• In 2015, MSD was one of three utilities to receive the prestigious Excellence inManagement Award for its continued implementation and sustainment of successful
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programs, addressing the range of management challenges that are faced by publicclean water utilities in today’s competitive environment.
• In 2015, MSD received the Mill Creek Treatment Plant Safety Award for safetyprograms in place for treatment plants, as well as the Wastewater CollectionsDivision Safety Award for excellent safety programs in place for collective systemsfrom Ohio Water Environment Association (OWEA).
• In 2015, Ohio Water Environment Association (OWEA) recognized Little Miami,Muddy Creek, Polk Run, and Taylor Creek treatment plants with safety certificates.
• In 2016, the Little Miami Plant received the Water Environment Federation’s BurkeAward for Active and Effective Safety Programs.
Collection System
MSD considers the overall condition of the sewer lines to be satisfactory. Although theCity is a relatively old municipality, sewer lines serving a majority of the population, particularlysewer lines existing outside the older areas of the City, have a median age of approximately 35-40 years. Based on its own experience, and industry experience, MSD believes that factors suchas the initial quality of construction and installation and external factors such as location, depthand traffic impact, rather than age, are the largest determinants of long term sewer condition.Accordingly, MSD repairs, rehabilitates and replaces existing sewer lines based on known datasuch as standardized closed-circuit television and visual inspection reports, evidence of excessinflow or infiltration and other factors rather than on the basis of age alone.
MSD conducts an extensive risk-based inspection, maintenance and rehabilitationprogram. Since 1987, MSD has operated an aggressive program of “trenchless” sewerrehabilitation utilizing cured-in-place lining and other trenchless rehabilitation methods. During2015, approximately 182 miles of sewers (including 68 miles of building sewer laterals) wereinspected, and 24 miles were cleaned. Approximately 4,300 linear feet of sewer lines wererehabilitated using trenchless technology at a cost of approximately $884,000. Manholerehabilitation and repair costs in 2015 were approximately $1.34 million. 158 manholes wererehabbed using trenchless technology/lining method. 1060 manholes were repaired using theHigh Risk Asset Renewal allowance. MSD intends to spend approximately $12,000,000 on thistechnology each year for the foreseeable future. In addition to the awards relating to plantperformance, in 2001 the North American Society for Trenchless Technology recognized MSDfor its significant contributions to the industry.
During the years prior to 1991, the primary emphasis in the Capital ImprovementsProgram was on improving and upgrading the capacity of the wastewater treatment plants. Whilethis is an ongoing process, the primary focus of the Capital Improvements Programs since theearly 1990s shifted to the wastewater collection system. For the foreseeable future, it isanticipated that the largest portion of the Capital Improvement Programs will continue toemphasize improving, rehabilitating and expanding the wastewater collection system, includingelimination of sanitary sewer overflows (“SSOs”) and significant reduction in combined seweroverflows (“CSOs”). Measures designed to meet these goals could include improvements towastewater treatment plants.
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Environmental Compliance and Quality
Overview
The County, and the City in its role as the County’s agent, have entered into severalconsent decrees with U.S. EPA, Ohio EPA and other parties over the course of several decades.The requirements of the older consent decrees have been met and those consent decrees havebeen terminated. The City, the County, U.S. EPA, Ohio EPA and the Ohio River WaterSanitation Commission (“ORSANCO”)3 (U.S. EPA, Ohio EPA and ORSANCO are collectivelyreferred to herein as the “Regulators”) have negotiated and executed an Interim Partial ConsentDecree (see “Interim Partial Consent Decree on SSOs”) that addresses SSO issues and a GlobalDecree (see “The ‘Global’ Consent Decree”) addressing CSOs, wastewater treatment plants, andbasement backups caused by inadequate capacity in the collection system. Both decrees(“Consent Decrees”) were approved and entered by the Court on June 9, 2004. The Court did soover the objections of the Sierra Club which sued the City and the County in connection withMSD’s SSOs and challenged the adequacy of the Consent Decrees. A final wet weatherimprovement program (“Final WWIP”) that implements the Consent Decrees was conditionallyapproved by the Regulators in January 2010, and final approval occurred in August 2010.
Consent Decrees Summary
NameDate
Approved Primary Focus StatusInterim PartialConsentDecree
June 2004 SSOs Being implemented through Final WWIPpursuant to First Amendment to ConsentDecrees
Global ConsentDecree
June 2004 CSOs, Treatment Plants, SSOs Being implemented through Final WWIPPursuant to First Amendment to ConsentDecrees
Final WWIPPhase 1
August 2010 Implement requirements ofConsent Decrees for specificprojects with schedulemilestones
MSD is obligated to complete Phase 1projects by December 31, 2018, exceptas allowed by Final WWIP
Final WWIPPhase 2
August 2010 Remaining projects notspecified in Final WWIPPhase 1
Commences at the conclusion of FinalWWIP Phase 1. Schedule to bedetermined based on a variety of factors.
The following summary is set forth in three sections: (i) a summary of the history of thedevelopment of the Consent Decrees, (ii) the current status of the Consent Decrees, and (iii)terms applicable to all phases of the Final WWIP.
3ORSANCO is an interstate compact comprised of representatives from each of the eight states in the Ohio River drainage basin that is charged
with establishing water quality standards for the Ohio River.
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History of the Consent Decrees
Background on MSD SSO Issues. MSD operates a number of separate sanitary sewersystems that are subject to infiltration and inflow of storm water, which cause the affected sewersto discharge untreated sewage or other wastes directly into streams. In 1992, MSD establishedthe Storm Water Removal Program (originally the Rainfall Derived Infiltration/Inflow Program),to identify and remove storm water inflows from private property into sanitary sewers. Thereduction in storm water inflow substantially helps eliminate SSOs. Private property owners arereimbursed for 100% of their costs, up to $3,000, incurred in the removal of unauthorizedconnections to the sanitary sewer system.
Perhaps the most difficult issue with the elimination of SSOs is how to define, from anengineering standpoint, when an SSO is eliminated. Since SSOs in MSD’s system are primarilythe result of storm water infiltration and inflow, including in some cases overland floodingduring storm events, the total elimination of all SSOs under all circumstances is practicallyimpossible. Because these issues have been recognized as common to many sewer systemsacross the country, U.S. EPA has stated that it intends to propose new SSO standards andregulations. Although draft SSO regulations were developed by U.S. EPA in 2001, they weresubsequently withdrawn by the Agency and no final regulations have been promulgated.
Plans for remedying SSO issues are addressed in the Interim Partial Consent Decree andGlobal Decree discussed below.
Interim Partial Consent Decree on SSOs. In 2002, because MSD is not a legal entity, theCity, the County, the United States (on behalf of U.S. EPA), the State (on behalf of Ohio EPA)and ORSANCO executed and agreed to enter into an Interim Partial Consent Decree on SSOs(“Interim Decree”). The Interim Decree was first lodged in February, 2002 with the Court inconnection with a lawsuit brought under the Clean Water Act (“CWA”) by the United States andthe State against the County and the City as the owner and operator, respectively, of MSD. InAugust, 2002, a revised version of the Interim Decree adding ORSANCO as a party and makingother technical revisions to the February, 2002 version of the Interim Decree was lodged with theCourt. Pending final Court approval, MSD began implementation of the Interim Decree when itwas lodged. The Interim Decree was approved by the Court on June 9, 2004.
Terms of the Interim Decree. The Interim Decree is focused on SSOs and sets forthvarious requirements and milestones with which the City and the County must comply. MSDanticipates that the costs associated with implementing the requirements contained in theInterim Decree will be included in its annual Capital Improvement Program document. Thescheduling of past, current, and future SSO related projects and work is addressed in MSD’sFinal WWIP, dated November 9, 2009, which was conditionally approved by the U.S. EPA,Ohio EPA and ORSANCO on January 6, 2010, and approved by the Court in August 2010. Themajor topics covered by the Interim Decree are briefly described below.
Capital Improvement Projects. Under the Interim Decree, the County and the City arerequired to address certain of MSD’s “Most Highly Active” SSOs. “Most Highly Active SSOs”are locations where SSO discharges occur more frequently and with greater volume than at otherlocations. An appendix to the Interim Decree set out specific CIP projects to address 16 of
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MSD’s Most Highly Active SSOs and individual schedules by which each project must beaccomplished. All of these 16, except SSO 700 (see “SSO 700 Remedial Measures” below),were completed prior to the development and finalization of the Final WWIP.
SSO 700 Remedial Measures. SSO 700 is located approximately 13 miles upstream fromthe Mill Creek Wastewater Treatment Plant, in the Mill Creek drainage basin. The InterimDecree requires implementation of a series of remedial measures to address SSO 700 - MSD’slargest SSO. The Interim Decree requires MSD to design and build a Chemically Enhanced HighRate Settling and Storage Facility (“CEHRS&S”) to reduce contaminant loading from SSO 700.This facility was constructed and began operating in December, 2006.
The Interim Decree, as amended by the First Amendment to the Consent Decrees,approved on August 10, 2010 (see “Current Status of Consent Decrees”), calls for a plan (“SSO700 Final Remedial Plan”) that identifies final remedial measures at SSO 700 to be submitted byMSD by December 31, 2012 and that plan was timely submitted (See “CURRENT STATUS OFTHE CONSENT DECREES – Phase 1 of Final WWIP”). The SSO 700 Final Remedial Planmust be approved by U.S. EPA, Ohio EPA, and ORSANCO. The deadline for completingconstruction of the final remedy will be scheduled as part of the Final WWIP Phase 2 work.
Comprehensive SSO Remediation Program. In addition to requiring specific remedialmeasures to address SSO 700, the Interim Decree also requires implementation of aComprehensive SSO Remediation Program. Under terms of the Interim Decree, MSD is requiredto undertake a comprehensive program to evaluate and propose measures to rehabilitate theSanitary Sewer System in order to meet the objectives of the Interim Decree. The program willbuild upon the capital improvements mentioned above. It will be implemented in phases,including data collection and modeling, data analysis, remedial design and remedialimplementation.
Short-term Adequate Capacity. The Interim Decree requires MSD to implement a Short-Term Adequate Capacity Program Plan (“STAC Plan”). The objective of the STAC Plan is toprevent wastewater flows from new development sites from contributing to the volume ofwastewater discharged from downstream SSOs. The plan is designed to ensure that more flow isremoved from the system than is added from proposed new sewers, sewer extensions, or otherincreases associated with new development. Compliance with this plan will be required for sub-basins until such time as the sub-basin remedial measures set forth in the Sewer SystemCapacity Assurance Program Plan (“CAPP”) are met.
Stipulated Penalties. The Interim Decree sets forth stipulated penalties for failure tocomply with its provisions, but no civil penalties for asserted violations occurring prior to thelodging of the order were assessed. Penalties of $1,500 to $5,000 per day may be imposed forfailure to comply with critical path submittals and critical remedial milestones as identified in theInterim Decree. Civil penalties for failure to comply with reporting requirements range from$500 to $1,500 per day. Stipulated penalties for Sanitary Sewer Discharges (“SSD”) andimproper Sewer Connections range from $3,000 to $5,000 per day depending on the timing andcause of the violation. MSD will not owe stipulated penalties for any SSDs caused by a ten-yearstorm or greater. Stipulated penalties associated with the failure to meet report submittal
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deadlines and to comply with other requirements are $2,000 per day. MSD has not paid anystipulated penalties under the Interim Decree.
Background on MSD CSO Issues. MSD has a sewer system that contains both sanitaryand combined sewers. Approximately 40% of the MSD collection system is combined sewers.Combined sewers convey both sanitary waste and surface drainage or rain water. During wetweather, because of the large inflow of storm water, the combined wastewater and storm waterflow may exceed the capacity of the treatment plants, and the remainder discharges directly intocreeks, channels or rivers.
In April, 1994, the U.S. EPA issued a Combined Sewer Overflow Policy (“CSOPolicy”), which requires communities that experience CSOs to take certain steps to control theimpact of these discharges. The CSO Policy requires two general types of remedial measures: 1)implementation of interim adjustments to system operation and maintenance practices (knownas the “Nine Minimum Controls”) to reduce and mitigate the impact of CSOs; and 2)development and implementation of a CSO Long Term Control Plan (“LTCP”) setting out aseries of long term remedial measures designed to bring receiving streams into compliance withwater quality standards. On December 21, 2000, Congress added Section 402(q)(1) to the CleanWater Act, which requires all permits, orders and decrees addressing CSOs issued after that dateto conform with U.S. EPA’s CSO Policy.
The “Global” Consent Decree. In September, 2003, the City, the County, the UnitedStates (on behalf of U.S. EPA), the State (on behalf of Ohio EPA) and ORSANCO executed andagreed to enter into a settlement agreement entitled “Consent Decree on Combined SewerOverflows, Wastewater Treatment Plants and Implementation of Capacity Assurance Plan forSanitary Sewer Overflows” (the “Global Decree”). The Global Decree was lodged in December,2003 with the Court. Simultaneous with lodging of this document, the United States, the State andORSANCO filed a complaint under the Clean Water Act against the City and the Countydetailing the alleged violations being settled by the Global Decree. The Global Decree wasapproved and entered by the Court on June 9, 2004. Because MSD is not a separate legal entity,MSD could not be a party to the Global Decree (see “Formation and MSD OperatingAgreement”). The City and the County were each parties to the Global Decree.
CSO Long Term Control Plan. The Global Decree requires the County and the City,acting through MSD, to design and implement, in accordance with U.S. EPA’s CSO Policy, theupdate to MSD’s 1996 CSO Long Term Control Plan (“Update”). The Update, which wasapproved as part of the Final WWIP, contains strategies for addressing each area of MSD’ssystem that experiences CSOs.
As part of the LTCP, MSD monitors accomplishments. The results of this monitoringwill guide the extent to which longer term controls must be implemented. The Lower Mill CreekSystem Wide Model (the “Model”) serves as a tool for MSD CSO remediation efforts. TheModel is currently being updated by MSD and is under review by the County (see CURRENTSTATUS OF CONSENT DECREE - Phase 1 of Final WWIP).
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Ohio EPA issued to MSD an updated CSO NPDES permit that has an effective date ofApril 1, 2009. Ohio EPA renewed this CSO NPDES permit, effective August 1, 2014, but it hasbeen appealed by the County.
Implementation of SSO Capacity Assurance Program Plan. The Global Decree requiresMSD to implement the CAPP developed pursuant to the Interim Decree. The resulting CAPP isexpected to alleviate capacity-related basement flooding and SSO’s during a typical year,subject to continued aggressive pursuit of limiting extraneous flows.
Water In Basement Provisions. The Global Decree requires MSD to implement threeprograms designed to mitigate the impact of the backup of wastewater into customers’ homesand businesses as a result of inadequate capacity in the collection system. All three programsrequired by the Global Decree have been implemented and are ongoing. They are describedbelow: First, MSD implemented a “Customer Service” Plan pursuant to which MSD providesimmediate cleanup services to the victims of sewer backups resulting from inadequate capacityin the collection system. Second, the City and County implemented a program to pay the validclaims of residents who have suffered damages as a result of sewer backups resulting frominadequate capacity in the collection system. In entering the Global Decree, the Courtdetermined that the water in basement claims program extended to claims for diminution in valueof real property arising from water in basement problems. Third, MSD implemented what is nownamed the “Sewer Backup Response Program,” which is intended to prevent basement backupsfrom occurring by installing backflow prevention devices, pumps and other measures atproperties that have experienced multiple backups as a result of inadequate capacity in thecollection system
Penalties. In June, 2004, the City and County paid a $1.2 million civil penalty insettlement of all alleged Clean Water Act violations relating to the matters covered by the GlobalDecree. In addition, MSD has implemented at least $5.7 million in Supplemental EnvironmentalProjects (“SEP”) that are identified in a SEP Plan attached to the Global Decree. A SEP isimplemented in lieu of a penalty or penalties. The Global Decree also requires the City andCounty to pay stipulated penalties ranging from $500 per day to $3,000 per day for failure to meetdeadlines or comply with other requirements set out in the Global Decree. The City and Countymust also pay a stipulated penalty of $3,000 for unpermitted CSOs that occur after completion ofthe Update. The City and County will not be liable for stipulated penalties, however, inconnection with unpermitted overflows caused by a ten-year storm or greater. Additionally, theGlobal Decree imposes stipulated penalties of between $1,000 and $8,000 per violation forfailure to comply with effluent limits established by the NPDES permits for MSD’s majorwastewater treatment plants. Except as set forth above, the City and the County have not paidany stipulated penalties under the Global Decree.
Wet Weather Implementation Plan/LTCP/CAPP Requirements of Global ConsentDecree. MSD has implemented the Nine Minimum Controls and developed a Wet WeatherImprovement Plan (“WWIP”) that addressed the Consent Decrees’ requirements for the CAPPand the LTCP Update. The WWIP is the plan used to fulfill the core requirements of theConsent Decrees. The Final WWIP was conditionally approved on January 6, 2010. Approvalof the Final WWIP required an amendment to the Consent Decrees (“First Amendment toConsent Decrees”), which First Amendment to Consent Decrees was approved by the Court on
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August 10, 2010, and its Order was not appealed. Changes in certain project and studyschedules and creation of stipulated penalties for certain Final WWIP required submittals byMSD were part of the First Amendment to Consent Decrees.
Current Status of the Consent Decrees
Final WWIP Implementation. The Final WWIP includes the Update and the CAPPthrough projects and project bundles to be constructed. It also includes so-called “allowance”work activities (“Allowances”) which are subject matter programs that complement theconstruction of individual projects and project bundles.
The Final WWIP is to be implemented in phases, with each Phase including constructionof projects and project bundles and work performed through the Allowance programs. Some ofthis work has already been completed or is underway as work required by the Consent Decreesbut performed prior to approval of the Final WWIP. The Final WWIP includes detailed exhibitsidentifying the past and future individual projects and project bundles, costs expended andexpected to be expended, and details of specific projects and project bundles.
The following is a summary of Phase 1 and Phase 2 of the Final WWIP, including certainestimated cost projections and revenue requirements. As discussed below, these are engineeringestimates that are the result of work at only a conceptual planning stage, and are based on variousassumptions and expectations. As with any financial projections, these estimates includecontingencies to address uncertainty and unanticipated changes. The actual costs and revenuerequirements may vary from those forecasted due to factors generally outside of the control ofMSD, such as inflation, interest rates, and future regulatory requirements. The County passed aresolution in 2012 requiring MSD to notify the County immediately upon learning that estimatedcosts may or will be exceeded for any WWIP project, and provide a corrective action plan. Thecost estimates for the Final WWIP when approved were stated in 2006 U.S. Dollars. The costsreported or estimated below are in actual dollars spent or in expected dollars to be spent(including expected inflation), except when specifically stated as 2006 U.S. Dollars.
Phase 1 of Final WWIP. Phase 1 requires MSD to complete construction of a specificlist of projects and project bundles by December 31, 2018, with various completion dates priorto that end date. As of December 31, 2014, MSD has expended $766 million on this work,including individual projects, project bundles and Allowances. The remaining cost of FinalWWIP projects for Phase 1 will include approximately $556 million in work, includingindividual projects, project bundles, and Allowances (see “CONCEPTS APPLICABLE TOALL PHASES OF THE FINAL WWIP – Allowances”).
Most of the individual projects and project bundles include work in the Mill Creek, LittleMiami River, and Muddy Creek watersheds, including work at treatment plants and in multiplecollection areas to address CSOs and SSOs. Additional treatment plant improvement projects areidentified for the Polk Run and Sycamore watersheds.
The largest project bundle in the Final WWIP Phase 1 is the Revised Original Lower MillCreek Partial Remedy (“LMCPR”) project, which includes strategic stormwater separation, newstormwater sewers, detention basins/storage, stream restoration, and stream daylighting in some
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or all of the Lick Run, Kings Run and West Fork watersheds of Mill Creek, as well as utilizationof Real Time Control (RTC) facilities. MSD’s previous studies (2012) indicated that the LMCPRwill achieve the CSD control and cost approximately $244 million in 2006 U.S. Dollars (or $284million over the course of its construction). The LMCPR plan was submitted to the Regulators inlate December of 2012 and, following a public hearing and comment period, on May 30, 2013,the Regulators approved the LMCPR.
Updating the Model is ordinary and customary in the industry due to technicalimprovements. MSD is conducting updates on models it has used in other LMCPR watershedsand in other watersheds across the District. Depending on the Model results, the scope and costof the Final WWIP Phase I (including the LMCPR) may change, subject to approval from theRegulators.
To address required SSO 700 conceptual planning (See “HISTORY OF THE CONSENTDECREES” above), MSD submitted the SSO 700 Final Remedial Plan on December 30, 2012.The Regulators are evaluating the SSO 700 Final Remedial Plan. One aspect of the SSO 700Final Remedial Plan now under review with the Regulators is an ongoing, multi-jurisdictionalintegrated watershed action plan (“IWAP”) which would seek to identify and eliminatesignificant quantities of stormwater from entering the massive watershed that drains throughSSO 700. The resulting removal of stormwater from this large non-combined sanitary sewersystem is anticipated to provide significant environmental and other benefits. The actualschedule for starting and completing Final SSO 700 Remedial Plan work will be part of thePhase 2 schedule, as noted below.
MSD has conducted work since 2009 to update its System Wide Model (“Model”), whichcalculates sewer flows for the long range planning of projects to control sewer overflows. TheModel was originally used to size and scope various projects in Final WWIP Phases 1 and 2,including the LMCPR. While final review of the Model’s preliminary conclusions is underway,MSD now projects that the total overflow volume estimate for parts of the Lower Mill Creekwatershed have decreased since the approval of the Final WWIP. With less stormwater enteringthe combined sewer system, less overflow volume remains to be controlled. Decreased overflowvolume may eventually result in revisions to Final WWIP projects, which may eventually result indecreased costs. The County and City anticipate discussions with the Regulators over theimplications of lower overflow volumes. MSD is conducting similar update work on Models ithas used in other watersheds. Depending on Model results, proposed revisions to Final WWIPprojects may be proposed. As noted above, recent Model updates indicate that stormwater andoverflow volumes in the Lick Run element of the LMCPR are now significantly less thanpreviously estimated (see, “PHASE 1 OF FINAL WWIP”).
The overall cost of Phase 1 was previously estimated by MSD to be approximately $1.37billion, including the $285 million estimate for the LMCPR. However, as design andconstruction during Phase 1 continue to occur, certain projects may cost more than originallyestimated. The Werk & Westbourne EHRT project was estimated by MSD to cost $30 million(in 2012 U.S. dollars), but is now as a result of right-sizing the facility is estimated to cost $49million. MSD is allocating its WWIP Phase 1 program management fees to specific WWIPprojects. The implications of Model-related changes, noted above, are being evaluated. The MillCreek Grit Facility is projected to exceed budget by approximately $7 million, and some changes
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to the influent pumping may be required to achieve the appropriate efficiencies. The Mill CreekWWTP Incinerator project now requires additional pollution abatement equipment, estimated tocost $22 million. Reevaluation processes are currently underway and additional project costincreases may result. At the same time, the County and MSD are undertaking efforts to mitigatepotential cost increases. The County and MSD have also started the process of evaluating thepotential impact on future sewer rates.
Projections of anticipated Phase 1 expenditures are listed below by year.
Projected Final WWIP Phase 1 Expenditures1
(Current Dollars)
Year Amount2Number of
Active ProjectsCumulative Program
ExpendituresPercentage ofCompletion
Pre-2016 $792,382,949 $792,382,949 67%2016 $61,646,130 107 $854,029,080 72%2017 $93,294,197 103 $947,323,277 80%2018 $159,636,094 86 $1,106,959,371 94%2019 $76,351,431 52 $1,183,310,802 100%Total $1,183,310,802
_______
1 Includes Projects, Project Bundles and Allowances. Represents July 2016 cash flow forecast through 2019. Includes 50% of total assessmentcosts and 6% contingency of construction.
2 MSD assumes a 3.5% escalation factor.
Phase 2 of the Final WWIP. By June 30, 2017, MSD must submit a proposed Phase 2schedule for remaining Final WWIP projects and project bundles to be constructed consistentwith a prioritized list attached to the Final WWIP and according to design and performancecriteria also attached to the Final WWIP. The schedule must be as expeditious as practicable, butwill consider local residential household income (see the discussion of the Residential Indicatorbelow), impacts of the cost and length of the schedule on financing in the tax exempt bondmarket, local and national experience with the time, cost, economics and practicality ofCSO/SSO program implementation, technical feasibility, and other relevant factors. Thus, thespecific Phase 2 projects and project bundles have been established in the Final WWIP but theirscheduling will be determined during Phase 2 scheduling discussions with the Regulators. Theeventual determination of this scheduling could affect the amount and timing of futureborrowings in the latter part of this decade and the subsequent decade.
The proposed Phase 2 schedule will include all remaining Final WWIP individualprojects and project bundles not completed in Phase 1, unless the County and City choose tosubmit a Phase 2 schedule for only a subpart of the remaining Phase 2 projects and projectbundles. The Final WWIP refers to this as Phase 2A. In this case, the remainder of the FinalWWIP projects and project bundles would be required to be scheduled as part of a Phase 2B.The schedule for Phase 2B work would be required as a submittal during the process of Phase2A work. If the City and County demonstrate that the additional subparts beyond Phase 2B arerequired to avoid severe financial hardship, the remaining Final WWIP projects and projectbundles may be scheduled accordingly, provided the schedule is as expeditious as practicable.Thus, as a multi-phase program, no completion date for the last Final WWIP project is set forth
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in the Final WWIP. This differs from the terms of the original Consent Decrees and so requiredthe First Amendment to the Consent Decrees.
Additionally, in no case can MSD be required to propose, or continue, a Phase 2schedule or Final WWIP work that would cause or contribute to the costs of such workexceeding a cap of 2.8% of the “Residential Indicator” as that term is determined in the FinalWWIP and referenced in U.S. EPA’s Financial Capability Assessment and ScheduleDevelopment Guidance. The CWA affordability guidance uses the calculation of the ResidentialIndicator to evaluate relative impacts of sewer costs. Residential Indicator is a percentage ofmedian household income spent on sewer costs. The calculation uses many factors, includingcapital, operating, and debt service costs of the sewer utility, number of residential users,interest rates, and median household income. The Final WWIP includes details on how thisResidential Indicator will be calculated.
While a schedule for Phase 2 projects (previously estimated to be approximately $2billion) (2006 U.S. Dollars) is not due until mid-2017, MSD has started planning and design onsome projects to be constructed during Phase 2. As design work during Phase 1 for early Phase 2projects continues to occur, one or more projects now appear to cost more than originallyestimated and some are under the original estimate. The scope and cost of the aforesaid Phase 2projects are being continuously monitored by MSD and the County.
The Lower Mill Creek Final Remedy (“LMCFR”) is the final project to be constructed inPhase 2 of the WWIP. In 2013, the Regulators agreed that one part of the LMCFR (the so-called“lower 11 CSOs”) could be addressed on a watershed basis; however, the remaining CSO’s inthe Lower Mill Creek remain to be addressed through a deep tunnel. The County and City havebeen discussing with the Regulators regarding use of the watershed approach, as an alternative tothis tunnel. Because Interstate 75, which runs parallel, and drains to, the Mill Creek is now undera multi-year reconstruction, certain pre-LMCFR projects which are proposed by MSD andapproved by the County, may occur in the LMCFR area. Discussions with the Regulators onthese projects are ongoing.
Concepts Applicable to All Phases of the Final WWIP
The Final WWIP has terms which apply to all phases. Some of these concepts aredescribed below.
Bond Covenants. If facts or circumstances arise that suggest implementation ofthe Final WWIP may result in a violation of MSD bond covenants, a request may besubmitted to modify the Final WWIP to avoid those violations, provided the requestmeets certain demonstrations set forth in the Final WWIP.
Allowances. The eight enumerated Allowances programs that can beimplemented as part of the Final WWIP are: (i) water in basement, (ii) sewer relining,(iii) manhole rehabilitation, (iv) infiltration and inflow, (v) elimination of home sewagetreatment systems, (vi) urgent response, (vii) Final WWIP progress studies, and (viii)green projects. Through December 31, 2013, MSD has spent more than $161.8 million inAllowances and is forecasting an additional approximately $40 million in Allowance
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spending through the end of Phase 1. Water in basement costs are no longer allowances,but are funded as part of the operation budget. The Program Management Consultantservices were previously considered an allowance. These costs are now allocated to thespecific projects for the budget year.
Green Projects. MSD may identify and propose changes to the Final WWIPprojects by adding or substituting “green infrastructure” (i.e., rain gardens, permeablepavement, etc.) for “gray infrastructure” (i.e., traditional pipes and treatment systems),subject to approval by U.S. EPA, Ohio EPA and ORSANCO.
Adaptive Plan Alterations. MSD may identify and propose significant changes tothe Final WWIP projects, project bundles, watershed approaches, priorities and othermatters through “adaptive management” reviews and proposals to U.S. EPA, Ohio EPAand ORSANCO provided that such proposals are to be made no more frequently thanevery five years, and they provide comparable or better aggregate control of annualvolumes as the original project(s) in the Final WWIP.
Dispute Resolution. Disputes that arise regarding the Final WWIP are, with a fewlimited exceptions, subject to the Dispute Resolution provisions of the Consent Decrees,which would ultimately have such disputes resolved by the Court if the parties could notresolve them.
Project Management, Required Staffing and Contractor Availability. In June of2010, MSD brought in-house program and project management responsibilities for theFinal WWIP. (See “MSD Management/Organization and County Oversight/Monitoring.”) One of the program and project management enhancements is the additionof a focus group instituted in 2010 to concentrate on Quality Assurance and QualityControl (QA/QC). This group remains responsible for development, refinement andtraining of specific procedures which MSD follows for project execution from planningthrough close-out. A document referred to as the Master Program Management Plan(MPMP) is updated regularly as procedures are streamlined and new sections are created.The QA/QC group, which operates within the Project Delivery Division, also maintains alessons learned database to ensure critical knowledge is documented. In addition, theQA/QC group has taken on the value engineering program.
The project requirements of the Final WWIP will require MSD to add personnelor contract out certain work. MSD uses a mix of employee staff and supplemental outsideprofessional consultants to manage the multiple projects in planning, design, andconstruction phases. As nearly 30% of its work force are eligible for retirement over thenext five years, MSD is developing a succession plan and is working with the City toevaluate the City pay scales and its effect on MSD hiring, particularly with regard tocompensation for engineers. MSD has re-organized its engineering division to address theimplementation needs of the Final WWIP and has also implemented a staffsupplementation program that allows it to contract for outside staffing support as needed.As MSD embarks upon the 8th year of implementation of the Final WWIP (while theFinal WWIP was approved by the Court in 2010, MSD began implementing some of theprojects in 2007), it has begun to integrate some supplemental staff positions with MSD
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personnel. Continued succession planning efforts need to be implemented with the goalof minimizing the use of outside professional consultants for program implementation.Supplemental staffing provided by external consultants will continue to be utilized for thenext several years, to handle a significant portion of peak project load and projectplanning to ensure all Final WWIP milestones are fully satisfied.
MSD also evaluated the capacity of contractors in the region to undertake thevolume of work required by the Final WWIP and, if necessary, possible programs toincrease that capacity. A capacity study was completed in June 2009. MSD isimplementing the recommendations of this study to address any projected shortages. In2011, MSD reassessed the capacity of contractors in the region with a focus onidentifying forecasted and projected shortfalls that have a potential to impact MSD’sability to complete all Phase I projects by December 31, 2018. That study, conducted byFMI Corporation, predicts (i) no shortage of engineering resources through 2020, (ii)shortages in 3 trades (masonry and concrete finishing, laborers, and operating engineers)during peak season through 2020, (iii) low availability of electricians, pipefitters, andreinforced iron and rebar workers during seasonal peaks in 2014 and 2015, and (iv) allskilled craft will run at capacity beginning in 2012. Obviously with the procurement issueimpacting projects for 2014, the timing of some of the tight aspects of the contractingindustry will be delayed. MSD is working collaboratively with the County and City tooptimize the utilization of small businesses throughout the region.
Reporting and Implementation. The Consent Decrees require MSD to submitquarterly and annual reports to the United States, the State and ORSANCO summarizingactions undertaken by MSD in implementing the Consent Decrees. MSD satisfies theserequirements by submitting a single consolidated report each quarter.
MSD management has indicated to the County that MSD believes it is in materialcompliance with the Decrees and is current on its reporting requirements.
Other Environmental Regulatory Actions. From time to time, U.S. EPA or OhioEPA will discuss potential violations of NPDES permits or other environmentrequirements and Ohio Bureau of Workman’s Compensation will discuss safetyrequirements of public employers. There is on-going discussion with the U.S. EPA andthe Ohio EPA concerning compliance with the environmental requirements of theseagencies, consent orders, and findings. MSD believes that it is in substantial compliancewith these consent order requirements, and will remain so in the future. While periodicfailure to comply may result in fines and other costs, MSD does not anticipate that non-compliance with such ongoing requirements will result in any material financial cost toMSD through fines or other costs.
The County is engaged in monitoring compliance with the Consent Decree andwill continue to spend time and effort focusing on WWIP compliance.
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National Leadership by Hamilton County on Integrated Planning Issues
Hamilton County has taken the lead in forming a national “Perfect Storm” CommunitiesCoalition (Coalition), made up of communities dealing with a “perfect storm”: combinations ofhigh unemployment, high home foreclosure rates, stagnant economic growth, and an exodus ofbusiness and industry, while being mandated to meet expensive CSO/SSO wet weather consentdecrees and stormwater regulations. Hamilton County and the Coalition have worked withCongressional leaders to draft H.R. 2707, the “Clean Water Compliance and RatepayerAffordability Act”, which was introduced by U.S. Rep. Steve Chabot of Cincinnati and fellowOhioan, Rep. Marcia Fudge, with 13 bipartisan co-sponsors. Commissioner Todd Portune hastestified before the lead House Subcommittee overseeing U.S. EPA on the bill and related issuesmultiple times and the bill has the support of the current and past Commissions.
H.R. 2707 would require the Administrator of the Environmental Protection Agency(EPA) to carry out a program to work cooperatively with, and facilitate the efforts of,specifically identified pilot showcase communities to develop and implement integrated plans tomeet their wastewater and stormwater obligations under the Federal Water Pollution ControlAct, also known as the Clean Water Act (CWA). These pilot programs are to be focused on cost-effective and flexible compliance methods consistent with the EPA’s Integrated MunicipalStormwater and Wastewater Approach Framework issued by the agency in May 2012.
The bill directs the EPA Administrator, in consultation with state regulators, to select atleast 15 pilot showcase communities to participate in the program each year for each of fiveyears. It sets forth selection factors, including prioritizing those communities with a history ofknowledgeable, detailed, and comprehensive efforts to develop integrated and adaptive cleanwater management practices. It is important to highlight, that communities who wish to revisetheir existing Long Term Control Plan to include a more cost effective and innovative approachto compliance would be eligible for relief under this pilot program.
In addition, H.R. 2707 includes financial capability criteria, prioritization of obligationsunder the CWA, and the use of innovative and flexible approaches to meet obligations. The billalso allows priority to be given to municipalities seeking to develop and implement approachesthat adapt to changed or uncertain future circumstances.
Finally, the bill would provide additional authorities regarding selected municipalitiesconcerning extending the allowable National Point Source Discharge Elimination System(NPDES) permit term from five years to up to 25 years, modifying the implementation terms of aconsent decree, and providing additional regulatory flexibility in approving and implementing anintegrated plan that includes adaptive approaches.
An important component of this Framework will enable communities to more readilyapply green infrastructure technology to storm water management. Unlike traditional gray buildprojects which are removed from the public eye and serve a limited function, green infrastructureprojects provide the public additional social, economic and environmental benefits as a return ontheir investment. Not only does this technology offer a far more cost effective investment, but alsooffers communities continued savings in reducing the overall amount of water that enters thesystem and that must be processed. The proposed showcase communities, of which it is hoped
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that Hamilton County/MSD would be one, would offer a promising opportunity to generate largequantities of meaningful data on green infrastructure and how it is best optimized.
Capital Improvement Program
Procedure to Establish Program
The Capital Improvement Program of MSD (“CIP”) is developed annually for both aone-year and five-year timetable during the mid-August through early December and issubmitted as the CIP document to the Board for its review prior to the end of the year. CIPincorporates planning, design and construction of projects. It includes estimated costs, methodsof financing such costs and year of proposed construction. The Board holds public hearings onthe CIP and after the hearings adopts or modifies and adopts the one-year CIP and approves thefive-year CIP. Phase 1 Final WWIP projects have been set up in a master schedule to ensure thatthe Consent Decrees’ milestones are met. All projects expected to be commenced within the fiveyear timetable are prioritized by MSD. The priority system is based on relative needs andimportance of each improvement, the time required for planning, design and easementacquisition, and the position of regulatory authorities.
For the 2015 CIP, the County established a target amount based on the required WWIPspending, asset management needs and the allowances that provide funding for the support stafffor the CIP. The target was transmitted to MSD management in order to provide guidance andfacilitate the prioritization of the CIP projects.
Approval of the CIP does not represent approval of construction of any specific projectincluded in the CIP. As a general matter, the determination of which projects will be financed ismade during the annual capital improvement program evaluation process. The CIP identifies anaggregate level of anticipated spending, so that certain financing strategies, such as cash flowneeds, are not necessarily correlated to each specific project, but rather the capital improvementprogram as a whole. Generally speaking, County representatives meet with MSD representativesto determine the volume and dollar amount of anticipated projects for the succeeding fiscal year.Thereafter, the Board makes a decision on whether to proceed with specific projects, and if so,how those projects will be financed.
Individual Projects
Pursuant to applicable Ohio law, prior to the issuance of public obligations for non-special assessment Sewer System projects, which are the type of projects on which proceeds ofthe County’s Sewer Revenue Bonds are spent, the County must undertake certain preliminarysteps that include preparation of a general plan of sewerage and a declaration of its necessity, aswell as the preparation and approval of detailed plans, specifications and an estimate of cost.Subsequently, the County may, by resolution, including a resolution authorizing the issuance orincurrence of public obligations for a particular improvement, authorize an improvement and theappropriation and expenditure of funds required for its acquisition or construction, and mayproceed with the improvement.
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Historical Expenditures
MSD reports that its actual CIP capital expenditures for the past five years were asfollows:
YearAmountSpent1
2011 $154,957,0002012 $159,437,0002013 $120,968,2192014 $ 85,633,0392015 $112,000,941Total $632,996,199
__________1This column represents the capital expenditures MSD reports it has actually spent on all capital work, including those projects budgeted,appropriated and encumbered in prior years.
The CIP as approved by the Board presents total engineering and construction budgets inone year, even though the project will be designed and constructed over several years. As such,expenditures occur over multiple years.
Capital Improvement Program 2015-2019
The CIP for the years 2015-2019, adopted by the Board in December, 2014, anticipates atotal capital plan of $818,575,000 including the design phase of certain projects, the constructionof which will occur beyond the five year planning horizon of the CIP. The Board must passresolutions authorizing actual spending.
The CIP for the years 2015-2019 includes work required under the final WWIP Phase 1mandated by the Consent Decree, as well as MSD’s ongoing efforts to maintain existing assetsthrough its Capital Asset Management program. The 2015 CIP budget is approximately $297million. Of this, approximately $211 million relates to improvements mandated by the ConsentDecree.
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MSD Projected CIP Expenditures 2015-2019
MSD’s projected capital expenditures during the years 2015-2019 (the Final WWIPPhase 1 time frame) are shown below by key categories. Please note that with the delay of theLick Run Valley Conveyance Project, approximately $103 million of CIP authorization willmove from 2015 to 2016.
YearWWIP1
Projects
Asset Management(not Consent Decree) Total
2016 $59,651,992 $51,826,816 $111,478,8072017 $89,907,779 $65,653,414 $155,561,1932018 $151,900,835 $75,966,666 $227,867,5012019 $90,369,314 $44,427,412 $134,796,7262020 $51,680,135 $40,737,515 $92,417,650
Total $443,510,055 $278,611,822 $722,121,877__________1 Includes projects, project bundles and Allowances. Forecast as of July 2016. Does not include contingency and capitalized interest.
Future Financings
Compliance with terms of the requirements of the Consent Decrees is causing substantialincreases in the level of capital expenditures. The timing and amount of such requiredexpenditures, and what portions will be paid from funds generated from operations, fundsgenerated from future financing and/or other potential funding sources cannot be predicted at thistime. In conjunction with reviewing MSD’s annual Capital Improvement Program, the Countyprojects its financing needs based upon estimated rates, account balances, cash flows, timing andcosts of anticipated capital improvements and other factors, including amounts previously spentor encumbered on long term construction contracts. As part of its 2015-2019 CapitalImprovement Program, MSD contemplates that during the period from 2015-2019 it will need toallocate approximately $944 million for capital projects.
Capital Improvement Program Funding Sources(Current Dollars)
Year Revenue Bonds1 Other Obligations2 Total2016 -- $40,000,000 $40,000,0002017 $100,000,000 25,000,000 125,000,0002018 175,000,000 25,000,000 200,000,0002019 90,000,000 25,000,000 115,000,0002020 50,000,000 25,000,000 75,000,000
Total $415,000,000 $140,000,000 555,000,000_______1 Includes reserve fund and issuance expenses.2 Expected to consist primarily of loans from the Ohio Water Development Authority and the Ohio Water Pollution Control Loan Fund. Assumed$25 million in out years as a conservative forecast of WPCLF’s ability to loan funds.3 Based on current projected CIP appropriations (as of July 2016)
In view of the anticipated need for increased capital expenditures, in December, 2014, theCounty approved a 2015 rate increase (See “Sewer Rates.”) Additionally, in connection with theBonds, the County has covenanted to charge such rates and charges for the services and facilities
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of the Sewer System as shall at all times produce revenues sufficient to meet the covenantrequirements set forth in the Trust Agreement. Pursuant to the Trust Agreement, the SewerSystem rates and charges must be sufficient to produce Net Income Available for Debt Serviceadequate to meet the reasonable expenses of operation and maintenance, the debt servicerequirements of the Bond Legislation, including certain reserves, sufficient earnings coverage topermit the issuance of Additional Bonds for construction of necessary improvements to theSewer System and to assure the normal growth and sound operation of the Sewer System. Failureto do so can be an event of default if remedial action is not taken.
Customers and Billing
Residential customers are primarily billed on a quarterly cycle. Customers with largermeters are billed primarily on a monthly cycle. Most bills sent to MSD customers are for bothwater and sewer service and are sent by the water provider for that customer. The water provider,as billing agent, receives the payment and forwards the appropriate portion to MSD. GCWWprovides water service to residences and businesses in essentially the same service area as MSD.Consequently, the GCWW bills approximately 90 percent of the MSD’s wastewater customerswith the remaining 10 percent billed by some nine different political subdivisions, includingeight municipalities in the County and an adjoining county.
The bills processed by GCWW are collected by the City. Pursuant to proceduresestablished by MSD, if payment is not received from the customer within twenty-six days, pastdue notices are sent with penalties assessed. If payment has not been received within theappropriate period (starting on day thirty-nine), GCWW may shut off the water service.Additionally, pursuant to Ohio statute, it is possible for a delinquent sewer service bill to becertified as a lien on the real estate. The lien takes effect only on the date that it is certified and isonly certified if the current owner of the real estate is obligated on the bill. In excess of 98% ofbilled revenue is collected, with less than two percent of MSD receivables written-off as bad debtannually.
The eight municipalities and one adjoining county that process their own bills areresponsible for all collection of such amounts. With the exception of the municipality ofLoveland, such municipalities are allowed collection expense of 7% of the total amount billedand remit the net amount (93% of the amount billed) to MSD on a quarterly basis.
GCWW classifies all customers as residential or non-residential and further classifies thenon-residential customers by Standard Industrial Classification Codes. This data correlates wellwith meter size, with the smallest meters being generally residential customers and the largermeters being commercial and industrial customers. The remaining 10% of the customers whohave their water service and bills provided by municipalities other than GCWW are not directlyclassified. However, MSD estimates their classification based on meter size.The number of residential, commercial, and industrial customer classes served, billablewastewater flow and average usage per account for the years 2010 through 2015, inclusive, isindicated in the table below.
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Number of Accounts and Wastewater Flow
YearResidentialAccounts
Commercial&Industrial
Accounts Total Accounts
BillableWastewaterFlow in Ccf
Average UsagePer Account
Ccf/Acct.2010 206,719 22,733 229,452 34,444,304 150.1
2011 208,542 22,558 231,100 33,504,893 145.02012 207,511 22,316 229,827 32,542,971 141.62013 204,444 22,716 227,160 34,799,087 153.22014 204,604 21,978 226,582 34,709,453 153.872015 204,106 22,067 226,333 31,323,690 138.40
_____NOTE: The above data has been estimated by MSD based upon data obtained from the GCWW, and adjusted for accounts not serviced by
GCWW.
The ten largest sewer users in the area serviced by MSD for 2015 are listed below:
Customer Product or ServicesPercent of Sewer Revenues(Not Including Surcharges)
1. Emery Oleochemicals Chemicals:distillers 0.75%2. General Electric Aircraft Engines 0.513. University of Cincinnati Medical Services 0.454. P&G Consumer Products 0.435. Children’s Hospital Medical Services 0.346. P&G Consumer Products 0.327. John Morrell & Co. Food Processing and Packaging 0.308. Rhodia Inc. Chemicals 0.289. Samuel Adams Brewery Brewery 0.2710. Jim Trillium Properties Consumer Products 0.26
TOTAL 3.98%
Sewer Rates
The Ohio Revised Code generally requires counties to establish reasonable rates thatmust be at least sufficient to pay all the costs of operation and maintenance and debt service forall revenue bonds of sewer systems. Additionally, pursuant to numerous CooperativeAgreements for Construction, Maintenance and Operation of Wastewater Facilities betweenthe County and the Ohio Water Development Authority (“OWDA”), the County is required toestablish and maintain rates resulting in revenues at least adequate to meet operation andmaintenance and amortize all long-term debt. The debt has included at least $22,360,000 inCity issued bonds which the County began paying from the County Sewer District Revenues in1968. Pursuant to its statutory role under the Ohio Revised Code, the County has establishedrates sufficient to cover MSD’s operation and maintenance costs and pay all debt service on itsobligations.
The sewer charges consist of a minimum charge and a commodity charge. Sewer Ratesare the same for residential and commercial users. The minimum charge is based on water metersize or the size of the premises (based on the number of family units) whichever results in thelarger minimum charge. Residential customers are primarily billed quarterly and larger users are
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primarily billed monthly. See “THE METROPOLITAN SEWER DISTRICT OF GREATERCINCINNATI – Customers and Billing.” Effective January 9, 2015, the minimum charge rateswere as follows:
Sewer Rates
Monthly Bills Quarterly Bills
Meter Size Number of Minimum Meter Size Number of Minimum(Inches) Family Units Rate (Inches) Family Units Rate
5/8 1 $ 57.11 5
/8 1 $ 117.353/4 2-3 68.49 3/4 2-3 151.321 4-5 88.14 1 4-5 207.44
11/2 6-12 135.90 11/2 6-12 352.512 13-20 187.29 2 13-20 499.333 21-50 459.03 3 21-50 1,281.494 51-115 760.08 4 51-115 2,122.306 116-250 1,487.10 6 116-250 4193.178 Over 250 2,210.47 8 Over 250 6,256.78
10 2,970.50 10 8,360.7512 3,458.83 12 9,653.24
The commodity charge is based on the quantity of water used and is as follows:
For monthly bills, for each 100 cubic feet consumed per month in excess of 500 cubicfeet, but not in excess of 5,000 cubic feet, the commodity charge is $5.879 per 100 cubic feet.For each 100 cubic feet consumed per month in excess of 5,000 cubic feet, the commoditycharge is $4.701 per 100 cubic feet.
For quarterly bills, for each 100 cubic feet consumed per quarter in excess of 900 cubicfeet but not in excess of 15,000 cubic feet, the commodity charge is $5.879 per 100 cubic feet.For each 100 cubic feet consumed per quarter in excess of 15,000 cubic feet, the commoditycharge is $4.701 per 100 cubic feet.
MSD estimates that the average quarterly bill for a residential household is approximately$211.41 based on average consumption of 25 ccf. The average quarterly water bill based on thesame consumption is approximately $76.74 in the City and $100.32 in the County, resulting incombined bills of approximately $288.15 and $311.73, respectively.
Sewer rates are designed to meet average conditions for groups of customers havingsimilar service requirements. MSD periodically reviews the adequacy of its rate structure togenerate sufficient revenues for its operating and capital requirements and engages the servicesof an independent consultant to advise it. Adjustments to sewer rates are based upon the cost ofservice from the customer classes served and MSD’s overall level of revenue requirements.Since 1985, the County has increased sewer rates 23 times as indicated in the table below. Therate increases do not translate directly to an increase in revenues due to a variety of factors,including that certain of the rate increases were by usage category versus across the board,variances in consumption by user type, rate increases being implemented mid-year and lags inbilling and collection.
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Year
Approximate CompositeRate Increase Over
Previous Effective Rates Year
Approximate CompositeRate Increase Over
Previous Effective Rates
1985 21.0% 2005 12.0
1987 17.0 2006 4.01989 11.0 2007 8.61991 18.0 2008 12.01993 20.0 2009 12.01995 6.0 2010 11.01996 4.0 2011 8.02000 9.5 2012 8.02001 7.0 2013 5.02002 6.0 2014 6.02003 7.0 2015 5.52004 14.0
The implementation of these increases through detailed allocation across rate categoriesrequires further implementation routinely done by MSD which relies, in part, on therecommendation of an independent rate consultant based on a study completed at the end ofevery odd-numbered year. Future rates will be impacted by the Consent Decrees. Prior to theimplementation of the rate increase for 2015, the application of the rate increases across each ratecategory were presented to the County for review and approval.
On August 12, 2015, the County approved a resolution appointing 15 members,representing local governments, business and environmental interest groups, senior citizens,low-income residents, and homeowners and renters, to the MSD Rate Affordability Task Force.The MSD Rate Affordability Task Force will study MSD rate structures and policies andprovide the County with recommendations to mitigate ratepayer fee increases and promotewater conservation.
Operating Budget
For budgetary purposes, MSD operates on a cash basis encumbrance accountingsystem. MSD is organized into eight operating divisions (“See THE METROPOLITANSEWER DISTRICT OF GREATER CINCINNATI – Management/Organization and CountyOversight Monitoring”); each division is comprised of various sections which representoperating units. The operating and capital budgets are products of total managementinvolvement down to the section level of the organization. The Cincinnati StormwaterManagement Utility is funded separately by a stormwater drainage service charge and itsbudget is developed separately from MSD.
The operating budget for each division is prepared by the section heads, reviewed by therespective division head and consolidated into a division budget request, which is reviewed bythe Executive Director of Sewers. The presentation of the budget compares, on a division level,the previous year’s budget to the previous year’s actual experience and compares the previousyear’s actual experience to the requested budget. Any significant increases or decreases in eitheranalysis are noted and explained. Once the budget is satisfactory to MSD, it is reviewed by theCity Manager who forwards it, along with his recommendation to City Council. Pursuant to the
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1997 MSD Supplemental Agreement, the City and County agreed that prior to August 15 of eachyear a tentative annual operating budget prepared by the City would be submitted to the County,followed by an annual operating budget approved by City Council no later than September 15 ofeach year. Under the current process, given the change in City fiscal year to July to June, theCouncil approves the MSD budget along with the rest of the City departments in June. TheCounty has the authority to amend, modify or supplement the proposed operating budgetsubmitted by the City, but not so as to impair the ability of either the City or County to performtheir obligations pursuant to the MSD Operating Agreement or the Trust Agreement. The Countyhas the responsibility to pass the appropriation resolution and final operating budget, which theCity follows in operating MSD pursuant to the MSD Operating Agreement.
In 1997, the City and County entered into the 1997 MSD Supplemental Agreement,which clarifies the respective roles of the City and County regarding the operating budget. The1997 MSD Supplemental Agreement established a procedure (including advice of an outsideconsultant) to reach agreement on a new formula for the charging of indirect costs by the Cityand County with respect to budgeting and allocation of indirect costs. The new formula was usedin 1998 and subsequent years. The City and the County also agreed in the 1997 MSDSupplemental Agreement that any disagreement over indirect costs will not justify termination ofthe MSD Operating Agreement. The County has sought support for the indirect costs paid byMSD to the City for recent years. The County has not yet received the information sought anddiscussions between the County and City will continue.
The approved 2015 operating budget authorizes cash expenditures of approximately$216,646,258 compared to an approved budget for 2014 of approximately $213,291,279.Because the operating budget is a cash budget, it includes certain expenditures, which will becapitalized on a generally accepted accounting principle basis and does not include depreciation.
Summary of Historical Financial Information
The historical portion of the following summary was prepared by MSD from its recordsfor the years January 1, 2011 through December 31, 2015, including for the years 2011-2014inclusive, its audited financial reports for such time and for 2015 its unaudited financial reportfor such time. It reflects the operations of the Sewer System on an accrual accounting basis. Themanagement of MSD states that there have been no material adverse changes in the financialcondition of MSD from that stated in the audited financial statements for the year endingDecember 31, 2014. These summaries should be read in conjunction with the related financialstatements included as Appendix A-3 hereto.
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Selected Historical Financial Information(In Thousands)
OperationsFor Years Ended December 31
2011 2012 2013 2014 20151
Operating Revenue:Sewerage Service Charges $213,435 $224,160 $231,958 $237,346 $258,455Sewerage Surcharges 21,470 21,454 18,424 20,119 14,052Other Revenue 4,520 3,542 8,947 7,746 1,719
Total Operating Revenue $239,425 $249,156 $259,329 $265,211 $278,226
Operating Expenses:Personnel services $54,758 $47,704 $51,291 $55,487 $56,474Utilities, fuel & supplies 22,181 19,481 20,579 19,668 18,783Depreciation & amortization 49,222 54,823 62,938 56,121 55,581Purchased services 24,367 25,428 42,274 35,707 31,549Other expenses 10,517 8,805 12,145 9,156 8,465
Total Operating Expenses $161,045 $156,241 $189,227 $176,139 $170,852
Income for Operations $78,380 $92,915 $70,102 $89,072 $107,374
Other Income (Expenses):Interest income $2,484 $8,560 $9,445 $9,548 $9,530Net change in fair value of Investments 2,221 (905) (5,132) 33,010 (29,053)Property disposals (gain/loss) 217 181 289 0 0
Total Other Income (Expense) $4,922 $7,836 $4,602 $42,558 ($19,523)Interest Expense $34,212 $33,765 $40,049 $43,427 $37,211
Loss on Impairment of Assets $16,103 $0 $0
Net Income from Operations $49,090 $66,986 $18,552 $88,203 $50,640______1 Values from unaudited 2015 financials.
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Selected Historical Financial Information(In Thousands)
Cash and InvestmentsAs of December 31
2011 2012 2013 2014 20151
Current Assets:Cash, cash equivalents and pooledinvestments
$19,118 $17,306 $20,551 $53,018 $27,424
Restricted AssetsHeld by City of Cincinnati:
Construction account $40,200 $71,026 $52,083 $6,295 $53,832Amount to be transferred to SurplusAccount
62,180 73,070 56,048 33,513 70,757
Held by Trustee:
Reserve account2 79,674 74,701 81,020 81,848 62,363
Replacement and improvement account2 5,616 5,649 5,665 0 0
Bond account 8,008 7,994 8,423 4,531 8,241Surplus Account 187,563 153,996 278,593 319,748 269,418
Total restricted assets $383,241 $386,436 $481,832 $445,935 $464,611
Cash available for operations and capitalimprovements:
Cash and investments $19,118 $17,306 $20,551 $53,018 $27,424
Amount to be transferred to SurplusAccount
62,180 73,070 56,048 33,513 70,757
Replacement and improvement account 5,616 5,649 5,665 0 0Surplus Account 187,563 153,996 278,593 319,748 269,418
Total available assets $274,477 $250,021 $360,857 $406,625 $367,599______1 Values from unaudited 2015 financials.2 Excess funds from the reserve account and the closure of the Replacement and Improvement Account did not occur by December 31, 2013. The
actions have taken place in 2014.
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Selected Historical Financial Information(In Thousands)
Debt Service CoverageFor Years Ended December 31
2011 2012 2013 2014 20151
RevenuesTotal Operating Revenues $239,425 $249,156 $259,329 $265,211 $278,226Interest Income 2,484 8,560 9,445 9,548 9,530Capitalized Interest 226 507 0 0 0Tap-in/Connection fees 2,119 2,156 2,145 2,182 2,675
Total Pledged Revenues $244,254 $260,388 $270,919 $276,941 $290,431
Total Operating & Maintenance Expenses ($111,823) ($101,418) ($126,289) ($120,018) ($115,271)
Net Income Available for Debt Service $132,431 $158,970 $144,630 $156,923 $175,160
Principal and InterestRequirements on Revenue Bonds $74,155 $73,803 $74,538 $77,646 $76,111
Principal and InterestRequirements on all Obligations $82,624 $85,062 $93,005 $98,527 $96,793
Debt Service Coverage2
Revenue Bonds 1.79x 2.15x 1.94x 2.02x 2.30xAll Obligations 1.60x 1.87x 1.56x 1.59x 1.81x
______1 Values from unaudited 2015 financials.2 Prior to the Seventeenth Supplemental Trust Agreement which became effective for the year ended December 31, 2013, Debt Service Coveragewas calculated permitting one-half of Pledged Revenue transferred to the Surplus Fund during the year to be added back to Net Income Availablefor Debt Service. The table above has recalculated the years 2011 through 2013 utilizing the amended calculation (without such add-back) forcomparative purposes.
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Projected Debt Service CoverageFor Years Ended December 31
2016 2017 2018 2019 2020Revenues
Total Operating Revenues $272,661 $283,023 $293,777 $304,941 $316,529Interest Income 8,000 8,000 8,000 8,000 8,000Capitalized Interest 0 0 0 0 0Tap-in/Connection fees 2,675 2,675 2,675 2,675 2,675
Total Pledged Revenues $283,336 $293,698 $304,452 $315,616 $327,204
Total Operating & Maintenance Expenses ($118,729) ($122,291) ($125,960) ($129,739) ($133,631)
Net Income Available for Debt Service $164,607 $171,407 $178,493 $185,877 $193,573
Principal and InterestRequirements on Revenue Bonds $77,952 $78,500 $68,117 $81,037 $87,220
Principal and InterestRequirements on all Obligations $103,175 $104,089 $96,449 $110,350 $114,877
Debt Service CoverageRevenue Bonds 2.11x 2.18x 2.62x 2.29x 2.22xAll Obligations 1.60x 1.65x 1.85x 1.68x 1.69x
Management Discussion of Results of Operations
MSD maintains its financial records on a cash basis encumbrance accounting system.Annual operating and capital improvement program budgets are developed, which serve as thebasis of financial operations during the ensuing year. The audited financial statements areprepared on an accrual basis in accordance with generally accepted accounting principles. Theamounts used in this discussion are taken directly from or were prepared by MSD using theaudited statements.
In setting policy for MSD, the County Commissioners have adopted a philosophy thatdirects that all major capital improvements should be debt financed; and that rates should be setat a level that provides sufficient funds for operations, maintenance, routine capitalimprovements, debt service and repairs and improvements and that complies with all covenantsset forth in the respective Trust Agreement.
Overview 2011-2015
While individual revenue and expense items fluctuate on a year-to-year basis, MSD’soperating results for the five years 2011-2015 reflect the overall financial stability of the system.
Sewerage service charges have increased 16.2% from 2011 through 2015, which is areflection of rate increases in 2011, 8%; 2012, 8%, 2013, 5%, 2014 6%, and 2015, 6%. Since2011 there has been an overall decrease in surcharge revenue of 35%.
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Operating Expenses net of Depreciation increased less than 3.5% during this five-yearperiod. Personnel costs increased about 3.1%, reflecting modest salary increases along withincreasing employee benefit costs which includes accrual of liability for pension and other post-employment benefit obligations. These personnel cost increases are offset by increasedcapitalization of personnel activity directly related to the capital program. Active expensemanagement helped to restrain growth in other operating costs.
Interest income has historically provided a consistent source of Other Income. The resultsvary based on the invested balances and current interest rates that decreased significantly since2008. Pursuant to MSD’s cash basis encumbrance system, funds for construction costs areencumbered in their entirety upon execution of the contract. Interest income generated on fundsheld in construction accounts are transferred from these restricted assets to MSD and areavailable for MSD operations. In addition to interest income on construction accounts, there arealso significant balances in the Reserve, and Surplus Accounts, which also generate investmentincome and are available for MSD purposes.
Overall, the periodic rate increases, expense management efforts and contribution frominvestment income have enabled MSD to maintain stable debt service coverage. The Countyincreased MSD rates 6.0% effective January 9, 2015.
Summaries by Year
2011. Operating revenues increased 8.2% over 2010. This was primarilyattributable to an 8.0% rate increase that was effective January 9, 2011. MSD’s operatingexpenses net of depreciation decreased 7.1% compared to 2010 primarily because theincrease in accrued pension liability for 2011 was significantly lower than the increasefor 2010 (see “City Retirement Plan”). A significant increase in health care costs in 2011was more than offset by this decrease related to the pension accrual.
2012. Operating revenues increased 4.6% over 2011. This was primarilyattributable to an 8.0% rate increase that was effective January 9, 2012, offset by anongoing decrease in usage per customer account. MSD’s operating expenses net ofdepreciation decreased 9.4% compared to 2011. The increase in accrued pension liabilityfor 2012 was significantly lower than the increase for 2011 (see “City Retirement Plan”).Increases in health care costs and pension costs in 2012 was more than offset by thisdecrease related to the pension accrual. Labor costs were also lower in 2012 due tokeeping vacant positions unfilled throughout much of the year. Efficiencies as well as thereplacement of various Treatment Division assets resulted in lower maintenance costs forMSD. Sewer Backup Unit costs, including overtime expenses, were lower in 2012 due tothe heavier rainfall events experienced in 2011.
2013. Operating revenues increased 3% over 2012. This was primarilyattributable to a 5.0% rate increase that was effective January 9, 2013, offset by anongoing decrease in usage per customer account. MSD’s operating expenses net ofdepreciation increased 19% compared to 2012. The majority of the increase is due toreclassifying expenditures that were historically capital.
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2014. Operating revenues increased 2% over 2013. This was primarilyattributable to a 6.0% rate increase that was effective January 9, 2014, offset by anongoing decrease in usage per customer account. MSD’s operating expenses net ofdepreciation increased 3% compared to 2013.
2015. Operating revenues increased 5% over 2014. This was primarilyattributable to a 6.0% rate increase that was effective January 9, 2015, offset by anongoing decrease in usage per customer account. MSD’s operating expenses net ofdepreciation decreased 4% compared to 2014.
Employees
In 2015 MSD had approximately 589 employees and payroll and related benefits costs of$43,642,016. A portion of this expense principally related to project engineering is capitalized.Approximately 54% of MSD employees are members of various locals of the AmericanFederation of State, County and Municipal Employees (AFSCME) and 37% of MSD employees,the middle management employees, are members of Cincinnati Organized and DedicatedEmployees Bargaining Unit (CODE). AFSCME has a contract that expires in August of 2016.The CODE contract, originally set to expire in March of 2016, has been extended to August of2016, pending negotiations. The Building Trades has 3 employees at MSD and the contractexpires in 2018. MSD considers its labor relations generally to be good.
MSD offers healthcare coverage through the Anthem Blue Access 80/20 Plan. Thesebenefits are generally paid by MSD with AFSCME, CODE and non-represented employeespaying $471.12 per month for the single plan and $1,389.46 per month for the family plan in2015, and Building Trades employees paying $497.14 per month for the single plan and$1,461.56 per month for the family plan in 2015.
City Retirement Plan
With the exception of a very small number of employees who were formerly employedby the County or other agencies of the State, all employees of MSD are participants in the Cityof Cincinnati Retirement System (the “City Retirement Plan”). Both the employee and the Citycontribute to the funding of these plans. Employees who participate in the City’s Retirement Plancontribute 9.0% of their gross pay to the system in 2015. Other MSD employees contribute 10%of their gross pay to the Ohio Public Employees Retirement System.
The City Retirement Plan is comprised of employees of the City. As of December 31,2015, there were an estimated 2,931 covered employees and 4,264 covered retirees in the CityRetirement Plan. This represents a 4.53% increase in active membership and a 1.27% decrease inthe number of retired members receiving a pension benefit. The current ratio of actives to retireesis [1:1.5], the same as the prior year. The City Retirement Plan is financed through contributionsfrom the employees and the employer as well as income earned on investments of the CityRetirement Plan. By the terms of a cooperation agreement entered into May 2015, the City willcontribute no less than 16.25% of covered employee payroll for 30 years.
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On August 4, 2016, the City Retirement Plan's actuary presented the December 31, 2015Annual Valuation of the Retirement System Pension Report and Retiree Health Benefits Reportto the City Retirement Plan's Board of Trustees. Each report takes into account auditedinvestment results, actual experience of the City Retirement Plan, and actuarial assumptionsconsistent with accepted actuarial principles.
The respective reports note that the market value of assets for the City Retirement Planfor the year ended December 31, 2015, net of other receivables and liabilities, increased from theprevious year to $1.67 billion. The actuarial value of assets was $1.70 billion as of December 31,2015 compared to $1.45 billion as of December 31, 2014, an increase of 17.13%. The AnnualValuation reports suggest that employer contributions to the City Retirement Plan be set at a rateof 27.92% of payroll for pension and 3.70% of payroll for retiree health benefits for the calendaryear ending December 31, 2015.
Setting the contribution rates as suggested may result in significant reprogramming ofbudgetary priorities of the City for fiscal year 2016 and beyond. The City's biennial budget isapproved by City Council, historically before June 30 of each fiscal year. The System is 77.1%funded for pension as of December 31, 2015 compared to 64.3% funded as of December 31,2014, an increase of 12.8%. The System is 97.9% funded for healthcare as of December 31, 2015compared to 119.6% funded as of December 31, 2014, a decrease of 21.7%.
In 2011, City Council approved changes to pension benefits for active employees. Inrecent years the active employees filed multiple suits against the City in response to the pensionchanges. The retirees joined the litigation in anticipation of adjustment to future cost-of-livingadjustments (COLA’s). The City and the adverse parties in the pension litigation agreed to acollaborative mediation in Federal District Court to attempt to reach an agreed resolution of theCity’s pension issues. Pursuant to Ordinance No. 38-2014, adopted by the City Council on March19, 2014 (the “Mediation Ordinance”), the City Manager was authorized to negotiate and enterinto a global consent decree with respect to the pension litigation. Pursuant to the MediationOrdinance, the City Manager was directed to negotiate the following, (i) a stabilized employercontribution rate, (ii) the elimination of the current compound COLA to be replaced with a simpleCOLA not to exceed 3%, and (iii) a prospective suspension of COLAs for a period of time not toexceed 5 years. The City Manager was also authorized to take all necessary steps to makeavailable a portion of the CRS Health Care Trust to stabilize the CRS Pension Trust.A proposed settlement agreement with a term of 30 years was approved by the parties in April2015. The agreement successfully includes all of the City’s priorities listed above. Specificallythese changes include an employer contribution rate of 16.25%, a change in the COLA from a3% compound to a fixed 23% simple COLA, a three year suspension of COLA payments forcurrent retirees and future retirees upon their retirement date, and approval to transfer at least$200 million from the Retiree Health Care Trust to the Pension Trust. The remaining legalproceedings include notification to covered class members and a court held Fairness Hearing inlate September of 2015. Final approval by the court is expected to happen following theFairness Hearing and would result in a termination of the pending pension lawsuits.
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City Retirement PlanSchedule of Funding Progress1
(Dollar Amounts in Thousands)
ActuarialValuation
Date
ActuarialValue of Assets
( a )
ActuarialAccrued Liability
(AAL)Entry Age
( b )
Unfunded AAL(UAAL)( b – a )
FundedRatio
( a / b )Covered Payroll
( c )
UAAL as aPercentage of
Covered Payroll(( b – a ) / c )
12/31/2009 $1,631,407 $2,125,738 $494,331 76.7% $170,416 290.1%12/31/2010 1,565,949 2,085,987 520,038 75.1 167,589 310.312/31/2011 1,466,077 2,194,505 728,428 66.8 165,029 441.412/31/2012 1,367,695 2,229,818 862,123 61.3 167,1482 515.812/31/2013 1,424,933 2,254,121 829,188 63.2 163,4773 507.212/31/2014 1,453,922 2,259,822 805,900 64.3 164,5754 489.7
12/31/2015 1,703,022 2,207,484 504,482 77.1 174,9635 288.3_______1 Source: Cavanaugh McDonald Consulting, LLC. All figures prior to December 31, 2008 were reported by the previous actuary except thecovered payroll figures which were reported in the City’s financial statements.2 Includes $7,069,702 in part-time compensation.3 Includes $7,511,838 in part-time compensation.4 Includes $6,749,941 in part-time compensation.5 Includes $7,714,292 in part-time compensation.
Healthcare PlanSchedule of Funding Progress1
(Dollar Amounts in Thousands)
ActuarialValuation
Date
ActuarialValue of Assets
( a )
ActuarialAccrued Liability
(AAL)Entry Age
( b )
Unfunded AAL(UAAL)( b – a )
FundedRatio
( a / b )Covered Payroll
( c )
UAAL as aPercentage of
Covered Payroll(( b – a ) / c )
12/31/2009 $746,029 $877,399 $131,370 85.03% $170,416 77.09%12/31/2010 726,412 657,045 (69,367) 110.56 167,589 (41.39)12/31/2011 668,392 653,404 (14,988) 102.29 165,029 (9.08)12/31/2012 634,173 641,876 7,703 98.8 167,1482 4.6012/31/2013 674,709 618,508 (56,201) 109.1 163,4773 (34.4%)12/31/2014 706,959 590,902 (116,057) 119.6 164,5754 (70.5)
12/31/2015 474,746 484,833 10,087 97.9 174,9635 5.8__________1 Source: Cavanaugh McDonald Consulting, LLC. All figures prior to December 31, 2008 were reported by the previous actuary except thecovered payroll figures which were reported in the City’s financial statements.2 Includes $7,069,702 in part-time compensation.3 Includes $7,511,838 in part-time compensation.4 Includes $6,749,941 in part-time compensation.5 Includes $7,714,292 in part-time compensation.
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Schedule of Employers’ Contributions(Dollar Amounts in Thousands)
Pension Plan
Year Annual RequiredContribution
PercentageContributed
2009 $43,065 61.882010 80,882 37.132011 54,875 56.782012 49,952 67.282013 66,999 55.502014 78,101 43.50
2015 63,761 62.50
Healthcare Plan
YearAnnual Required
ContributionPercentage
Contributed
2009 $11,388 49.152010 44,689 9.782011 19,943 10.742012 453 442.002013 5,697 0.002014 7,363 0.00
2015 6,188 17.07
COUNTY DEBT AND OTHER LONG TERM OBLIGATIONS
The following describes statutory and constitutional debt and ad valorem property taxlimitations applying to the County, and presently outstanding and projected bond and noteindebtedness and certain other long-term financial obligations of the County.
In recent years the County has issued a number of industrial revenue bond issues andhospital revenue bond issues. No schedule for these bonds is provided because such bonds do notrepresent an obligation of the County. These bonds are payable solely from rentals and otherrevenues derived from the lease, sale or other disposition of the projects financed thereby.
The County is not and has never been in default on any of its debt obligations.
Statutory Direct Debt Limitations
The Ohio Revised Code provides that the aggregate principal amount of unvoted “netindebtedness” of a county, such as the County, may not exceed one percent of the total value ofall property in such county as listed and assessed for taxation, and that the aggregate principalamount of voted and unvoted “net indebtedness” of such county may not exceed a sum equal tothree percent of the first $100,000,000 of the assessed valuation, plus one and one-half percent ofsuch valuation in excess of $100,000,000 and not in excess of $300,000,000, plus two and one-
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half percent of such valuation in excess of $300,000,000. In calculating “net indebtedness,” theRevised Code provides that certain obligations of a county are not to be considered in thecalculation, including self-supporting obligations, revenue bonds, and special assessment debt.(For a complete list of exempt debt see the Financial Statement attached as Appendix C.)
Other infrequently issued types of obligations are also excluded from the calculation ofnet indebtedness; the County has no such obligations outstanding. Notes issued in anticipation ofbonds excluded from the calculation of net indebtedness are also excluded from such calculation.In calculating net indebtedness, amounts in a county’s bond retirement fund allocable to theprincipal amount of bonds otherwise included in the amount of net indebtedness are deductedfrom the total net indebtedness of such county.
Appendix C of this Annual Statement is a Financial Statement for the County, certifiedby the County Auditor, calculating the amount of the outstanding obligations of the Countywhich are subject to the total direct debt limit (3%, 11/2%, 21/2% limit) and the unvoted directdebt limit (1% limit). The total principal amount of voted and unvoted general obligation debtthat could be issued by the County, subject to the total direct debt limitation is $457,209,391 andthe County’s net debt subject to such limitation presently outstanding is $107,460,022, less thebalance in the bond retirement fund of $2,485,200, leaving a balance of approximately$352,234,569 borrowing capacity issuable within such limitation on combined voted andunvoted non-exempt debt. The County has no voted debt outstanding which is subject to suchlimitation as indicated on page [102] herein.
The total unvoted County general obligation debt that could be issued subject to the onepercent unvoted direct debt limitation is $183,483,757. The net County debt subject to suchlimitation presently outstanding is $107,460,022, less the balance in the bond retirement fund of$2,485,200, leaving a balance of approximately $78,508,935 of additional unvoted non-exemptdebt that could be issued by the County under such one percent limitation.
However, as described below, the County’s ability to incur debt in these amounts isrestricted by the indirect debt limitation. In the case of unvoted general obligation debt, both thedirect and the indirect debt limitations must be met.
Indirect Debt Limitations
Pursuant to Ohio law, a maximum tax levy of ten mills per dollar of assessed valuation(tax list) can be levied on any property without a vote of the people. The first charge againstthese ten mills is the debt service requirements on all limited tax general obligation bond andnote issues of all overlapping political subdivisions. These ten mills are available for the debtservice requirements of both limited tax bonds and notes for which tax levies are actually madeto pay principal and interest, and limited tax bonds and notes supported by revenues ormunicipal income taxes and not actually levied for unless such other sources becomeinsufficient. Calculations with respect to compliance with the ten-mill limitation are made forthe year in which pledged millage for unvoted general obligation bonds (or notes) of alloverlapping political subdivisions is the highest. When notes are involved, theoretical debtservice requirements for the bonds in anticipation of which such notes are issued are used incalculating aggregate pledged millage within the ten-mill limitation, and an assumed rate of
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interest for the bonds whose issuance is so anticipated is employed. A ten-mill certificate datedJuly 18, 2016 is attached as Appendix D.
Because bonded indebtedness in Ohio cannot be incurred or renewed unless provision ismade for levying taxes to pay debt service on the indebtedness (except in the case ofindebtedness payable solely from revenues or special restricted-purpose tax levies), the ten-milltax limitation represents an indirect limitation on a political subdivision’s capacity to incur debtwithin applicable direct debt limitations. Capacity within the ten-mill limitation is available to bepledged for debt service by overlapping political subdivisions having unvoted debt capacity on afirst-come, first-served basis, and because of the disparity in the sizes of the tax lists orduplicates, a political subdivision with a relatively small tax list whose territory overlaps that of apolitical subdivision with a relatively large tax list can use up indirect debt capacity available toboth through the issuance of a given principal amount of debt much more quickly than could thelatter subdivisions issuing the same amount of debt.
A constitutional amendment designed to remove this indirect debt limitation was defeatedby the electors of the State at the primary election on June 8, 1976.
At the present time, the Village of Silverton, Ohio is the taxing subdivision in the Countywith the highest potential millage requirements for debt service on its own unvoted generalobligation debt, with the amount theoretically required for a given tax payer in the overlappingsubdivisions of the Cincinnati City School District and the County being approximately 7.565mills, 0.777 mills of which are attributable to the County. The total amount leaves 2.435 millsfree to be used by the County and its overlapping subdivisions for additional unvoted generalobligation bonds. The ten-mill limitation is such that a relatively small issue by some otheroverlapping taxing subdivision with a small tax duplicate can encumber a significant amount ofmillage, thereby dramatically reducing the amount of unvoted general obligation debt that theCounty could issue.
Overlapping Debt
The net overall debt for Hamilton County and all overlapping political subdivisions is setforth in Debt Table A.
The boundary of the County includes 23 school districts, 20 cities, 17 villages, 12townships, one public library district, seven special districts, two park districts, and two jointvocational school districts, all of which are separate political subdivisions with operating anddebt service funding independent from that of the County. Various contractual and otherarrangements not material except as may be noted elsewhere herein are in effect among orbetween the County and certain of the other political subdivisions.
Under Revised Code Section 133.06, Boards of Education of the school districts cannotincur more than one-tenth of one percent of their respective tax lists as general obligation debtwithout majority approval by the voters of the respective school districts. Such Boards ofEducation may request voter approval of general obligation debt not in excess of nine percent ofthe tax list of the school district. Under State law, before seeking voter approval, a Board ofEducation is required where applicable to receive the consent of the Ohio Department of
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Taxation and the State Superintendent of Public Instruction in accordance with policies adoptedby the State Board of Education.
Cities and villages within the County are subject to the direct debt limitation imposed bySection 133.05 of the Ohio Revised Code, which provides that a municipal corporation’s votedand unvoted debt may not exceed ten and one-half per cent of its tax list, and that its unvoteddebt may not exceed five and one-half per cent of its tax list. By virtue of its City Charter andspecial court proceedings, the unvoted debt of the City is not subject to the ten-mill limitationand so need not be considered by the County in computing its ten-mill limitations on overlappingdebt.
Under Revised Code Section 133.09, the net indebtedness of a township, shall neverexceed five per cent of the township’s tax valuation, and, with the exceptions noted, no suchindebtedness shall be incurred unless authorized by vote of the electors of the township.
Certain classes of debt are exempt from these limitations, chief among which are specialassessment debt, notes issued in anticipation of current revenues or taxes or for certainemergency purposes, revenue bonds for various purposes, self-supporting debt for utility andquasi-utility purposes, voted urban redevelopment bonds not exceeding two per cent of theissuer’s tax list, self-supporting debt for recreational facilities, and debt covenanted to be paidfrom lawfully available municipal income taxes.
The net city debt in the County is $536,055,686; net village debt is $20,009,279; nettownship debt is $55,110,000; net city school district debt is $707,333,406; net local schooldistrict debt is $309,020,035; joint vocational school debt is $7,977,432; and miscellaneousdistrict debt is $7,495,000.
_____Source: Ohio Municipal Advisory Council.
Debt Table A
Overall Debt Statistics(as of July 15, 2016)
Net Debt of the County $80,665,000Per Capita Net Debt $100Net Debt as a Percentage of Assessed Valuation 0.44%Net Overall Debt $1,723,665,838Per Capita Net Overall Debt $2,146Net Overall Debt as a Percentage of Assessed Valuation 9.39%
Source: Ohio Municipal Advisory Council.
Bond Anticipation Notes and Certificates of Indebtedness
Under Ohio law applicable to the County, notes and certificates of indebtedness,including renewal notes, issued in anticipation of the issuance of general obligation bonds maybe issued from time to time up to a maximum maturity of 20 years from the date of issuance ofthe original notes (except for notes and certificates issued in anticipation of special
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assessments, for which the maximum maturity is five years). Any period in excess of five yearsmust be deducted from the permitted maximum maturity of the bonds anticipated, and portionsof the principal amount of such notes or certificates must be retired in amounts at least equal toand payable not later than principal maturities that would have been required if the bonds hadbeen issued at the expiration of the initial five-year period.
As of July 1, 2015, $-0- of outstanding County debt is in the form of bond anticipationnotes or certificates of indebtedness (as listed in Debt Table B).
The ability of the County to retire any bond anticipation notes or certificates ofindebtedness it may issue in the future will be dependent upon the marketability of renewal notesor certificates or bonds under market conditions then prevailing.
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Debt Currently Outstanding
Debt Table B lists the current outstanding indebtedness of the County in the form ofbonds, notes, and certificates of indebtedness:
Debt Table B
Principal Amount of Debt Outstandingas of January 1, 2016
Voted General Obligation Bonds
None
Unvoted General Obligation Bonds
Date ofIssue Purpose
OriginalAmountof Issue Interest Rate
CouponMaturity
FinalBond
AmountOutstanding
11/01/01 Various Purpose Refunding $12,165,000 4.00-5.00% J1-D1 12/21 $1,055,00003/15/05 Refunding 2005 28,715,000 5.00 J1-D1 12/17 4,885,0001
08/15/06 Emer. Mgmt. & Op. Ctr. 2006 725,000 4.25-4.50 J1-D1 12/25 450,00011/01/06 Emergency Services2 19,520,000 4.00 J1-D1 12/16 1,375,00001/04/07 Various Purpose Refunding 25,465,000 3.75-4.15 J1-D1 12/24 8,170,0003
04/15/07 Communication Center 1,025,000 3.75 J1-D1 12/16 120,00009/03/08 Various Purpose Ser. 2008 8,795,000 3.50-4.00 J1-D1 12/18 2,925,00005/20/09 Emergency Alert System 1,615,000 4.00-4.25 J1-D1 12/24 1,035,00007/15/09 Urban Redevelopment4 12,550,000 4.125-6.80 J1-D1 12/39 10,900,00012/20/11 Energy Conservation 2011A 3,448,675 2.40 J1-D1 12/22 2,601,27212/20/11 Energy Conservation 2011B5 2,063,750 5.25 J1-D1 12/26 2,063,75005/23/12 Energy Conservation 2012 9,400,000 2.00-3.125 J1-D1 12/27 7,815,00001/15/14 Riverfront Infrastructure Impr 19,030,000 2.00-5.00 J1-D1 12/28 18,095,00004/15/15 Various Purpose Impr & Ref.6 25,230,000 3.00-5.00 J1-D1 12/30 24,895,00007/23/15 The Banks Dev. Project7 21,880,000 12/44 21,720,000
TOTAL $191,627,425 $108,105,022_________1 A portion of the principal amount ($865,000), which has been excluded from the “Amount Outstanding,” has been defeased and acorresponding principal amount of bonds was redeemed on June 1, 2015.2 Refers to the Series 2006 Bonds, a portion of such Series 2006 Bonds, in the amount of $7,725,000, has been defeased and refunded with aportion of the proceeds of the 2015 Bonds and a corresponding principal amount of bonds will be redeemed on December 1, 2016.3 A portion of the principal amount ($3,670,000), which has been excluded from the “Amount Outstanding,” has been defeased and acorresponding principal amount of bonds will be redeemed on December 1, 2016.4 These bonds constitute Build America Bonds.5 These bonds constitute Qualified Energy Conservation Bonds. Principal amortization begins December 1, 2022.6 The 2015 Bonds are comprised of (i) a new money portion in the amount of $19,745,000 and (ii) a refunding portion in the amount of$5,485,000 (see footnote 2 above).7 Refers to the $21,880,000 Taxable Limited Tax General Obligation Improvement Bonds (The Banks Development Project – Phase 3 Parking),Series 2015.
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Sewer Revenue Bonds 133.08
Date ofIssue Purpose
OriginalAmountof Issue
InterestRate
CouponMaturity
FinalBond
AmountOutstanding
11/15/06 Sewer System (Series A)* $83,045,000 4.00-5.00 J1-D1 12/16 $2,690,00012/20/07 Sewer System (Series A)* 72,385,000 3.75-5.25 J1-D1 12/17 4,575,00008/25/09 Sewer System (Series A)* 19,515,000 4.00-5.00 J1-D1 12/19 12,725,00008/25/09 Sewer System (Series B)** 130,300,000 5.46-6.50 J1-D1 12/34 130,300,00011/03/10 SS Refunding (Series A) 43,595,000 2.00-5.00 J1-D1 12/21 35,185,00011/03/10 SS Improvement(Series B)** 87,080,000 4.613-5.370 J1-D1 12/35 87,080,00007/31/13 Sewer System (Series A) 178,760,000 5.00 J1-D1 12/38 178,760,00007/31/13 Sewer System (Series B) 79,935,000 0.80-1.76 J1-D1 12/17 28,645,00011/19/14 Sewer System (Series A) 215,170,000 3.00-4.00 J1-D1 12/32 208,360,000
TOTAL $909,785,000 $688,320,000_______* Partially defeased by the Sewer System Series A Bonds (2014).** These bonds constitute Build America Bonds.
Special Assessment Bonds
Date of Issue Purpose
OriginalAmountof Issue Interest Rate
CouponMaturity Final Bond
AmountOutstanding
09/01/96 Sewer District $445,000 5.625 J1-D1 12/16 $35,00008/01/97 Sewer District 340,000 5.30 J1-D1 12/17 50,00009/01/98 Sewer District 705,000 4.75 J1-D1 12/18 155,00009/01/99 Sewer District 170,000 5.5 J1-D1 12/19 50,00010/01/00 Sewer District 545,000 5.40-5.55 J1-D1 12/20 190,00008/15/01 Sewer District 150,000 4.80-5.10 J1-D1 12/21 60,00008/15/02 Sewer District 295,000 4.50-5.05 J1-D1 12/22 130,00009/01/03 Sewer District 460,000 5.30-5.75 J1-D1 12/23 230,00009/01/04 Sewer District 625,000 4.15-4.90 J1-D1 12/24 325,00009/01/05 Sewer District 110,000 4.40 J1-D1 12/25 60,00008/01/06 Sewer District 76,000 4.65-4.75 J1-D1 12/26 42,00009/01/07 Sewer District 750,000 4.30-4.65 J1-D1 12/27 520,00009/03/08 Sewer District 262,000 4.625-5.50 J1-D1 12/28 190,00009/16/09 Sewer District 710,000 3.00-4.50 J1-D1 12/29 535,00008/25/10 Sewer District 387,000 2.25-4.35 J1-D1 12/30 305,00008/24/11 Sewer District 275,000 4.75 J1-D1 12/31 230,00009/05/12 Sewer District* 373,000 3.50 J1-D1 12/32 332,00008/20/13 Sewer District* 182,000 4.21 J1-D1 12/33 169,78808/25/14 Sewer District* 326,000 4.75 J1-D1 12/34 315,878
09/08/15 Sewer District* 169,100 4.83 J1-D1 12/35 169,100
TOTAL $7,355,000 $4,093,766_________* Manuscript debt purchased by the Treasurer, Hamilton County, Ohio.
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Other Revenue Bonds
Date ofIssue Purpose
OriginalAmountof Issue
InterestRate
CouponMaturity
FinalBond
AmountOutstanding
12/12/01 Parking System $24,500,000 Var. Monthly 12/26 $15,395,000
$24,500,000 $15,395,000
Sales Tax Bonds
Date ofIssue Purpose
Original Amountof Issue
InterestRate
CouponMaturity
FinalBond
AmountOutstanding
11/01/00 Baseball Project* $349,992,512 5.00-5.85% J1-D1 12/32 $ 41,662,51212/12/06 Refunding Bonds 452,270,000 4.00-5.00 J1-D1 12/32 396,280,00010/13/11 Refunding 72,665,000 4.00-5.00 J1-D1 12/32 70,485,000
TOTAL $874,927,512 $508,427,512_______*A portion of these bonds was refunded with a portion of the proceeds of the County’s $452,270,000 Sales Tax Refunding Bonds, SubordinateSeries 2006A, dated December 12, 2006 (the 1998A Bonds called on 12/01/07 and the 1998B Bonds called on 06/01/08).
Ohio Public Works Commission*
Date ofIssue Purpose
OriginalAmount of
IssueInterest
RateCoupon
MaturityFinalBond
AmountOutstanding
01/99 Sewer Improvement $1,233,377 3.00 J1-D1 07/18 $153,09407/01 Sewer Improvement 1,094,898 0.00 J1-D1 07/20 273,72401/02 Sewer Improvement 1,434,351 3.00 J1-D1 06/21 363,71401/04 Sewer Improvement 608,853 3.00 J1-D1 07/24 227,35407/04 Sewer Improvement 812,947 0.00 J1-D1 07/17 81,29901/09 Sewer Improvement 1,552,500 0.00 J1-D1 07/28 973,08407/12 Sewer Improvement 312,440 0.00 J1-D1 12/41 270,781
$8,901,349 $2,343,050_________
* Debt service on the OPWC Loans is computed as if the debt service was paid in level payments based on the remaining outstanding principal as
of December 31, 2014 for each individual loan.
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Water Pollution Control Loan Fund – Sewer District
FirstPayment
DatePurpose
Amountof Issue
InterestRate
CouponMaturity
FinalBond
AmountOutstanding
7/1/96 Mill Creek CSO $1,164,829 4.56 July1-Jan1 1/16 $43,7037/1/96 Mill Creek CSO Phase 3 461,754 4.56 July1-Jan1 1/16 17,325
1/1/97 Mill Creek CSO Phase 5 254,073 4.35 Jan1-July1 7/16 18,5437/1/97 CSO Phase 6 618,760 4.35 July1-Jan1 1/17 67,0207/1/98 Sewer Construction 4,692,214 4.04 July1-Jan1 1/18 810,8557/1/97 CSO Phase 7 543,489 4.12 July1-Jan1 1/17 57,8337/1/02 Springdale-Sharonville Replacement 4,362,482 4.66 July1-Jan1 1/22 1,875,1061/1/05 Springdale/Sharonville, Contract 3 1,975,164 3.50 Jan1-July1 7/24 1,058,7131/1/06 Wooster Pike Sewer Phases 2 & 4 7,762,092 3.50 Jan1-July1 7/25 4,547,6807/1/05 Miamitown Interceptor Sewer 4,988,091 3.41 July1-Jan1 1/25 2,788,3277/1/06 Ludlow Run Relief Sewer 2,050,342 3.35 July1-Jan1 1/26 1,243,8287/1/08 Sycamore WWTP Ph 1 & 2 22,205,503 3.25 July1-Jan1 1/28 15,498,2421/1/10* Mill Creek WWTP Aerat'n Tank 3,340,495 3.42 Jan1-July1 7/29 2,563,7151/1/11 Wesselman Rd Interceptor 8,455,236 3.30 Jan1-July1 7/30 6,828,8917/1/11 Mill Creek WWTP Incinerator 25,247,574 2.80 July1-Jan1 1/31 20,723,6521/1/12 West Branch Muddy Creek Bundle 4,948,515 3.20 Jan1-July1 7/16 391,3677/1/12* Little Miami WWTP Improvements 5,939,221 3.25 July1-Jan1 1/31 5,155,807
7/1/12* Dry Run Area Sewers Ph 1 & 2 6,328,640 2.52 July1-Jan1 1/32 5,436,9137/1/12* Wesselman Rd Sewer Phase 2A 2,288,839 2.80 July1-Jan1 1/32 1,973,2457/1/12* Sagebrush Ln., et al Local Sewer 3,308,705 2.80 July1-Jan1 1/32 2,854,0791/1/13* Flow Monitoring & Modeling 4,258,123 2.80 Jan1-July1 7/32 3,760,1451/1/13* Little Miami Sludge Handling 5,481,811 2.66 Jan1-July1 7/32 4,832,368
1/1/13 Wet Weather Program Mgmt 16,480,953 2.80 Jan1-July1 7/32 14,553,5507/1/13* Mill Creek WWTP Primary 41,071,255 3.25 July1-Jan1 1/33 37,264,4677/1/13* Mill Creek WWTP Secondary 39,474,006 3.25 July1-Jan1 1/33 35,815,2637/1/13* Dry Run Area Sewers Ph 1 & 2 B 3,709,956 3.08 July1-Jan1 1/33 3,360,4197/1/13* Mill Creek WWTP Pump Station 9,651,053 3.08 July1-Jan1 1/33 8,741,7711/1/14* Mt. Airy Grating Sewer Sep. 2,141,014 2.21 Jan1-July1 7/33 1,966,7267/1/14 Werk & Welbourne EHRT 4,943,300 3.40 July1-Jan1 1/19 3,546,7807/1/14* Little Miami & Muddy Creek 10,967,809 3.01 July1-Jan1 1/34 10,352,9747/1/14* Muddy Creek WWTP Skim/Sludge 3,769,271 2.44 July1-Jan1 1/34 3,545,5707/1/14* Muddy Creek WWTP Electrical 5,352,500 2.44 July1-Jan1 1/34 5,034,8387/1/14* Little Miami WWTP Planning 6,417,000 2.15 July1-Jan1 1/34 6,025,0801/1/15* Westwood Northern Separation 3,184,843 2.80 Jan1-July1 7/34 3,064,1231/1/15* Queen City Ave Sewer Separation 7,377,996 3.27 Jan1-July1 7/34 7,111,6061/1/15* Sewer Relining Trenchless Tech 9,404,145 3.27 Jan1-July1 7/34 9,064,6007/1/15* Lower Mill Creek Partial Remedy 16,167,283 3.70 July1-Jan1 1/20 14,680,6241/1/16* Mill Creek WWTP Blower 12,418,349 3.27 Jan1-July1 7/35 12,418,3497/1/16* SCADA System Upgrades 13,282,206 2.20 July1-Jan1 1/36 13,282,2057/1/16* Muddy Creek WWTP Grit Replace 4,700,771 2.09 July1-Jan1 1/36 4,700,7717/1/16* Eastern and Delta Sewer Separation 5,041,759 2.04 July1-Jan1 1/36 5,041,7597/1/16* Daly Road Sewer Replacement 5,713,193 2.04 July1-Jan1 1/36 5,713,1937/1/17* Indian Creek WWTP Upgrades 7,345,036 1.68 July1-Jan1 1/37 7,345,0367/1/17* Sunset & Rapid Run Separation 8,067,454 1.67 July1-Jan1 1/37 8,067,4541/1/18* Upper Duck All WWIP 3,911,242 2.80 Jan1-July1 7/37 3,911,242
$361,268,346 $307,155,757________* Disbursements and amortization schedules for these WPCLF loans are not complete. The issue amount reflects anticipated total borrowing as well as capitalizedinterest as it accumulates. Debt service is calculated based on level payments on the remaining outstanding principal as of December 31, 2015 for each individualloan.
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State Infrastructure Bank Loan Fund – Loans
Date ofIssue Purpose
OriginalAmount ofIssue
InterestRate
CouponMaturity
FinalBond
AmountOutstanding
07/16/09 Intermodal Transit* $11,685,000 3.25-4.25% M15-N15 05/19 $6,205,000
$11,685,000 $6,205,000______* This loan is secured by parking revenues, sales tax receipts, and, on a contingent basis, by other non-tax revenues of the County.
Urban Redevelopment Loan Fund – Loans
Date ofIssue Purpose
OriginalAmount of
IssueInterest
RateCoupon
Maturity Final BondAmount
Outstanding10/30/09 Banks Development* $5,475,000 3.00 Monthly** 12/24 $4,998,328
$5,475,000 $4,998,328______*This loan is secured by parking revenues, sales tax receipts, and, on a contingent basis, by other non-tax revenues of the County. It isexpected that TIF revenues of the County and the City will be available to make debt service payments.**Balance as of 8/1/2015.
Capital Leases
Date ofIssue Purpose
OriginalAmount of
IssueInterest
RateCoupon
MaturityFinalBond
AmountOutstanding
07/22/09 Waste Water Eng Bld $15,000,000 2.50-5.00% J1-D1 12/29 $11,515,00001/30/15 Bengals Scoreboard 7,500,000 3.36 Quarterly* 10/19 6,045,04309/30/15 Bengals Scoreboard 238,315 3.36 Quarterly* 10/19 224,888
$22,500,000 $17,784,931
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Debt Table C(1)
Summary of Debt Service Due on Outstanding County ObligationsBy Principal Only as of December 31, 2015
DATEUNVOTEDGO BONDS
SALES TAXBONDS
OTHERREVENUE
BONDS* SIB LOAN
URBANREDEVELOP-MENT LOAN
SPECIALASSESSMENT
BONDS
SEWERREVENUE
BONDSCAPITALLEASES OWDA OPWC** WPCLF**
TOTAL
% OFPRINCIPAL
REMAINING12/31/16 $9,835,999 $22,120,000 $1,030,000 $1,685,000 $491,171 $385,904 $43,125,000 $2,122,280 0 $308,801 $17,054,566 $98,158,721 94.10%12/31/17 9,380,851 22,005,000 1,090,000 1,750,000 506,111 367,432 44,865,000 2,189,515 0 312,645 17,991,613 100,458,166 88.06%12/31/18 7,366,550 24,565,000 1,155,000 1,830,000 521,505 349,108 29,050,000 2,263,584 0 275,955 18,824,878 86,201,579 82.87%12/31/19 4,998,130 27,285,000 1,225,000 940,000 537,367 319,734 30,475,000 2,339,553 0 225,910 18,699,854 87,045,548 77.64%12/31/20 5,220,621 22,188,036 1,300,000 0 553,711 302,513 31,500,000 720,000 0 228,487 16,948,965 78,962,333 72.89%12/31/21 5,494,058 23,527,798 1,375,000 0 570,553 279,345 33,100,000 755,000 0 176,396 15,649,328 80,927,478 68.02%12/31/22 5,578,477 24,917,130 1,460,000 0 587,907 271,134 34,270,000 795,000 0 111,989 15,948,143 83,939,779 62.97%12/31/23 5,849,079 26,338,829 1,545,000 0 605,789 268,184 35,730,000 830,000 0 112,791 16,249,501 87,529,172 57.71%12/31/24 6,147,505 27,320,486 1,640,000 0 624,214 234,295 37,270,000 865,000 0 113,617 16,729,998 90,945,114 52.24%12/31/25 5,836,790 28,618,173 1,735,000 0 0 217,374 38,890,000 900,000 0 85,267 16,912,681 93,195,286 46.64%12/31/26 6,011,962 28,086,527 1,840,000 0 0 204,717 41,395,000 940,000 0 85,267 16,617,518 95,180,991 40.91%12/31/27 5,685,000 29,318,372 0 0 0 207,936 39,570,000 980,000 0 85,267 17,032,172 92,878,747 35.33%12/31/28 5,185,000 9,822,163 0 0 0 165,426 41,410,000 1,020,000 0 85,267 16,771,629 74,459,485 30.85%12/31/29 3,360,000 44,750,000 0 0 0 157,998 32,990,000 1,065,000 0 10,415 16,488,849 98,822,262 24.90%12/31/30 3,160,000 46,915,000 0 0 0 105,550 34,485,000 0 0 10,415 16,733,099 101,409,064 18.81%12/31/31 1,205,000 49,175,000 0 0 0 88,388 30,200,000 0 0 10,415 15,803,193 96,481,996 13.00%12/31/32 1,260,000 51,475,000 0 0 0 71,316 25,710,000 0 0 10,415 14,829,964 93,356,695 7.39%12/31/33 1,315,000 0 0 0 0 48,038 23,445,000 0 0 10,415 9,728,935 34,547,387 5.31%12/31/34 1,375,000 0 0 0 0 36,616 24,445,000 0 0 10,415 5,756,639 31,623,670 3.41%12/31/35 1,445,000 0 0 0 0 12,758 12,995,000 0 0 10,415 3,669,549 18,132,722 2.32%12/31/36 1,510,000 0 0 0 0 0 7,420,000 0 0 10,415 2,011,976 10,952,391 1.66%12/31/37 1,580,000 0 0 0 0 0 7,795,000 0 0 10,415 702,698 10,088,113 1.05%12/31/38 1,650,000 0 0 0 0 0 8,185,000 0 0 10,415 0 9,845,415 0.46%12/31/39 1,735,000 0 0 0 0 0 0 0 0 10,415 0 1,745,415 0.36%12/31/40 1,075,000 0 0 0 0 0 0 0 0 10,415 0 1,085,415 0.29%12/31/41 1,125,000 0 0 0 0 0 0 0 0 10,415 0 1,135,415 0.22%12/31/42 1,180,000 0 0 0 0 0 0 0 0 0 0 1,180,000 0.15%12/31/43 1,240,000 0 0 0 0 0 0 0 0 0 0 1,240,000 0.08%12/31/44 1,300,000 0 0 0 0 0 0 0 0 0 0 1,300,000 0.00%
TOTALS $108,105,022 $508,427,514 $15,395,000 $6,205,000 $4,998,328 $4,093,766 $688,320,000 $17,784,932 0 $2,343,054 $307,155,748 $1,662,878,359
______* DEBT SERVICE ON THE OTHER REVENUE BONDS IS COMPUTED USING A 6.00% COUPON FOR THE VARIABLE RATE PARKING SYSTEM BONDS.** THE OPWC AND WPCLF DEBT SERVICE REPRESENT LINES OF CREDIT. AMORTIZATION OF THESE LINES (AND DEBT TABLE C) IS BASED ON THE ASSUMPTION THAT ALLOF THE PRINCIPAL HAS BEEN DRAWN ON. HOWEVER NOT ALL OF THE LINES OF CREDIT HAVE BEEN ORIGINATED. DEBT TABLE B NOTES THE PRINCIPAL AMOUNT THATHAS BEEN ORIGINATED TO DATE. WHEN CONSTRUCTION IS COMPLETE, THE DEBT SERVICE SCHEDULE WILL BE ADJUSTED TO REFLECT ACTUAL PRINCIPAL ORIGINATED(GIVING CREDIT FOR PRIOR OVERPAYMENT OR UNDERPAYMENT). DEBT SERVICE ON THE OPWC AND WPCLF LOANS IS COMPUTED AS IF THE DEBT SERVICE WAS PAID INLEVEL PAYMENTS BASED ON THE REMAINING OUTSTANDING PRINCIPAL AS OF DECEMBER 31, 2015 FOR EACH INDIVIDUAL LOAN.
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Summary of Debt Service Due on Outstanding County ObligationsBy Total Debt Service as of December 31, 2015
DATEUNVOTEDGO BONDS
SALES TAXBONDS
OTHERREVENUE
BONDS*SIB LOAN
URBANREDEVELOP-MENT LOAN
SPECIALASSESSMENT
BONDS
SEWERREVENUE
BONDSCAPITALLEASES OWDA OPWC** WPCLF**
TOTAL
% OF DEBTSERVICE
REMAINING12/31/16 14,553,522 44,909,100 1,953,700 1,914,800 634,404 575,083 77,951,503 0 331,126 24,875,449 170,497,156 93.29%12/31/17 13,731,112 43,787,800 1,951,900 1,918,138 634,404 536,946 78,499,927 2,796,007 0 331,126 25,719,491 169,906,850 86.60%12/31/18 11,350,913 45,247,550 1,951,500 1,926,772 634,404 501,666 60,734,487 2,796,507 0 290,476 26,243,821 151,678,096 80.63%12/31/19 8,716,725 46,739,300 1,952,200 959,975 634,404 456,089 60,735,087 2,796,407 0 236,353 25,556,136 148,782,677 74.77%12/31/20 8,766,899 48,270,050 1,953,700 0 634,404 423,903 60,274,137 1,114,975 0 236,353 23,255,695 144,930,116 69.07%12/31/21 8,824,556 49,841,600 1,950,700 0 634,404 386,530 60,313,237 1,113,975 0 181,608 21,497,935 144,744,545 63.37%12/31/22 8,692,526 51,444,750 1,953,200 0 634,404 365,340 59,823,916 1,116,225 0 114,467 21,358,079 145,502,908 57.65%12/31/23 8,757,501 53,096,450 1,950,600 0 634,404 349,792 59,547,356 1,111,475 0 114,467 21,215,035 146,777,080 51.87%12/31/24 8,790,153 54,283,750 1,952,900 0 634,404 303,423 59,269,054 1,113,275 0 114,467 21,240,273 147,701,698 46.05%12/31/25 8,212,022 55,099,250 1,949,500 0 0 275,933 58,984,362 1,113,675 0 85,267 20,954,738 146,674,748 40.28%12/31/26 8,142,248 55,083,750 1,950,400 0 0 253,685 59,453,120 1,115,425 0 85,267 20,192,529 146,276,423 34.52%12/31/27 7,558,387 55,194,000 0 0 0 247,635 55,406,250 1,115,475 0 85,267 20,144,296 139,751,311 29.02%12/31/28 6,788,944 54,010,175 0 0 0 195,758 55,120,969 1,113,825 0 85,267 19,407,477 136,722,415 23.64%12/31/29 4,705,169 54,001,175 0 0 0 180,911 44,477,570 1,112,925 0 10,415 18,668,554 123,156,718 18.79%12/31/30 4,336,656 54,006,825 0 0 0 121,546 44,163,827 0 0 10,415 18,457,083 121,096,351 14.03%12/31/31 2,220,709 54,002,975 0 0 0 99,820 37,988,738 0 0 10,415 17,067,592 111,390,249 9.64%12/31/32 2,209,931 53,930,025 0 0 0 78,913 31,810,797 0 0 10,415 15,669,376 103,709,457 5.56%12/31/33 2,196,105 0 0 0 0 52,623 28,075,034 0 0 10,415 10,179,064 40,513,240 3.97%12/31/34 2,184,327 0 0 0 0 038,981 27,709,861 0 0 10,415 5,995,896 35,939,480 2.55%12/31/35 2,179,267 0 0 0 0 13,374 14,836,691 0 0 10,415 3,786,790 20,826,536 1.73%12/31/36 2,164,171 0 0 0 0 0 8,590,000 0 0 10,415 2,052,231 12,816,817 1.23%12/31/37 2,149,176 0 0 0 0 0 8,594,000 0 0 10,415 711,769 11,465,359 0.78%12/31/38 2,130,215 0 0 0 0 0 8,594,250 0 0 10,415 0 10,734,879 0.35%12/31/39 2,122,388 0 0 0 0 0 0 0 0 10,415 0 2,132,803 0.27%12/31/40 1,364,775 0 0 0 0 0 0 0 0 10,415 0 1,375,189 0.22%12/31/41 1,363,035 0 0 0 0 0 0 0 0 10,415 0 1,373,450 0.16%12/31/42 1,362,764 0 0 0 0 0 0 0 0 0 0 1,362,764 0.11%12/31/43 1,364,790 0 0 0 0 0 0 0 0 0 0 1,364,790 0.05%12/31/44 1,363,869 0 0 0 0 0 0 0 0 0 0 1,363,869 0.00%
TOTALS $158,302,855 $872,948,525 $21,470,300 $6,719,685 $5,709,637 $5,457,951 $1,060,954,173 $22,328,640 $ 0 $2,426,906 $384,249,309 $2,540,567,974
_______* DEBT SERVICE ON THE OTHER REVENUE BONDS IS COMPUTED USING A 6.00% COUPON FOR THE VARIABLE RATE PARKING SYSTEM BONDS.** THE OPWC AND WPCLF DEBT SERVICE REPRESENT LINES OF CREDIT. AMORTIZATION OF THESE LINES (AND DEBT TABLE C) IS BASED ON THEASSUMPTION THAT ALL OF THE PRINCIPAL HAS BEEN DRAWN ON. HOWEVER NOT ALL OF THE LINES OF CREDIT HAVE BEEN ORIGINATED. DEBT TABLE BNOTES THE PRINCIPAL AMOUNT THAT HAS BEEN ORIGINATED TO DATE. WHEN CONSTRUCTION IS COMPLETE, THE DEBT SERVICE SCHEDULE WILL BEADJUSTED TO REFLECT ACTUAL PRINCIPAL ORIGINATED (GIVING CREDIT FOR PRIOR OVERPAYMENT OR UNDERPAYMENT). DEBT SERVICE ON THE OPWCAND WPCLF LOANS IS COMPUTED AS IF THE DEBT SERVICE WAS PAID IN LEVEL PAYMENTS BASED ON THE REMAINING OUTSTANDING PRINCIPAL AS OFDECEMBER 31, 2015 FOR EACH INDIVIDUAL LOAN.
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FUTURE FINANCINGS
The County may issue $20-40 million of general obligation bonds for replacement andrenovation of the County Coroner’s facility in the next 12 to 24 months. The County is alsocontinuing to proceed with a facility master planning effort that will entail annual cash or debtinvestment in deferred maintenance, with an eye toward debt capacity made available as existingbonds are retired.
LEASES AND CONTRACTS
The County has entered into various contracts and leases for the rental of property andoffice space throughout the County. The following data represents the approximate rentalliabilities involved as of December 31 for the years indicated.
YearOperating Lease
PaymentCapital Lease
PaymentTotal Lease
Payment2011 $1,321,000 -0- $1,321,0002012 1,314,000 -0- 1,314,0002013 1,343,000 -0- 1,343,0002014 1,764,000 -0- 1,764,0002015 1,587,000 $1,639,000 3,226,000
_______Source: Hamilton County Auditor; 2015 data is unaudited.
OHIO EMPLOYER’S CONTRIBUTION TOOHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM
Approximately 4,600 current full and part-time employees of the County are coveredby the Ohio Public Employees Retirement System (“OPERS”), which retirement programincludes both employee and employer payments. Forty-two County employees are covered bythe State Teachers Retirement System of Ohio (“STRS”), which retirement program includesboth employee and employer payments. The County’s contributions are current and fully metas required by law. Annual contributions include provision for reserves to properly fundpension and other benefits payable on account for creditable service. OPERS and STRS areevaluated annually by nationally recognized actuarial consultants.
In 2015, employees covered by OPERS contributed at a statutory rate of 10% of earnablesalary. The County’s statutory contribution rate for those employees was 14% (18.10% for lawenforcement and public safety officers) of the same base, the rate actuarially established byOPERS. In 2015, employees covered by STRS contributed at a statutory rate of 12% of earnablesalary until June 30 and at a statutory rate of 13% of earnable salary from and after July 1. TheCounty’s statutory contribution rate for those employees was 14% of the same base. Theemployee and employer contribution rates for OPERS and STRS were the maximums permittedunder current State law. Historical County employer contributions to OPERS are set forth below.
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Employer’s Contribution Rate
YearPublic
EmployeesLaw Enforcement andPublic Safety Officers
TotalContribution
2011 14.00% 18.10% $29,100,4272012 14.00 18.10 28,414,6342013 14.00 18.10 28,189,6302014 14.00 18.10 29,323,4002015 14.00 18.10 29,647,663
_______Source: Hamilton County Auditor; 2015 data is unaudited.
The County’s annual OPERS employer contribution of $29,647,663 for 2015 wastreated as a current expenditure and is included in the County’s operating expenditures. TheCounty’s annual OPERS contributions totaled $50,990,304 in 2015, which included bothemployee and employer contributions.
With the implementation of GASB Statement No. 68 and GASB Statement No. 71, asof January 1, 2015, the County will report a substantial net pension liability in its BasicFinancial Statements for Fiscal Year 2015 due to the allocation of the State’s pension systems’unfunded pension liabilities to be reflected therein. The pension systems will allocate theunfunded liability by total employer contributions made by the County as a percentage of therespective system’s total employer contributions received.
Neither OPERS nor STRS is subject to the funding and vesting requirement of theEmployees Retirement Income Security Act of 1974. From time to time the Internal RevenueService reviews that Act to determine its position on whether pension funds for public bodiesmust meet certain provisions of that Act.
OTHER OBLIGATIONS
Sales Tax and Economic Development
The electorate approved a 1/2% additional sales tax at the primary election held March 19,1996, and the additional 1/2% sales tax is currently being collected. For information regarding thecurrent sales tax (see “OTHER MAJOR COUNTY REVENUE SOURCES, Total Sales TaxCollections.”
The County has executed leases with the Cincinnati Bengals and the Cincinnati Reds fornew stadiums which have been completed.
The County has financed construction with the issuance of significant levels of sales taxsupported obligations secured by the increased sales tax and has issued $623.1 million to fundthe football project and the baseball project. Such sales tax supported obligations are not generalobligation debt of the County and are not subject to either the direct debt limit or theconstitutional Ten-Mill unvoted tax rate limit (see “County Debt and Other Long TermObligations, Statutory Direct Debt Limitations” and “Indirect Debt Limitations” herein).
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Further, the Board of County Commissioners has pledged 30% of the additional one-halfcent sales tax to reduce annual ad valorem property taxes for owner-occupied residentialproperties and has agreed to make payments in lieu of taxes on the new stadium facilities to theBoard of Education of the Cincinnati City School District from sales tax receipts in an amountestimated to be approximately $10.5 million per year. The payment stream was restructuredduring 2006 deferring annual payments until 2010. Payments began again in 2010 at $10.9million annually until 2027 when they increase to $11.7 million per year until 2032.
The County and the City are cooperating in the redevelopment of the Central RiverfrontArea in downtown Cincinnati known as “The Banks,” including the development of the CentralRiverfront Park (collectively referred to as “The Banks Project”) and have entered into a MasterDevelopment Agreement, Infrastructure Development Management Agreement and aCooperation Agreement for the purpose of implementing The Banks Project.
The Banks Development Documents contemplate the commitment and expenditure offunding by the County and the City relating to the completion of certain public improvements,including, but not limited to, the intermodal transit facility, utility relocations, street gridcompletion, as well as certain additional expenditures relating to The Banks Project. Funding forthe County and City commitments consists of federal and state grants and loans as well as debtissued by the County and the City.
In April 2015, the County started collecting an additional one-quarter of one percent(1/4%) sales tax that will last five years in order to restore the Union Terminal at the CincinnatiMuseum Center. The total anticipated cost of the project is $212 million and is scheduled to becompleted in 2020. Of the total costs, $175 million are to be paid for using the proceeds from theone-fourth (1/4%) sales tax increase.
LEGAL MATTERS
General
The County is a party to various legal proceedings seeking damages or injunctive reliefand generally incidental to its operations but unrelated to any outstanding County debt or thesecurity therefore. The ultimate disposition of these various proceedings is not presentlydeterminable but will not, in the opinion of the Office of the Prosecuting Attorney of HamiltonCounty (the legal adviser to the Board of County Commissioners), have a material adverse effecton any outstanding County debt or the security therefore.
In addition to the foregoing, there is an ongoing matter involving the Hamilton CountyDepartment of Job and Family Services. Please see discussion of the special audits by the OhioDepartment of Job and Family Services and the Ohio Auditor of State of the Hamilton CountyJob and Family Services as well as the County’s financial obligation and any impact on theCounty general fund from such audits, which is set forth herein on Pages 35.
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Bond Counsel
In 2015, the County retained the legal services of Calfee, Halter & Griswold LLP,(“Calfee”), Cincinnati, Ohio, as Bond Counsel in connection with the issuance of the bonds andnotes of the County.
Calfee also serves and has served in a bond counsel capacity for one or more of thepolitical subdivisions that territorially overlap the County.
RATINGS
General
The County has a rating from Moody’s Investors Service for its outstanding generalobligation bonds and for its outstanding uninsured revenue bonds, as well as ratings fromStandard & Poor’s and Fitch Ratings, Inc. for the County’s Sales Tax Revenue Bonds. Thoserating reflects only the views of such rating agency. Any explanation of the significance of therating may only be obtained from the applicable rating agency. The County furnished to therating agencies certain information and materials, some of which may not have been included inthis Annual Statement, relating to the outstanding general obligation bond issues, the sales taxbond issues and the County. Generally, rating agencies base their ratings on such informationand materials and investigation, studies and assumptions by the rating agency. There can be noassurance that a rating when assigned will continue for any given period of time or that it willnot be lowered or withdrawn entirely by the rating agency if in its judgment circumstances sowarrant. Any such downward change in or withdrawal of a rating may have an adverse effect onthe marketability and/or market price of the County’s outstanding obligations.
The County presently expects to furnish such rating agencies with information andmaterial that they may request on future general obligation bond and sales tax revenue bondissues. However, the County 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 agency’s ratings on outstanding general obligationbonds or sales tax revenue bonds.
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Current Credit Ratings
The County currently obtains credit ratings on all of its debt and maintains ratings asfollows:
Bond Rating
InsurerMoody’s Standard & Poor’s(S&P) FitchGeneral Obligation Bonds Aa2 - - -
MSD Revenue (Series 2007-2015) Aa2 AA+ - -
Sales Tax—Riverfront (2000B and2006A)*
A1 - A+ AMBAC**
Sales Tax—Riverfront (2011) A1 - A+ -
Sales Tax -- Riverfront (2016)*** A1 AA- A+ -
Riverfront Parking Revenue (2001) A3 - - -__________* Underlying rating is “A1” by Moody’s Investors Service and “A+” by Fitch.**The surety provider AMBAC had its rating withdrawn by Standard & Poor’s and Moody’s which initially caused a nonpaymentdefault under the documentation for the sales tax bonds for which AMBAC served as a surety provider. The county filed a MaterialEvent Notice on July 8, 2011. The non-payment default came about through no fault of the County and does not affect the ability of theCounty to make timely payments of its debt service obligations. In order to satisfy the debt service requirements set forth in the TrustAgreement for the County’s Sales Tax Bonds, the County started to make monthly cash deposits into the debt service reserve fund forthe County’s Sales Tax Bonds as of August 2011 continuing through December 2012. Beginning in January 2013, the County provideda credit support instrument, initially through BBVA Compass Bank and currently through PNC Bank, National Association, in order tosatisfy its obligation to fully replenish the debt service reserve fund over approximately 40 months. Since the date of the initial cashdeposit into the debt service reserve fund for purposes of replenishing such fund, the County has been in compliance with the TrustAgreement governing replenishment of the debt service reserve fund.*** The County will issue its $324,035,000 Sales Tax Refunding Bonds, Series 2016A on September 7, 2016, the proceeds of whichwill be used to refund all but the December 1, 2016 maturity of the Series 2006A Bonds and to pay certain issuance costs. Inconnection with the refunding, the County will obtain a credit support instrument from Build America Mutual Assurance Company inan amount equal to the Reserve Requirement. The AMBAC sureties will be cancelled (although AMBAC will continue to insure theSeries 2000B Bonds) and the credit support instrument from PNC Bank, National Association will be cancelled as well.
CONTINUING DISCLOSURE
The County plans to meet all of the continuing disclosure requirements to be incompliance with Securities and Exchange Commission Rule 15c2-12, as amended (the“Rule”). The County has entered into a Master Continuing Disclosure Agreement covering alltransactions which are subject to the provisions of the Rule with respect to its Sewer Revenueand Sales Tax Bonds. Currently most annual financial information will be available on orabout August 15 following the end of the fiscal year under the terms of that agreement.
CONCLUDING STATEMENT
To the extent that any statements made in this Annual Statement involve matters ofopinion or estimates, whether or not expressly stated, these statements are made as such andnot as representations of fact or certainty, and no representation is made that any opinions orestimates in these statements will be realized. Information herein has been derived by theCounty from official and other sources and is believed by the County to be reliable, but suchinformation other than that obtained from official records of the County has not beenindependently confirmed or verified by the County and its accuracy is not guaranteed.
This Annual Statement has been prepared by Hamilton County under the direction of the Hamilton County Board of Commissioners with the assistance of the Hamilton County Auditor.
COUNTY OF HAMILTON, OHIO
Jeff Aluotto, Interim County Administrator
By: Dusty RhO£S, County Auditor
APPENDIX A-I AUDITED FINANCIAL STATEMENTS FOR HAMIL TON COUNTY, OHIO
FOR THE YEAR ENDED DECEMBER 31, 2014
Dave Yost· Auditor of State
HAMILTON COUNTY
TABLE OF CONTENTS
TITLE PAGE
Independent Auditor’s Report ...................................................................................... Under separate cover Comprehensive Annual Financial Report ................................................................... Under separate cover Federal Awards Expenditures Schedule ....................................................................................................... 1 Notes to the Federal Awards Expenditures Schedule .................................................................................. 7 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards ........................................................................................... 9 Independent Auditor’s Report on Compliance with Requirements Applicable to the Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 ........................................................................................ 11 Schedule of Findings ................................................................................................................................... 15 Schedule of Prior Audit Findings ................................................................................................................. 25 Corrective Action Plan ................................................................................................................................. 27
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Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
U.S. DEPARTMENT OF AGRICULTUREPassed through the Ohio Department of Education: Nutrition Cluster:
School Breakfast Program Juvenile Court 10.553 069690 $63,847National School Lunch Program Juvenile Court 10.555 069690 119,514
National School Lunch ProgramDevelopmental
Disabilities Services 10.555 067231 23,933Total for CFDA 10.555 143,447Total Ohio Department of Education—Nutrition Cluster 207,294
Passed through the Ohio Department of Job and Family Services:
State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
Job and Family Services 10.561 G-1415-11-5365 4,327,700
Total U.S. Department of Agriculture 4,534,994
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTDirect Programs:
Community Development Block Grants/Entitlement Grants
Planning and Development 14.218 2,260,244
Emergency Solutions Grants ProgramPlanning and Development 14.231 290,413
Neighborhood Stabilization ProgramPlanning and Development 14.264 80,440
Home Investment Partnerships ProgramPlanning and Development 14.239 839,324
Passed through the City of Cincinnati:
Home Investment Partnerships ProgramPlanning and Development 14.239 45X2014-033 329,084
Total for CFDA 14.239 1,168,408
Total U.S. Department of Housing and Urban Development 3,799,505
U.S. DEPARTMENT OF JUSTICEDirect Programs:
Drug Court Discretionary Grant Program
Mental Health and Recovery Services
Board 16.585 $70,710DNA Backlog Reduction Program Coroner 16.741 183,408Equitable Sharing Program Sheriff 16.922 1,859
Passed through the Ohio Department of Youth Services:Juvenile Accountability Block Grants Juvenile Court 16.523 2011-JB-011-A054S 24,961
Passed through the Ohio Office of Criminal Justice Services:Project Safe Neighborhoods Administrator 16.609 2012-PS-PSN-421 70,036Paul Coverdell Forensic Sciences Improvement Grant Program Coroner 16.742 2012-PC-NFS-7803 5,344Paul Coverdell Forensic Sciences Improvement Grant Program Coroner 16.742 2013-PC-NFS-7803 18,663Paul Coverdell Forensic Sciences Improvement Grant Program Coroner 16.742 2014-PC-NFS-7803 850
Total for CFDA 16.742 24,857Passed through the City of Cincinnati:
Edward Byrne Memorial Justice Assistance Grant Program Pretrial Services 16.738 2011-DJ-BX-3278 9,263Edward Byrne Memorial Justice Assistance Grant Program Pretrial Services 16.738 2012-DJ-BX-0145 51,955Edward Byrne Memorial Justice Assistance Grant Program Pretrial Services 16.738 2013-DJ-BX-0194 54,931
Total for CFDA 16.738 116,149
Total U.S. Department of Justice 491,980(Continued)
SCHEDULE OF FEDERAL AWARDS EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2014
HAMILTON COUNTY
1
Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
U.S. DEPARTMENT OF LABORPassed through the Ohio Department of Job and Family Services: Workforce Investment Act Cluster:
WIA Adult ProgramJob and Family
Services 17.258 G-1415-15-0301
Program $1,630,314
Administrative 32,910
Total 1,663,224
WIA Youth ActivitiesJob and Family
Services 17.259 G-1415-15-0301
Program 1,539,782
Administrative 152,293
Total 1,692,075
WIA Dislocated Worker Formula GrantsJob and Family
Services 17.278 G-1415-15-0301
Program 2,080,716
Administrative 193,138
Total 2,273,854Total Ohio Department of Job and Family Services—Workforce Investment Act Cluster 5,629,153
WIA Dislocated WorkersJob and Family
Services 17.277 G-1415-15-0301 205,248
Total U.S. Department of Labor 5,834,401
U.S. DEPARTMENT OF TRANSPORTATIONPassed through the Ohio Department of Transportation:
Highway Planning and Construction Stadia 20.205 PID86444 2,209,896Highway Planning and Construction Stadia 20.205 PID90848 326,612Highway Planning and Construction Engineer 20.205 PID82662 893,025Highway Planning and Construction Engineer 20.205 PID92742 0
Total for CFDA 20.205 3,429,533Passed through the Ohio Department of Public Safety:
State and Community Highway Safety Sheriff 20.600 STEP-2015-31-00-00-00563-00 3,652State and Community Highway Safety Sheriff 20.600 HVEO-2014-31-00-00-00356-00 26,380
Total for CFDA 20.600 30,032National Priority Safety Programs Sheriff 20.616 IDEP-2015-31-00-00-00593-00 10,919
Total U.S. Department of Transportation 3,470,484
U.S. ENVIRONMENTAL PROTECTION AGENCYDirect Programs:
Air Pollution Control Program SupportEnvironmental
Services 66.001 658,381
Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act
Environmental Services 66.034 273,350
Total U.S. Environmental Protection Agency 931,731(Continued)
HAMILTON COUNTY
SCHEDULE OF FEDERAL AWARDS EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2014
(Continued)
2
Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
U.S. DEPARTMENT OF EDUCATIONPassed through Great Oaks Institute of Technology and Career Development:
Adult Education—Basic Grants to States Sheriff 84.002 2004077 $98,843Passed through the Ohio Department of Rehabilitations and Corrections:
Title I State Agency Program for Neglected and Delinquent Children and Youth Sheriff 84.013 2015-T1-ED-0009 4,500
Title I State Agency Program for Neglected and Delinquent Children and Youth Sheriff 84.013 2014-T1-ED-0009 4,000
Total for CFDA 84.013 8,500Passed through the Ohio Department of Education:
Special Education—Grants to StatesDevelopmental
Disabilities Services 84.027 067231 221,557Passed through Hamilton County Family Children First Council:
Special Education-Grants for Infants and Families
Developmental Disabilities Services 84.181 129733 386,508
Special Education-Grants for Infants and Families
Developmental Disabilities Services 84.181 129553 381,290
Total for CFDA 84.181 767,798Passed through the Ohio Rehabilitation Services Commission:
Rehabilitation Services Demonstration and Training Programs
Developmental Disabilities Services 84.235 3100012 156,184
Passed through Ohio Mental Health and Addiction Services:
Race to the Top Early Learning Challenge
Mental Health and Recovery Services
Board 84.412 99-0031-RTTT-C-14-1779 42,163
Race to the Top Early Learning Challenge
Mental Health and Recovery Services
Board 84.412 99-0031-RTTT-C-15-1779 29,981Total for CFDA 84.412 72,144
Total U.S. Department of Education 1,325,026
U.S. ELECTION ASSISTANCE COMMISSIONPassed through the Ohio Secretary of State:
Help America Vote Act Requirements Payments Board of Elections 90.401 06-SOS-HAVA 22,084
Total U.S. Election Assistance Commission 22,084(Continued)
HAMILTON COUNTY
SCHEDULE OF FEDERAL AWARDS EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2014
(Continued)
3
Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICESDirect Programs:
Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Mental Health and Recovery Services
Board 93.104 $639,014Substance Abuse and Mental Health Services—Projects of Regional and National Significance
Mental Health and Recovery Services
Board 93.243 327,839Passed through Ohio Mental Health and Addiction Services:
Substance Abuse and Mental Health Services—Projects of Regional and National Significance Pretrial Services 93.243 VET-14-100-08-001 158,020Substance Abuse and Mental Health Services—Projects of Regional and National Significance
Mental Health and Recovery Services
Board 93.243 31-12864-SPFSIG-P-14-1191 81,606Substance Abuse and Mental Health Services—Projects of Regional and National Significance
Mental Health and Recovery Services
Board 93.243 31-12864-SPFSIG-P-15-1191 5,001Total for CFDA 93.243 572,466
Projects for Assistance in Transition from Homelessness (PATH)
Mental Health and Recovery Services
Board 93.150 31-0031-PATH-T-15-1578 80,310
Projects for Assistance in Transition from Homelessness (PATH)
Mental Health and Recovery Services
Board 93.150 PATH 14-100-20-005 154,985Total for CFDA 93.150 235,295
Passed through the Ohio Secretary of State:Voting Access for Individuals with Disabilities—Grants to States Board of Elections 93.617 06-SOS-HHS 18,746
Passed through the Ohio Department of Job and Family Services:
Promoting Safe and Stable FamiliesJob and Family
Services 93.556 G-1415-11-5365 491,638
Temporary Assistance for Needy Families Job and Family
Services 93.558 G-1415-15-0301 977,684
Temporary Assistance for Needy Families Job and Family
Services 93.558 G-1415-11-5365 10,221,743Total for CFDA 93.558 11,199,427
Child Support Enforcement Job and Family
Services 93.563 G-1415-11-5365 6,342,683Refugee and Entrant Assistance—State Administered Programs
Job and Family Services 93.566 G-1415-11-5365 211,713
Child Care and Development Block Grant Job and Family
Services 93.575 G-1415-11-5365 2,177,328Community-Based Child Abuse Prevention Grants
Job and Family Services 93.590 G-1415-11-5365 2,100
Grants to States for Access and Visitation Programs
Job and Family Services 93.597 G-1415-09-0557 40,922
Children's Justice Grants to StatesJob and Family
Services 93.643 G-1415-11-5365 1,552Stephanie Tubbs Jones Child Welfare Services Program
Job and Family Services 93.645 G-1415-11-5365 364,389
Foster Care—Title IV-EJob and Family
Services 93.658 G-1415-11-5365 22,473,755Foster Care—Title IV-E Juvenile Court 93.658 G-1415-06-0206 2,552,045
Total for CFDA 93.658 25,025,800(Continued)
FOR THE YEAR ENDED DECEMBER 31, 2014(Continued)
HAMILTON COUNTY
SCHEDULE OF FEDERAL AWARDS EXPENDITURES
4
Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
Passed through the Ohio Department of Job and Family Services (continued):
Adoption AssistanceJob and Family
Services 93.659 G-1415-11-5365 $5,077,739
Social Services Block GrantJob and Family
Services 93.667 G-1415-11-5365 8,291,877Passed through the Ohio Department of Developmental Disabilities:
Social Services Block GrantDevelopmental
Disabilities Services 93.667 3100012 548,906Passed through Ohio Mental Health and Addiction Services:
Social Services Block Grant
Mental Health and Recovery Services
Board 93.667 14-3A70 335612 4221C 287,252
Social Services Block Grant
Mental Health and Recovery Services
Board 93.667 15-3A70 335612 4221C 283,252Total for CFDA 93.667 9,411,287
Passed through the Ohio Department of Job and Family Services:
Chafee Foster Care Independence Program Job and Family
Services 93.674 G-1415-11-5365 492,543
Children's Health Insurance ProgramJob and Family
Services 93.767 G-1415-11-5365 4,587
Medical Assistance ProgramJob and Family
Services 93.778 G-1415-11-5365 7,931,848Passed through the Ohio Department of Developmental Disabilities:
Medical Assistance ProgramDevelopmental
Disabilities Services 93.778 3100012 1,580,484Total for CFDA 93.778 9,512,332
Passed through Ohio Mental Health and Addiction Services:
Block Grants for Community Mental Health Services
Mental Health and Recovery Services
Board 93.958 BG-14-430-08-09 12,829
Block Grants for Community Mental Health Services
Mental Health and Recovery Services
Board 93.958 99-0031-EXOFFEND-C-15-15009 12,500
Block Grants for Community Mental Health Services
Mental Health and Recovery Services
Board 93.958 14-3A90 335614 4221C Base 810,919
Block Grants for Community Mental Health Services
Mental Health and Recovery Services
Board 93.958 15-3A90 335614 4221C BG 1,100Total for CFDA 93.958 837,348
(Continued)
HAMILTON COUNTY
SCHEDULE OF FEDERAL AWARDS EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2014
(Continued)
5
Pass-ThroughCounty of Hamilton Federal Entity
Federal Grantor/Pass-Through Department or CFDA Identifying Grantor/Program or Cluster Title Board Number Number Expenditures
Passed through the Ohio Department of Alcohol and Drug Addiction Services:
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 FY13: 2080I, 2000C, 2050C $73,494
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 FY14: 2050C 2,161,974Passed through Ohio Mental Health and Addiction Services:
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959FY14: 2000C, 2030E, 2030M,
2080I 894,108
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 31-1036-CFRO-T-14-0138 50,988
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 31-13864-CMMCO-P-14-8992 25,655
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 31-10136-TASC-T-14-0728 339,466
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959 31-1036-UMADAOP-P-14-9149 149,328
Block Grants for Prevention and Treatment of Substance Abuse
Mental Health and Recovery Services
Board 93.959
31-1349-WOMEN-T-14-9046, 31-1358-WOMEN-T-14-9030, 31-1358-WOMEN-T-14-9036, 31-1367-WOMEN-T-14-9048, 31-2996-WOMEN-T-14-8992 919,068
Total for CFDA 93.959 4,614,081
Total U.S. Department of Health and Human Services 77,272,990
U.S. DEPARTMENT OF HOMELAND SECURITYDirect Program:
Homeland Security Biowatch ProgramEnvironmental
Services 97.091 245,629Passed through the Ohio Emergency Management Agency:
Emergency Management Performance GrantsEmergency
Management Agency 97.042 EMW-2013-EP-00060-S01 108,827
Emergency Management Performance GrantsEmergency
Management Agency 97.042 EMW-2014-EP-00064 137,103Total for CFDA 97.042 245,930
Homeland Security Grant ProgramEmergency
Management Agency 97.067 EMW-2011-SS-00070 2,768,232
Homeland Security Grant ProgramEmergency
Management Agency 97.067 EMW-2012-SS-00001 226,899
Homeland Security Grant ProgramEmergency
Management Agency 97.067 EMW-2013-SS-00120 238,774
Homeland Security Grant ProgramEmergency
Management Agency 97.067 EMW-2014-SS-00101-S01 107,961Total for CFDA 97.067 3,341,866
Total U.S. Department of Homeland Security 3,833,425
Total Federal Expenditures $101,516,620
See Notes to Schedule of Expenditures of Federal Awards.
SCHEDULE OF FEDERAL AWARDS EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2014
(Continued)
HAMILTON COUNTY
6
HAMILTON COUNTY
NOTES TO THE SCHEDULE OF FEDERAL AWARDS EXPENDITURES FISCAL YEAR ENDED DECEMBER 31, 2014
7
A. Significant Accounting Policies: The accompanying Schedule of Federal Awards Expenditures
(the Schedule) reports the County of Hamilton’s federal award programs’ disbursements. The Schedule has been prepared on the cash basis of accounting.
B. Subrecipients: Certain federal awards are passed through to other governments or not-for-profit
agencies (subrecipients) by the County. As note A describes, the County reports expenditures of federal awards to subrecipients when paid in cash. The table below identifies the total amount of federal assistance per federal program that is provided to subrecipients by the County:
Program Title
Federal CFDA
Number
Amounts Provided to
SubrecipientsCommunity Development Block Grants/Entitlement Grants 14.218 $ 964,158
Emergency Solutions Grants Program 14.231 290,413
Home Investment Partnerships Program 14.239 201,934
Drug Court Discretionary Grant Program 16.585 68,513
WIA Youth Activities 17.259 1,395,678
Race to the Top Early Learning Challenge 84.412 72,144Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) 93.104 528,027Projects for Assistance in Transition from Homelessness (PATH) 93.150 235,295Substance Abuse and Mental Health Services—Projects of Regional and National Significance 93.243 408,050
Temporary Assistance for Needy Families 93.558 4,050,730
Social Services Block Grant 93.667 570,504
Block Grants for Community Mental Health Services 93.958 837,348Block Grants for Prevention and Treatment of Substance Abuse 93.959 4,614,081
Homeland Security Grant Program 97.067 1,652,624
The County has certain compliance requirements regarding its subrecipients, such as monitoring them to help assure they use these subawards as authorized by laws, regulations, and the provisions of contracts or grant agreements, and that subrecipients achieve the awards’ performance goals.
C. Child Nutrition Cluster: Cash receipts from the U.S. Department of Agriculture are commingled
with the State grants. When reporting expenditures on this Schedule, it is assumed federal monies are spent first.
D. Community Development Block Grant (CDBG) and HOME Investment Partnerships Program
Revolving Loan Programs: The County has a revolving loan fund program to provide low-interest loans to eligible persons to rehabilitate homes. The U.S. Department of Housing and Urban Development (HUD) granted money for these loans to the County. When issued, these loans and administrative costs were recorded as disbursements on the Schedule. These loans are collateralized by home mortgages. We have liens on all properties and receive proof of homeowners’ insurance annually to ensure that they are still owner-occupied homes. This program was discontinued, and no new loans were processed in 2014. Activity in the revolving loan fund during 2014 is as follows:
HAMILTON COUNTY
NOTES TO THE SCHEDULE OF FEDERAL AWARDS EXPENDITURES FISCAL YEAR ENDED DECEMBER 31, 2014
(Continued)
8
CFDA 14.218
CFDA 14.239
Beginning loans receivable balances as of January 1, 2014
Community Development Block Grants/Entitlement Grants $271,363 HOME Investment Partnerships Program $ 16,331Loan principal repaid (46,425) (1,486)Ending loans receivable balances as of December 31, 2014 $224,938 $ 14,845 Administrative costs expended during 2014 $ 2,100 $ 348
The table above reports gross loans receivable. Of the loans receivable as of December 31, 2014, the County estimates $23,268 to be delinquent (more than 30 days past due).
E. Matching Requirements: Certain federal programs require the County to contribute nonfederal
funds (matching funds) to support the federally funded programs. The County has met its matching requirements (some occurred in 2015). The Schedule does not include expenditures of nonfederal matching funds.
F. Cost Report Settlement: During the calendar year, the County received notice of a liability owed to
the Ohio Department of Developmental Disabilities (ODODD) for the Medicaid program (CFDA #93.778) in the amount of $15,179. This Cost Report liability was for settlement of the difference between the statewide payment rate and the rate calculated based upon actual expenditures for Medicaid services. This liability is not listed on the County’s Schedule of Expenditures of Federal Awards since the underlying expenses occurred in prior reporting periods and the liability was invoiced by ODODD.
G. Medicaid Administrative Claim (MAC) Reconciliation: During the calendar year, the County
received a payment for a MAC Reconciliation of calendar years 2011 and 2012 MAC payments from ODODD for the Medicaid Program (CFDA #93.778) in the amount of $2,903. The MAC Reconciliation payment was to correct manual data entry errors of the Medicaid Eligibility Rates from Excel into the new RMTS system. This revenue is not listed on the County’s Schedule of Expenditures of Federal Awards since the underlying expenses occurred in prior reporting periods.
H. Transfers between Federal Programs: During 2014, the Ohio Department of Job and Family
Services, on the County’s behalf, made allowable transfers of $4,586,514 from the Temporary Assistance for Needy Families (TANF) (93.558) program to the Social Services Block Grant (SSBG) (93.667) program. The Schedule shows the County spent $11,199,427 on the TANF program. The amount reported for the TANF program on the Schedule excludes the amount transferred to the SSBG program. The amount transferred to the SSBG program is included as SSBG expenditures when disbursed. The following table shows the gross amount drawn for the TANF program during 2014 and the amount transferred to the Social Services Block Grant program.
Temporary Assistance for Needy Families $ 15,785,941 Transfer to Social Services Block Grant (4,586,514) Total Temporary Assistance for Needy Families $ 11,199,427
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov9
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
REQUIRED BY GOVERNMENT AUDITING STANDARDS Hamilton County 138 East Court Street Cincinnati, Ohio 45202 To the Board of County Commissioners: We have audited, in accordance with auditing standards generally accepted in the United States and the Comptroller General of the United States’ Government Auditing Standards, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Hamilton County, Ohio, (the County) as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the Entity’s basic financial statements and have issued our report thereon dated December 1, 2015, which was qualified due to material misstatements of the assets, liabilities, and fund balances presented in the governmental fund statements for the Public Assistance Fund, the Health and Human Services Levies Fund, and the Other Governmental Funds for the fiscal year ended December 31, 2014. We noted other auditors audited the financial statements of the Hamilton County Mental Health and Recovery Services Board (included in the Health and Human Services Levies Fund and Other Governmental Funds opinion units). This report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that those auditors separately reported.
Internal Control Over Financial Reporting As part of our financial statement audit, we considered the County’s internal control over financial reporting (internal control) to determine the audit procedures appropriate in the circumstances to the extent necessary to support our opinion on the financial statements, but not to the extent necessary to opine on the effectiveness of the Entity’s internal control. Accordingly, we have not opined on it. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Therefore, unidentified material weaknesses or significant deficiencies may exist. However, as described in the accompanying schedule of findings we identified certain deficiencies in internal control over financial reporting, that we consider a material weakness and a significant deficiency. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, when performing their assigned functions, to prevent, or detect and timely correct misstatements. A material weakness is a deficiency, or a combination of internal control deficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timely correct a material misstatement of the Entity’s financial statements. We consider finding 2014-002 described in the accompanying schedule of findings to be a material weakness. A significant deficiency is a deficiency, or a combination of internal control deficiencies less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider finding 2014-001 described in the accompanying schedule of findings to be a significant deficiency.
Hamilton County Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards Page 2
10
Compliance and Other Matters
As part of reasonably assuring whether the County’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 statement amounts. However, opining on compliance with those provisions was not an objective of our audit and accordingly, we do not express an opinion. The results of our tests disclosed instances of noncompliance or other matters we must report under Government Auditing Standards which are described in the accompanying schedule of findings as items 2014-001 and 2014-002. Entity’s Response to Findings
The County’s responses to the findings identified in our audit are described in the accompanying schedule of findings. We did not audit the County’s responses and, accordingly, we express no opinion on them. 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 County’s internal control or on compliance. This report is an integral part of an audit performed under Government Auditing Standards in considering the County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Dave Yost Auditor of State Columbus, Ohio December 1, 2015
11
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Hamilton County 138 East Court Street Cincinnati, Ohio 45202 To the Board of County Commissioners:
Report on Compliance for Each Major Federal Program We have audited Hamilton County, Ohio, (the County) compliance with the applicable requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133, Compliance Supplement that could directly and materially affect each of Hamilton County’s major federal programs for the year ended December 31, 2014. The Summary of Auditor’s Results in the accompanying schedule of findings identifies the County’s major federal programs. Management’s Responsibility The County’s Management is responsible for complying with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to opine on the County’s compliance for each of the County’s major federal programs based on our audit of the applicable compliance requirements referred to above. Our compliance audit followed auditing standards generally accepted in the United States of America; the standards for financial audits included in the Comptroller General of the United States’ Government Auditing Standards; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. These standards and OMB Circular A-133 require us to plan and perform the audit to reasonably assure whether noncompliance with the applicable compliance requirements referred to above that could directly and materially affect a major federal program occurred. An audit includes examining, on a test basis, evidence about the Entity’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our compliance opinion on the County’s major programs. However, our audit does not provide a legal determination of the County’s compliance. The County’s basic financial statements include the operations of Metropolitan Sewer District, which received $16,954,558 in federal awards which is not included in the County’s Schedule of Federal Awards Expenditures for the year ended December 31, 2014. Our audit of Federal awards, described below, did not include the operations of Metropolitan Sewer District because the department engaged the Auditor of State to separately audit its Federal award programs in accordance with OMB Circular A-133.
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov
12
Hamilton County Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Page 2 Basis for Qualified Opinion on Medicaid As described in finding 2014-005 in the accompanying schedule of findings, the County did not comply with requirements regarding special test and provisions applicable to its Medicaid major federal program. Compliance with this requirement is necessary, in our opinion, for the County to comply with requirements applicable to this program. Qualified Opinion on Medicaid In our opinion, except for the noncompliance described in the Basis for Qualified Opinion on Medicaid paragraph, Hamilton County complied, in all material respects, with the requirements referred to above that could directly and materially affect its Medicaid program for the year ended December 31, 2014. Unmodified Opinion on Each of the Other Major Federal Programs In our opinion, Hamilton County complied in all material respects with the requirements referred to above that could directly and materially affect each of its other major federal programs identified in the Summary of Auditor’s Results section of the accompanying schedule of findings for the year ended December 31, 2014. Other Matters The results of our auditing procedures disclosed instances of noncompliance which OMB Circular A-133 requires us to report, described in the accompanying schedule of findings as items 2014-003 and 2014-004. These findings did not require us to modify our compliance opinion on each major federal program. The County’s responses to our noncompliance findings are described in the accompanying schedule of findings and/or corrective action plan. We did not audit the County’s responses and, accordingly, we express no opinion on them. Report on Internal Control Over Compliance
The County’s management is responsible for establishing and maintaining effective internal control over compliance with the applicable compliance requirements referred to above. In planning and performing our compliance audit, we considered the County’s internal control over compliance with the applicable requirements that could directly and materially affect a major federal program, to determine our auditing procedures appropriate for opining on each major federal program’s compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not to the extent needed to opine on the effectiveness of internal control over compliance. Accordingly, we have not opined on the effectiveness of the County’s internal control over compliance. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. Therefore, we cannot assure we have identified all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses.
13
Hamilton County Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Page 3 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, when performing their assigned functions, to prevent, or to timely detect and correct, noncompliance with a federal program’s applicable compliance requirement. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a federal program’s compliance requirement will not be prevented, or timely detected and corrected. A significant deficiency in internal control over compliance is a deficiency or a combination of deficiencies in internal control over compliance with a federal program’s applicable compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings as item 2014-003 through 2014-005 to be material weaknesses. The County’s responses to our internal control over compliance finding are described in the accompanying schedule of findings. We did not audit the County’s responses and, accordingly, we express no opinion on them. This report only describes the scope of our tests of internal control over compliance and the results of this testing based on OMB Circular A-133 requirements. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Federal Awards Expenditures Required by OMB Circular A-133
We have also audited the financial statements of the governmental activities, the business-type activities, the discretely-presented component unit, each major fund and the aggregate remaining fund information of Hamilton County, Ohio, (the County) as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements. We issued our report thereon dated December 1, 2015, which we modified due to material misstatements of the assets, liabilities, and fund balances presented in the governmental fund statements for the Public Assistance Fund, the Health and Human Services Levies Fund, and the Other Governmental Funds at December 31, 2014. We also noted that other auditors audited the financial statements of the Hamilton County Mental Health and Recovery Services Board (included in the Health and Human Services Levies Fund and Other Governmental Funds opinion units as described in our opinion on the County’s financial statements). The report does not include the results of other auditors’ testing of internal control over financial reporting or compliance and other matters that those auditors separately reported. We conducted our audit to opine on the County’s basic financial statements. We have not performed any procedures to the audited financial statements subsequent to December 1, 2015. The accompanying schedule of federal awards expenditures presents additional analysis required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and is not a required part of the basic financial statements. The schedule is management’s responsibility, and was derived from and relates directly to the underlying accounting and other records management used to prepare the basic financial statements. We subjected this schedule to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling this schedule directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, in accordance with auditing standards generally accepted in the United States of America. In our opinion, this schedule is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
14
Hamilton County Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Page 4 Dave Yost Auditor of State Columbus, Ohio December 1, 2015
15
HAMILTON COUNTY
SCHEDULE OF FINDINGS OMB CIRCULAR A -133 § .505
DECEMBER 31, 2014
1. SUMMARY OF AUDITOR’S RESULTS
(d)(1)(i) Type of Financial Statement Opinion Qualified - Public Assistance fund, Health and Human Services Levies fund, and Other Governmental fund opinion units.
Unmodified - for all other opinion units.
(d)(1)(ii) Were there any material control weaknesses reported at the financial statement level (GAGAS)?
Yes
(d)(1)(ii) Were there any significant deficiencies in internal control reported at the financial statement level (GAGAS)?
Yes
(d)(1)(iii) Was there any reported material noncompliance at the financial statement level (GAGAS)?
Yes
(d)(1)(iv) Were there any material internal control weaknesses reported for major federal programs?
Yes
(d)(1)(iv) Were there any significant deficiencies in internal control reported for major federal programs?
No
(d)(1)(v) Type of Major Programs’ Compliance Opinion Qualified on Special Tests and Provisions – Medicaid (JFS Only)
Unmodified – Remaining Major Programs
(d)(1)(vi) Are there any reportable findings under § .510(a)?
Yes
16
Hamilton County Schedule of Findings Page 2
(d)(1)(vii) Major Programs (list): CFDA 93.558 Temporary Assistance for Needy Families Cluster
CFDA 93.658 Foster Care
CFDA 10.561 Supplemental Nutrition Assistance Program CFDA 93.778 Medicaid (Title XIX) CFDA 93.959 Block Grants for Prevention and Treatment of Substance Abuse CFDA 97.067 Homeland Security Grant Program CFDA 14.218 Community Development Block Grant/ Entitlement Grants
(d)(1)(viii) Dollar Threshold: Type A\B Programs Type A: > $3,000,000 Type B: > $300,000
(d)(1)(ix) Low Risk Auditee? No
2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GAGAS
FINDING NUMBER 2014-001
Noncompliance/Significant Deficiency Ohio Rev. Code, § 2335.25, states that each clerk of a court of record, the sheriff, and the prosecuting attorney shall enter in a journal or cashbook, provided at the expense of the county, an accurate account of all moneys collected or received in his official capacity, on the days of the receipts, and in the order of time so received, with a minute of the date and suit, or other matter, on account of which the money was received. The cashbook shall be a public record of the office, and shall, on the expiration of the term of each such officer, be delivered to his successor in office. The clerk shall be the receiver of all moneys payable into his office, whether collected by public officers of court or tendered by other persons and, on request, shall pay the moneys to the persons entitled to receive them. The clerk of the court of common pleas or of the county court may deposit moneys payable into his office in a bank or building and loan association, as defined in section 1151.01 of the Revised Code, subject to section 131.11 of the Revised Code. All public officials are responsible for the design and operation of a system of internal control that is adequate to provide reasonable assurance regarding the achievement of objectives for their respective public offices. In addition, all local public offices shall maintain an accounting system and accounting records sufficient to enable the public office to identify, assemble, analyze, classify, record and report its transactions, maintain accountability for the related assets, document compliance with finance-related legal and contractual requirements and prepare financial statements. The Clerk of Courts utilized zero balance accounts with Fifth Third Bank and beginning in June 2014 with US Bank to account for the activity of the separate divisions of the Court. The Clerk of Courts used nine separate sub-accounts to account for the disbursement and depository activity of the Court’s separate divisions and a single master operating account that retains all of the cash. The bank automatically transfers funds to or from the master operating account at the end of each business day to offset the net activity in each zero balance sub-account. The Clerk of Courts also had a STAR Ohio account and eleven certificates of deposit. The Clerk of Courts prepares a monthly cash reconciliation for the zero balance master operating account, the STAR Ohio account, and the certificates of deposit.
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Hamilton County Schedule of Findings Page 2
FINDING NUMBER 2014-001 (Continued)
The Clerk of Courts Office did not complete timely bank reconciliations. The May, June and July 2014 bank reconciliations, the months related to the change in banks from Fifth Third Bank to US Bank, were not prepared until the end of February 2015. The December 2014 bank reconciliation was not prepared until the end of April 2015. The reconciliations provided for audit were not accurate or complete. The following inaccuracies were noted for the December 2014 bank reconciliation: The adjusted bank balance did not reconcile to the Court's cashbook balances in the Court
Management System (CMS). The Court has retained amounts from prior years totaling $946,000 that are not accounted for on any cashbook. The Clerk of Courts should work with the County to determine what amount of this variance should be remitted to the County;
Three out of the nine sub-account reconciliations did not reconcile to an accurate CMS system balance. The Municipal Civil Court reconciliation balance was $57,157 greater than the CMS system balance. The Municipal Civil Court Rent Escrow Division, Municipal Civil Court Trust Division and Common Pleas Court reconciliation balances were $58,893, $85,757 and $1,430,411 less than the CMS system balance, respectively. In addition the Clerk of Courts prepares a combined reconciliation which includes all 9 sub-accounts and an additional account utilized as a sweep account. The total system balance presented on the Clerk of Courts combined reconciliation was $1,270,858 greater than the actual CMS system balances;
The bank reconciliations provided for the sub-account bank balances presented on the reconciliation for certificates of deposit compared to the amounts confirmed by the banks were overstated by $300,000;
Outstanding checks presented on the reconciliation were understated by $40,570;
Deposits in transit presented on the reconciliation were overstated by $187;
Reconciling items for the Common Pleas Court totaling $16,937 related to canceled checks and
declined credit card transactions were not reported on the reconciliation;
Two of the 9 sub-accounts were reconciled to a negative cashbook balance of ($159,523) and ($2,776) for the Municipal Criminal Traffic Division and the Auto Title Division respectively;
The Clerk of Courts did not present CMS system balance reports to substantiate the balances presented on the reconciliation for two of the nine sub-accounts, the Municipal Criminal Traffic Division and the Auto Title Division Passport Fees Account;
The Clerk of Courts Office overstated their reconciled cash balance by $3,078,385 to the County Auditor's Office for financial reporting purposes.
There was no evidence that anyone in the Clerk of Courts Office approves the monthly bank reconciliations of the various accounts under the control of the Clerk of Courts. Additionally, the Clerk of Courts Office had discrepancies in the listing of authorized signatories for nine out of the ten bank accounts with US Bank. The listing provided by the Clerk of Courts included signers not on the bank confirmation while the bank confirmation listed signers not on the Clerk of Courts listing. Failure to approve the monthly bank reconciliation and monitor authorized signatories may result in errors or inaccuracies on the reconciliations and an inability to identify potential errors or irregularities in a timely manner.
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Hamilton County Schedule of Findings Page 3
FINDING NUMBER 2014-001 (Continued)
We recommend that when preparing the bank reconciliations, the Clerk of Courts Office reconcile to the actual bank statement amounts and any variance between the court cashbook activity and the bank statement activity be investigated by the Clerk of Courts as a reconciling item. We recommend the preparers of bank reconciliations sign and date when the reconciliation is completed. We further recommend that management review and approve in writing all cash reconciliations prepared for the various accounts under the control of the Clerk of Courts. Officials’ Response: The Clerk has discontinued using the zero balance account. Each of the Clerk’s accounts is now maintaining its own balance and will be reconciled each month. The process will be in place and the monthly reconciliations will be up to date by December 31, 2015.
FINDING NUMBER 2014-002
Noncompliance/Material Weakness Ohio Rev. Code, § 5705.10 (I), requires that money paid into any fund be used only for the purposes for which such fund is established. The December 31, 2012 audit report identified an unrecorded fund finding for adjustment, impacting the following funds:
(amounts in 000’s)
Opinion Unit General Public Assistance HHS levies Other gov funds
Fund Balance ($1,752) ($35,050) $40,658 ($3,856) In October 2015, the County authorized two 20-year promissory notes to provide for the partial repayment of the required adjustments from the Public Assistance Fund to the Health and Human Services Levies Fund (Children’s Services subfund) in the amount of $10,615,000, and from the General Fund to the Public Assistance fund in the amount of $1,752,000. The County has recorded interfund payable liabilities and interfund receivable assets in the 2014 financial statements to reflect these promissory notes. The County has not provided sufficient evidentiary matter for audit that the remaining difference owed to the Children Services subfund (Health and Human Services Levies Fund) would meet the requirements of 5705.10(l) and could be eliminated from the original finding. Therefore, we consider the differences between the unrecorded fund adjustments reported in the 2012 audit report and the repayment amounts recorded in 2014 to be the remaining unpaid finding for adjustment. A summary of the differences between the unrecorded fund adjustments reported in the 2012 audit report and the repayment amounts recorded in 2014 follows:
(amounts in 000’s)
Opinion Unit Public Assistance HHS levies Other gov funds
Receivable ‐ Assets $30,043
Payable ‐ Liabilities $26,187 $3,856
Fund Balance 26,187 (30,043) 3,856 The lack of evidentiary matter to verify that amounts reimbursed from restricted funds were used only for the purposes for which such fund was established resulted in a qualified opinion for the Public Assistance, Health and Human Service Levies, and Other Governmental Funds opinion units.
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Hamilton County Schedule of Findings Page 4
FINDING NUMBER 2014-002 (Continued)
We recommend that the County either authorize promissory notes for the full amounts of the finding for adjustment identified in the 2012 report, or present the appropriate evidentiary matter for audit. Officials’ Response:
Crowe Horwath LLP (“Crowe”), one of the largest public accounting, consulting and technology firms in the United States, which has also performed work for certain State of Ohio entities, has evaluated the adjustments in question and has reached conclusions as to the proper amounts of the receivables and payables that should be recorded from the Public Assistance Fund to the Health and Human Services Levies Fund (Children’s Services Subfund) and from the General Fund to the Public Assistance Fund. The Board of County Commissioners, Hamilton County, Ohio, based upon the extensive work performed by Crowe and in an effort to begin to bring closure to the issues related to the above-referenced funds, authorized a promissory note in the amount of $10,615,000 from the Public Assistance Fund to the Health and Human Services Levies Fund (Children’s Services Subfund). It also authorized a promissory note in the amount of $1,752,000 from the General Fund to the Public Assistance Fund. Work is continuing between the County, Crowe and the Ohio Auditor of State to complete recently requested analyses by the Ohio Auditor of State in relation to these adjustments. 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS
Noncompliance/Material Weakness OMB Circular A133, Subpart C, 310(b)(3) states the auditee shall prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. At a minimum the schedule shall provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. OMB Circular A133, Subpart B, 205 (a) defines the determination of a federal awards expended as when the activity related to the award occurs. The activity pertains to events that require the non-Federal entity to comply with laws, regulations, and the provisions of contracts or grant agreements, such as: expenditure/expense transactions associated with grants. The County reports Foster Care expenditures utilizing the Ohio Department of Job and Family Services (ODJFS) 2820 and 454 reports, however, these ODJFS reports are not limited to the period covered by the County's financial reporting period. Additionally, the Ohio Department of Job and Family Services (ODJFS) advises the County agency to utilize internal records for the determination of Protect Ohio expenditures of current capitation and prior year earned amounts for reporting in accordance with the County’s schedule of expenditures of Federal awards. Due to timing issues related to the reporting of Protect Ohio expenditures, Hamilton County Department of Job and Family Services (HCJFS) included Protect Ohio expenditures that occurred in 2013 in the amount reported to the County Auditor for the County's schedule of expenditures of federal awards rather than only expenditures actually incurred during 2014. This resulted in a $17,471,534 decrease in Protect Ohio expenditures in the schedule of expenditures of federal awards.
Finding Number 2014-003
CFDA Title and Number CFDA 93.658 Foster Care
Federal Award Number / Year 2014
Federal Agency U.S. Department of Health and Human Services
Pass-Through Agency Ohio Department of Job and Family Services
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Hamilton County Schedule of Findings Page 5
FINDING NUMBER 2014-003 (Continued)
Additionally, because HCJFS utilized ODJFS 454 reports for their federal schedule reporting Protect Ohio expenditures were understated by $5,894,345. This was prior year earned Protect Ohio reserved for local match however, the 454 reports identified all reserved Protect Ohio match as a reduction to total Protect Ohio expenditures when these are considered federal monies that should have been included in the schedule of expenditures of federal awards. The 2014 schedule of expenditures of federal awards for CFDA 93.658 Foster Care was adjusted for these errors resulting in a net decrease of $11,577,189. We recommend the HCJFS implement internal control procedures to accurately report Protect Ohio expenditures. This includes procedures to reconcile ODJFS reports to the County Auditor's ledgers, to address timing differences to limit federal schedule amounts to those occurring during the calendar years as well as procedures to continually track unspent capitation (i.e. earned amounts) until they are expended. Officials’ Response: Expenses for Protect Ohio funding occur when a Journal Entry (JE) or a direct expense is entered into the County’s Accounting system charging it to Protect Ohio. We reported the correct amount of Protect Ohio disbursements based on when they were coded and subsequently reported via the ODJFS02820 report as Protect Ohio. The expenses that occurred in 2013 were not a federal expense until 2014 when a JE was entered into the County’s accounting system classifying them as Protect Ohio. In 2013 they were paid and classified as a local expense not Federal. On page 12 of the Auditor of the State of Ohio’s Compliance Guidance for Foster Care, CFDA 93.658, it states “Per ODJFS, all grants are reported on a cash basis and should be presented likewise on the SFAE.” HCJFS believes this supports our argument from above. HCJFS also sought ODJFS technical assistance when this same finding occurred last year. The following is the email response from Donna Tucker, ODJFS Bureau Chief of County Finance and Technical Assistance: Yes Mark. We would report for the month you claimed FFP – not when the services were provided or were paid with local funds. Let me know if this doesn’t answer his question. Thanks. D Donna Tucker, Bureau Chief County Finance and Technical Assistance Office of Fiscal and Monitoring Services 30 E. Broad Street 37th Floor Columbus OH 43215 614-466-6067 From: MARK MILLER [mailto:[email protected]] Sent: Friday, July 17, 2015 9:29 AM To: Tucker, Donna Cc: HILES, MIKE Subject: Question Donna: A general question was posed to us from our County Auditor, basically it is as follows: Would it be true to say that the expense is recognized to be a federal expense in the period (month) in
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Hamilton County Schedule of Findings Page 6
FINDING NUMBER 2014-003 (Continued)
which we (JFS) code and report the expense on the applicable financial report under the federal funding source (IE: Title XX,Title IVE)? So it would then follow that period on the required Federal reports that you (ODJFS) file and the Federal Schedule on the local level? For example: Payments in the Oct-Dec quarter for Out of Home Care (placement) are coded and reported as local are then re-coded and reported to ProtectOhio (Title IVE)/ Title XX in January of the following year. Thanks Mark Mark Miller Chief Financial Officer Hamilton County JFS 222 East Central Parkway, 7NW701 Phone: 513-946-1354 Fax: 513-946-2451 Auditor of State Conclusion: OMB Circular A-133 governs how and when HCJFS is to report on the County’s federal schedule. Per A-133.310(b)(3), the auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. At a minimum the schedule shall provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. A-133 section .205 (a) defines the determination of federal awards expended as when the activity related to the award occurs. The activity pertains to events that require the non-Federal entity to comply with laws, regulations, and the provisions of contracts or grant agreements, such as expenditure/expense transactions associated with grants. The actual transactions occurred in 2014 and in order to be able to apply grant funds against these expenditures the HCJFS was required to comply with the laws, regulations and provisions of the grant agreement at the time of purchase; otherwise, HCJFS could not have used grant funds to pay for these expenditures. Also, the reference to the ODJFS requirement to report the SFAE on a cash basis does not support the practice of classifying cash payments as federal expenditures in a fiscal year different that when the actual expenditures were made.
Noncompliance/Material Weakness Ohio Administrative Code Section 5101:9-6-25 C(3) states the Public Children's Service Agency (PCSA) shall act to reserve the non-federal share requirement for each capitation payment within ten business days of the deposit of the capitation payment into the county children services fund by the county auditor. The PCSA may advance reserve the non-federal share requirement for projected capitation payments at its discretion. A PCSA that reserves the non-federal share requirement in
Finding Number 2014-004
CFDA Title and Number CFDA 93.658 Foster Care
Federal Award Number / Year 2014
Federal Agency U.S. Department of Health and Human Services
Pass-Through Agency Ohio Department of Job and Family Services
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Hamilton County Schedule of Findings Page 7
FINDING NUMBER 2014-004 (Continued)
advance for its projected capitation payments shall not reserve an additional non-federal share until the following conditions are met: (i) The aggregate total amount of the reserved non-federal share is insufficient; and (ii) The aggregate total amount cannot fully support the non-federal share requirement for the aggregate sum of capitation payments received by the PCSA during the current demonstration budget cycle. The PCSA shall act within ten days to reserve additional non-federal share funds in an amount that is at least adequate to meet the variance between the reserved amount and the required amount. ODJFS shall not view a PCSA's failure to fully reserve its non-federal share requirement within the prescribed ten business day period as a violation of this policy when the following criteria have been met: (i) The PCSA demonstrates that the failure was solely attributable to timing issues associated with the disbursement of county tax revenues due to the PCSA; and (ii) The PCSA shows that it has fully met its non-federal share requirement by the close of each demonstration budget year. Hamilton County Job and Family Services (HCJFS) did not reserve the non-federal share requirements within 10 days for nine out of 13 (69%) monthly and closeout capitation payments deposited to the Children Services Levy fund by the County Auditor. HCJFS utilizes unspent capitation and local match from prior Protect Ohio grant years to provide for current year Protect Ohio non-federal match requirement. Therefore, the non-federal share is not being reserved till after prior year grant closeout which has been eight to 15 months after the first capitation payment has been deposited. For the remaining three months, the match was advance reserved. As a result, the amounts included on the ODJFS reports which are utilized for federal schedule reporting inaccurately reduced Protect Ohio expenditures by $5,894,345. HCJFS should act to reserve the non-federal share on a monthly basis on the 2820 to comply with OAC requirements and to avoid reporting errors of federal expenditures on the County's Federal Schedule. We recommend HCJFS establish procedures to comply with Protect Ohio matching requirements. Officials’ Response: Starting in October 2015, HCJFS will complete a JE each and every month that moves the amount of the monthly match to the Protect Ohio subaccount.
Noncompliance/Material Weakness Ohio Administrative Code 5160:1-2-16 (D)(11) states in part the administrative agency shall maintain documentation in a case file for each eligible individual. The file shall consist of permanent records, either hard copy or electronically stored, containing the following information, when appropriate: (a) Copy of the ODM 03528, ODM 03535, or other referral forms received by the county; (b) Copy of correspondence received and sent;
Finding Number 2014-005
CFDA Title and Number CFDA 93.778 Medicaid
Federal Award Number / Year 2014
Federal Agency U.S. Department of Health and Human Services
Pass-Through Agency Ohio Department of Job and Family Services
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Hamilton County Schedule of Findings Page 8
FINDING NUMBER 2014-005 (Continued)
(c) Documentation of agency contacts with the individual, both attempted and established; (d) Documentation of the MCP in which the individual is enrolled; (e) Information received from another county when the individual is an intercounty transfer; (f) Documentation of all service requests, steps taken by the administrative agency, and whether the
individual received services; and (g) Records of transportation services provided. The Hamilton County Department of Job and Family Services (HCJFS) did not provide support to substantiate that the County was maintaining proper documentation indicating proper follow up was performed for seven of the 46 (15%) individuals reviewed that were determined to be at risk of a high risk pregnancy. Failure of HCJFS to properly maintain documentation of their follow-up with individuals labeled with high risk pregnancies could lead to the individuals not receiving the proper services to manage the high risk pregnancy. We recommend the Hamilton County Department of Job and Family Services maintain proper documentation as required for individuals labeled as high risk pregnancies and follow up as necessary and document this follow up. Officials’ Response: Starting in October 2015 tighter controls will be put into place to avoid this from occurring in the future.
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HAMILTON COUNTY
SCHEDULE OF PRIOR AUDIT FINDINGS OMB CIRCULAR A-133 § .315 (b)
DECEMBER 31, 2014
Finding Number Finding Summary
Fully Corrected?
Not Corrected, Partially Corrected; Significantly Different Corrective Action Taken; or Finding No Longer Valid; Explain
Hamilton County Department of Job and Family Services Special Audit for the period July 1, 2000, through June 30, 2004
The special audit identified findings for adjustment affecting the following opinion units related to correct fund balances for undocumented interfund transfers, and amounts incorrectly paid from special funds during the period of audit (amounts in thousands): General Fund $(1,752) Public Assistance Fund $(35,050) Health & Human Services Levies Fund $40,658 Remaining Fund Information $(3,856) Since the initial finding for adjustment, the County has provided additional information that has significantly reduced the finding for adjustment to the amount set forth above. The County is working with an independent, certified accounting firm to assist in providing additional documentation for potential further reduction of the finding for adjustment.
No Partially corrected. County booked the following: General Fund $(1,752) Public Assistance Fund $ 1,752 $(10,615) Health & Human Services Levies Fund $ 10,615 Continuing work on final resolution. Reflected in audit opinion for the year ended December 31, 2014. Finding 2014-002
2013-001 Regarding Hamilton County Job and Family Services (HCJFS) reserving the nonfederal share of capitation payments (OAC §5101:9-6-25 C (3); CFDA 93.658 Foster Care): Nonfederal share reserve requirements were not met for 6 of twelve capitation payments.
No Reissued, Finding 2014-004
2013-002 Regarding HCJFS minimizing the time elapsing between receipt of IV-E waiver (Protect Ohio, CFDA 93.658 Foster Care) capitation payments and the disbursement of those funds (45CFR92 Subpart C-92.20b.7, OAC §5101:9-6-25 & 9-6-50 (B), ORC §5101.21 (C)(1)). HCJFS receives capitation revenues monthly but only disburses Protect Ohio funds in the accounting ledger after the grant closeout.
Yes Finding no longer valid.
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Hamilton County Schedule of Prior Audit Findings Page 2
2013-003 Regarding HCJFS’s accurate reporting of federal awards’ expenditures during the County’s fiscal year for CFDA 93.658 Foster Care, due to timing and incorrect coding of local match for Protect Ohio (A-133 Subpart C 310 (b)).
No Reissued, Finding 2014-003
2013-004 Regarding Prevention, Retention and Contingency (PRC) benefits of the Temporary Assistance to Needy Families Cluster (CFDA 93.558 & 93.714): Four of 60 case files (6.7%) could not be located, and one of 60 case files (in addition to the three missing case files) did not contain a completed PRC worksheet and application.
Yes
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HAMILTON COUNTY
CORRECTIVE ACTION PLAN OMB CIRCULAR A -133 § .315 (c)
FISCAL YEAR END DECEMBER 31, 2014
Finding Number
Planned Corrective Action
Anticipated Completion
Date
Responsible Contact Person
2014-001
The Clerk has discontinued using the zero balance account. Each of the Clerk’s accounts is now maintaining its own balance and will be reconciled each month. The process will be in place and the monthly reconciliations will be up to date by 12/31/2015.
12/31/2015
Mary Couzins
2014-002
Work is continuing between the County, its outside consultant, and the Ohio Auditor of State to complete recently requested analyses by the Ohio Auditor of State in relation to these adjustments.
6/30/2016
Deb Garvey
2014-003
Expenses for Protect Ohio funding occur when a Journal Entry (JE) or a direct expense is entered into the County’s Accounting system charging it to Protect Ohio. We reported the correct amount of Protect Ohio disbursements based on when they were coded and subsequently reported via the ODJFS02820 report as Protect Ohio. The expenses that occurred in 2013 were not a federal expense until 2014 when a JE was entered into the County’s accounting system classifying them as Protect Ohio. In 2013 they were paid and classified as a local expense not Federal.
Mark Miller/ Mike Hiles
2014-004
HCJFS will complete a JE each and every month that moves the amount of the monthly match to the Protect Ohio subaccount.
10/2015
Mark Miller/ Mike Hiles
2014-005
Tighter controls will be put into place to avoid this occurring in the future.
10/2015
Mark Miller/ Mike Hiles
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2014ComprehensiveAnnualFinancialReport
For the year ended The County of December 31, 2014 Hamilton, Ohio
Issued by Dusty Rhodes Hamilton County Auditor
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2014 Comprehensive
Annual Financial Report
For the fiscal year ended
December 31, 2014
Issued by
Dusty Rhodes
Auditor
Hamilton County, Ohio
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COUNTY OF HAMILTON, OHIO COMPREHENSIVE ANNUAL FINANCIAL REPORT
Year Ended December 31, 2014
TABLE OF CONTENTS INTRODUCTORY SECTION PAGELETTER OF TRANSMITTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 LIST OF ELECTED OFFICIALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ORGANIZATION CHART. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 MANAGEMENT’S DISCUSSION AND ANALYSIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements: Statement of Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Fund Financial Statements: Balance Sheet—Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Reconciliation of Balance Sheet—Governmental Funds—to Government-Wide Statement of Net Position 37 Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds. . . . . . . . . 38 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances—
Governmental Funds—to Government-Wide Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Statements of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual:
General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Public Assistance—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Health and Human Services Levies—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Statement of Fund Net Position—Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Statement of Revenues, Expenses and Changes in Fund Net Position—Proprietary Funds. . . . . . . . . . . . 46 Statement of Cash Flows—Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Statement of Assets and Liabilities—Agency Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Notes to the Basic Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 SUPPLEMENTARY INFORMATION:
Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet—Nonmajor Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—
Nonmajor Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Schedules of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual:
General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Public Assistance—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Health and Human Services Levies—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Motor Vehicle Gas Tax—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Health and Community Services Nongrants—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Health and Community Services Grants—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Transportation Improvement District—Special Revenue Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 General Obligation Nonvoted—Debt Service Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Special Assessments—Debt Service Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Combining Statement of Fund Net Position—Nonmajor Enterprise Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 128 Combining Statement of Revenues, Expenses and Changes in Fund Net Position—
Nonmajor Enterprise Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Combining Statement of Cash Flows—Nonmajor Enterprise Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Combining Statement of Net Position—Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Combining Statement of Revenues, Expenses and Changes in Fund Net Position—
Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Combining Statement of Cash Flows—Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Combining Statement of Assets and Liabilities—Agency Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Combining Statement of Changes in Assets and Liabilities—Agency Funds. . . . . . . . . . . . . . . . . . . . . . . . . 141
STATISTICAL SECTION STATISTICAL SCHEDULES:
Net Position by Component—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 145 Changes in Net Position—Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Fund Balances of Governmental Funds—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Changes in Fund Balances of Governmental Funds—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Assessed Value and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years . . . . . . . . . . . . . . . 150 Property Tax Rates—Direct and Overlapping Governments—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . 152 Principal Property Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Property Tax Levies and Collections—Real, Utility and Tangible Taxes—Last Ten Years . . . . . . . . . . . . . . . . 155 Ratios of Outstanding Debt by Type—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Legal Debt Margin Information—Total Debt Limit—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Legal Debt Margin Information—Unvoted Debt Limit—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Pledged Revenue Coverage—Metropolitan Sewer District—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . 160 Pledged Revenue Coverage—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Ratios of Net General Bonded Debt Outstanding—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Demographic and Economic Statistics—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Principal Employers—Current Year and Nine Years Ago . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Full-Time Equivalent County Government Employees by Function/Program—Last Ten Fiscal Years . . . . . . . 167 Operating Indicators by Function/Program—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Capital Asset Statistics by Function—Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Introductory
Section
The County of
Hamilton, Ohio
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December 1, 2015
To the Honorable Board of County Commissioners and Citizens of Hamilton County: I am pleased to present the Comprehensive Annual Financial Report (CAFR) of the County of Hamilton for the year ended December 31, 2014. This report contains the financial and statistical data that provide a complete and full disclosure of all material financial aspects of the County. Ohio Revised Code Section 117.38 and Ohio Administrative Code Section 117-2-03 require that the County produce annual financial statements pursuant to generally accepted accounting principles (GAAP). The responsibility for the accuracy of all data presented and its completeness and fairness of presentation rests with the County Auditor’s Office and, specifically, the Department of Finance. To the best of management’s knowledge, this report contains the financial statements and other financial and statistical data that provide a complete and full disclosure of all material financial aspects of the County. All disclosures necessary to enable the reader to gain an understanding of the County of Hamilton’s activities have been included. This report represents the financial activity of the County in conformity with generally accepted accounting principles (GAAP) as set forth by the Governmental Accounting Standards Board (GASB) and other recognized authoritative sources, and is consistent with the reporting model as promulgated by GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. The County of Hamilton is required to undergo an annual single audit in conformity with provisions of the Single Audit Act of 1984, the Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget’s Circular A-133, Audits of State and Local Governments. Information related to this single audit, including a schedule of federal financial assistance, the independent auditor’s report on internal control and compliance with applicable laws and regulations, and a schedule of findings are included in a separately issued audit report. The basic financial statements of the County as of and for the year ended December 31, 2014, included in this CAFR have been audited by the Ohio Auditor of State. The independent auditor’s report is located at the front of the financial section of this report. GAAP requires that management provide a Management’s Discussion and Analysis (MD&A), a narrative introduction, overview and analysis to accompany the basic financial statements. The MD&A complements
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this letter and should be read in conjunction with it. The MD&A appears immediately after the independent auditor’s report. Reporting Entity County of Hamilton was named for the former Secretary of the Treasury Alexander Hamilton, and was created by proclamation of Arthur St. Clair, Governor of the Northwest Territory, on January 2, 1790. The County was the second county formed in the State of Ohio, with Cincinnati as the County seat. The County is situated in the extreme southwestern corner of the State and covers an area of 407.4 square miles. The County encompasses 49 cities, villages and townships, of which Cincinnati is the largest. The County is the third largest in the State of Ohio in terms of population (802,374 per the 2010 U.S. Census). Located on the Ohio River, Hamilton County forms the core of the Greater Cincinnati Metropolitan Area, which also includes the counties of Brown, Butler, Clermont and Warren in Ohio; Dearborn, Franklin and Ohio Counties in Indiana; and Boone, Bracken, Campbell, Gallatin, Grant, Kenton and Pendleton Counties across the river in Kentucky. The metro area has a population of 2,130,151 which makes it the 27th largest metropolitan area in the country per the 2010 U.S. Census. The County has operated under the statutory form of government since its founding. As an agent of the State, County government serves the entire County in a variety of ways. The County’s legislative and taxing authority are vested in an elected, three-member Board of County Commissioners that is responsible for, among other things, passing resolutions, issuing bonds, adopting budgets and hiring the County Administrator. The County Administrator is responsible for carrying out the policies and resolutions of the Board of County Commissioners, and for appointing the heads of the departments under the control of the Board. The County Auditor is also elected and serves as both the chief fiscal officer for the County and the real property assessor for all political subdivisions within the County. As chief fiscal officer, the Auditor is responsible for maintaining the County’s centralized accounting, payroll and benefits systems; for preparing the Comprehensive Annual Financial Report; and for issuing warrants and processing payments made on behalf of County agencies. The Auditor prepares the general tax list of the County, calculates the voted and unvoted tax rates for real estate and personal property and, once collected, distributes the tax receipts to the appropriate political subdivisions and agencies within the County. As real property assessor, the Auditor is responsible for a full reappraisal of approximately 350,000 parcels of real property in the County every six years, with an interim update three years later. The Treasurer is the custodian of County funds and is responsible for collecting all tax moneys and applying payments to the appropriate tax accounts. As specified by law, the Treasurer is also responsible for investing idle County funds. In addition to those discussed immediately above, other elected officials serving four-year terms are the Clerk of Courts, Coroner, Engineer, Prosecutor, Recorder and Sheriff. The Court of Appeals Judges, Common Pleas Judges and the County-wide Municipal Court Judges are all elected to six-year terms. Included in the financial statements that follow is reporting for a component unit of Hamilton County, the Convention Facilities Authority (CFA) for Hamilton County, Ohio. The CFA is a legally separate entity for which the County is financially accountable because the County appoints a voting majority of CFA’s governing body and has the ability to impose its will on the CFA. The CFA was created in 2002 for the purpose of financing the Cincinnati Convention Center (now known as the Duke Energy Center) renovation and expansion. (See the notes to the financial statements for additional information about the CFA.) The annual budget is the starting point for the County’s financial planning and control. The budgeting process is primarily the province of the Board of County Commissioners (BOCC). Initially, the County’s Office of Budget and Strategic Initiatives released a General Fund forecast so that all County agencies would be aware of and prepared for the 2014 budget reductions. Prior to the County Administrator releasing a recommended budget in early October, departments had the opportunity to respond to the forecasts in work sessions with the BOCC. The BOCC typically adopts the final budget by December. If a
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final budget is not adopted before January 1, the start of the County’s fiscal year, then the BOCC must adopt a temporary appropriation measure, and then approve the final budget by April 1. The appropriated budget is prepared by (1) fund, (2) agency/function and (3) appropriation level (personnel services, other expenditures and capital outlay), otherwise known as the legal level of budgetary control (the level at which agencies may not overspend appropriations). The adopted budget may be amended in one of three ways: (1) transfer of appropriations between funds, departments or appropriation levels, all of which must be approved by the BOCC; (2) additional appropriations, which also require BOCC approval; and (3) transfers within appropriated levels, which require County Administrator approval. (With regard to this latter category, however, such transfers within appropriated levels are not necessary since agencies may legally spend within their total budget for a given appropriation level without further approval.) Budget-to-actual comparisons are provided in this report for the General Fund and each annually budgeted major special revenue fund, and are included as part of the basic governmental fund financial statements. In the supplementary information section, budgetary comparisons are presented at the legal level of budgetary control for all governmental funds with legally adopted annual budgets (i.e., the General Fund, some special revenue funds and all debt service funds). Factors Affecting Financial Condition Local Economy Hamilton County’s economy represents a cross-section of the national economy, with a diversity that does not rely too heavily on any one sector. In 2014, Hamilton County’s average unemployment rate was 5.3, and the local growth in employment outpaced the rest of the country, which has not been the case historically. The Cincinnati USA Regional Chamber and the Northern Kentucky Chamber of Commerce in their 2014 Regional Economic Outlook report that an increasing number of positive signs indicate the economy is beginning to stabilize; however, the region’s recovery from the recession continues to be modest. Long-Term Financial Planning The County’s top revenue sources for the General Fund continue to be impacted by the slow economic recovery in the region as well as State budget pressures; however, sales tax revenue increased by 6.4% in 2014. The original 2014 General Fund budget of $200.3 million is structurally balanced, and reflects an increase of 2.7% from that of 2013. General Fund revenue stagnation has had another critical implication beyond its impact on the General Fund. The BOCC has also historically relied upon the annual sales tax growth rate of 3.0% in planning to meet the County’s legal and/or political obligations associated with a special 0.5% additional sales tax initiated in the late 1990s to cover the costs of ambitious riverfront redevelopment efforts, obligations that include financing debt to cover the costs of building new major league football and baseball stadiums and related infrastructure, developing “The Banks” riverfront project begun in 2008, as well as covering the costs of the continued operation of those stadia and infrastructure and a property tax credit for people who own and occupy their own homes in Hamilton County. The lack of consistent sales tax growth has resulted in a projected Sales Tax Fund deficit beginning in 2010 totaling approximately $14 million. This deficit grows to over $90 million in less than five years. The BOCC addressed the 2010 deficit by using available fund balance in the Sales Tax Fund, a transfer from the Sales Tax Stabilization Fund, a transfer from the General Fund, and a reduction in project overhead costs for The Banks Riverfront Redevelopment project. In December 2009, the Commission approved a framework for permanently addressing the Sales Tax Fund deficit that includes dedicating a portion of the anticipated casino revenue beginning in 2013, anticipated lease concessions from the Cincinnati Reds and Cincinnati Bengals professional sports teams, and a new revenue stream.
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In November 2012, the Commission took additional action, adopting a consensus approach to systematically address the structural imbalance in the sales tax fund. In this legislation, the Commission resolved (1) to approve a .25% increase in the permissive sales and use tax rate (subsequently approved in December 2012); (2) that the amount of the property tax rebate slated for elimination will work toward ensuring that net property taxes collected do not change (subsequent resolution in December 2012); (3) that the county Administrator is to work with the professional sports teams to gain commitments of revenue contributions and/or expense reductions; and (4) that beginning in 2014, at least $1.5 million of casino revenue will be dedicated to economic development in high-priority sites. While faced with the strains of the economy, the County is also trying to maintain a minimum General Fund reserve of 5.0% of ongoing General Fund expenditures, with the longer-term goal of a 15.0% reserve. The reserve balance in 2014 was approximately 13.2% of General Fund expenditures. Major Events and Initiatives Significant economic development activity occurred in Hamilton County in 2014. Major hospital expansions were either commenced or completed. Christ, Jewish, Children’s and Mercy West Hospitals were involved. The long-term employment impact of these projects will be significant. Redevelopment projects in the Over-the-Rhine neighborhood continued, drawing national attention. Riverfront development also continued with General Electric selecting The Banks for an administrative headquarters. Another significant event dates to late 2004 when the Ohio Auditor of State and the Ohio Department of Job and Family Services announced that they would conduct a special audit of Hamilton County’s Department of Job and Family Services. Some issues from that special audit remain unresolved, and any liability related to the unresolved special audit issues has yet to be finalized. For more information on the special audit, see the Notes to the Basic Financial Statements in this report. Acknowledgments The preparation of this report could not have been accomplished without the dedicated services of the Auditor’s Finance Department, as well as other Auditor staff. I would like to express my appreciation to all members of the Department who assisted and contributed to the preparation of this report. Due credit also should be given to the County administration for their efforts to fulfill their responsibilities with regard to the operations of the County. Sincerely,
Dusty Rhodes Auditor
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COUNTY OF HAMILTON, OHIO ELECTED OFFICIALS
As of December 31, 2014
Board of County Commissioners Christopher Monzel, President
Gregory P. Hartmann Todd Portune
Dusty Rhodes Auditor Theresa Winkler Clerk of Courts Lakshmi K. Sammarco, M.D. Coroner Theodore B. Hubbard Engineer Joseph T. Deters Prosecutor Wayne Coates Recorder James C. Neil Sheriff Robert A. Goering Treasurer
Ohio Court of Appeals First District Penelope R. Cunningham, Presiding Judge Patrick F. Fischer R. Patrick DeWine Sylvia Sieve Hendon Patrick T. Dinkelacker Lee H. Hildebrandt, Jr.
Common Pleas Court Judges General Division Ethna M. Cooper, Presiding Judge Jerome J. Metz, Jr. Nadine L. Allen Beth A. Myers Kim Wilson Burke Norbert A. Nadel Leslie E. Ghiz Robert P. Ruehlman Charles J. Kubicki, Jr. Carl Stich Jr. Jody M. Luebbers John Andrew West Melba D. Marsh Ralph E. Winkler Steven E. Martin Robert C. Winkler Domestic Relations Division Susan L. Tolbert, Administrative Judge Jon H. Sieve Amy L. Searcy Probate Court Division James C. Cissell, Presiding Judge
Juvenile Court Division John M. Williams, Presiding Administrative Judge
Hamilton County Municipal Court
Melissa A. Powers, Presiding Judge Dwane K. Mallory Lisa C. Allen William L. Mallory Richard A. Bernat Russell J. Mock II Theodore N. Berry Fanon A. Rucker Bernard A. Bouchard Heather S. Russell Cheryl D. Grant Megan Shanahan Bradley J. Greenberg Tyrone K. Yates
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CITIZENS OFHAMILTONCOUNTY
Clerk Common Court Domestic Board ofAuditor of Pleas Coroner of Relations Engineer County Juvenile Municipal Probate Prosecuting Recorder Sheriff Treasurer
Courts Court Appeals Court Commissioners Court Court Court Attorney
Metropolitan
Sewer
District
County ClerkAdministrator of
Board
County Communications Planning County Human Emergency Environmental Job andAdministration Center and Facilities Resources Management Services Family Riverfront
Development Agency Services
BOARDS AND COMMISSIONS
Board of Elections Public Defender Commission
Board of Developmental Disabilities Services Transportation Improvement District
Law Library Resources Board Veterans Service Commission
Mental Health and Recovery Services Board
ORGANIZATION CHART COUNTY OF HAMILTON, OHIO
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Financial
Section
The County of
Hamilton, Ohio
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INDEPENDENT AUDITOR’S REPORT Hamilton County 138 East Court Street Cincinnati, Ohio 45202 To the Board of County Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Hamilton County, Ohio (the County), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for preparing and fairly presenting these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes designing, implementing, and maintaining internal control relevant to preparing and fairly presenting financial statements 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 did not audit the financial statements of the Hamilton County Mental Health and Recovery Services Board, which represent 11 percent of the expenditures and revenues of the Health and Human Services Levies Fund, and eight percent and 10 percent of the expenditures and revenues respectively, of the Other Governmental Funds opinion units. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amount included for the Hamilton County Mental Health and Recovery Services Board, is based solely on the report of other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the financial audit standards in the Comptroller General of the United States’ Government Auditing Standards. Those standards require us to plan and perform the audit to reasonably assure the financial statements are free from material misstatement. An audit requires obtaining evidence about financial statement amounts and disclosures. The procedures selected depend on our judgment, including assessing the risks of material financial statement misstatement, whether due to fraud or error. In assessing those risks, we consider internal control relevant to the Government's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not to the extent needed to opine on the effectiveness of the Government's internal control. Accordingly, we express no opinion. An audit also includes evaluating the appropriateness of management’s accounting policies and the reasonableness of their significant accounting estimates, as well as our evaluation of the overall financial statement presentation.
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov
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Hamilton County Independent Auditor’s Report Page 2 We believe the audit evidence we obtained is sufficient and appropriate to support our audit opinions. Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Business-Type Activities Unmodified
Aggregate Discretely Presented Component Unit Unmodified
General Fund Unmodified
Public Assistance Fund Qualified
Health and Human Services Levies Fund Qualified
Other Governmental Funds Qualified
Metropolitan Sewer District Fund Unmodified
Paul Brown Stadium Fund Unmodified
Baseball Stadium Fund Unmodified
Aggregate Remaining Enterprise Information Unmodified
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Hamilton County Independent Auditor’s Report Page 3 Basis for Qualified Opinions on Major Governmental Funds Public Assistance, Health and Human Services Levies, and Other Governmental Funds Opinion Units The December 31, 2012 audit report identified an unrecorded fund finding for adjustment, impacting the following funds:
(amounts in 000’s)
Opinion Unit General Public Assistance HHS levies Other gov funds
Fund Balance ($1,752) ($35,050) $40,658 ($3,856) In October 2015, the County authorized two 20-year promissory notes to provide for the partial repayment of the required adjustments from the Public Assistance Fund to the Health and Human Services Levies Fund (Children’s Services subfund) in the amount of $10,615,000, and from the General Fund to the Public Assistance fund in the amount of $1,752,000. The County has recorded interfund payable liabilities and interfund receivable assets in the 2014 financial statements to reflect these promissory notes; however, these amounts were less than the required adjustments at December 31, 2012. The County has not provided evidentiary matter for audit examination of specific transactions to justify a reduction in interfund payable liabilities and interfund receivable assets, therefore the difference is considered to be still outstanding and material to the opinion units. The following table summarizes the differences between the unrecorded fund adjustments reported in the 2012 audit report and the repayment amounts recorded in 2014 follows:
(amounts in 000’s)
Opinion Unit Public Assistance HHS levies Other gov funds
Receivable ‐ Assets $30,043
Payable ‐ Liabilities $26,187 $3,856
Fund Balance 26,187 (30,043) 3,856 Qualified Opinions In our opinion, except for the effects of the matter described in the Basis for Qualified Opinions on Major Governmental Funds Public Assistance, Health and Human Services Levies, and Other Governmental Funds Opinion Units paragraph, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Public Assistance, Health and Human Services Levies, and Other Governmental Funds Opinion Units Hamilton County, Ohio, as of December 31, 2014, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Unmodified Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the discretely presented component unit, the General Fund, Metropolitan Sewer District Fund, Paul Brown Stadium Fund, Baseball Stadium Fund, and the aggregate remaining Enterprise fund information of Hamilton County, Ohio as of December 31, 2014, and the respective changes in its financial position and where applicable, cash flows thereof and the respective budgetary comparisons for the General, Public Assistance, and Health and Human Services Levies funds thereof for the year then ended in accordance with the accounting principles generally accepted in the United States of America.
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Hamilton County Independent Auditor’s Report Page 4 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require this presentation to include Management’s discussion and analysis listed in the table of contents, to supplement the basic financial statements. Although this information is not part of the basic financial statements, the Governmental Accounting Standards Board considers it essential for placing the basic financial statements in an appropriate operational, economic, or historical context. We applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, consisting of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, to the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not opine or provide any assurance on the information because the limited 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 County’s basic financial statements taken as a whole. The introductory section, the financial section’s combining statements, individual fund statements and schedules, and the statistical section information present additional analysis and are not a required part of the basic financial statements. The statements and schedules are management’s responsibility, and derive from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. We subjected this information to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling this information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves in accordance with auditing standards generally accepted in the United States of America. In our opinion, except for statements and schedules presenting the Public Assistance Fund, the Health and Human Services Levies Fund, and the Other Governmental Funds opinion unit this information is fairly 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 procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or any other assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 1, 2015, on our consideration of the County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report describes the scope of our internal control testing over financial reporting and compliance, and the results 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 in considering the Government’s internal control over financial reporting and compliance.
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Hamilton County Independent Auditor’s Report Page 5 Dave Yost Auditor of State Columbus, Ohio December 1, 2015
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
The discussion and analysis of Hamilton County’s financial performance provides an overall review of the County’s financial activities for the fiscal year ended December 31, 2014. The intent of this discussion and analysis is to present a narrative overview of the County’s financial performance as a whole. Readers should also review the transmittal letter, at the front of this report, and the County’s financial statements and notes, which follow this section, to enhance their understanding of the County’s financial performance. FINANCIAL HIGHLIGHTS Key financial highlights for 2014 are as follows: The net position of the County as of December 31, 2014, was $1,674.4 million. Of the
$668.5 million in total net position of governmental activities, unrestricted net position of $40.9 million may be used to meet the government’s ongoing obligations to citizens and creditors.
Unrestricted net position in business-type activities was $436.4 million as of December 31, 2014.
In total, net position increased $125.3 million in 2014. Net position of governmental
activities increased $39.1 million. Net position of business-type activities increased $86.2 million.
The revenues of the governmental activities were $709.4 million; $342.0 million was from program revenues, and $367.4 million was from general revenues. During this same period, expenses related to the governmental activities were $664.8 million. The largest category of expenses was for health-related purposes in the amount of $185.6 million.
The 2014 revenues of the business-type activities were $407.9 million—$297.4 million from program revenues and $110.5 million from general revenues. Expenses related to the business-type activities were $327.2 million. The largest expenses were in the operations of Metropolitan Sewer District in the amount of $219.6 million.
General revenues accounted for $477.9 million of total revenues for 2014. Program-specific revenues in the form of charges for services, grants and contributions accounted for $639.4 million of total revenues of $1,117.3 million in 2014.
As of December 31, 2014, the County’s governmental funds reported a combined fund balance of $384.3 million, an increase of $24.9 million compared to 2013. Approximately 12% of this combined fund balance ($46.9 million) is available for spending at the government’s discretion (unassigned fund balance).
The fund balance of the County’s General Fund increased $1.6 million in 2014.
Unassigned fund balance for the General Fund was $52.4 million in 2014, compared to
$56.5 million in 2013, a change of 7%. This unassigned fund balance represents 26% of General Fund expenditures and other financing uses.
Total long-term liabilities in business-type activities decreased $33.8 million due to MSD’s defeasance of prior-year bond issuances.
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COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
USING THIS COMPREHENSIVE ANNUAL FINANCIAL REPORT Overview of the Financial Statements This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Hamilton County as a financial whole, an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial activities. The discussion and analysis in this section is intended to serve as an introduction to the County’s basic financial statements. The County’s basic financial statements include three components: (1) the government-wide financial statements, (2) the fund financial statements and (3) the notes to the financial statements. This report also contains other supplementary information that further explains and supports information in the basic financial statements.
1. The government-wide financial statements—the Statement of Net Position and the Statement of Activities—are designed to provide both long-term and short-term information about the County’s overall financial status.
2. The fund financial statements report detailed financial information about individual parts
of the County’s operations. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. The most significant funds—major funds—are presented in separate columns on the fund financial statements. All other funds—nonmajor funds—are presented in total in one column.
3. The financial statement notes provide more detailed data and explanations for some
financial statement information.
REPORTING HAMILTON COUNTY AS A WHOLE Government-Wide Financial Statements This document contains information about the separate funds used by Hamilton County to account for services and programs provided to our citizens. Additionally, the review of the County as a financial whole assesses all financial transactions and measures the County’s financial position and liquidity. The government-wide financial statements—the Statement of Net Position and the Statement of Activities—are designed to provide readers with a broad overview of the County’s finances. Statement of Net Position and Statement of Activities The Statement of Net Position and the Statement of Activities report both long-term and short-term information about the County’s overall financial status using the accrual basis of accounting, similar to the method of accounting used by private-sector companies.
Statement of Net Position. The Statement of Net Position presents information on all of the County’s assets, liabilities and deferred inflows/outflows of resources, with the difference between all elements reported as net position. This statement provides information about the nature and amounts of investments in resources (assets) and the obligations to County creditors (liabilities), and supplies the basis for evaluating the County’s capital structure, for computing the rates of return and for assessing the liquidity and financial flexibility of the County.
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COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Statement of Activities. The Statement of Activities provides information about all of the County’s current-year revenues and expenses, and measures the success of the County’s operations over the past year. Use of the accrual basis of accounting for financial reporting means all current-year revenues and expenses are reported regardless of when cash is received or paid.
These two government-wide statements report the County’s net position and the change in net position. The change is important because it tells the reader whether, for the County as a whole, the financial position has improved or diminished. In evaluating the overall position of the County, nonfinancial information—such as changes in the County’s tax or employment base, the condition of County capital assets, changing economic conditions, population and customer growth, and new or changed rules and regulations—also need to be considered. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the Statement of Activities for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). In the Statement of Net Position and the Statement of Activities, County functions are divided into the following two distinct kinds of activities:
Governmental Activities—Most of the County’s programs and services mandated by State statute are reported as governmental activities, including general government, judicial, public safety, social services, health, public works, environmental control, economic development, and recreational activities. These services are funded primarily by taxes and intergovernmental revenues, including federal and state grants and other shared revenues.
Business-Type Activities—Most of the County’s programs or services intended to recover
all or a significant portion of their costs through user fees and charges are reported as business-type activities. The County charges fees to recoup the cost of operations and capital expenses associated with these activities.
The separately audited financial statements of the Metropolitan Sewer District of Greater Cincinnati (MSD), the County-owned sewer district operated by the City of Cincinnati under a management contract, have been included in this report as a proprietary enterprise fund with appropriate note disclosure. The government-wide financial statements include not only the County itself (known as the primary government) but also any component units, if applicable. Component units are legally separate entities for which the primary government is financially accountable. For 2014, the Convention Facilities Authority (CFA) is a discretely presented component unit, and its financial data is reported on the government-wide statements. The Hamilton County Transportation Improvement District (TID) is reported as a blended component unit. Even though the TID is a legally separate entity, it is reported as if it were part of the County because its governing board is substantively the same as that of the County. The TID is reported as part of the nonmajor governmental funds. The government-wide financial statements can be found in this report immediately following this narrative.
16
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
REPORTING HAMILTON COUNTY’S MOST SIGNIFICANT FUNDS Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Based on restrictions on the use of moneys, the County maintains many funds that account for the multitude of services provided to its citizens. The fund financial statements report detailed financial information about individual parts of the County’s operations, focusing on the County’s most significant funds—major funds. Major funds are presented in separate columns on the fund financial statements, with all nonmajor funds presented in total in one column. Governmental Funds, Proprietary Funds and Fiduciary Funds All of the funds of the County can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources (cash and other financial assets that can readily be converted to cash flow in and out), as well as on balances of spendable resources available at the end of the fiscal year. Governmental fund statements explain how services were financed in the short term, as well as what dollars remain for future spending. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. The Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balances for the governmental funds provide reconciliations to facilitate this comparison between governmental funds and governmental activities. The County maintains a multitude of individual governmental funds. Information is presented separately in the Balance Sheet and in the Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund, the Public Assistance fund and the Health and Human Services Levies fund, all of which are considered to be major governmental funds. Data from the other nonmajor governmental funds, which include special revenue, debt service and capital projects funds, are combined into a single, aggregate presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements in the supplementary information section of this report. The County is required by Ohio law to adopt budgets for the General Fund, special revenue funds and debt service funds. A budgetary comparison statement for the General Fund and each annually budgeted major special revenue fund has been provided as part of the basic governmental fund financial statements. In the supplementary information, budgetary
17
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
comparisons are presented at the legal level of budgetary control for all governmental funds with legally adopted annual budgets. The basic governmental fund financial statements can be found in this report immediately following the government-wide financial statements. Proprietary Funds. Proprietary fund statements present both short-term and long-term financial information about County operations financed and operated in a manner similar to a private business. On the Statement of Fund Net Position and the Statement of Revenues, Expenses and Changes in Fund Net Position, proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The final required statement for proprietary funds is the Statement of Cash Flows. This statement reports cash receipts, cash payments and net changes in cash and cash equivalents resulting from operations, investing and financing activities. This statement provides answers to such questions as where did cash come from, what was cash used for and what was the change in the cash balance during the reporting period. Generally, the purpose of a proprietary fund is to provide a service or product to operating units within the reporting entity (the County) or to the public at a reasonable cost. Proprietary funds may also be used where the Board of County Commissioners has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. The County charges fees to recoup the cost of operations and capital expenses associated with these activities. The County maintains two different types of proprietary funds: enterprise funds and internal service funds.
Enterprise Funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County maintains eight enterprise funds: the Metropolitan Sewer District of Greater Cincinnati (MSD) fund, to account for sewer services provided to County residents; the Paul Brown Stadium fund, to account for the operations of the Bengals football stadium; the Baseball Stadium fund, to account for the operations of the Great American Ball Park and the Cincinnati Reds Hall of Fame and Museum; the Riverfront Development fund, to account for various construction projects (including parking) located between the stadia; the Main Street Parking Garage fund, to account for the operations of the Main Street Parking Garage; the Sales Tax Stabilization fund, to account for revenue to be used as a contingency account for future debt service payments; the Rotary fund, to track the cost of various activities of the Sheriff’s Department within the County; and the Communications Center fund, to account for the financial activity relating to 911 services for Hamilton County.
Financial information is presented separately in the proprietary funds financial statements for the Metropolitan Sewer District fund, the Paul Brown Stadium fund and the Baseball Stadium fund, all of which are considered to be major enterprise funds. All other nonmajor enterprise funds are combined in total in one column.
Internal Service Funds. Internal service funds are used to accumulate and allocate costs internally between the County’s various functions, or to account for operations that provide services to County departments, agencies or other governments on a cost-reimbursement basis. Because the services provided by the County’s governmental internal service funds—the Workers’ Compensation Reserve fund, the Auditor’s
18
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Computer Center fund, and the Medical Self-Insurance fund—benefit governmental functions, they have been included with governmental activities in the government-wide financial statements.
The basic proprietary fund financial statements can be found in this report immediately following the basic governmental fund financial statements.
Fiduciary Funds. The fiduciary fund financial statements provide information about funds used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found in this report immediately following the basic proprietary fund financial statements. Notes to the Financial Statements The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data that is essential to a full understanding of the information provided in the government-wide and fund financial statements. The notes to the financial statements can be found in this report immediately following the basic fiduciary fund financial statement. Other Information In addition to the basic financial statements and accompanying notes, this report also presents individual fund data for each of the nonmajor governmental funds, nonmajor enterprise funds, internal service funds and certain required supplementary information that is provided in the form of Combining and Individual Fund Financial Statements and Schedules. The supplementary information section can be found in this report immediately following the notes to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS Hamilton County’s financial statements comply with the reporting model required by the Governmental Accounting Standards Board. A comparative analysis of current-year and prior-year financial data is included in this report. Net Position Net position may serve over time as a useful indicator of the County’s financial health. At the end of 2014, Hamilton County was able to report positive balances in all categories of net position for the County as a whole and for its separate governmental and business-type activities. Hamilton County’s assets plus deferred outflows of resources exceeded liabilities plus deferred inflows of resources by $1,674.4 million in 2014. This represents $668.5 million in governmental activities and $1,005.9 million in business-type activities.
19
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Table 1 provides a summary of the County’s net position for fiscal year 2014, as compared to 2013.
Table 1
HAMILTON COUNTY’S NET POSITION
(In Millions)
Governmental
Business-Type
Total Activities
Activities
2014
2013*
2014
2013*
2014
2013*
ASSETS
Current and Other Assets $ 760.8 $ 724.4 $ 647.1 $ 615.1 $1,407.9 $1,339.5
Capital Assets, Net 326.7 342.9 2,075.1 2,062.1 2,401.8 2,405.0
TOTAL ASSETS 1,087.5 1067.3 2,722.2 2,677.2 3,809.7 3,744.5
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 0.1 0.4 34.9 22.4 35.0 22.8
TOTAL DEFERRED OUTFLOWS OF RESOURCES 0.1 0.4 34.9 22.4 35.0 22.8
LIABILITIES
Current and Other Liabilities 76.6 83.6 44.0 51.9 120.6 135.5
Long-Term Liabilities
Due Within One Year 13.5 16.3 89.7 78.2 103.2 94.5
Due in More Than One Year 92.5 101.1 1,617.5 1,649.8 1,710.0 1,750.9
TOTAL LIABILITIES 182.6 201.0 1,751.2 1,779.9 1,933.8 1,980.9
DEFERRED INFLOWS OF RESOURCES Property Taxes Not Levied to Finance Current Year Operations 236.5 237.3 - - 236.5 237.3
TOTAL DEFERRED INFLOWS OF RESOURCES 236.5 237.3 - - 236.5 237.3
NET POSITION
Net Investment in Capital Assets 273.5 279.3 561.1 501.2 834.6 780.5
Restricted for:
Debt Service 5.9 5.8 8.4 8.4 14.3 14.2
Capital Projects - 1.7 - - - 1.7
Special Revenue Funds 348.2 305.1 - - 348.2 305.1
Unrestricted 40.9 37.5 436.4 410.1 477.3 447.6
TOTAL NET POSITION $ 668.5 $ 629.4 $1,005.9 $ 919.7 $1,674.4 $1,549.1 *As restated due to the special audit finding for adjustment (governmental activities) and the implementation of MSD’s new capital asset system (business-type activities). (See note II B in the Notes to the Basic Financial Statements.)
20
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
By far, the largest portion of the County’s net position, $834.6 million, reflects its investment in capital assets, which includes property, plant, equipment and infrastructure assets, net of accumulated depreciation and less any related debt used to acquire those assets that is still outstanding. The County uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the County’s net position represents resources that are subject to external restrictions on how they may be used. Restricted net position was $354.1 million of governmental activities and $8.4 million of business-type activities in 2014. The remaining net position is unrestricted and may be used to meet the County’s ongoing obligations to its citizens and creditors and for business-type activities. Unrestricted assets were $40.9 million of governmental activities and $436.4 million of business-type activities in 2014. Changes in Net Position Hamilton County’s total revenues were $1,117.3 million. Various taxes make up 37% of the County’s revenue. Another 36% of the County’s revenue comes from fees charged for services, and 23% is state and federal aid. Overall expenses in governmental activities were down $11.4 million in 2014 versus the prior year. Revenues were up by $42.9 million, resulting in an increase in governmental net position of $44.6 million excluding transfers. Table 2 below provides a summary of the County’s revenues and expenses—the changes in net position—for fiscal year 2014.
Table 2
HAMILTON COUNTY’S CHANGES IN NET POSITION
(In Millions)
Governmental
Business-Type
Total Activities
Activities
2014
2013
2014
2013*
2014
2013*
REVENUES
Program Revenues:
Charges for Services $109.7 $113.9 $287.7 $279.1 $397.4 $393.0
Operating Grants and Contributions 231.7 195.4 - - 231.7 195.4
Capital Grants and Contributions 0.6 0.6 9.7 14.9 10.3 15.5
General Revenues:
Property Taxes 235.1 228.7 - - 235.1 228.7
Sales and Use Taxes 81.2 77.9 59.80 56.0 141.0 133.9
Other Taxes 35.4 33.3 - - 35.4 33.3
Grants and Entitlements 11.3 11.3 - - 11.3 11.3
Unrestricted Investment Earnings 3.7 3.7 42.5 4.2 46.2 7.9
Gain on Sale of Capital Assets - - - 0.5 - 0.5
Other .7 1.7 8.2 9.1 8.9 10.8
TOTAL REVENUES 709.4 666.5 407.9 363.8 1,117.3 1,030.3
21
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
EXPENSES
Program Expenses:
General Government $ 68.1 $ 82.0 $ - $ - $ 68.1 $ 82.0
Judicial 94.3 89.5 - - 94.3 89.5
Public Safety 104.5 101.2 - - 104.5 101.2
Social Services 143.1 146.2 - - 143.1 146.2
Health 185.6 189.6 - - 185.6 189.6
Public Works 43.0 41.0 - - 43.0 41.0
Environmental Control 6.9 5.9 - - 6.9 5.9
Economic Development 9.0 8.9 - - 9.0 8.9
Parks and Recreation 7.2 8.2 - - 7.2 8.2
Interest and Fiscal Charges 3.1 3.7 - - 3.1 3.7
Metropolitan Sewer District - - 219.6 245.3 219.6 245.3
Paul Brown Stadium - - 44.3 44.6 44.3 44.6
Baseball Stadium - - 30.3 29.7 30.3 29.7
Riverfront Development - - 14.9 15.0 14.9 15.0
Main Street Parking Garage - - 0.9 0.8 0.9 0.8
Rotary Funds - - 9.8 8.9 9.8 8.9
Communications Center - - 7.4 6.7 7.4 6.7
Total Program Expenses 664.8 676.2 327.2 351.0 992.0 1,027.2
Indirect Expenses Allocation 3.4 3.2 - - 3.4 3.2
Indirect Expenses Reimbursement (3.4) (3.2) - - (3.4) (3.2)
TOTAL EXPENSES 664.8 676.2 327.2 351.0 992.0 1,027.2
Increase (Decrease) in Net Position Before Transfers 44.6 (9.7) 80.7 12.8 125.3 3.1
Transfers (5.5) (5.9) 5.5 5.9 - -
INCREASE (DECREASE) IN NET POSITION 39.1 (15.6) 86.2 18.7 125.3 3.1
NET POSITION—BEGINNING OF YEAR 629.4 645.0 919.7 901.0 1,549.1 1,546.0
NET POSITION—END OF YEAR $668.5 $629.4 $1,005.9 $919.7 $1,674.4 $1,549.1 *As restated due to the implementation of MSD’s new capital asset system.
Governmental Activities. Governmental activities increased Hamilton County’s net position by $39.1 million (6% increase compared to 2013’s net position). The most significant change over 2013 was in revenues. In total, governmental revenues increased $42.9 million, with 85% of the increase ($36.3 million) being in operating grants and contributions. The largest portion of that increase is attributable to a $25.1 million accrual for revenue related to real estate tax settlements, for which there was no offsetting accrual for 2013. Combined, grant revenues ($243.6 million) was the largest category of governmental revenues in 2014. Tax revenue accounts were $351.7 million, which was 50% of the $709.4 million total revenue for governmental activities. Taxes overall increased from 2013. While property tax had the largest dollar increase ($6.4 million), sales tax had the greatest percentage increase (4%). This reflects the trend that began in late 2012 and has continued due to the gradual improvement in the economy.
22
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Total expenses of the County’s governmental activities were $664.8 million in 2014. The health category accounts for $185.6 million (28%) of the total expenses for governmental activities. Social services was the next largest program within the County, accounting for $143.1 million (22%) of total expenses for governmental activities for the year.
23
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Business-Type Activities. Business-type activities increased Hamilton County’s net position by $86.2 million, or 9%, in 2014.
24
$260
$240
$220
$200
$180
$1tiU
$140
$120
$100
$80
$60
$40
$20
$0
2014 EXPENSES AND PROGRAM REVENUES-BUSINESS-TYPE ACTI VITIES (In Milli ons)
CExpenses
. Program Revenues
" r <V .}~" pvf:' ~~ 4..~I>"" .fr.:s of· ~ ~, ~' OW ." .v
,j' ~ &' 1::,<§' q"J ,l ",0' .<
,f,f-q o· ,s ., i8-~ " O~ .} ,,"
1" c.I'
2014 REVENUES BY SOURCE-BUSINESS-TYPE ACTI VIT IES TOTAL $407.9 MILLION
Unreslncted Inveslmenl Earnlngs $42.5M
Other
. _ 1T"', - ---I82M '- 2%
Sales and Use ____ _
Tax $S9.8M
15%
Capital Grants and Contributions
$9.7M 2%
_ Chaca"!ar Services $2877M
71 %
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
The County’s direct charges to users of County business-type services, charges for services, were $287.7 million or 71% of business-type activities’ revenues in 2014. A significant portion of these charges, $257.5 million, were Metropolitan Sewer District sewer service charges and surcharges that will provide for necessary operating expenses, annual debt support, support of the District’s capital program and the satisfaction of bond covenants. The other major revenue source in 2014 was sales and use tax revenues of $59.8 million. Overall expenses of the County’s business-type activities were $327.2 million. Metropolitan Sewer District accounted for $219.6 million (67%) of the total expenses for business-type activities in 2014. Paul Brown Stadium accounted for the next largest amount of business-type expenses at $44.3 million (14%) of the 2014 total. FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS As noted earlier, Hamilton County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of Hamilton County’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the County’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of the County’s net resources available for discretionary use as they represent the portion of fund balance that has not yet been limited to use for a particular purpose by either an external party, the County itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the County commissioners. As the County completed the year, its governmental funds reported a combined ending fund balance of $384.3. Approximately 12% of this amount ($46.9 million) constitutes unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is either nonspendable, restricted, committed, or assigned to indicate that it is (1) not in spendable form ($3.9 million); (2) legally required to be maintained intact ($5.2 million); (3) restricted for particular purposes ($303.2 million); (4) committed for particular purposes ($8.6 million), or (5) assigned for particular purposes ($16.5 million).
General Fund. The General Fund is the chief operating fund of the County, available for any authorized purpose and used to account for all financial resources except those required to be accounted for in another fund. In 2014, unassigned fund balance of the General Fund was $52.4 million, while total fund balance was $78.0 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. In 2014, unassigned fund balance represents approximately 26% of the total General Fund expenditures and other financing uses, while total fund balance represents 38% of that same amount. The fund balance of the County’s General Fund increased $1.6 million during 2014, with both revenues and expenditures remaining essentially even with those of 2013. Public Assistance Fund and Health and Human Services Levies Fund. The Public Assistance fund and the Health and Human Services Levies fund, major special revenue funds used to account for specific governmental revenues, require separate accounting because of legal or regulatory provisions or administrative action and account for expenditures for specified purposes.
25
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Public Assistance Fund. The Public Assistance fund, an annually budgeted special revenue fund, is used to account for revenue from the federal, state and county governments and for expenditures used to provide services to eligible County residents. The fund balance of the Public Assistance fund increased by $1.0 million in 2014. The $3.2 million increase in revenues was mostly due to the timing of the federal grant drawdowns. Health and Human Services Levies Fund. The Health and Human Services Levies fund, an annually budgeted special revenue fund, is used to account for the revenue from health and human services levies. Levies and expenditures are determined by policies of the Board of County Commissioners. The fund balance of the County’s Health and Human Services Levies fund increased by $25.7 million in 2014. Some of the contributing factors: Property tax collections increased $2.8 million due to an improving economy. Health expenditures decreased $3.9 million due to the State being the payor for more services that were now Medicaid eligible due to the expansion of the eligibility level. Timing differences between accruals in 2014 versus 2013 resulted in an increase to intergovernmental revenue of $6.2 million. Similarly, the change in expenditure accruals resulted in $2.0 less in Social Services expenditures. Another $2.8 million reduction in Social Services expenditures was due to fewer internal reimbursements between Job and Family Services funds in 2014. Other Governmental Funds. The fund balances of Other Governmental Funds—Nonmajor Governmental Funds—decreased by $3.4 million during 2014, with no significant change in either revenues or expenditures.
Proprietary Funds Proprietary enterprise funds provide the same type of information reported in the government-wide financial statements as business-type activities, but in more detail. Metropolitan Sewer District Fund, Paul Brown Stadium Fund and Baseball Stadium Fund. The Metropolitan Sewer District fund, the Paul Brown Stadium fund and the Baseball Stadium fund are major enterprise funds. The expenses (including depreciation) of providing goods and services primarily or solely to the general public are financed or recovered mainly through fees and user charges. Metropolitan Sewer District Fund.* The Metropolitan Sewer District fund is used to account for County-provided sewer services to residential, commercial and industrial users in Hamilton County. Sewer charges are the major revenue source for financing operations and maintenance for the sewer system. The fund assets and deferred outflows of Metropolitan Sewer District exceeded liabilities by $908.1 million in 2014. Of that net position, 55% reflects MSD’s investment in capital assets, less any related debt used to acquire those assets that is still outstanding. These capital assets are used primarily in the collection and treatment of wastewater throughout the District’s service area. The related debt will be repaid with resources provided by systems users through rates and fees. Net position increased $92.1 million in 2014. Some of the major factors that contributed to these results are as follows:
Charges for services increased $7.1 million primarily due to increased revenues from sewerage service charges received from rate increases.
Operating expenses, excluding depreciation and amortization, decreased $6.3 million mostly because of lower purchased services and other expenses.
26
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Depreciation expenses decreased $7.4 million compared to 2013, due to reclassifications of capital assets in the new software system.
Net nonoperating revenues and expenses changed by $50.7 million, including $38.2 million in increased investment earnings and $15.8 million due to the loss on capital asset retirements in 2013 but essentially none in 2014.
*Source: Metropolitan Sewer District of Greater Cincinnati 2014 Audited Financial Statements
Paul Brown Stadium Fund. The Paul Brown Stadium fund is used to account for revenue received from stadium tenants and for the operation of Paul Brown Football Stadium. The fund net position of the Paul Brown Stadium fund was a negative $80.7 million in 2014, basically unchanged from 2013. Baseball Stadium Fund. The Baseball Stadium fund is used to account for the operations of Great American Ball Park Baseball Stadium and the Cincinnati Reds Hall of Fame and Museum. The fund net position of the Baseball Stadium fund was $35.2 million, a decrease of $7.1 million compared to 2013. The major factors contributing to the decrease in fund net position were depreciation expense and interest expense, in conjunction with minimal operating revenue offset. Revenues and expenditures are largely fixed amounts, as set forth in the ballpark lease. Operating costs are shared by the Cincinnati Reds and County sales tax. Other Enterprise Funds. The $143.3 million fund net position of Other Enterprise Funds (nonmajor enterprise funds) reflects only a 1% change from 2013. There were no major changes in activity compared to the prior year. For more information related to the change in net position of Other Enterprise Funds, please refer to the Combining Statement of Revenues, Expenses and Changes in Fund Net Position found in this report in the section following the Notes to the Financial Statements. GENERAL FUND BUDGETARY HIGHLIGHTS The County’s annual budget, the starting point for the County’s financial planning and control, is prepared according to Ohio law and is based on accounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. The most significant budgeted fund is the General Fund. Typically, the Board of County Commissioners (BOCC) adopts the annual operating budget for the County, including MSD, on or about the first of each year. All disbursements and transfers of cash between funds require appropriation by the County Commissioners. The adopted budget may be amended in one of three ways: (1) transfer of appropriations between funds, departments or appropriation levels, all of which must be approved by the BOCC; (2) additional appropriations, which also require BOCC approval; and (3) transfers within appropriated levels, which require County Administrator approval. (With regard to this latter category, however, such transfers within appropriated levels are not necessary since agencies may legally spend within their total budget for a given appropriation level without further approval.) The Office of Budget and Strategic Initiatives reviews departmental requests for transfers and supplemental appropriations throughout the year and assists departments in monitoring budget activity. All budgetary amendments and supplemental appropriations made during 2014 are included in the revised budget amounts presented in the budget-to-actual comparisons.
27
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
The final revised General Fund appropriations for 2014 were $210.7 million. The County spent 98% of the amount appropriated in the General Fund during 2014. Expenditures in the areas of public safety and the court system combine for 74% of General Fund expenditures. The cost of employee wages and benefits continues to be the largest expenditure category, accounting for approximately 70% of expenditures. The final revised estimated resources for the General Fund for 2014 were $205.7 million. Actual General Fund revenues received were $212.9 million, about 4% greater than final budgeted General Fund revenues in 2014. One of the reasons revenues exceeded expectations was the greater-than-projected sales tax collections ($5.8 million greater than budgeted), thanks to the continued growth in local consumer purchases. A significant change in final versus original budget occurred in the Sheriff’s personnel budget, which increased $3.4 million (7%) over original budget. While appropriations were reduced due to 45 positions being charged to the Indigent Care levy in 2014 instead of the General Fund, this reduction was more than offset by the increased appropriations needed to cover cost-of-living and other salary adjustments related to multiple union contracts. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets Hamilton County has invested $2,401.8 million (net of accumulated depreciation) as of 2014 year-end in a broad range of capital assets, which include property, plant, equipment and infrastructure assets. Net capital assets related to governmental activities amount to $326.7 million. Net capital assets related to business-type activities amount to $2,075.1 million and include $1,440.4 million net capital assets of MSD. Table 3 summarizes the County’s capital assets, net of accumulated depreciation, for 2014.
Table 3
HAMILTON COUNTY’S
CAPITAL ASSETS AT YEAR-END
(Net of Accumulated Depreciation, in Millions)
Governmental
Business-Type
Total Activities
Activities
2014
2013
2014
2013*
2014
2013*
Land and Improvements $ 93.9 $ 93.8 $ 97.5 $ 97.5 $ 191.4 $ 191.3
Buildings, Structures and Improvements 81.0 86.0 753.5 784.1 834.5 870.1
Infrastructure 128.2 139.0 - - 128.2 139.0
Sewer Laterals -
-
691.9
689.7
691.9
689.7
Furniture, Fixtures and Equipment 19.5 19.1 201.3 192.5 220.8 211.6
Construction in Progress 4.1 5.1 330.9 298.2 335.0 303.3
TOTAL CAPITAL ASSETS, NET $326.7 $343.0 $2,075.1 $2,062.0 $2,401.8 $2,405.0
*As restated due to the implementation of MSD’s new capital asset system.
28
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Major Capital Asset Events. Major capital asset events during the current fiscal year included the following:
Expenses of about $60.1 million for Metropolitan Sewer District capital improvement projects and equipment replacement (including receipt of about $1.3 million in capital contributions) with sewer replacements and improvement projects making up about 50% of the total.*
The change in governmental activities is attributable to net deprecation of $16.6 with only $0.3 change in 2014 net purchases and disposals.
Construction of the new scoreboard at Paul Brown Stadium increased Construction in Progress by $10.1 million. *Source: Metropolitan Sewer District of Greater Cincinnati 2014 Audited Financial Statements
Five-Year Capital Plans. The Hamilton County and Metropolitan Sewer District five-year capital plans were submitted and accepted for the years 2015 through 2019. Hamilton County Capital Improvement Plan. The 2015-2019 capital improvement plan includes $1.9 million in approved and $142.3 million in recommended capital improvement projects. The 12 recommended projects would be funded by the General Fund and the election capital reserve. Metropolitan Sewer District Capital Plan. MSD finances its construction program through a combination of revenue bonds, revolving loans through the State of Ohio and cash, with the primary source being tax-exempt revenue bonds.* *Source: Metropolitan Sewer District of Greater Cincinnati 2014 Audited Financial Statements
Additional information regarding the County’s capital assets can be found later in this report in the Notes to the Basic Financial Statements. Long-Term Obligations Hamilton County’s total long-term obligations outstanding at year-end, excluding premiums and discounts, were $1,729.1 million ($105.7 million related to governmental activities and $1,623.4 million related to business-type activities). This includes liabilities for bonds, loans, capital leases, forgivable mortgages and loan, workers’ compensation, compensated absences, and net pension and other post-employment obligations. Outstanding Debt Issues. At the end of 2014, the County had a number of debt issues outstanding. These issues, excluding any unamortized discounts and premiums, included $78.6 million of general obligation bonds, $4.3 million of general obligation special assessment bonds, $960.1 million of sewer revenue bonds and other obligations of MSD, $16.4 million of parking garage adjustable rate revenue bonds, $528.1 million of stadium sales tax bonds, and $14.9 million in loans. General obligation bonds and notes are backed by the full faith and credit of the government. General obligation special assessment bonds are debt for which the County is liable in the event of default by the property owners subject to the assessment. Sewer revenue bonds are backed by user charges against individual ratepayers. Sales tax bonds are backed by a lien on the receipts of an additional ½% sales tax approved by County voters in 1996.
29
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Table 4 provides a summary of the County’s outstanding long-term bonds and loans for fiscal years 2014 and 2013.
Table 4
HAMILTON COUNTY’S
OUTSTANDING LONG-TERM BONDS AND LOANS AT YEAR-END
(In Millions)
Governmental
Business-Type
Total Activities
Activities
2014
2013
2014
2013
2014
2013
General Obligation Bonds—Unvoted $ 54.1 $ 64.9 $ 24.5 $ 6.0 $ 78.6 $ 70.9
General Obligation Special Assessment Bonds 4.3 4.3 - - 4.3 4.3
Metropolitan Sewer District Obligations - - 960.1 1,017.4 960.1 1,017.4
Adjustable Rate Revenue Bonds - - 16.4 17.3 16.4 17.3
Sales Tax Bonds - - 528.1 543.9 528.1 543.9
Loans 1.6 1.5 13.3 14.9 14.9 16.4
TOTAL LONG-TERM DEBT $ 60.0 $ 70.7 $1,542.4 $1,599.5 $1,602.4 $1,670.2
New Debt. During 2014, the County issued new bonds and a loan for the purposes listed below. Governmental Activities—Long-Term Debt. Special Assessment Bonds ($0.3 million) were issued for the purpose of constructing sewer improvements in anticipation of the collection of special assessments against the benefited properties. Two new loans were approved in 2014 to be used to finance road improvement projects. The work on these projects has not been fully completed; therefore, the loan amounts have not been issued in full. During 2014, the amount of the loan used was $537. Business-Type Activities—Long-Term Debt. MSD issued $162.7 million in Sewer System Revenue Refunding Bonds to defease portions of the 2003, 2005 and 2006 revenue bonds, pay the cost of issuance, permanently fund certain previous capital expenditures, and fund the new bond reserve requirements. The County issued $19.0 million in Riverfront Infrastructure Improvement Limited Tax General Obligation Bonds for the purpose of acquiring, constructing and installing energy efficiency improvements for the stadia and parking garages located on the riverfront.
30
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Credit Ratings. The County currently obtains credit ratings on all of its bonds and maintains ratings as of 2014 as follows:
County Bonds Issued Bond Rating Insurer
Moody’s Standard & Poor’s (S&P) Fitch
General Obligation Aa2
MSD Revenue (Series 2003-2006)* Aa2 AA+ MBIA
MSD Revenue (Series 2007-2010) Aa2 AA+
Sales Tax—Riverfront (2000B and 2006A)** A2 A+ AMBAC***
Sales Tax—Riverfront (2011) A2 A+
Riverfront Parking Revenue (2001) A3 Sources: Hamilton County Office of Budget and Strategic Initiatives and Metropolitan Sewer District of Greater Cincinnati 2014 Audited Financial Statements Ratings Aaa (Moody’s), AAA (S&P, Fitch)—prime, maximum safety Aa1, Aa2, Aa3 (Moody’s), AA+, AA, AA- (S&P, Fitch)—high grade, high quality A1, A2, A3 (Moody’s), A+, A, A- (S&P, Fitch)—upper medium grade Insurers MBIA—Municipal Bond Investors Assurance AMBAC—American Municipal Bond Assurance Corporation *Underlying rating is Aa2 by Moody’s Investors Service and AA+ by Standard and Poor’s Corporation. **Underlying rating is A2 by Moody’s Investors Service and A+ by Fitch. ***The surety provider AMBAC had its rating withdrawn by Standard & Poor’s and Moody’s which initially caused a non-payment default under the documentation for the sales tax bonds for which AMBAC served as a surety provider. The county filed a Material Event Notice on July 8, 2011. The non-payment default came about through no fault of the County and does not affect the ability of the County to make timely payments of its debt service obligations. In order to satisfy the debt service requirements set forth in the Trust Agreement for the County’s Sales Tax Bonds, the County started to make monthly cash deposits into the debt service reserve fund for the County’s Sales Tax Bonds as of August 2011 continuing through December 2012. Beginning in January 2013, the County provided a credit support instrument, initially through BBVA Compass Bank and currently through PNC Bank, National Association, in order to satisfy its obligation to fully replenish the debt service reserve fund over approximately 40 months. Since the date of the initial cash deposit into the debt service reserve fund for purposes of replenishing such fund, the County has been in compliance with the Trust Agreement governing replenishment of the debt service reserve fund.
Legal Debt Margins. The Uniform Bond Law of the State of Ohio provides that the total net indebtedness created or incurred by any county shall never exceed a sum equal to 3% of the first $100 million or part of the tax list, plus 1½% of the tax list in excess of $100 million and not in excess of $300 million, plus 2½% of the tax list in excess of $300 million. In addition, the net indebtedness created or incurred by any county without vote of the electors shall never exceed a sum equal to 1% of the tax list of the County. Contained in the Uniform Bond Law of the State of Ohio are exceptions for debt limitations. Among the kinds of debt exempted are debt issued for special assessments, sewer works, self-supported revenue bonds and jail facilities. The total voted and unvoted non-exempt debt of the County that could be issued subject to the 3%, 1½% and 2½% limitation described above is $455.2 million. The total County net debt subject to this limitation is $76.9 million, leaving a borrowing capacity of $378.3 million within the limitation from combined voted and unvoted non-exempt debt. The total County unvoted, non-exempt debt that could be issued subject to the 1% limitation is $182.7 million. The total County debt subject to such limitation is $76.9 million, leaving a borrowing capacity of $105.8 million within the 1% limitation for unvoted non-exempt debt.
31
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
Other Long-Term Obligations. The County’s long-term obligations for 2014 also include compensated absences of $40.1 million related to governmental activities and $9.6 million related to business-type activities; forgivable loan contracts of $4.3 million; various long-term leases for office space or equipment amounting to $16.5 million; and workers’ compensation of $1.3 million. Additionally, MSD has reported a net pension obligation and other post-employment benefits obligation of $59.3 million. Interest and fiscal charges for governmental activities were $3.1 million, less than 1% of the total expenses in 2014. For more information regarding the County’s debt, see the section of the Notes to the Basic Financial Statements (found later in this report) titled Long-Term Debt and Other Obligations. ECONOMIC FACTORS, NEXT YEAR’S BUDGETS AND RATES, AND OTHER SIGNIFICANT MATTERS* The area’s economic recovery continues to show growth and is forecast to do so again in 2015. Here are some highlights and recent trends of the region: Positives
#2 ranking in lowest business-operating costs in the nation (KPMG Competitive Alternatives Study)
#3 ranking in U.S. for economic development projects (Site Selection) #7 ranking in the nation for quality of life (Business Facilities Metro Ranking Report) fifth most affordable, livable city in the U.S. (money.msn.com) employment growth in 2014 declining unemployment rate growth in manufacturing jobs exceeds nation’s high share of affordable homes for families earning median income increased percent of knowledge jobs—managers and professionals—in our labor force improvement in per capita income, having recovered from drop during economic
downturn increase in residential construction nine Fortune 500 and five Fortune 1000 headquarter companies diverse workforce central access to customers, suppliers and purchasing power low cost of living
Negatives
educational attainment of population below peer region average and well behind top-performing regions
more people living in poverty in region than in 2010 negative net migration (number of people moving into area annually minus number
moving out) since 2010 showed positive population skewing older, meaning more demand on health and public services and
greater burden on labor pool to support higher costs to community drop in available labor pool gross domestic product growth but slower than the nation’s
32
COUNTY OF HAMILTON, OHIO MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014
UNAUDITED
For 2015 the Board of County Commissioners (BOCC) approved a total budget of $1,076.9 million. General Fund appropriations are $201.8 million, a $1.5 million increase, less than 1%, from the 2014 budget. While a slight increase from the 2014 budget, the 2015 budget is still below actual 2014 expenses. General Fund employee positions are estimated to increase by 16.3 positions from the 2014 budget as a result of 17 Court of Common Pleas positions returning to the General Fund from restricted funds, offset by small variations in other General Fund departments. Revenues for 2015 are budgeted at a modest increase (less than 2%) from the 2014 budget. The 2015 budget is much less dependent on onetime sources, and largely maintains the 2014 budget’s cautious approach to revenue growth. The total 2015 budget for the County’s restricted funds is $875.1 million, a $22.5 million decrease from 2014’s original appropriations. The Board of County Commissioners approved a 6% sewerage rate increase for MSD effective January 2015.
Bonds issued to date in 2015 are as follows: (1) Various Purpose Improvement and Refunding General Obligation Bonds in the amount of $25,230; (2) Sewer System Refunding Revenue Bonds, issued by MSD, for $52,520; (3) Taxable Limited Tax General Obligation Improvement Bonds in the amount of $21,880; and (4) Taxable Special Assessment General Obligation Bonds in the amount of $169. The County entered into a capital lease in January 2015 in the amount of $7.5 million. In September, an addition to the lease was issued for $0.2 million. There are pending matters related to the special audit of Hamilton County Department of Job and Family Services that could have a material effect on the County’s net position. Please see more about the special audit in the Notes to the Basic Financial Statements (note VI I). Sources: Hamilton County, Ohio, 2015 Budget in Brief; redicincinnati.com (Regional Economic Development Initiative Cincinnati); www.regional-indicators.org; www.cincinnatichamber.com/economicoutlook, Board of County Commissioners’ meeting minutes and Metropolitan Sewer District of Greater Cincinnati 2014 Audited Financial Statements
REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, creditors and investors with a general overview of the County’s finances and to show the County’s accountability for the money it receives. If you have any questions about this report or need additional financial information, contact Hamilton County Auditor Dusty Rhodes, 138 East Court Street, Cincinnati, Ohio 45202, (513) 946-4000, or visit the Auditor’s website at www.hamiltoncountyauditor.org.
33
Component Unit
Governmental Business-TypeConvention
FacilityActivities Activities Totals Authority
ASSETSEquity in Pooled Cash and Investments 415,267$ 45,868$ 461,135$ 84,183$ Cash and Cash Equivalents—Segregated Accounts 1,846 53,291 55,137 - Accounts Receivable 6,353 77,355 83,708 - Sales Tax Receivable 13,959 9,211 23,170 - Interest Receivable 1,060 - 1,060 - Intergovernmental Receivable 49,409 37 49,446 - Real and Other Taxes Receivable 266,871 - 266,871 2,421 Internal Balances 15 (15) - - Prepaid Expenses - 1,483 1,483 1,100 Inventories 293 - 293 - Restricted Assets: Cash and Cash Equivalents Held by the City of Cincinnati: Construction Account - 6,295 6,295 - Amount to Be Transferred to Surplus Account - 33,513 33,513 - Held by Trustees: Cash and Cash Equivalents - 16,770 16,770 - Investments—Held to Maturity - 403,219 403,219 - Special Assessments Receivable 5,769 - 5,769 - Nondepreciable Capital Assets 97,447 428,430 525,877 - Depreciable Capital Assets, Net 229,237 1,646,601 1,875,838 - Other Long-Term Assets - 157 157 - TOTAL ASSETS 1,087,526 2,722,215 3,809,741 87,704
DEFERRED OUTFLOWS OF RESOURCESDeferred Charge on Refunding 82 34,958 35,040 - TOTAL DEFERRED OUTFLOWS OF RESOURCES 82 34,958 35,040 -
LIABILITIESAccounts Payable 25,553 9,211 34,764 - Accrued Wages and Benefits Payable 7,528 2,943 10,471 - Matured Compensated Absences Payable 321 - 321 - Intergovernmental Payable 2,028 107 2,135 - Accrued Interest Payable 211 5,423 5,634 270 Construction Accounts Payable - 9,552 9,552 - Retainage Payable 1,059 694 1,753 - Due to Other Governments - - - 10,386 Due to Component Unit 1,619 - 1,619 - Unearned Revenue 28,894 16,113 45,007 - Escheat 5,179 - 5,179 - Estimated Future Claims 4,194 - 4,194 - Deposits Payable for Refunded Debt - - - 67,675 Long-Term Liabilities: Due Within One Year 13,534 89,691 103,225 2,570 Due in More Than One Year 92,512 1,617,478 1,709,990 75,503 TOTAL LIABILITIES 182,632 1,751,212 1,933,844 156,404
DEFERRED INFLOWS OF RESOURCESProperty Taxes Not Levied to Finance Current-Year Operations 236,514 - 236,514 - Deferred Gain on Defeasance - - - 2,571 TOTAL DEFERRED INFLOWS OF RESOURCES 236,514 - 236,514 2,571
NET POSITIONNet Investment in Capital Assets 273,507 561,056 834,563 - Restricted for: Debt Service 5,933 8,454 14,387 - Public Assistance 19,983 - 19,983 - Health and Human Services Levies 238,083 - 238,083 - Motor Vehicle Gas Tax 35,747 - 35,747 - Health and Community Services Nongrants 49,964 - 49,964 - Capital Outlay - - - 5,000 Other Purposes 4,346 - 4,346 - Unrestricted 40,899 436,451 477,350 (76,271) TOTAL NET POSITION 668,462$ 1,005,961$ 1,674,423$ (71,271)$
See accompanying notes to the basic financial statements.
COUNTY OF HAMILTON, OHIOSTATEMENT OF NET POSITION
December 31, 2014(Amounts in Thousands)
Primary Government
34
Operating Capital Primary Government Component UnitIndirect Charges Grants Grants Convention
Expenses for and and Governmental Business-Type Facility FUNCTION/PROGRAMS Expenses Allocation Services Contributions Contributions Activities Activities Total AuthorityPrimary Government:Governmental Activities General Government 68,133$ (3,400)$ 44,309$ 18,324$ 275$ (1,825)$ -$ (1,825)$ $ Judicial 94,281 78 26,321 20,514 - (47,524) - (47,524) Public Safety 104,530 60 17,123 5,174 179 (82,114) - (82,114) Social Services 143,149 2,723 5,438 104,410 - (36,024) - (36,024) Health 185,594 50 9,534 75,232 - (100,878) - (100,878) Public Works 42,979 191 4,156 2,679 141 (36,194) - (36,194) Environmental Control 6,889 288 2,743 3,436 - (998) - (998) Economic Development 9,014 - 32 - - (8,982) - (8,982) Parks and Recreation 7,159 10 - 1,683 - (5,486) - (5,486) Debt Service: Interest and Fiscal Charges 3,118 - - 297 - (2,821) - (2,821) Total Governmental Activities 664,846 - 109,656 231,749 595 (322,846) - (322,846)
Business-Type Activities Metropolitan Sewer District 219,566 - 257,465 - 3,957 - 41,856 41,856 Paul Brown Stadium 44,276 - 997 - - - (43,279) (43,279) Baseball Stadium 30,276 - 1,458 - - - (28,818) (28,818) Riverfront Development 14,876 - 11,322 - 5,722 - 2,168 2,168 Main Street Parking Garage 883 - 951 - - - 68 68 Rotary Funds 9,829 - 10,212 - - - 383 383 Communications Center 7,367 - 5,311 - - - (2,056) (2,056) Total Business-Type Activities 327,073 - 287,716 - 9,679 - (29,678) (29,678)
Total Primary Government 991,919$ -$ 397,372$ 231,749$ 10,274$ (322,846) (29,678) (352,524)
Component Unit: Convention Facility Authority 9,833$ -$ -$ -$ 1,350$ (8,483)
General Revenues Property Taxes 235,070 - 235,070 - Sales and Use Taxes 81,242 59,764 141,006 - Hotel Occupancy Taxes - - - 10,076 Other Taxes 35,356 - 35,356 - Grants and Entitlements not Restricted to Specific Programs 11,263 - 11,263 - Gifts and Donations 186 - 186 - Unrestricted Investment Earnings 3,742 42,505 46,247 - Gain on Sale of Capital Assets 37 37 - Other 497 8,162 8,659 - Transfers (5,508) 5,508 - - Total General Revenues and Transfers 361,885 115,939 477,824 10,076 Change in Net Position 39,039 86,261 125,300 1,593 Net Position—Beginning (As Restated—Note II B) 629,423 919,700 1,549,123 (72,864) Net Position—Ending 668,462$ 1,005,961$ 1,674,423$ (71,271)$
See accompanying notes to the basic financial statements.
FOR THE YEAR ENDED DECEMBER 31, 2014
COUNTY OF HAMILTON, OHIOSTATEMENT OF ACTIVITIES
(Amounts in Thousands)
Net (Expense) Revenue Program Revenues and Changes in Net Position
35
Health and Other TotalPublic Human Services Governmental Governmental
General Assistance Levies Funds FundsASSETSEquity in Pooled Cash and Investments 66,425$ 29,870$ 200,019$ 101,408$ 397,722$ Cash and Cash Equivalents—Segregated Accounts - - 1,721 125 1,846 Accounts Receivable 4,058 14 594 1,673 6,339 Sales Tax Receivable 12,340 - - 1,619 13,959 Interest Receivable 1,060 - - - 1,060 Intergovernmental Receivable 7,953 1,643 28,509 11,304 49,409 Real and Other Taxes Receivable 44,392 - 212,430 10,049 266,871 Due from Other Funds 1,420 2,246 - 71 3,737 Inventories - - - 293 293 Due from Advances to Other Funds 3,625 - - 3,625 Interfund Receivable - 1,752 10,615 - 12,367 Special Assessments Receivable - - - 5,769 5,769 TOTAL ASSETS 141,273$ 35,525$ 453,888$ 132,311$ 762,997$
LIABILITIESAccounts Payable 3,528$ 3,421$ 11,587$ 6,982$ 25,518$ Accrued Wages and Benefits Payable 4,055 1,103 1,200 1,125 7,483 Matured Compensated Absences Payable 120 12 130 59 321 Intergovernmental Payable 786 218 552 466 2,022 Retainage Payable 18 - 2 1,039 1,059 Due to Component Unit - - - 1,619 1,619
DECEMBER 31, 2014(Amounts in Thousands)
COUNTY OF HAMILTON, OHIOBALANCE SHEET
GOVERNMENTAL FUNDS
Due to Other Funds 12 173 2,773 764 3,722 Advances from Other Funds - - - 3,625 3,625 Unearned Revenue 4,813 - 6 24,075 28,894 Interfund Payable 1,752 10,615 - - 12,367 Escheat 5,179 - - - 5,179 TOTAL LIABILITIES 20,263 15,542 16,250 39,754 91,809
DEFERRED INFLOWS OF RESOURCESProperty Taxes Not Levied to Finance Current-Year Operations 36,959 - 199,555 - 236,514 Unavailable Revenue 6,028 - 36,419 7,882 50,329 TOTAL DEFERRED INFLOWS OF RESOURCES 42,987 - 235,974 7,882 286,843
FUND BALANCES (DEFICITS)Nonspendable 8,804 - - 293 9,097 Restricted - 19,983 201,159 82,048 303,190 Committed 302 - 505 7,804 8,611 Assigned 16,514 - - - 16,514 Unassigned (Deficit) 52,403 - - (5,470) 46,933 TOTAL FUND BALANCES (DEFICITS) 78,023 19,983 201,664 84,675 384,345
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES (DEFICITS) 141,273$ 35,525$ 453,888$ 132,311$ 762,997$
See accompanying notes to the basic financial statements.
36
Total Governmental Funds Balances 384,345$
Amounts reported for governmental activities in the Statement of Net Position are different fromthe amounts reported in the governmental funds because of the following:
Capital assets used in governmental activities are not financial resources and therefore arenot reported in the funds.
Capital Assets 1,254,590$Accumulated Depreciation (928,101)
Total 326,489
Other long-term assets that are not available to pay for current-period expenditures aredeferred in the funds but not in the governmental activities.
Property Taxes 14,629Grants and Other Intergovernmental Revenue 29,691Nongrants 240Special Assessments 5,769
Total 50,329
Internal service funds are used by management to charge the costs of workers' compensation,the Auditor's computer center, the Multi-County System Agencies, and medicalself-insurance to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the Statement of Net Position. 12,050
Long-term liabilities, including bonds and notes payable, loans and loan contracts, compensatedabsences, and accrued interest payable, are not due and payable in the current periodand therefore are not reported in the funds but are included in governmental activities.
General Obligation Bonds and Notes (54,112)Deferred Amount on Refunding 82Unamortized Premium (367)Special Assessment Bonds (4,304)Loan Contracts (3,340)State Loan (2,541)Compensated Absences (39,958)Accrued Interest Payable (211)
Total (104,751)
Net Position of Governmental Activities 668,462$
See accompanying notes to the basic financial statements.
DECEMBER 31, 2014(Amounts in Thousands)
COUNTY OF HAMILTON, OHIORECONCILIATION OF BALANCE SHEET—GOVERNMENTAL FUNDS
TO GOVERNMENT-WIDE STATEMENT OF NET POSITION
37
Health andHuman Other Total
Public Services Governmental Governmental General Assistance Levies Funds Funds
REVENUES Property Taxes and Special Assessments 36,509$ -$ 198,711$ 576$ 235,796$ Sales and Use Tax 73,081 - - 8,161 81,242 State Shared Taxes 13,430 - - 21,926 35,356 Charges for Services 40,258 - 400 27,899 68,557 Licenses and Permits 2,300 - - 4,957 7,257 Fines and Forfeitures 7,797 - - 4,821 12,618 Intergovernmental 18,116 46,731 95,210 62,784 222,841 Investment Earnings 4,230 (43) (315) (115) 3,757 Other 8,699 1,191 8,008 3,965 21,863 TOTAL REVENUES 204,420 47,879 302,014 134,974 689,287
EXPENDITURES Current: General Government 34,176 - 2,281 17,844 54,301 Judicial 66,807 - 5,747 21,662 94,216 Public Safety 78,230 - 17,269 8,699 104,198 Social Services 1,459 47,541 78,446 18,424 145,870 Health - - 164,923 20,328 185,251 Public Works 2,808 - - 30,190 32,998 Environmental Control - - - 6,597 6,597 Economic and Community Development 1,643 - - 7,399 9,042 Recreational Activities - - 7,687 - 7,687 Capital Outlay - - - 5,363 5,363 Debt Service: - Principal Retirement - - - 11,369 11,369 Interest and Fiscal Charges - - - 2,966 2,966 TOTAL EXPENDITURES 185,123 47,541 276,353 150,841 659,858
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES 19,297 338 25,661 (15,867) 29,429
OTHER FINANCING SOURCES (USES) Transfers In 1,748 681 80 13,534 16,043 Transfers Out (19,424) - - (1,929) (21,353) Proceeds of OPWC Loan - - - 537 537 Proceeds from Sale of Bonds - - - 326 326 TOTAL OTHER FINANCING SOURCES (USES), NET (17,676) 681 80 12,468 (4,447)
NET CHANGE IN FUND BALANCES 1,621 1,019 25,741 (3,399) 24,982
FUND BALANCES AT BEGINNING OF YEARAS RESTATED (NOTE II B) 76,402 18,964 175,923 88,074 359,363
FUND BALANCES AT END OF YEAR 78,023$ 19,983$ 201,664$ 84,675$ 384,345$
See accompanying notes to the basic financial statements.
COUNTY OF HAMILTON, OHIOSTATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
38
Net Change in Fund Balance—Total Governmental Funds 24,982$
Amounts reported for governmental activities in the Statement of Activities are different from amounts reported in the governmental funds because of the following:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the costs of the capital assets are allocated over their estimated useful lives as depreciation expense.This is the amount by which depreciation expense exceeded capital outlays in the current period.
Capital Outlays 8,660$ Depreciation Expense (24,568)
Excess of Depreciation over Capital Outlays (15,908)
In the governmental funds, the proceeds from the sales of capital assets increase financial resources. In the Statement of Activities, however, the assets sold had been capitalized previously and have book values that need to be removed. The difference between the proceeds and the book values is the gain or loss that is recognized in the Statement of Activities. The change in net position differs from the change in fund balance by the net book values of the capital assets sold.
Reduction of Revenue for Proceeds Received on Sale of Capital Assets (40) Gain Earned on Sale of Capital Assets 37 Loss on Sale of Capital Assets (386)
Net Book Value of Capital Assets Sold (389)
Property taxes that will not be collected for several months after the County's fiscal year ends, not considered to be available revenues to pay for current-period expenditures, are deferred in the governmental funds.Similarly, certain other revenues that do not provide current financial resources are deferred and not reported as revenues in the governmental funds but are included in the Statement of Activities.
Property Taxes (676) Grants and Other Intergovernmental Revenue 20,312 Nongrants (54) Special Assessments (51)
Total Revenues 19,531
The issuance of long-term debt provides current financial resources to governmental funds, while the repaymentof the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Governmental funds also report premiums and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.
Special Assessment Bonds Issued (326) Proceeds of OPWC Loans (538) Principal Retirement 11,369
Total 10,505
In the Statement of Activities, interest is accrued on outstanding bonds, whereas in the governmental funds,interest is expensed when due. 35
Some expenses reported in the Statement of Activities do not require the use of current financial resourcesand are not reported as expenditures in the governmental funds.
Compensated Absences Payable 46 Amortization of Deferred Amount on Refundings (341) Amortization of Premium on Bonds 154 Amortization of Mortgages Payable and Forgiveness of Loans or Loan Contracts 592
Total 451
The governmental internal services funds are used by management to charge the costs of workers'compensation, the Auditor's computer center, and medical self-insuranceto individual funds. The net decrease of these internal service funds are reportedwith governmental activities. (168)
Change in Net Position of Governmental Activities 39,039$
See accompanying notes to the basic financial statements.
COUNTY OF HAMILTON, OHIO
RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—GOVERNMENTAL FUNDS
TO GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
39
COUNTY OF HAMILTON, OHIOSTATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 35,520$ 35,520$ 36,509$ 989$ Sales and Use Tax 68,391 68,391 74,146 5,755 State Shared Taxes 11,042 11,042 11,395 353 Charges for Services 46,098 46,098 47,628 1,530 Licenses and Permits 2,145 2,145 2,316 171 Fines and Forfeitures 7,679 7,679 7,737 58 Intergovernmental 12,864 18,364 20,088 1,724 Investment Earnings 7,980 7,980 4,953 (3,027) Other 8,466 8,466 8,173 (293) TOTAL REVENUES 200,185 205,685 212,945 7,260
EXPENDITURESCurrent:
General Government 49,407 50,228 47,538 2,690 Judicial 68,404 70,081 69,474 607 Public Safety 79,858 83,443 82,758 685 Social Services 1,571 1,567 1,472 95 Public Works 3,161 3,746 3,610 136 Economic and Community Development 1,649 1,649 1,641 8
TOTAL EXPENDITURES 204,050 210,714 206,493 4,221
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (3,865) (5,029) 6,452 11,481
OTHER FINANCING SOURCES (USES) Transfers In 2,455 2,455 2,898 443 Advances In - - 192 192 Transfers Out (14,228) (21,280) (20,574) 706 Advances Out - - (1,012) (1,012) TOTAL OTHER FINANCING SOURCES (USES), NET (11,773) (18,825) (18,496) 329
NET CHANGE IN FUND BALANCE (15,638) (23,854) (12,044) 11,810
FUND BALANCE AT BEGINNING OF YEAR 48,369 48,369 48,369 -
Prior-Year Encumbrances Appropriated 15,518 15,518 15,518 -
FUND BALANCE AT END OF YEAR 48,249$ 40,033$ 51,843$ 11,810$
See accompanying notes to the basic financial statements.
Budgeted Amounts
40
COUNTY OF HAMILTON, OHIOSTATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALPUBLIC ASSISTANCE—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESCharges for Services 29,318$ 29,318$ 27,963$ (1,355)$ Intergovernmental 62,319 62,319 55,976 (6,343) Other 2,026 2,026 1,766 (260) TOTAL REVENUES 93,663 93,663 85,705 (7,958)
EXPENDITURESCurrent:
Social Services 100,057 96,049 83,531 12,518 TOTAL EXPENDITURES 100,057 96,049 83,531 12,518
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (6,394) (2,386) 2,174 4,560
OTHER FINANCING SOURCESTransfers In 681 681 681 - Advances In - - 1,451 1,451 TOTAL OTHER FINANCING SOURCES 681 681 2,132 1,451
NET CHANGE IN FUND BALANCE (5,713) (1,705) 4,306 6,011
FUND BALANCE AT BEGINNING OF YEAR 8,680 8,680 8,680 -
Prior-Year Encumbrances Appropriated 8,139 8,139 8,139 -
FUND BALANCE AT END OF YEAR 11,106$ 15,114$ 21,125$ 6,011$
See accompanying notes to the basic financial statements.
Budgeted Amounts
41
COUNTY OF HAMILTON, OHIOSTATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND HUMAN SERVICES LEVIES—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 192,367$ 192,367$ 198,711$ 6,344$ Charges for Services 4,853 4,853 7,542 2,689 Intergovernmental 84,212 85,043 92,705 7,662 Other 7,995 11,221 7,741 (3,480) TOTAL REVENUES 289,427 293,484 306,699 13,215
EXPENDITURESCurrent:
General Government 2,822 2,822 2,822 - Judicial 6,771 6,771 6,713 58 Public Safety 19,647 19,947 19,501 446 Social Services 106,305 123,967 96,954 27,013 Health 184,971 188,831 181,093 7,738 Recreational Activities 7,338 7,868 7,688 180
TOTAL EXPENDITURES 327,854 350,206 314,771 35,435
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (38,427) (56,722) (8,072) 48,650
OTHER FINANCING SOURCES (USES)Transfers In - - 2,910 2,910 Transfers Out (553) (3,384) (2,830) 554 TOTAL OTHER FINANCING SOURCES (USES), NET (553) (3,384) 80 3,464
NET CHANGE IN FUND BALANCE (38,980) (60,106) (7,992) 52,114
FUND BALANCE AT BEGINNING OF YEAR 157,176 157,176 157,176 -
Prior-Year Encumbrances Appropriated 23,329 23,329 23,329 -
FUND BALANCE AT END OF YEAR 141,525$ 120,399$ 172,513$ 52,114$
See accompanying notes to the basic financial statements.
Budgeted Amounts
42
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43
MetropolitanSewer Paul Brown BaseballDistrict Stadium Stadium
ASSETSCurrent Assets: Equity in Pooled Cash and Investments -$ 12,758$ 4,267$ Cash and Cash Equivalents—Segregated Accounts 53,018 - 260 Restricted Cash, Cash Equivalents and Investments: Cash and Cash Equivalents Held by Trustees 2,908 9,059 4,803 MSD Construction Account Held by the City of Cincinnati 6,295 - - Accounts Receivable 75,634 397 97 Sales Tax Receivable - 6,733 2,478 Intergovernmental Receivable - - - Due from Other Funds - - - Prepaid Expenses 1,483 - - Total Current Assets 139,338 28,947 11,905
Noncurrent Assets: Restricted Cash, Cash Equivalents and Investments: Held by the City of Cincinnati: Amount to Be Transferred to Surplus Account 33,513 - - Held by Trustees: Investments—Held to Maturity 403,219 - - Total Restricted Assets 436,732 - -
Capital Assets: Nondepreciable Capital Assets: Land and Improvements 6,481 67,916 17,685 Construction in Progress 319,389 10,131 377 Total Nondepreciable Capital Assets 325,870 78,047 18,062 Depreciable Capital Assets, Net: Buildings, Structures and Improvements 351,707 379,178 351,731 Sewer Laterals 1,083,889 - - Furniture, Fixtures and Equipment 489,492 8,786 5,782 Less Accumulated Depreciation (810,543) (207,572) (151,890)
Total Depreciable Capital Assets Net 1 114 545 180 392 205 623
COUNTY OF HAMILTON, OHIOSTATEMENT OF FUND NET POSITION
Business-Type Activities—Enterprise Funds
PROPRIETARY FUNDSDECEMBER 31, 2014
(Amounts in Thousands)
Total Depreciable Capital Assets, Net 1,114,545 180,392 205,623 Total Capital Assets, Net 1,440,415 258,439 223,685 Other 157 - - Total Noncurrent Assets 1,877,304 258,439 223,685 TOTAL ASSETS 2,016,642 287,386 235,590
DEFERRED OUTFLOWS OF RESOURCESDeferred Charge on Refunding 15,283 10,545 9,130 TOTAL DEFERRED OUTFLOWS OF RESOURCES 15,283 10,545 9,130 TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 2,031,925$ 297,931$ 244,720$
LIABILITIESCurrent Liabilities: Accounts Payable 6,257$ 700$ 398$ Construction Accounts Payable 9,552 - - Due to Other Funds - - - Accrued Wages and Benefits Payable 2,633 49 14 Intergovernmental Payable - 28 2 Unearned Revenue - 8 5 Accrued Interest Payable - - - Accrued Interest Payable from Restricted Assets 2,908 1,666 774 Retainage Payable - 380 275 Accrued Compensated Absences 3,786 7 - Unearned Lease Rent Revenue - 1 - Current Portion of State Loans Payable - - - Current Portion of Long-Term Debt 61,765 15,879 4,633 Estimated Future Claims - - - Total Current Liabilities 86,901 18,718 6,101
Noncurrent Liabilities: Estimated Future Claims - - - Accrued Compensated Absences 4,746 311 - Unearned Lease Rent Revenue - 3,693 12,406 State Loans Payable - - - Long-Term Debt 972,844 355,941 190,953 Net Pension Obligation 46,819 - - Net Other Post Employment Benefit Obligation 12,456 - - Total Noncurrent Liabilities 1,036,865 359,945 203,359 TOTAL LIABILITIES 1,123,766 378,663 209,460
NET POSITIONNet Investment in Capital Assets 501,260 (94,231) 37,423 Restricted for Debt Service 8,454 - - Unrestricted 398,445 13,499 (2,163) TOTAL NET POSITION 908,159$ (80,732)$ 35,260$
See accompanying notes to the basic financial statements.
44
Governmental
Activities
Other Total InternalEnterprise Enterprise Service
Funds Funds Funds
28,843$ 45,868$ 17,545$ 13 53,291 -
- 16,770 - - 6,295 -
1,227 77,355 14 - 9,211 -
37 37 - 15 15 -
- 1,483 - 30,135 210,325 17,559
- 33,513 -
- 403,219 - - 436,732 -
5,465 97,547 - 986 330,883 -
6,451 428,430 -
224,383 1,306,999 41 - 1,083,889 -
9,080 513,140 533 (87,422) (1,257,427) (379) 146 041 1 646 601 195
Business-Type Activities—Enterprise Funds
146,041 1,646,601 195 152,492 2,075,031 195
- 157 - 152,492 2,511,920 195 182,627 2,722,245 17,754
- 34,958 - - 34,958 -
182,627$ 2,757,203$ 17,754$
1,856$ 9,211$ 35$ - 9,552 -
30 30 - 247 2,943 45
77 107 6 - 13 -
21 21 - 54 5,402 - 39 694 - 41 3,834 14
- 1 - 2,107 2,107 - 1,473 83,750 -
- - 5,186 5,945 117,665 5,286
- - 268 744 5,801 150
- 16,099 - 11,203 11,203 - 21,461 1,541,199 -
- 46,819 - - 12,456 -
33,408 1,633,577 418 39,353 1,751,242 5,704
116,604 561,056 195 - 8,454 -
26,670 436,451 11,855 143,274$ 1,005,961$ 12,050$
45
COUNTY OF HAMILTON, OHIOSTATEMENT OF REVENUES, EXPENSESAND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2014
(Amounts in Thousands)
MetropolitanSewer Paul Brown BaseballDistrict Stadium Stadium
OPERATING REVENUES Charges for Services -$ 632$ 919$
Lease Rent Revenue - 365 539
Enterprise FundsBusiness-Type Activities—
Lease Rent Revenue - 365 539 Sewerage Service Charges 237,346 - - Sewerage Surcharges 20,119 - - Other 7,746 122 102 TOTAL OPERATING REVENUES 265,211 1,119 1,560
OPERATING EXPENSES Personnel Services 55,487 1,658 207 Utilities, Fuel and Supplies 19,668 2,931 1,088 Purchased Services 35,707 2,626 2,733 Claims - - - Depreciation and Amortization 56,121 14,165 13,100 Other 9,156 713 396 TOTAL OPERATING EXPENSES 176,139 22,093 17,524
OPERATING INCOME (LOSS) 89,072 (20,974) (15,964)
NONOPERATING REVENUES (EXPENSES) Investment Earnings 42,558 (9) 1 Sales and Use Tax for Debt Service - 28,821 12,900 Sales and Use Tax - 9,234 8,697
Other Nonoperating Revenue - 82 20 Other Nonoperating Revenue 82 20 Other Nonoperating Expense - (6,264) (4,645) Interest Expense (43,427) (15,650) (8,016) (Loss) on Retirement of Capital Assets - (8) (27) Fiscal Charges on Long-Term Debt - (261) (64) TOTAL NONOPERATING REVENUES (EXPENSES) (869) 15,945 8,866
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 88,203 (5,029) (7,098)
Capital Contributions 3,957 - - Transfers In - 4,827 - T f O tTransfers Out - - -
CHANGE IN NET POSITION 92,160 (202) (7,098)
TOTAL NET POSITION—BEGINNINGAS RESTATED (NOTE II B) 815,999 (80,530) 42,358
TOTAL NET POSITION—ENDING 908,159$ (80,732)$ 35,260$
See accompanying notes to the basic financial statements.
46
GovernmentalActivities
Other Total InternalEnterprise Enterprise Service
Funds Funds Funds
27,723$ 29,274$ 41,000$ 73 977 -
Business-Type Activities—Enterprise Funds
73 977 - - 237,346 - - 20,119 - - 7,970 -
27,796 295,686 41,000
14,302 71,654 1,590 710 24,397 15
6,441 47,507 3,430 - - 35,926
8,772 92,158 38 1,663 11,928 154
31,888 247,644 41,153
(4,092) 48,042 (153)
(45) 42,505 (15) - 41,721 -
112 18,043 - 90 192 -90 192
(300) (11,209) - (599) (67,692) -
(1) (36) - (167) (492) - (910) 23,032 (15)
(5,002) 71,074 (168)
5,920 9,877 - 2,631 7,458 -
(2 148) (2 148)(2,148) (2,148) -
1,401 86,261 (168)
141,873 919,700 12,218
143,274$ 1,005,961$ 12,050$
47
MetropolitanSewer Paul Brown BaseballDistrict Stadium Stadium
CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers and Users 262,681$ 586$ 915$ Lease Rent Revenue - - - Cash Received from Interfund Services Provided - - - Cash Payments to Suppliers for Goods and Services (58,550) (5,556) (3,533) Cash Payments for Claims - - - Cash Payments for Personnel Costs (45,514) (1,627) (192) Other Operating Revenues 3,346 86 15 Other Operating Expenses - (612) (396) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 161,963 (7,123) (3,191)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Sales and Use Tax - 9,234 8,697 Other Nonoperating Revenue - 20 10 Other Nonoperating Expense (6,264) (4,645) Transfers from Other Funds - 4,827 - Transfers to Other Funds - - - Negative Cash Balance Implicitly Financed from the General Fund - - NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES - 7,817 4,062
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Sales and Use Tax for Debt Service - 27,573 13,091 Principal Payments on Long-Term Debt (54,820) (10,682) (5,128) Interest Payments on Long-Term Debt (41,716) (17,095) (8,021) Fiscal Charges on Long-Term Debt - (244) (52) Repayment of Loan - (5,527) (3,873) MSD Loan Proceeds 2,434 - - Transfer into Construction Account from Trustee Investment Account 24,000 - - Transfer from Operating Cash to Trustee Investment Account 2013 Year (32,048) Transfer from Operating Cash to Trustee Investment Account (24,000) - - General Obligation Bond Proceeds - 18,955 578 Transfer In - - - Advance from Other Fund - - - Tap-in Fees 2,855 - - Capital Contributions 3,957 - - Acquisition and Construction of Property, Plant and Equipment (79,867) (9,518) (455) Gain on Sale of Property, Plant and Equipment 189 - - NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (199,016) 3,462 (3,860)
CASH FLOWS FROM INVESTING ACTIVITIES
Business-Type Activities—Enterprise Funds
(Amounts in Thousands)
COUNTY OF HAMILTON, OHIO STATEMENT OF CASH FLOWS
PROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2014
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Government Securities 1,446 - - Investment Earnings 1,198 (9) 1 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 2,644 (9) 1
Net Increase (Decrease) in Cash and Equity in Pooled Cash and Investments (34,409) 4,147 (2,988) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 128,931 17,670 12,318 CASH AND CASH EQUIVALENTS AT END OF YEAR 94,522$ 21,817$ 9,330$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) 89,072$ (20,974)$ (15,964)$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation and Amortization 56,121 14,165 13,100 Capital Expenses Moved to Operating 5,130 - - Net Changes in Operating Assets and Liabilities: Accounts Receivable 5,914 (120) (87) Due from Other Funds - - - Other Assets (74) - - Operating Accounts Payable (1,535) 119 288 Accrued Payroll and Other Related Withholdings 960 (3) 13 Intergovernmental Payable - (17) 2 Claims Payable - - - Deferred Lease Rent Revenue - (321) (539) Deferred Revenue - (6) (4) Compensated Absences - 34 - Due to Other Funds - - - Estimated Future Claims - - - Net Pension Obligation 8,862 - - Net Other Post Employment Benefit Obligation 820 - - Cash Received from Customers (1,617) - - Cash in Transit 36 - - Accrued Payroll Change (307) - - ODWA Loan Forgiveness 2014 (841) - - Capital Expenses Not Moved to Fixed Assets Fund (578) - - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 161,963$ (7,123)$ (3,191)$
RECONCILIATION OF CASH AND CASH EQUIVALENTS Equity in Pooled Cash and Investments -$ 12,758$ 4,267$ Cash and Cash Equivalents—Segregated Accounts 53,018 - 260 Restricted Cash and Cash Equivalents Held by Trustees 1,696 9,059 4,803 Construction Account Held by the City of Cincinnati 6,295 - - Amount to Be Transferred to Surplus Account Held by the City of Cincinnati 33,513 - - TOTAL CASH AND CASH EQUIVALENTS 94,522$ 21,817$ 9,330$
NONCASH INVESTING AND FINANCING TRANSACTIONS Structures Donated as Contributed Capital in Aid of Construction 2,182$ -$ -$ Contribution of Capital Asset from Government - - - Acquisition and Construction of Capital Assets Paid Directly by WPCLF Loan Proceeds 16,955 - - Construction Accounts Payable Related to Acquisition of Capital Assets 9,552 - - TOTAL NONCASH INVESTING AND FINANCING TRANSACTIONS 28,689$ -$ -$
See accompanying notes to the basic financial statements. 48
Governmental
ActivitiesOther Total Internal
Enterprise Enterprise Service Funds Funds Funds
27,192$ 291,374$ -$ 73 73 -
- - 41,000 (6,956) (74,595) (4,337)
- - (37,576) (14,247) (61,580) (1,578)
- 3,447 1,197 (1,521) (2,529) (30) 4,541 156,190 (1,324)
112 18,043 - 6 36 -
(300) (11,209) - 2,030 6,857 -
(2,148) (2,148) - 30 30 -
(270) 11,609 -
- 40,664 - (2,935) (73,565) -
(633) (67,465) - (159) (455) -
- (9,400) - - 2,434 - - 24,000 -
(32,048) - - (24,000) -
1,059 20,592 - 601 601 -
(601) (601) - - 2,855 -
10,745 14,702 - (6,268) (96,108) (69)
- 189 - 1,809 (197,605) (69)
Business-Type Activities—Enterprise Funds
- 1,446 - (45) 1,145 (15) (45) 2,591 (15)
6,035 (27,215) (1,408) 22,821 181,740 18,953 28,856$ 154,525$ 17,545$
(4,092)$ 48,042$ (153)$
8,772 92,158 38 - 5,130 -
(580) 5,127 (14) 49 49 -
- (74) - 326 (802) (11) 78 1,048 3 3 (12) - - - 4 - (860) - - (10) -
(5) 29 8 (10) (10) -
- - (1,199) - 8,862 - - 820 - - (1,617) - - 36 - - (307) - - (841) - - (578) -
4,541$ 156,190$ (1,324)$
28,843$ 45,868$ 17,545$ 13 53,291 -
- 15,558 - - 6,295 - - 33,513 -
28,856$ 154,525$ 17,545$
-$ 2,182$ -$ 198 198 -
- 16,955 - - 9,552 -
198$ 28,887$ -$
49
(Amounts in Thousands)
AgencyASSETSEquity in Pooled Cash and Investments 80,629$ Cash and Cash Equivalents—Segregated Accounts 28,624 Real and Other Taxes Receivable 1,287,105 TOTAL ASSETS 1,396,358$
LIABILITIESIntergovernmental Payable 52,207$ Future Tax Collections to Be Distributed 1,287,105 Other Current Liabilities 57,046 TOTAL LIABILITIES 1,396,358$
See accompanying notes to the basic financial statements.
COUNTY OF HAMILTON, OHIOSTATEMENT OF ASSETS AND LIABILITIES
AGENCY FUNDSDECEMBER 31, 2014
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51
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity Hamilton County is governed by a board of 3 commissioners elected by the voters of the County. The County Commissioners serve as the County’s taxing authority, its primary contracting body and the chief administrators of many of its public services. Other elected officials include the Auditor, Clerk of Courts, Coroner, Engineer, Prosecutor, Recorder, Sheriff, Treasurer, 6 Court of Appeals Judges, 20 Common Pleas Court Judges and 14 County Municipal Court Judges. A reporting entity is composed of the primary government, component units and other organizations that are included to ensure that the financial statements of the County are not misleading. The primary government consists of all funds, departments, boards and agencies that are not legally separate from the County. For Hamilton County, this includes the Board of Elections, Developmental Disabilities Services, the Mental Health and Recovery Services Board, the Veterans Service Commission and all departments and activities that are directly operated by the elected County officials. Component units are legally separate organizations for which the County is financially accountable. The County is financially accountable for an organization if the County appoints a voting majority of the organization’s governing board and (1) the County is able to significantly influence the programs or services performed or provided by the organization; or (2) the County is legally entitled to or can otherwise access the organization’s resources; the County is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization; or the County is obligated for the debt of the organization. Component units also include organizations that are fiscally dependent on the County, in that the County approves the organization’s budget, the issuance of its debt or the levying of its taxes. Blended Component Unit. The Hamilton County Transportation Improvement District (TID) is a body corporate and politic, organized and existing under Chapter 5540 of the Ohio Revised Code. The TID provides the opportunity to finance, construct, maintain, repair and operate roads, bridges, parking facilities and accompanying improvements within the County. It serves all the citizens of Hamilton County and is governed by a board that includes five voting and two nonvoting members. The voting members are the three County Commissioners, the County Engineer and a representative from the City of Cincinnati. The nonvoting members are appointed by the speaker of the House of Representatives of the General Assembly and by the President of the Senate of the General Assembly. Even though the TID is a legally separate entity, it is reported as if it were part of the County because its governing board is substantively the same as that of the County. The TID is reported as a separate fund in the combining statements. Discretely Presented Component Unit. The Convention Facilities Authority (CFA) of Hamilton County, Ohio, is an up to eleven-member body corporate and politic, organized and existing under Chapter 351 of the Ohio Revised Code as amended. It is controlled by Hamilton County, which may appoint six members. The City of Cincinnati may appoint three members, and the remaining two members are from other municipalities. Each member may serve a four-year term and may not serve more than three consecutive terms. The CFA was created in 2002 for the purpose of financing the renovation and expansion of the Cincinnati Convention Center, now known as the Duke Energy Center. No financial activity took place until the revenue bonds were sold in 2004. The County is considered financially accountable for the CFA because the County appoints a voting majority of the CFA’s governing body and the County has the ability to impose its will on the CFA. The CFA is not, however, fiscally dependent on the County. Complete financial statements for the CFA may be obtained from the City of Cincinnati, Office of Finance and Budget, 801 Plum Street, Cincinnati, Ohio 45202. Fiscal Agent Related Entities. As counties are structured in Ohio, the County Auditor and County Treasurer serve as fiscal officer and custodian of funds, respectively, for various non-County entities. As fiscal officer, the Auditor maintains the accounts and certifies the availability of appropriated funds prior to the processing of warrants for payment. As custodian of funds, the Treasurer invests public moneys held on deposit in the County
52
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
treasury and redeems the Auditor’s warrants. In the case of the separate districts and commissions listed below, the County Auditor and County Treasurer serve as statutory fiscal agent and custodian of funds, respectively. The County, however, is not otherwise accountable for these entities. Accordingly, only the cash for the following boards and commissions that is being held by the County Treasurer is reflected in accompanying agency funds statements:
The Hamilton County Family and Children First Council was formed under Ohio Revised Code Section 121.37. The Council works in cooperation with several community partners to provide early intervention services for children in at-risk families. The Hamilton County Department of Job and Family Services serves as administrative agent for the Council.
The Hamilton County General Health District (Health District) provides public health services to its residents and communities to prevent the spread of communicable diseases and promote good health. The Health District is governed by a five member Board of Health (BOH), four of whom are elected by the District Advisory Council, which consists of the President of the Board of County Commissioners, the chief executive of each municipal corporation not constituting a city health district, and the chairperson of the board of township trustees. The other BOH member is elected by the District Licensing Council, which consists of representatives of entities licensed by the Health District. The BOH appoints the Health Commissioner, and approves the budget and various resolutions including fees and operating policies. The Health Commissioner is empowered to direct the activities of the Health District, including hiring and adjusting employee wages, approving grant budgets and executing contracts. The Health District is responsible for its own fiscal management and undergoes an annual financial audit. The Health District is dependent on the County to provide facilities, legal counsel and custodianship over its funds.
The Hamilton County Regional Planning Commission serves the Board of County Commissioners by providing advisory planning services to the unincorporated areas (12 townships) of the County. It also serves 37 County municipalities that are members of the Commission and pay annual fees. The Commission itself is made up of 7 representatives: 4 township representatives appointed by the Board of County Commissioners, 1 municipality representative appointed by the Board of County Commissioners, 1 municipal planning commission representative elected by municipal planning commissions and 1 City of Cincinnati representative appointed by the Cincinnati Planning Commission. The Regional Planning Commission appoints an Executive Director and can hire and fix compensation of employees. The Commission is dependent on the County to provide facilities and legal counsel and to act as fiscal agent and custodian of its funds. The budget is approved by the Commission, which is responsible for fiscal management through its authority to enter into contracts and prepare certain financial reports.
The Hamilton County River City Correctional Center (RCCC), a Community-Based Correctional Facility, is a local alternative to prison with the primary purpose of rehabilitation for nonviolent felony offenders. The RCCC is governed by a Facility Governing Board, two-thirds of which is appointed by the Hamilton County Court of Common Pleas and one-third by the Board of County Commissioners. The Facilities Governing Board approves the annual budget and any revisions thereto. Ongoing fiscal management occurs with oversight from both the RCCC Executive Director and the Business Manager. The Hamilton County Soil and Water Conservation District (SWCD) is a separate political subdivision of the State of Ohio and Hamilton County, organized under the Ohio Soil Conservation Act of 1941. Since its inception, the SWCD has been governed by a publicly elected board of volunteer supervisors that are authorized to contract and sue on behalf of the District. The Supervisors adopt their own budget, authorize District expenditures, hire and fire staff, and do not rely on the County to finance deficits. The District is committed to assist the citizens of Hamilton County through education, technical assistance and leadership in the conservation of our soil and water resources.
Jointly Governed Organizations. Hamilton County Board of Developmental Disabilities is a member of the Southwest Ohio Regional Council of Governments formed by Hamilton, Clermont, Butler and Warren Counties.
53
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
The purpose of this Council is to coordinate the powers and duties of the member counties to better serve and benefit persons with developmental disabilities. Hamilton County Mental Health and Recovery Services Board is a member of the Three C Recovery and Health Care Network Council of Governments, which was created by the Hamilton County Mental Health and Recovery Services Board; The Alcohol, Drug and Mental Health Board of Franklin County; and The Alcohol, Drug Addiction and Mental Health Services Board of Cuyahoga County. The purpose of this Council is for creating a Shared Health care and Recovery Enterprise System (SHARES) to support management of client enrollment, benefit management, provider contracting, payment processes and utilization management for the member boards. (See note VI C, Jointly Governed Organizations.) The Southwest Ohio Regional Transit Authority (SORTA) is jointly governed with the City of Cincinnati. The County has no ongoing financial interest or responsibility in SORTA. Separate financial statements are available by contacting SORTA at 602 Main Street, Suite 1100, Cincinnati, Ohio 45202. Hamilton County and the City of Cincinnati also jointly govern the Southwest Ohio Region Workforce Investment Board (SWORWIB). While the County is the fiscal agent and administrative entity for this board, the County has no ongoing financial interest or responsibility to the board. Separate financial statements are available by contacting SWORWIB at 441 Vine Street, Suite 300, Cincinnati, Ohio 45202. Related Organizations. The Board of County Commissioners is responsible for appointing the majority of the members of the Board of Building Appeals, Board of Building Standards, Community Development Advisory Committee, Local Corrections Planning Board, County Land Reutilization Corporation, Elderly Services Programs Advisory Council, Hamilton County Hospital Commission, Public Defender Commission, and Public Library of Cincinnati and Hamilton County. Hamilton County Commissioners also appoint half of the board members for the Port of Greater Cincinnati Development Authority. The Hamilton County Probate Court Judge appoints the Board of Park Commissioners of the Hamilton County Park District. In none of the aforementioned instances does the County’s accountability extend beyond making the appointments. These organizations do not have significant operational or financial relationships with the County. B. Basis of Presentation The financial statements of the County and CFA have been prepared in conformity with GAAP as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The most significant of the County’s accounting policies are described below. The County’s basic financial statements consist of government-wide statements and fund financial statements. The government-wide statements include a Statement of Net Position and a Statement of Activities. The fund financial statements provide a more detailed level of financial information. Government-Wide Financial Statements. The Statement of Net Position and the Statement of Activities display information about the County as a whole. These statements include the financial activities of the primary government and its component unit, whose financial activities are reported separately from those of the primary government. Agency funds are not included in the government-wide statements. The statements distinguish between those activities of the County that are governmental, which normally are supported by taxes and intergovernmental revenues, and those that are considered business-type activities, which rely to a significant extent on fees and charges for support. The activity of the governmental internal service funds is eliminated to avoid doubling up revenues and expenses. For the most part, the effect of interfund activity has been removed from these statements. The exceptions to this general rule are charges between the Rotary nonmajor enterprise funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. The Statement of Net Position presents the financial condition of the County’s governmental and business-type activities and the component unit’s activities at year-end. The Statement of Activities presents a comparison between direct expenses and program revenues for each program or function of the County’s governmental activities and for the business-type activities. Direct expenses are those that are specifically associated with a
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
service, program or department and are, therefore, clearly identifiable to a particular function. The policy of the County is to allocate indirect expenses to functions in the Statement of Activities. Program revenues 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 particular program, and interest earned on grants that is required to be used to support a particular program. Revenues that are not classified as program revenues are presented as general revenues of the County or the component unit, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the County. Fund Financial Statements. During the year, in order to aid financial management and to demonstrate legal compliance, the County segregates in separate funds the transactions related to certain County functions or activities. Fund financial statements are designed to present financial information of the County at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. The total for all internal service funds is presented in a separate column on the face of the proprietary fund statements. Separate financial statements are provided for the agency funds, even though they are not included in the government-wide statements. C. Fund Accounting The County uses funds to maintain its financial records during the year. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purposes and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. There are three categories of funds: governmental, proprietary and fiduciary. Governmental Funds. Governmental funds are those through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets plus deferred outflows of resources and liabilities plus deferred inflows of resources is reported as fund balance. The following are the County’s major governmental funds:
The General Fund is the County’s primary operating fund. It accounts for the general operating revenues and expenditures of the County not recorded elsewhere. The General Fund balance is available to the County for any purpose provided it is expended or transferred according to the general laws of Ohio.
Public Assistance, a special revenue fund, accounts for revenue from federal, State and County governments and expenditures used to provide services to eligible County residents. The Health and Human Services Levies special revenue fund accounts for the revenue from health and human services levies. Levies and expenditures are determined by policies of the Board of County Commissioners.
The nonmajor governmental funds of the County account for grants and other resources, whose use is restricted, committed or assigned to particular purposes. Proprietary Funds. Proprietary fund reporting focuses on the determination of operating income, changes in net position, financial position and cash flows. Proprietary funds are classified as either enterprise or internal service:
Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Board of County Commissioners has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
accountability. The expenses of providing goods and services primarily or solely to the general public are financed or recovered primarily through user charges.
The following are the County’s major enterprise funds:
Metropolitan Sewer District (MSD) is the County-owned sewer district operated by the City of Cincinnati under a management contract. The MSD fund accounts for County-provided wastewater service to residential and industrial users in Hamilton County. Sewer charges serve as the major revenue source for financing operations and maintenance of the sewer system. MSD employees are employees of the City. Per the contract with the City, the County has exercised its option to have a separate financial audit of MSD. Additionally, bond indentures require separately audited financial statements of MSD. These audited statements are included in this report as a major enterprise fund with appropriate note disclosure. Paul Brown Stadium fund accounts for revenue received from football stadium tenants and for the operations of the stadium. Baseball Stadium fund accounts for revenue and expenses associated with the operations of the baseball stadium (Great American Ball Park) and the Cincinnati Reds Hall of Fame and Museum.
Internal service funds account for the financing of services provided by one department or agency of the County to other departments or agencies of the County on a cost-reimbursement basis. The internal service funds report on (1) workers’ compensation, (2) the Auditor’s computer center and (3) medical self-insurance.
Fiduciary Funds. The County’s only fiduciary funds are agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. These funds account for (1) assets held by the County as agent for the entities described in note I A as Fiscal Agent Related Entities and (2) various taxes, assessments and State-shared resources collected on behalf of other local governments. D. Measurement Focus Government-Wide Financial Statements. The government-wide financial statements are prepared using the economic resources measurement focus. All assets and all liabilities associated with the operation of the County and its component unit are included on the Statement of Net Position. The Statement of Activities presents increases (i.e., revenues) and decreases (i.e., 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, deferred outflows of resources, current liabilities, and deferred inflows of resources generally are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances reports on the sources (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 governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements, therefore, include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the fund financial statements. Like the government-wide statements, all proprietary fund types are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (i.e., revenues) and decreases (i.e., expenses) in total net position. The Statement of Cash Flows provides information about how the County finances and meets the cash flow needs of its proprietary activities.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
E. Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting. Differences in the accrual basis and the modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred inflows and outflows of resources, and the presentation of expenses versus expenditures. Revenues—Exchange and Non-exchange Transactions. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Measurable means the amount of the transaction can be determined; available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. Hamilton County considers revenues available if they are expected to be received within 60 days of year-end. Non-exchange transactions, in which the County or CFA receives value without directly giving equal value in return, include sales taxes, property taxes, grants and donations. On an accrual basis, revenue from sales taxes is recognized in the period in which the taxable sale takes place. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied (see note V B). Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted; matching requirements, in which the County or CFA must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the County or CFA on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at year-end: sales tax, local government funds, interest, fees and charges for services. Unearned Revenue. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before the eligibility requirements are met are recorded as unearned revenue, as are some taxes and local government funds and, in the enterprise funds, lease revenue that must be recognized over the life of the lease. Deferred Inflows/Outflows of Resources. In addition to assets, the statements of financial position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until then. For the County, deferred outflows of resources include deferred charges on refundings. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized as interest expense over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statements of financial position report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. For the CFA, deferred inflows of resources include the gain on defeased bonds, which is amortized over the life of the bonds in the same proportion as the annual principal payment to total outstanding principal. For the County, deferred inflows of resources include property taxes, amounts for which there is an enforceable legal claim as of December 31, 2014, but which were levied to finance fiscal year 2015 operations. These amounts have been recorded as a deferred inflow on both the government-wide Statement of Net Position and the governmental fund financial statements. Unavailable revenue is reported only on the governmental funds Balance Sheet and represents receivables that will not be collected within the available period. For the County, unavailable revenue includes delinquent property
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
taxes, special assessments, loans and grants not yet received though eligibility requirements have been met. These amounts are deferred 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 in which the related fund liability is incurred, if measurable, except for unmatured interest on general long-term debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds. F. Budgetary Process The County is required by Ohio law to adopt annual budgets for the General Fund, some special revenue funds and all debt service funds. Under the direction of the County Administrator, staff of the Commissioners’ Office and County Administration Department prepares the budget and issues a separate budgetary report. The budgetary process begins at least six months prior to the calendar year for which the budget is to be adopted, with the County certifying the proposed budget to the County Auditor by July 20. By January 1, the County Commissioners may adopt annual or temporary measures using, in part, the official certificate of estimated resources approved by the County Budget Commission and the tax rates certified by the County Auditor. Appropriations cannot exceed estimated resources. By April 1, the County Commissioners must adopt an annual appropriation resolution. The certificate of estimated resources may be amended during the year for projected increases or decreases in revenue. The amounts reported as the original budgeted amounts on the budgetary statements reflect the amounts on the certificate of estimated resources when the original appropriations were adopted. Modifications to the original budget are approved by the Board of County Commissioners throughout the year as allowed by State statute. All budgetary amendments and supplemental appropriations made during 2014 are included in the revised budget amounts presented in the budget-to-actual comparisons. The County maintains budgetary control within an organizational unit and fund by not permitting expenditures and encumbrances to exceed appropriations within three major categories—Personnel Services, Other Expenditures and Capital Outlay. The budgetary process does not include annual budgeting for certain grants and the Capital Projects funds. For these funds, appropriations are made on a multiyear basis with the free balance and encumbrances being reappropriated annually. The administrative control is on a grant or project basis and, therefore, comparisons with annually appropriated funds do not provide meaningful data. The County adopts annual budgets for proprietary funds; however, budgetary data is not presented for proprietary funds due to the nature of the funds, where demand for goods and services largely determines the level of revenues and expenses. There is no legal requirement to report on such budgets. The annual budget for MSD is prepared on a non-GAAP budgetary basis of accounting, is approved by the Board of County Commissioners and is administered by the City of Cincinnati. Budgetary control is exercised at the divisional level, and between personnel and other costs. G. Cash, Cash Equivalents and Investments The County’s cash consists of cash on hand and demand deposits. County investments with original maturities of one year or less are recorded at cost or amortized cost. Investments of both the County and its component unit that have original maturities of one year or more are recorded at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. For presentation on the financial statements, funds included within the Treasurer’s cash management pool and County, CFA or MSD investments with original maturities of three months or less are considered to be cash and cash equivalents.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
State statutes authorize the County Treasurer to invest in obligations of the U.S. Treasury; obligations or securities issued by any government agency; certificates of deposit; bonds and other obligations of the State; and written repurchase agreements, where the institution agrees unconditionally to repurchase only securities of the U.S. Treasury or any other government agency. In 2014, investments were limited to federal securities, repurchase agreements, STAR Ohio and money market funds. Investments in STAR Ohio, an investment pool managed by the State Treasurer’s Office, are valued at STAR Ohio’s share price, which is the price for which the investment could be sold on December 31, 2014. (See note V A for a detailed disclosure of cash, cash equivalents and investments held by the County.) The CFA’s receipts are accounted for by its fiscal agent, the City of Cincinnati, or trustee. Cash received by the fiscal agent or trustee is maintained in accounts in the CFA’s name. MSD is required by Ohio law to invest in only U.S. obligations; federal agency securities; Ohio bonds and other obligations of the State or such obligations of political subdivisions of the State, provided that the subdivisions are located within Hamilton County; time certificates of deposit or deposit accounts in an eligible institution; and no-load money market mutual funds consisting only of investments mentioned above. Investments are required to mature within five years from the date of settlement, unless the investment is matched to a specific obligation or debt of MSD. In accordance with GASB 31, investment securities are stated at fair value, which is based on the quoted market prices or current share prices. Cash resources of individual funds, including proprietary funds, are combined to form a pool of cash and investments that is managed by the County Treasurer. Individual fund integrity is maintained through the County’s records. Each fund’s interest in the pool is presented as Equity in Pooled Cash and Investments on the financial statements. Certain moneys for MSD are held and invested by the City and trustees. These bank accounts and investments are represented by Cash and Cash Equivalents Held by the City of Cincinnati and Held by Trustees asset accounts. Under existing Ohio statutes, all investment earnings are assigned to the General Fund unless statutorily required to be credited to a specific fund. Interest revenue credited to the General Fund during 2014 amounted to $4,953, which includes $809 assigned from other County funds. In the Statement of Revenues, Expenditures, and Changes in Fund Balances, the Public Assistance, Health and Human Services Levies, and Other Governmental Funds show a negative total for Investment Earnings. Due to declining interest rates, the fair market value adjustment posted to 2014 was insufficient to offset the reversal of the 2013 fair market value adjustment. The County has segregated bank accounts for moneys held separate from the County’s central bank accounts. Additionally, the Southwest Ohio Council of Governments and Three C Recovery and Health Care Network Council of Governments are currently holding deposits that belong to the County. These monies are presented as Cash and Cash Equivalents—Segregated Accounts. H. Inventories Inventories of governmental funds are valued at cost. Costs are determined by the first-in, first-out (FIFO) method. The costs of inventory items are recognized as expenditures in the governmental funds when consumed. MSD’s supplies and materials are stated at the lower of cost or market on a FIFO basis. I. Prepaid Expenses MSD payments made to vendors for services that will benefit periods beyond December 31, 2014, are recorded as Prepaid Expenses using the consumption method. Under this method, a current asset is recorded for the prepaid amount and expenses are reflected in the year in which services are consumed.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
J. Interfund Transactions On fund financial statements, receivables and payables resulting from long-term interfund loans are classified as Advances to/from Other Funds or as Interfund Receivable/Payable. Receivables and payables resulting from interfund transactions other than loans are classified as Due from/to Other Funds. Interfund transactions are eliminated in the governmental and business-type activities columns of the Statement of Net Position, except for any net residual amounts due between governmental and business-type activities, which are presented as Internal Balances. K. Restricted Assets The Trust Agreement for MSD’s Series A Revenue bonds (see note V G) requires the establishment of certain trust accounts, including a Bond Account, Bond Reserve Account, Replacement and Improvement Account, and Surplus Account to be held by the trustee. The Bond Account will be used to accumulate periodic principal and interest payments. The Bond Reserve Account will be funded in an amount equal to the highest annual future debt service requirement. The Surplus Account is available to be used for any other sewer system purpose. The Trust Agreement also requires the creation of a Construction Account to be held by the City to pay for project costs. For Paul Brown and baseball stadia, per the bond indenture requirements, restricted assets include sales tax withholdings required to be held by the custodial trustee for semiannual debt service for 2006 and 2011 sales tax–supported bonds. Also in the stadia’s restricted assets at December 31, 2014, are the 2011 refunding bond proceeds, short-term loan proceeds and sales tax revenues used to fund the mandatory debt service reserve. At December 31, 2014, the following balances (at fair value) were maintained in trust accounts:
Held by Trustees: Bond Retirement $ 8,940 Reserve 91,301 Surplus 319,748 Total $ 419,989
L. Capital Assets Capital assets, which include real property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets used by proprietary funds are also reported in the financial reports of the respective funds. Except for the capital assets of the baseball and football stadia acquired prior to 2013 (which include all assets originally inventoried by an independent appraisal firm and updated annually by the County), the County defines a capital asset as an asset with an initial cost of at least $5,000 (amount not in thousands) and an estimated useful life of at least two years. Most capital assets are capitalized at cost or estimated historical cost. Donated capital assets or assets the County takes ownership of as a result of seizure or forfeiture are recorded at their fair market values as of the date received. Capitalized amounts are updated for additions and retirements during the year. MSD assets acquired prior to its inception in 1968 that are not identifiable with specific historical costs are not included in the capital assets balance. Assets acquired by MSD through contributions, such as contributions from land developers and federal and State grants, are capitalized and recorded in the plant records at the contributor’s reported cost. Land acquired for MSD’s use is titled to either the City or the County. The cost of the land has been recorded on the books of MSD, since it has the full benefits of the land as an economic resource. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not. Construction in progress includes the cost of in-force labor and costs incurred for projects not placed in use as of December 31, 2014. Additionally, in the enterprise funds, this amount includes interest capitalized on debt during the period of construction. For 2014, the amount of capitalized interest was $371 for the County and $635 for MSD.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Capital assets are depreciated except for land, some land improvements, and construction in progress. Depreciation is computed using the straight-line method over the following useful lives, unless history or other factors indicate a different estimate would be more appropriate:
Bridges 50 years Buildings and Structures 40 years MSD Sewer Laterals 40 years Parking Garages 30 years Stadia 28 years Roads 20 years Building Improvements 20 years Depreciable Land Improvements 20 years Office and Service Equipment 2 to 25 years
Infrastructure assets consist of roads and bridges. They are reported as governmental activities. Infrastructure assets acquired prior to January 1, 2002, consist of the bridges and roads that were acquired or that received substantial improvements subsequent to January 1, 1980, and are reported at estimated historical cost using deflated replacement cost. Any material gain or loss arising from the disposal of capital assets for proprietary funds has been credited or charged to income or expense of the respective fund. The net gain or loss for governmental funds has been credited to General Revenues or charged to expenses of the General Government function in the Statement of Activities. M. Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees’ rights to receive compensation are attributable to services already rendered and it is probable that the employer will compensate the employees for the benefits through paid time off or some other means. Compensatory time is accrued as a liability as the benefits are earned. Sick leave benefits are accrued as a liability using the termination payment method. An accrual for earned sick leave is made to the extent that it is probable that the benefits will result in termination payments. The liability is based on the County’s past experience of making termination payments. The entire compensated absence liability is reported on the government-wide financial statements. For governmental fund financial statements, compensated absences are recognized as liabilities and expenditures to the extent that payments come due each period upon the occurrence of employee resignations and retirements. These amounts are recorded as Matured Compensated Absences Payable in the funds from which the employees who have accumulated unpaid leave are paid. The noncurrent portion of the liability is not reported in governmental funds. For governmental funds, the portion of unpaid compensated absences expected to be paid within a year is noted next to the total Compensated Absences in the Long-Term Debt and Other Obligations table (see note V G). This amount is a portion of what is reported as Long-Term Liabilities Due within One Year in the government-wide Statement of Net Position. In proprietary funds, the entire amount of accrued compensated absences is reported as a fund liability. Ohio law requires that vacation time not be accumulated for more than three years. Normally, all vacation time is to be taken in the year available unless administrative written approval for carryover is obtained. Sick time not taken may be accumulated until retirement. Employees eligible to retire under a County-recognized retirement plan, with a minimum of 10 years of service, are paid one-half (up to 630 hours for 70-hour pay periods; 720 hours for 80-hour pay periods) of accumulated sick time upon retirement.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Certain agencies of the County that are not under the control of the Board of County Commissioners may have slight variances in policies on compensated absences. Compensated absences are accrued in accordance with GASB Statement No. 16, Accounting for Compensated Absences. N. Accrued Liabilities and Long-Term Obligations All payables, accrued liabilities and long-term obligations are reported in the government-wide financial statements. All payables, accrued liabilities and long-term obligations payable from proprietary funds are reported in the proprietary fund financial statements. In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources are reported as obligations of the funds. However, claims and judgments and compensated absences that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they are normally due for payment during the current year. Bonds and loans that will be paid from governmental funds are recognized as a liability in the fund financial statements when payment is due. O. Bond Premiums and Discounts, Prepaid Insurance On the government-wide financial statements (and in the enterprise funds), bond premiums/discounts and prepaid bond insurance are deferred and amortized over the term of the bonds using the straight-line (bonds outstanding) method, which approximates the effective interest method. Bond premiums/discounts are presented as additions/reductions to the face amount of bonds payable. Debt issuance costs, except any portion related to prepaid insurance costs, are recognized as an expense in the period incurred. On the governmental fund financial statements, premiums and discounts, as well as issuance costs, are recognized in the period in which the debt is issued. Bond premiums/discounts are reported as an Other Financing Source/Use. Issuance costs, even if withheld from the actual net proceeds received, are reported as Debt Service expenditures. P. Fund Balance Fund balance is divided into five classifications based primarily on the extent to which the County is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows:
Nonspendable: The nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form (i.e., they are not expected to be converted to cash) or (b) legally or contractually required to be maintained intact. The nonspendable fund balances include materials and supplies inventory (category a), unclaimed monies reduced by the amount of the estimated liability for payments to claimants (category b), and interfund advances (category b).
Restricted: The restricted classification is used when constraints placed on the use of resources are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments (e.g., State statutes) or (b) imposed by law through constitutional provisions or enabling legislation (County resolutions). Enabling legislation authorizes the County to assess, levy, charge, or otherwise mandate payment of resources (from external resource providers) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means that the County can be compelled by an external party, such as citizens, public interest groups or the judiciary, to use resources created by enabling legislation only for the purposes specified by the legislation. Committed: The committed fund balance classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action (resolution) of the County Commissioners. Those committed amounts cannot be used for any other purpose unless the Commissioners remove or change the constraint via another resolution. In contrast to fund balance that is restricted by enabling
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
legislation, committed fund balance classification may be redeployed for other purposes with appropriate due process. Constraints imposed on the use of committed amounts are imposed by the Board of County Commissioners, separate from the authorization to raise the underlying revenue; therefore, compliance with these constraints is not considered to be legally enforceable. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned: Assigned fund balance includes amounts intended to be used by the County 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 amounts represent the remaining amount that is not restricted or committed. Assigned fund balance addresses the government’s intent and should be expressed by the County Commissioners or a County official delegated that authority by resolution or by State statute. In the General Fund, assigned amounts represent encumbered amounts for outstanding obligations and the amount reserved for judgments and claims.
Unassigned: Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit fund balance.
The County applies restricted resources first when expenditures are incurred for the purpose for which either restricted or unrestricted (committed, assigned and unassigned) amounts are available. Similarly, within unrestricted fund balance, committed amounts are reduced first, followed by assigned and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classification could be used.
Q. Net Position Net position represents the difference between all other elements in a statement of financial position. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use either through the enabling legislation adopted by the County or CFA, or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. MSD’s restricted net position relates to debt service. MSD did not have net position restricted by enabling legislation. The County, MSD and CFA apply restricted resources first when an expenditure/expense is incurred for purposes for which both restricted and unrestricted net position is available. R. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activities of the proprietary funds. For the County, these revenues are charges for services for wastewater treatment, stadium rental income, parking fees, and charges to political subdivisions and County departments for services provided by the County, including the costs of providing law enforcement staff, computer services, emergency communications, and workers’ compensation and employees’ health insurance coverage. For the CFA, operating revenues include contributions for financing the Convention Facility and the hotel taxes for repayment of debt. Operating expenses are the necessary costs incurred to provide the good or service that is the primary activity of the fund or CFA. For the County, these expenses include personnel, utilities and supplies, claims, depreciation and purchased services. For the CFA, operating expenses were for the return of residual funds to the City and County. Revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. S. Capital Contributions Capital contributions in proprietary fund financial statements arise from outside contributions of capital assets, from grants or outside contributions of resources restricted to capital acquisition and construction, or from transfers from
63
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
governmental funds. These assets, which are recorded at their fair market values on the dates contributed, are not subject to repayment. Capital contributions in 2014 totaled $9,877. T. Internal Activity Transfers within governmental activities are eliminated on the government-wide financial statements. Transfers between governmental and business-type activities on the government-wide statements are reported in the same manner as general revenues. Internal allocations of overhead expenses from one function to another or within the same function are eliminated on the Statement of Activities. Payments for interfund services provided and used are not eliminated. Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as Transfers In and Transfers Out. Interfund transfers are reported as Other Financing Sources (Uses) in governmental funds and after Nonoperating Revenues (Expenses) in proprietary funds. Repayments from funds responsible for particular expenditures/expenses to the funds that initially paid for them are not presented on the financial statements. U. Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. V. Basis of Budgeting While reporting financial position, results of operations and changes in fund balance on the basis of GAAP, the basis of budgeting as provided by law is based upon accounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. A Statement of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual—is presented in the basic financial statements for the General Fund and major special revenue funds with annually appropriated budgets. The major differences for those funds between the basis of budgeting and the GAAP basis are the following: 1. Revenues are recorded when received (budget basis) as opposed to when susceptible to accrual (GAAP
basis). 2. Expenditures are recorded when paid (budget basis) as opposed to when the liability is incurred (GAAP basis). 3. Investments are reported at fair value (GAAP basis) rather than cost (budget basis). 4. Loans and advances in and out, as well as changes in segregated cash and escheat estimates, are operating
transactions (budget basis) as opposed to balance sheet transactions (GAAP basis). 5. Outstanding year-end encumbrances and prior-year appropriations are treated as expenditures (budget basis)
as opposed to restricted, committed or assigned fund balance (GAAP). Adjustments necessary to convert the results of operations at the end of the year on the basis of budgeting to the GAAP basis are presented in the following table:
Health and Human General Public Services Net Change in Fund Balance Fund Assistance Levies GAAP Basis $ 1,621 $ 1,019 $ 25,741Increase (Decrease):
Net Adjustment for Revenue Accruals 642 9,373 (2,631)Net Adjustment for Expenditure Accruals 1,050 1,201 (3,267)Net Adjustment for Unrealized Gains 237 44 315Net Adjustment for Change in Advances (820) 1,451 -Net Adjustment for Change in Segregated Cash - - (394)Net Adjustment for Change in Escheat Estimate 22 - -Encumbrances (14,796) (8,782) (27,756)
Basis of Budgeting $ (12,044) $ 4,306 $ (7,992)
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
II. CHANGES IN ACCOUNTING PRINCIPLES AND RESTATEMENT OF FUND BALANCE A. Changes in Accounting Principles In 2014, the County implemented the following Governmental Accounting Standards Board (GASB) Statements:
No. 67, Financial Reporting for Pension Plans—an Amendment of GASB Statement No. 25 No. 69, Government Combinations and Disposals of Government Operations No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees
GASB Statement No. 67 improves financial reporting by state and local governmental pension plans. GASB Statement No. 69 establishes accounting and financial reporting standards related to government combinations (which include a variety of transactions referred to as mergers, acquisitions and transfers of operations) and disposals of government operations. GASB Statement No. 70 improves accounting and financial reporting by state and local governments that extend and receive financial guarantees with another government, a not-for-profit entity or a private entity without directly giving or receiving equal or approximately equal value in exchange. The implementation of these statements did not result in any change in the County’s financial statements. B. Restatement of Net Position and Fund Balances As a result of implementation of a new capital asset system for MSD, capital asset classifications were updated and beginning net position was restated to correct the capital asset balances.
Balance Balance 12/31/2013 Additions Reductions 12/31/2013
Restated Business-Type Activities Capital Assets Not Being Depreciated: Land $ 97,547 $ - $ - $ 97,547 Construction in Progress 298,201 - - 298,201 Total Capital Assets Not Being Depreciated 395,748 - - 395,748 Capital Assets Being Depreciated: Buildings, Structures and Improvements 2,292,026 348,490 (1,345,176) 1,295,340 Processing System 477,004 - (477,004) - Sewer Laterals and Studies - 1,057,847 - 1,057,847 Furniture, Fixtures and Equipment 76,312 469,784 (53,386) 492,710 Total Capital Assets Being Depreciated 2,845,342 1,876,121 (1,875,566) 2,845,897 Less Accumulated Depreciation: Buildings, Structures and Improvements (881,479) (117,769) 488,036 (511,212) Processing System (235,632) - 235,632 - Sewer Laterals and Studies - (368,120) - (368,120) Furniture, Fixtures and Equipment (62,485) (281,877) 44,108 (300,254) Total Accumulated Depreciation (1,179,596) (767,766) 767,776 (1,179,586) Capital Assets Being Depreciated, Net 1,665,746 1,108,355 (1,107,790) 1,666,311Business-Type Activities Capital Assets, Net $ 2,061,494 $ 1,108,355 $ (1,107,790) $ 2,062,059
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
The special audit of Hamilton County Job and Family Services, related to interfund transactions for the period July 1, 2000, through June 30, 2004, resulted in a finding for adjustment and a restatement of beginning fund balances:
Health and Human Public Services General Assistance Levies Fund Fund Fund Total December 31, 2013 $ 78,154 $ 27,827 $ 165,308 $ 271,289 Special Audit Finding for Adjustment (1,752) 1,752 - - Special Audit Finding for Adjustment - (10,615) 10,615 - December 31, 2013, As Restated $ 76,402 $ 18,964 $ 175,923 $ 271,289
Further analysis on the amounts continues, which could result in revised adjustments. (See note V E.) III. FUND BALANCE The fund balances for all governmental funds are classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the County is bound to observe constraints imposed upon the use of the resources (see note I P). The constraints placed on the fund balance for the major and nonmajor governmental funds are presented below:
Health and
Human Nonmajor Public Services Governmental
Fund Balances General Assistance Levies Funds Total Nonspendable
Materials and Supplies $ - $ - $ - $ 293 $ 293 Advances to Other Funds 3,625 - - - 3,625 Escheat 5,179 - - - 5,179
Total Nonspendable 8,804 - - 293 9,097 Restricted for
Public Assistance - 19,983 - - 19,983 Health and Human Services Levies - - 201,159 - 201,159 Motor Vehicle Gas Tax - - - 32,892 32,892 Health and Community Services - - - 46,112 46,112 Debt Service Payments - - - 375 375 Other - - - 2,669 2,669
Total Restricted - 19,983 201,159 82,048 303,190 Committed
Capital Projects - - 505 7,804 8,309 Other Purposes 302 - - - 302
Total Committed 302 - 505 7,804 8,611 Assigned
Encumbrances 10,918 - - - 10,918 Future Appropriations 4,790 - - - 4,790 Other Purposes 806 - - - 806
Total Assigned 16,514 - - - 16,514 Unassigned (Deficit) 52,403 - - (5,470) 46,933 Total Fund Balance $ 78,023 $ 19,983 $ 201,664 $ 84,675 $384,345
The County has established by resolution, a reserve balance account within the General Fund to accumulate currently available resources for the purpose of mitigating the effects of cyclical changes in revenues and expenditures. The amount of money to be reserved in this account in any fiscal year shall not exceed 5% of the revenue credited in the preceding fiscal year to the General Fund. The resources reserved for stabilization may be
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
used as determined by resolution of the Board of County Commissioners. Additions to the fund may be increased by resolution within the guidelines specified by Ohio Revised Code. This account had a balance of $3,466 as of December 31, 2014, and is shown as unassigned in the General Fund. The County has also established a General Fund reserve policy. The Board of County Commissioners set a goal of 15% of the current year’s ongoing budgeted expenditures as a reserve. If the reserve is not at that level, the Board will increase the reserve by .5% of the General Fund budgeted expenditures each year until the 15% level is attained. The reserve may be used to stabilize revenues, retire outstanding debt or pay judgments. IV. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY At December 31, 2014, the following nonmajor fund groups had deficit fund balances:
Fund Group Fund Balance Health and Community Services Grants $ (1,093) Judicial Services Grants (1,310) Health Grants (696) Project Accounting (2,371)
These deficits were caused by deferring revenue for which eligibility requirements had not yet been met and/or the time lag between reimbursements for grant and project expenditures versus when the expenditures were incurred. The deficit net position of ($80,732) in the Paul Brown Stadium enterprise fund is due to the outstanding debt on the capital assets exceeding the cost of the assets net of depreciation. V. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments Moneys held by the County are classified by State statute into two categories: 1. Active moneys are public moneys determined to be necessary to meet current demand upon the County
treasury. Active moneys must be maintained either as cash in the County treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts.
2. Moneys held by the County that are not considered active are classified as inactive. The County’s Statement of Investment Policy, approved by the County’s Investment Advisory Committee, authorizes investments permitted under Ohio law, which states that inactive moneys are to be deposited or invested in the following: 1. U.S. Treasury notes, bills, bonds or other obligations or securities issued by the U.S. Treasury or any other
obligation guaranteed as to principal and interest by the United States; 2. bonds, notes, debentures or any other obligations or securities issued directly by any federal government
agency or instrumentality, including, but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association and Student Loan Marketing Association;
3. written repurchase agreements in the securities listed above provided that the market value of the securities subject to the repurchase agreement must exceed the principal value of the agreement by at least 2% and be marked to market daily, and that the term of the agreement must not exceed 30 days;
4. bonds and other obligations of the State of Ohio or its political subdivisions, provided that such political subdivisions are located wholly or partly within the County;
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
5. time certificates of deposit or savings or deposit accounts, including, but not limited to, passbook accounts; 6. no-load money market mutual funds consisting exclusively of obligations described in item 1 or 2 above and
repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions;
7. the State Treasurer’s investment pool (STAR Ohio); 8. securities lending agreements in which the County lends securities and the eligible institution agrees to
exchange either securities described in item 1 or 2 above or cash or both securities and cash, equal value for equal value;
9. high-grade commercial paper for a period not to exceed 270 days in an amount not to exceed (a) 10% of the aggregate value of the issuing corporation’s outstanding commercial paper or (b) 25% of the County’s total average portfolio; or
10. bankers’ acceptances for a period not to exceed 180 days and in an amount not to exceed 25% of the County’s total average portfolio.
Investments in stripped principal or interest obligations, reverse repurchase agreements and derivatives, as well as the issuance of taxable notes for the purpose of arbitrage, the use of leverage and short selling are all prohibited. Investments may be made only through specified dealers and institutions. Payment for investments may be made only upon delivery of the securities representing the investments to the Treasurer or, if the securities are not represented by a certificate, upon receipt of confirmation of transfer from the custodian. The following information categorizes deposits and investments and identifies risks related to deposits and investments as defined in GASB Statement No. 3, Deposits with Financial Institutions, Investments (Including Repurchase Agreements), and Reverse Repurchase Agreements, and GASB Statement No. 40, Deposit and Investment Risk Disclosures. Cash on Hand. At year-end, the County had $296 in undeposited cash on hand. This amount is included on the Statement of Net Position of the County as part of Equity in Pooled Cash and Investments. Deposits—County. At year-end, the County’s carrying amount of deposits was $113,265 and the bank balance was $119,856. Custodial Credit Risk. Custodial credit risk is the risk that, in the event of a bank failure, the County’s deposits may not be returned to it. The County’s policy for deposits is that any balance not covered by the Federal Deposit Insurance Corporation will be collateralized by the financial institutions with pledged securities. Of the year-end bank balance, $6,088 was covered by federal depository insurance or by collateral held by the County’s agent in the County’s name. The remaining balance of $113,768 was exposed to custodial credit risk because it was uninsured and collateralized with securities held by the pledging institution’s trust department or agent but not in the County’s name. Investments—County. At December 31, 2014, investment balances were as follows:
Investment Maturities Less Than % of Investments Fair Value 1 Year 1–5 Years Portfolio Federal Home Loan Bank (FHLB) $ 154,985 $ 47,507 $ 107,478 32.78 Federal National Mortgage Association (FNMA) 247,995 21,017 226,978 52.45 Federal Farm Credit Banks (FFCB) 22,650 - 22,650 4.79 U.S. Treasury Notes 28,498 1,979 26,519 6.03 Sewer Special Assessment Bond 848 - 848 .18 Repurchase Agreements 2,248 2,248 - .47 Investment in STAR Ohio 1 1 - - Money Market Funds—Trustee 15,583 15,583 - 3.30
Total County Investments $ 472,808 $ 88,335 $ 384,473 100.00
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
STAR Ohio allows governments within the State to pool their funds for investment purposes. STAR Ohio is not registered with the SEC as an investment company but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of 1940. STAR Ohio funds are invested in U.S. government and agency securities, collateralized repurchase agreements with eligible Ohio financial institutions and eligible bankers’ acceptances and commercial paper. The fair value of the County’s position in the pool is the same as the value of the pool shares. Credit Risk. It is the County’s policy to limit its investments in no-load money market mutual funds to funds rated in the highest category by nationally recognized statistical rating organizations and to limit investments in other obligations that are not U.S. government obligations or those explicitly guaranteed by the U.S. government to investments that have a credit quality rating of the top two ratings issued. Investments in the FHLB, FNMA and FFCB were rated Aaa and AA+ by Moody’s and Standard and Poor’s. Investments in STAR Ohio were rated AAA by Standard & Poor’s. The County’s investments in money market funds were rated AAA by Standard and Poor’s. Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County has implemented several controls to mitigate custodial risk. All security transactions are executed on a delivery versus payment basis. All securities are delivered to the County's custodian bank before payment is made to the broker dealer for the security. Securities delivered to the custodian are held in the name of the County. If the market conditions or liquidity needs require the sale of the security, the County will identify securities that mitigate the amount of the loss. With repurchase agreements, the County requires that the counterparty deliver securities with a market value at least equal to 102% of the purchase price of the securities. If the counterparty fails to repurchase the securities per the terms of the agreement, the County reserves the right to sell the securities in the market. Concentration of Credit Risk. The County's investment policy provides for diversification to avoid undue concentration in one type of securities. The County has invested more than 5% of the County’s investments in the FHLB (32.78%), the FNMA (52.45%), and U.S. Treasury Notes (6.03%). Interest Rate Risk. An investment must mature within five years from the date of purchase unless matched to specific obligations or debt of the County, and must be purchased with the expectation that it will be held to maturity. Additionally, policy specifies that the portfolio be structured to diversify investments to reduce the risk of loss resulting from over-concentration of assets in a specific maturity or a specific type of investment. Deposits—MSD. MSD has active deposits as described above. Its inactive deposits are public deposits that the MSD has identified as not required for use within the current two-year period of designation of depositories. Inactive deposits must either be evidenced by certificates 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. In addition to deposits of active and inactive moneys, MSD may have deposits of interim moneys. These are moneys that are not needed for immediate use but that will be needed before the end of the current period of designation of depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than one year from the date of deposit or by savings or deposit accounts, including passbook accounts. At December 31, 2014, the carrying amount of MSD’s deposits totaled $92,826. Amounts held by the City are invested on MSD’s behalf in accordance with the City’s Municipal Code. These amounts are collateralized as part of the City’s cash and investment balances. Custodial Credit Risk (Defined Above). MSD’s policy for deposits states that collateral is required for demand deposits and certificates of deposit at 105% of all deposits not covered by federal deposit insurance. Protection of MSD’s deposits is provided by the Federal Deposit Insurance Corporation (FDIC), by eligible securities pledged by the financial institution as security for repayment, by surety company bonds deposited with the finance director by the financial institution or by a single collateral pool established by the financial institution to secure the repayment of all public monies deposited with the institution. Obligations that may be pledged as collateral are obligations of
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
the United States and its agencies and obligations of the State and its municipalities, school districts and district corporations. Obligations pledged to secure deposits must be delivered to a bank other than the institution in which the deposit is made. Written custodial agreements are required. Although the pledging bank has an investment and securities pool used to collateralize all public deposits, which are held in the financial institution’s name, noncompliance with federal requirements could potentially subject MSD to a successful claim by the FDIC. The deposits not covered by federal depository insurance are considered uninsured and uncollateralized under the provisions of GASB 3 and subject to custodial credit risk. For additional GASB 40 disclosure requirements, refer to the financial statements as of June 30, 2014, the most recent available, for the City of Cincinnati. Investments—MSD. State statute, Board of County Commissioners’ resolutions, and the 1985 Trust Indenture as amended, authorize MSD to invest in obligations of the U.S. Treasury, its agencies or its instrumentalities; certificates of deposit; repurchase agreements; money market deposit accounts; municipal depository funds; super NOW accounts; sweep accounts; separate trading of registered interest and principal of securities; mutual funds; bonds and other obligations of the State; and the State Treasurer’s investment pool. The following investment policies are the same for MSD as defined in the County’s investment policy above: (1) limitations on repurchase agreements, (2) prohibited investments, and (3) guidelines governing dealers and payments. Investments made by MSD are summarized below:
% of Investments Fair Value Portfolio Investments Held by the City of Cincinnati $ 92,826 18.60 U.S. Government Securities 404,431 81.06 Money Market Funds 1,696 .34
Total Investments $ 498,953 100.00
Custodial Credit Risk (Defined Above). Funds held by trustees are eligible investments as defined by the Trust Agreement and are in the name of the trustee for the benefit of MSD. As stated in GASB 40, obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not considered to have credit risk and do not require disclosure of credit quality. The Federal National Mortgage Association notes, Federal Home Loan Mortgage Corporation notes and Federal Home Loan Bank notes are exposed to custodial credit risk in that they are uninsured, unregistered and held by the counterparty’s trust department or agent but not in MSD’s name. The money market funds are invested in a treasury obligation fund with a Moody’s credit rating of Aaa. MSD has no investment policy dealing with investment custodial risk beyond the requirement in State statute that prohibits payment for investments prior to the delivery of the securities representing such investments to the Treasurer or qualified trustee. Concentration of Credit Risk: MSD uses the City of Cincinnati’s investment policy, which addresses concentration of credit risk by requiring investments to be diversified to reduce risk of loss resulting from over-concentration of assets in a specific issue or class of security. The table above includes the percentage of each investment type held by MSD at December 31, 2014. MSD has no policy that addresses interest rate risk. Deposits—CFA. At year-end, the carrying amount of CFA deposits held by the trustee totaled $84,183 and the bank balance was $84,183. Included in this balance were deposits of the proceeds for the refunding of the old debt. The accounts are held in custodial accounts at The Bank of New York Mellon and are not collateralized.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Investments—CFA. The trustee for the CFA held no investments at December 31, 2014. The CFA’s investment policy is limited by the Cooperative Agreement with the City and the County. The eligible investments include obligations guaranteed as to principal and interest by the United States or by an agency or instrumentality of the federal government or a no-load money market fund that consists of these obligations. The CFA may also invest in time certificates of deposits of eligible institutions; bonds and other obligations of the State, City or political subdivision of the State; Ohio subdivision’s fund; and certain written repurchase agreements. The CFA does not have a written credit risk policy, concentration of credit risk policy, investment rate risk policy or foreign currency risk policy. Reconciliation of Balance Sheet Cash with Deposits and Investments. The classifications of cash and cash equivalents, and investments on the combined financial statements for the primary government are based on criteria set forth in GASB Statement No. 9, Reporting Cash Flows of Proprietary and Non-Expendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting. A reconciliation between the classifications of cash and investments on the combined financial statements and the classifications of deposits and investments, including MSD, presented above per GASB 3 is as follows: Carrying Amount of Deposits $ 206,387 Equity in Pooled Cash and Investments $ 541,764Carrying Amount of Investments 878,935 Cash and Cash Equivalents—Segregated Accounts 83,761
Total $ 1,085,322 Cash and Cash Equivalents—Restricted 56,578 Investments—Restricted 403,219 Total $ 1,085,322
B. Receivables Receivables at December 31, 2014, consisted of taxes, interest, special assessments, accounts (billings for user-charged services, including unbilled utility services), and intergovernmental receivables arising from grants, entitlements and shared revenues. All trade and property tax receivables, including those for MSD, are shown net of an allowance for uncollectibles. Receivables are recorded on the County’s financial statements to the extent that the amounts are determined to be material and substantiated, not only by supporting documentation but also by a reasonable, systematic method of determining their existence, completeness, valuation and collectability. Property Taxes. Property taxes include amounts levied against real, public utility and tangible (personal) property. The assessed value by property classification upon which the 2014 tax collection was based is as follows:
Real Property—2014 Valuation: Residential/Agricultural $ 12,705,736Commercial/Industrial/Public Utilities 4,619,940Public Utility Personal Property 843,929
Total Valuation $ 18,169,605
Ohio law prohibits taxation of property by all overlapping taxing authorities in excess of 10 mills per dollar of assessed value without a vote of the people. Presently, the County levies 2.26 mills of this 10-mill limit for its General Fund. In addition to the 2.26 mills, voted levies in the amount of 16.77 mills have been approved for health and hospitalization, law enforcement, developmental disabilities and health, children’s services, zoological parks, senior services, family treatment services and the museum center.
71
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
A summary of the voted levies follows:
Voter
Authorized Rates Levied for Final
Collection Rate(1) Current Year Collection(2) Year Residential/ Commercial/ Purpose Agricultural Industrial University Hospital 4.07 1.70 2.65 2014 Police Information Center 0.54 0.17 0.29 Continuing Developmental Disabilities 4.13 3.94 4.13 2014 Mental Health 2.99 1.64 2.26 2017 Children’s Services 2.77 1.88 2.60 2016 Zoo 0.46 0.35 .44 2018 Senior Services 1.29 1.00 1.23 2017 Family Treatment Services 0.34 .35 0.34 2014 Museum Center 0.18 0.17 0.18 2014
Total Voted Millage 16.77 11.20 14.12 (1)dollar amount per $1,000 of assessed valuation (2)reduction factors applied to levies
Ohio law provides for a reduction in the rates of voted levies to offset increased values resulting from the reappraisal of real property. Reduction factors are applied to authorized voted levies so that each levy yields the same amount from real property taxes as in the year in which the levy was approved. The reduction factors are computed annually and applied separately for residential/agricultural property and commercial/industrial property. Increases to voted levy revenues occur with the addition of new construction that is added to the tax duplicate each year. The County Commissioners allocated approximately 17.50% of the ½ cent permissive sales tax receipts to reduce residential property taxes in the County. In 2014, this represented a 1.75% reduction for all owner-occupied homeowners in the County. Taxes collected on real property (other than public utilities) in one calendar year are levied on the preceding calendar year’s assessed values as of January 1 of that preceding year, the lien date. Assessed values are established the preceding year by the County Auditor at 35% of appraised market value. A physical reappraisal of all real property is required every six years, with a statistical update every third year. The last physical reappraisal was completed during 2011. The County Treasurer bills and collects real property taxes on behalf of all taxing districts in the County, including the County. Taxes are payable annually or semi-annually. If paid annually, payment is due December 31; if paid semi-annually, the first payment is due December 31 with the remainder payable by June 20 of the following year. The County’s practice is to extend the December 31 due date to January. Unpaid taxes become delinquent after December 31 of the year they are due with penalties and interest assessed. Foreclosure proceedings may be initiated by the County Prosecutor if delinquent taxes are not paid within one year. Public utility real and tangible personal property taxes collected in one calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of the second year preceding the collection year, the lien date. The majority of public utility tangible personal property currently is assessed at 25% of its true value. Public utility taxes are payable on the same date as real property taxes described previously. The County Auditor periodically remits to the taxing districts their portions of the taxes collected. The final settlements of real and public utility property taxes are made in April and August. Collections of the taxes and remittance of them to the taxing districts are accounted for in various agency funds of the County. The County
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
accrues property taxes as receivables since they can be measured and recorded when levied and recognized as deferred revenue since they are collected in advance of the year for which they are levied. Property taxes are recognized as revenue in the year for which they are levied. Property tax revenues were recorded in the following funds in 2014:
General Fund $ 36,509 Health and Human Services Levies Fund 198,711 Nonmajor Special Revenue Funds 576 Total Property Tax Revenues $ 235,796
Property tax revenues include levies collected from both the current levy and delinquent levies. The cumulative delinquency as of December 31, 2014, was $15,086 of real and public utility taxes and $3,106 of tangible personal property taxes, for a total of $18,192. The delinquent property tax revenue was not recorded in the financial statements due to the uncertainty of collection. Recording the delinquency would not have an impact on the fund balance of the County since it would be offset by a reserve for delinquent accounts. Sales and Use Tax. On March 19, 1996, voters of Hamilton County approved a .5% increase (from .5% to 1.0%) in the County’s general sales tax. The County Commissioners approved by resolution that this additional tax will be used for development of the riverfront area, including construction of the football and baseball stadia. Vendor collections of the tax are paid to the State Treasurer by the 25th day of the month following collection. The State Tax Commissioner certifies to the State Auditor the amount of the tax to be returned to the County. The Tax Commissioner’s certification must be made within 45 days of the end of each month. The State Auditor then has 5 days in which to draw the warrant payable to the County. Hotel Occupancy Tax. The CFA receives hotel occupancy tax quarterly from the County and City. Intergovernmental. State subsidies for local property tax reductions are recorded as Intergovernmental Receivable when measurable and Intergovernmental Revenues when measurable and available. Federal and State grants and assistance awards made on the basis of entitlement are recorded as Intergovernmental Receivable and Revenues when entitlement occurs. All other federal and State reimbursement-type grants and other intergovernmental reimbursements are recorded as receivables and revenues when the related expenditures/expenses are incurred. A summary of the Intergovernmental Receivables for the year ended December 31, 2014, follows.
Governmental Activities Amount General Fund:
State Subsidies $ 4,274Non-Departmentals—Casino Revenue 2,352Board of Elections—Grants 2Emergency Management Agency—Grants 5Juvenile Court—Grants 85Municipal Court—Grants 42Clerk of Courts—Grants 5Juvenile Court—Other 1Probate Court—Other 103Public Defender—Other 1,084
General Fund Total 7,953
73
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Public Assistance—Special Revenue Fund:
Job and Family Services—Grants $ 1,643Public Assistance Total 1,643
Health and Human Services Levies—Special Revenue Fund:
State Subsidies 20,809Job and Family Services—Grants 1,567Developmental Disabilities Services—Grants 6,133
Health and Human Services Levies Total 28,509 Nonmajor Special Revenue Funds:
Job and Family Services—Grants 149Non-Departmentals—Grants 52Planning and Development—Grants 447Sheriff—Grants 99Coroner—Grants 42Emergency Management Agency—Grants 271Juvenile Court—Grants 860Municipal Court—Grants 243Adult Probation—Grants 1,222Environmental Services—Grants 1,573Developmental Disabilities Services—Grants 810Mental Health and Recovery Services Board—Grants 5,352Transportation Improvement District—Grants 35Engineer—Other 3Mental Health and Recovery Services Board—Other 146
Nonmajor Special Revenue Funds Total 11,304Governmental Activities Total $ 49,409
Business-Type Activities Amount Nonmajor Enterprise Funds:
Riverfront Development—Grants $ 37Nonmajor Enterprise Funds Total 37
Business-Type Activities $ 37
Loans. The Hamilton County Housing Rehab Program provides low-interest loans to income-qualifying homeowners to provide an affordable means for making major repairs on their homes. The program is funded by the Board of County Commissioners through the Hamilton County Community Block Grant Program, with funds from the U.S. Department of Housing and Urban Development. Funds from loan repayments by previous program recipients are made available for use through a revolving loan fund. These loans ($240) are classified as Accounts Receivable on the Balance Sheet—Governmental Funds.
74
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
In 2002, the County Commissioners adopted the Home Improvement Program (HIP). HIP allows homeowners in Hamilton County to borrow money from banks to repair or remodel their homes or rental property at interest rates 3% below the lowest rate the banks would normally offer. These loans are collateralized by Hamilton County certificates of deposit (CDs). These CDs totaled $2,839 at December 31, 2014, and are included in Equity in Pooled Cash and Investments on the Balance Sheet—Governmental Funds. C. Restricted Assets Restricted assets in the enterprise funds include the following cash, cash equivalents and investments:
Restricted Cash and Cash Equivalents: Held by the City of Cincinnati:
Construction Account $ 6,295Amount to Be Transferred to Surplus Account 33,513
Held by Trustees 16,770Total Restricted Cash and Cash Equivalents 56,578
Restricted Investments: Held by Trustees—Held to Maturity 403,219
Total Restricted Assets $ 459,797
D. Capital Assets
Capital asset activity for the year ended December 31, 2014 was as follows:
Balance Balance 1/1/2014 Additions Reductions 12/31/2014Governmental Activities Capital Assets Not Being Depreciated: Land and Improvements $ 93,265 $ 81 $ (2) $ 93,344 Construction in Progress 5,091 4,782 (5,770) 4,103 Total Capital Assets Not Being Depreciated 98,356 4,863 (5,772) 97,447 Capital Assets Being Depreciated: Land Improvements 664 15 - 679 Buildings, Structures and Improvements 374,030 1,522 (23) 375,529 Infrastructure 690,285 3,528 - 693,813 Furniture, Fixtures and Equipment 91,497 4,571 (8,372) 87,696 Total Capital Assets Being Depreciated 1,156,476 9,636 (8,395) 1,157,717 Less Accumulated Depreciation: Land Improvements (110) (55) - (165) Buildings, Structures and Improvements (288,058) (6,443) 22 (294,479) Infrastructure (551,292) (14,303) - (565,595) Furniture, Fixtures and Equipment (72,422) (3,805) 7,986 (68,241) Total Accumulated Depreciation (911,882) (24,606) 8,008 (928,480) Capital Assets Being Depreciated, Net 244,594 (14,970) (387) 229,237Governmental Activities Capital Assets, Net $ 342,950 $ (10,107) $ (6,159) $ 326,684
Deductions of capital assets being depreciated include $198 transferred to business-type activities.
75
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Balance Balance 1/1/2014 Additions Reductions 12/31/2014Business-Type Activities Capital Assets Not Being Depreciated: Land $ 97,547 $ - $ - $ 97,547 Construction in Progress 298,201 107,858 (75,176) 330,883 Total Capital Assets Not Being Depreciated 395,748 107,858 (75,176) 428,430 Capital Assets Being Depreciated: Buildings, Structures and Improvements 1,295,340 12,246 (587) 1,306,999 Sewer Laterals and Studies 1,057,847 37,041 (10,999) 1,083,889 Furniture, Fixtures and Equipment 492,710 22,426 (1,996) 513,140 Total Capital Assets Being Depreciated 2,845,897 71,713 (13,582) 2,904,028 Less Accumulated Depreciation: Buildings, Structures and Improvements (511,212) (42,315) - (553,527) Sewer Laterals and Studies (368,120) (23,901) - (392,021) Furniture, Fixtures and Equipment (300,254) (13,580) 1,955 (311,879) Total Accumulated Depreciation (1,179,586) (79,796) 1,955 (1,257,427) Capital Assets Being Depreciated, Net 1,666,311 (8,083) (11,627) 1,646,601Business-Type Activities Capital Assets, Net (As Restated—See Note II B) $ 2,062,059 $ 99,775 $ (86,803) $ 2,075,031
Additions to capital assets being depreciated include $198 transferred from governmental activities. Construction in Progress includes assets that upon completion will be transferred to the governmental activities or to the MSD or Riverfront Development enterprise fund. Depreciation expense was charged to functions/funds as follows:
Governmental Activities General Government $ 6,462Judicial 289Public Safety 1,627Social Services 348Health 883Public Works 14,799Environmental Control 160Internal Service Funds—Charged to Functions Based on Usage 38 Total Depreciation Expense $ 24,606 Business-Type Activities MSD $ 43,614Paul Brown Stadium 14,165Baseball Stadium 13,100Nonmajor Enterprise Funds 8,917 Total Depreciation Expense $ 79,796
E. Interfund Balances and Transfers Interfund balances at December 31, 2014, consisted of the following amounts and represent charges for services or reimbursable expenses except for the General Fund’s coverage of the negative cash balance for the Rotary Funds ($30), a nonmajor business-type fund.
76
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Due to/from balances resulted from the time lag between the dates that (1) interfund goods or services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting records and (3) payments are made between funds. All are expected to be paid within one year.
Advances to/from balances are amounts that are owed, other than charges for goods and services rendered, by a particular fund to another fund and that are not due within one year. At year-end, advances totaled $3,625. Interfund receivables/payables are a result of the special audit related to interfund transactions for the years 2000-2004. It was determined that payment of $1,752 was due from the General Fund to the Public Assistance Fund and that $10,615 was due from the Public Assistance Fund to the Health and Human Services Levies Fund. Loan agreements were established, calling for payment of the amounts over 20 years at 0% interest. Further analysis on the amounts continues, which could result in revised loan amounts and terms. (See note II B.) Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, to move unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations, to segregate money for anticipated capital projects, to provide additional resources for current operations or debt service, and to return money to the fund from which it was originally provided once a project is completed. In addition, a transfer of $198 in capital assets was made from governmental activities to the nonmajor Communications Center fund. Interfund transfers for the year ended December 31, 2014, consisted of the following:
Nonmajor Nonmajor General Governmental Enterprise
Transfers In Fund Funds Funds Total General Fund $ - $ 1,723 $ 25 $ 1,748Public Assistance 681 - - 681Health and Human Services Levies - 80 - 80Nonmajor Governmental Funds 11,285 126 2,123 13,534Paul Brown Stadium 4,827 - - 4,827Nonmajor Enterprise Funds 2,631 - - 2,631 Total $ 19,424 $ 1,929 $ 2,148 $ 23,501
Due to Other Governments represents the return of residual funds by the CFA and project funds being held by the CFA to pay for the City’s improvement of Duke Energy Center. The deposits payable for refunded debt are the December 2014 bond refunding proceeds, which are being temporarily held. F. Short-Term Debt
In 2013, the County secured a short-term loan of $9,400. The proceeds funded the debt service reserve requirement for the stadia’s three outstanding sales tax revenue bond series. The loan was repaid in 2014.
Balance Balance 1/1/2014 Additions Reductions 12/31/2014 $ 9,400 $ - $ 9,400 $ -
Due from Other Funds Nonmajor Nonmajor General Public Governmental Enterprise Due to Other Funds Fund Assistance Funds Funds Total General Fund $ - $ 5 $ 3 $ 4 $ 12Public Assistance 173 - - - 173Health and Human Services Levies 946 1,766 61 - 2,773Nonmajor Governmental Funds 271 475 7 11 764Nonmajor Enterprise Funds 30 - - - 30 Total $ 1,420 $ 2,246 $ 71 $ 15 $ 3,752
Transfers
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
G. Long-Term Debt and Other Obligations
The long-term obligations of the County payable as of December 31, 2014, are as follows:
Governmental Activities Interest Balance Balance Due in Maturity Rate % January 1 Additions Reductions December 31 One YearLong-Term Debt Year Issued/Purpose/Amount Issued
General Obligation Bonds—Unvoted 2001 Various Purpose—$1,455 2021 3.00-5.00 $ 520 $ - $ (55) $ 465 $ 55 2001 Water West Phase 2—$1,660 2021 3.00-5.00 825 - (90) 735 902004 Various Purpose Refunding—$21,915 2015 1.70-4.00 2,140 - (1,835) 305 3052004 Various Purpose Refunding—$16,115 2015 1.70-4.00 1,575 - (1,350) 225 2252004 Various Purpose Refunding—$4,100 2015 1.70-4.00 405 - (345) 60 602005 Various Purpose Refunding—$28,715 2017 3.00-5.00 9,605 - (2,305) 7,300 2,4152006 Emergency Management and Operations Center—$725 2025 4.00-4.50 520 - (35) 485 352006 Emergency Services Communications System—$19,520 2021 3.50-4.00 11,710 - (1,280) 10,430 1,3302007 Various Purpose Refunding—$18,130 2024 3.75-4.15 5,555 - (1,205) 4,350 1,2502007 Communications Center—$1,025 2016 3.75-4.00 350 - (115) 235 1152008 Various Purpose—$8,795 2018 3.00-4.00 4,720 - (885) 3,835 9102009 Emergency System Alert—$1,615 2024 2.00-4.25 1,235 - (100) 1,135 1002009 Urban Redevelopment —$12,550 2039 1.875-6.8 11,465 - (280) 11,185 2852011 Energy Conservation—$5,512 2026 2.40-5.25 5,244 - (287) 4,957 2922012 Energy Conservation Phase 1—$9,400 2027 2.0-3.125 9,000 - (590) 8,410 595Deferred Amounts: For Issuance Premiums 521 - (154) 367 - Total General Obligation Bonds—Unvoted 65,390 - (10,911) 54,479 8,062
Special Assessment Bonds 1994 Sewer District—$175 2014 5.75 10 - (10) - -1995 Sewer District—$210 2015 5.10-5.80 35 - (15) 20 201996 Sewer District—$445 2016 5.55-5.625 100 - (30) 70 351997 Sewer District—$340 2017 5.125-5.30 100 - (25) 75 251998 Sewer District—$705 2018 4.65-4.75 245 - (45) 200 451999 Sewer District—$170 2019 5.5 70 - (10) 60 10 2000 Sewer District—$545 2020 5.40-5.55 250 - (30) 220 302001 Sewer District—$150 2021 4.00-5.10 80 - (10) 70 10 2002 Sewer District—$295 2022 3.50-5.05 160 - (15) 145 152003 Sewer District—$460 2023 1.25-5.75 275 - (20) 255 252004 Water and Sewer—$625 2024 1.8-4.9 385 - (30) 355 302005 Sewer District—$110 2025 4.35-4.40 70 - (5) 65 52006 Sewer District—$76 2026 4.65-4.75 49 - (3) 46 42007 Sewer District—$750 2027 4.15-4.65 585 - (35) 550 302008 Sewer District—$262 2028 4.625-5.50 210 - (10) 200 102009 Sewer District—$710 2029 2.50-4.50 595 - (30) 565 302010 Sewer District—$387 2030 2.00-4.35 335 - (15) 320 152011 Sewer District—$275 2031 4.75 250 - (10) 240 102012 Sewer District—$373 2032 3.5 360 (14) 346 142013 Sewer District—$182 2033 4.21 182 - (6) 176 62014 Sewer District—$326 2034 4.75 - 326 - 326 10 Total Special Assessment Bonds 4,346 326 (368) 4,304 379 Total Governmental Long-Term Debt 69,736 326 (11,279) 58,783 8,441
Other Long-Term Liabilities Compensated Absences 40,160 35,268 (35,306) 40,122 3,752State Loans 1,547 537 (471) 1,613 106Loan Contracts 3,603 - (263) 3,340 175Forgivable Mortgage 1,030 - (102) 928 68Claims Payable 1,405 800 (945) 1,260 992 Total Governmental Long-Term Liabilities $117,481 $ 36,931 $ (48,366) $ 106,046 $ 13,534
78
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Business-Type Activities Interest Balance Balance Due in Maturity Rate % January 1 Additions Reductions December 31 One Year Long-Term Debt Year Issued/Purpose/Amount Issued
MSD Obligations 2014 Series A Revenue Bonds—$162,650 2032 4.00-5.00 $ - $162,650 $ - $ 162,650 $ -2013 Series A & B Revenue Bonds—$258,695 2038 0.45-5.00 258,225 - (24,605) 233,620 26,2152010 Series A & B Revenue Bonds—$130,675 2035 2.00-5.37 123,550 - (860) 122,690 4252009 Series A Revenue Bonds—$149,815 2034 4.00-6.50 149,815 - (6,790) 143,025 -2007 Series A Revenue Bonds—$72,385 2032 3.50-5.25 61,335 - (54,595) 6,740 2,1652006 Series A Revenue Bonds—$83,045 2031 4.00-5.00 68,360 - (63,095) 5,265 2,5752005 Series A & B Revenue Bonds—$170,560 2030 2.50-5.00 135,265 - (72,175) 63,090 12,0902004 Series A Revenue Bonds—$46,385 2017 2.00-5.00 1,420 - (1,420) - -2003 Series A & B Revenue Bonds—$215,575 2028 1.50-5.25 750 - (750) - -Ohio Water and Sewer Rotary Commission - - 50 - - 50 -Ohio Public Works Commission (OPWC) 2017 3.54-4.80 2,012 - (325) 1,687 330Construction Drawdown 2018 0.00-3.00 216,609 16,113 (11,460) 221,262 17,345Capital Lease Payable 2029 2.00-5.00 12,735 - (600) 12,135 620Deferred Amounts: For Issuance Premiums 34,245 36,830 (8,680) 62,395 - Total MSD Obligations 1,064,371 215,593 (245,355) 1,034,609 61,765
Enterprise Fund Debt—Parking Facility Market Value 2001 Parking Facility—$24,500 2026 Based 17,280 - (915) 16,365 970
Sales Tax Bonds 2000 Stadium Series B—$349,992 2032 5.57 41,661 - - 41,661 -2006 Stadium Series A—$452,270 2032 4.00-5.00 429,535 - (15,370) 414,165 17,8852011 Refunding Bonds A—$72,665 2032 2.00-5.00 72,665 - (345) 72,320 1,835Deferred Amounts:
For Issuance Discounts (943) - - (943) - For Issuance Premiums 23,051 - (2,155) 20,896 - Total Sales Tax Bonds 565,969 - (17,870) 548,099 19,720 General Obligation—Parking Facility 2007 Various Purpose Refunding—$7,335 2024 3.75-4.15 5,970 - (440) 5,530 4602014 Riverfront Infrastructure Improvement—$19,030 2028 2.00-5.00 19,030 (100) 18,930 835Deferred Amounts: For Issuance Discounts (10) - 2 (8) - For Issuance Premiums - 1,562 (138) 1,424 Total General Obligation Bonds 5,960 20,592 (676) 25,876 1,295
Total Business-Type Long-Term Debt 1,653,580 236,185 (264,816) 1,624,949 83,750
Other Long-Term Liabilities
Compensated Absences 9,924 3,807 (4,096) 9,635 3,834Urban Redevelopment Loan 5,475 - - 5,475 477State Infrastructure Bank Loan 9,410 - (1,575) 7,835 1,630MSD Net Pension and Other Post-Employment Benefits Obligation 49,593 9,682 - 59,275 -
Total Business-Type Long-Term Liabilities $1,727,982 $249,674 $(270,487) $ 1,707,169 $ 89,691 Convention Facilities Authority Interest Balance Balance Due in Maturity Rate % January 1 Additions Reductions December 31 One Year Long-Term Debt Year Issued/Purpose/Amount Issued
CFA Obligations 2004 First Lien Improvement Bonds—$70,065 2033 2.00-5.00 $ 56,720 $ - $ (56,720) $ - $ -2004 Second Lien Improvement Bonds—$35,940 2033 2.00-5.25 17,880 - (17,880) - -2014 First Lien Improvement Bonds--$69,890 2033 2.00-5.00 69,890 - 69,890 2,570Deferred Amounts: For Issuance Premium 3,238 8,183 (3,238) 8,183 - Total CFA Obligations $ 77,838 $ 78,073 $ (77,838) $ 78,073 $ 2,570
79
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Annual principal and interest requirements for the County’s long-term debt are as follows:
Governmental Activities General Obligation Bonds Special Assessment Bonds
Year Principal Interest Principal Interest 2015 $ 8,062 $ 2,329 $ 379 $ 201 2016 7,786 2,005 381 179 2017 7,626 1,690 362 162 2018 5,506 1,377 343 145 2019 3,033 1,169 314 129
2020-2024 10,879 4,332 1,321 441 2025-2029 5,370 2,587 910 177 2030-2034 2,600 1,634 294 31 2035-2039 3,250 682 - -
Total $ 54,112 $ 17,805 $ 4,304 $ 1,465
Business-Type Activities MSD* General Obligation Bonds** Sales Tax Bonds Year Principal Interest Principal Interest Principal Interest 2015 $ 61,765 $ 42,899 $ 2,265 $ 999 $ 19,720 23,686 2016 61,491 41,276 2,365 964 22,120 22,789 2017 63,190 39,523 2,505 927 22,005 21,783 2018 41,407 38,537 2,660 886 24,565 20,683 2019 47,902 66,917 2,820 844 27,285 19,454
2020-2024 248,667 96,757 17,200 3,109 124,292 132,644 2025-2029 262,949 85,343 11,010 868 140,594 132,793 2030-2034 171,884 24,789 - - 147,565 14,375 2035-2039 37,029 40,641 - - - - 2040-2044 21 - - - - -
Total $996,305 476,682 $ 40,825 $ 8,597 $528,146 $388,207 *Amounts include the total loan amounts, some of which has not been drawn down or finalized (related to WPCLF). **Adjustable Rate Parking System Revenue Bonds, in the amount of $24,500, were issued to pay the costs of making improvements and enlargements to the County’s above-ground parking structures and surface parking lots in the Cincinnati central riverfront area, near the stadia and at the US Bank Arena. The interest rate is to be determined at the close of business each Wednesday. The interest rate at the close of business on December 31, 2014, was 0.19%. Using this rate as a basis, the projected interest to be paid on this bond issue will be $223. Annual principal and interest requirements for the CFA’s long-term debt are as follows:
CFA Improvement Bonds
Year Principal Interest 2015 $ 2,570 $ 3,272 2016 2,595 3,249 2017 2,725 3,119 2018 2,865 2,983 2019 3,005 2,839
2020-2024 17,420 11,788 2025-2029 21,285 7,002 2030-2034 17,425 2,171
Total $ 69,890 $ 36,423
Long-Term Bonds. All long-term bonds of the County are retired from the debt service funds except for debt payable from enterprise funds. General obligation bonds and notes are backed by the County’s ability to levy a voted or unvoted property tax within limitations of State law. General obligation special assessment bonds are backed by the County’s ability to levy an assessment against individual property owners within limitation of State
80
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
law. Sewer revenue bonds are backed by user charges against individual ratepayers. Sales tax bonds are backed by a lien on the receipts of an additional .5% sales tax approved by the County voters on March 19, 1996. Parking revenue bonds are backed by revenues and other income derived from riverfront parking facilities. General obligation bonds are generally issued as 20-year serial bonds with various amounts of principal maturing each year. Under State law applicable to the County, general obligation bond anticipation notes may be issued from time to time up to a maximum maturity of 20 years from the date of issuance of the original notes. The Uniform Bond Law of the State of Ohio provides that the total net indebtedness created or incurred by any county shall never exceed a sum equal to 3.0% of the first $100,000 or part of the tax list, plus 1.5% of the tax list in excess of $100,000 and not in excess of $300,000, plus 2.5% of the tax list in excess of $300,000. In addition, the net indebtedness created or incurred by any county without vote of the electors shall never exceed a sum equal to 1.0% of the tax list of the county. Contained in the Uniform Bond Law of the State of Ohio are exceptions for debt limitations. Among the kinds of debt exempted are debt issued for special assessments, sewer works, self-supported revenue bonds and jail facilities. The total voted and unvoted non-exempt debt of the County that could be issued subject to the 3.0%, 1.5% and 2.5% limitation described above is $455,189. The total County net debt subject to this limitation is $76,894, leaving a borrowing capacity of $378,295 within the limitation from combined voted and unvoted non-exempt debt. The total County unvoted, non-exempt debt that could be issued subject to the 1.0% limitation is $182,675. The total County debt subject to such limitation is $76,894, leaving a borrowing capacity of $105,781 within the 1.0% limitation for unvoted non-exempt debt. 2014 General Obligation Bonds. In February 2014, Riverfront Infrastructure Improvement Limited Tax General Obligation Bonds were issued in the amount of $19,030. Proceeds of the bonds will be used to acquire, construct and install energy conservation improvements in various County-owned stadia and parking facilities, as well as pay capitalized interest and certain costs of issuance. The bonds carry an interest rate of 2%-5% and have a final maturity date of December 1, 2028. 2014 Special Assessment Bonds. Outstanding special assessment bonds consist of water and sewer line improvements, which are payable from the proceeds of tax assessments against the individual property owners. The full faith and credit of the County as additional security also backs these bonds. At year-end, delinquent receivables related to special assessment debt was $52. In August 2014, new special assessment bonds were issued in the amount of $326, with a final maturity date of December 1, 2034. These bonds carry an interest rate of 4.75%. Series A and B Revenue Bonds. In 2014, MSD issued $162,650 Series A, Sewer System Refunding Revenue Bonds. The proceeds were used to defease portions of the 2003, 2005 and 2006 revenue bonds and pay for the cost of issuance. The 2014A bonds are special obligations of MSD, payable solely from the net revenues of MSD and were issued on parity with the 1997, 2000, 2001, 2003A, 2003B, 2004, 2005A, 2005B, 2006, 2007, 2009A, and 2009B bonds, secured equally and ratably under the Trust Agreement. A portion of the proceeds was used to purchase U.S. Government Securities, which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service to refund $750 of outstanding 2003 Series A bonds, $61,190 of outstanding 2005 Series B bonds, $60,620 of outstanding 2006 Series A Bonds, $52,505 of outstanding 2007 Series A bonds and $6,790 of outstanding 2009 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the Statement of Net Position. Although the refunding resulted in the recognition of an accounting loss of $14,949 in accordance with GASB 23, Accounting and Financial Reporting for Refundings of Debt Reported by Proprietary Activities, MSD has, in effect, reduced its aggregate debt service payments by $70,966 and obtained a present value savings of $24,543. In 2009 and 2007, MSD issued County of Hamilton, Ohio, Series A Sewer System Improvement Revenue Bonds. In 2013, 2010, 2006, 2005 and 2004, MSD issued County of Hamilton, Ohio, Series A Sewer System Refunding Revenue bonds. In 2013, MSD also issued County of Hamilton, Ohio, Series B Sewer System Refunding Revenue
81
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
bonds. In 2009 and 2005, MSD also issued Series B Sewer System Improvement Revenue Bonds. In 2003, MSD issued County of Hamilton, Ohio, Series A Sewer System Improvement and Refunding Revenue bonds. In 2003, MSD also issued County of Hamilton, Ohio, Series B Sewer System Improvement and Refunding Revenue bonds, and in 2010, MSD issued Series B Sewer System Improvement Revenue Bonds (Build America Bonds). The proceeds of all of these bonds were used to permanently fund certain previous capital expenditures, provide funds for new projects, defease portions of previous bond issues, fund the new bond reserve requirements and pay the costs of issuance. The 2010, 2009, 2007, 2006, 2005, 2004 and 2003 bonds may be redeemed prior to their maturities in accordance with provisions of the bond resolutions. The redemption process for the bonds includes declining premiums up to 2% of principal. Under the terms of the amended revenue bond trust indenture, MSD has agreed to certain covenants, among other things to restrict additional borrowing, maintain rates sufficient to meet debt service requirements and maintain specified balances under trust agreements. The revenue bond issues contain covenants that require MSD to maintain a maximum level of debt service coverage of 125%. Ohio Water Development Authority Contracts. All contracts between the Ohio Water Development Authority (OWDA) and MSD require the County to prescribe and charge such rates for sewer usage that are sufficient (after expenses of operation and maintenance) to pay principal and interest on OWDA contracts. The principal is repayable in equal semi-annual installments to maturity. Ohio Water and Sewer Rotary Commission. Advances from the Ohio Water and Sewer Rotary Commission represent tap-in fees and acreage assessments to be forwarded to the Commission upon collection from customers. Such advances do not bear interest unless they are determined to be in default. Ohio Public Works Commission. MSD has entered into agreements with the Ohio Public Works Commission (OPWC) for financing of certain qualified capital projects. As the projects progress, the commitments are drawn down as funds are paid by OPWC directly to the contractors. The principal is repayable in semi-annual installments to the date of maturity for each project. Water Pollution Control Loan Fund. MSD has received low-interest loan commitments from the Ohio Water Pollution Control Loan Fund for certain qualified projects. As the projects progress, the commitments are drawn down. The principal is repayable in semi-annual installments to the date of maturity of each project. Prior Defeased Debt. The County has defeased various general obligation serial bonds and revenue serial bonds through refinancing and operations. Separate irrevocable trust funds were established and funded to fully service the defeased debt until the debt is called or matures. For financial reporting purposes, the debt has been considered defeased and is not included in the financial statements. At December 31, 2014, $4,535 general obligation bonds were considered defeased. For MSD, the amount of defeased debt outstanding was $181,855. Revenue Bonds. In 2004, the CFA issued revenue bonds totaling $106,005 for the Cinergy Center (now Duke Energy Center) expansion. A portion of the Second Lien Improvement Bonds was defeased in 2007. In 2014, First Lien Improvement Bonds for $69,890 were issued for the purpose of funding new projects and for refunding the 2004 First and Second Lien Improvement Bonds. The 2014 bonds have a final maturity date of December 1, 2033, and carry interest rates of 2%–5%. The revenues pledged to the trustee to support the debt include the following: County 3.5% hotel tax, City 2002 1.5% hotel tax, City 1.0% hotel tax, County annual contribution of $250 beginning in 2005 and ending in 2014, and City annual contribution of $1,000 beginning in 2004 and ending in 2014. Capital Lease. MSD issued a capital lease for a new engineering building in 2010. The lease obligation meets the criteria of a capital lease as defined by Financial Accounting Standards Board guidance. The leased assets have been capitalized for the amount of the present value of the minimum lease payments at the inception of the lease.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
The following is a schedule of the future minimum lease payments required under the capital lease and the present value of the minimum lease payments at year-end:
Year Ending December 31 MSD
2015 $ 1,1152016 1,1152017 1,1122018 1,1132019 1,113
2020-2024 5,5692025-2029 5,571
Total Minimum Lease Payments 16,708Less Amount Representing Interest (4,573)Present Value of Minimum Lease Payments $ 12,135
The capital asset acquired under the lease is $15,000. It is reported with other buildings in the capital asset activity in note V D. Compensated Absences. Employees with a minimum of one year of service become vested in accumulated unpaid vacation time. For County employees, Ohio law requires that vacation time not be accumulated for more than three years. Normally, all vacation time is to be taken in the year available unless administrative approval for carryover is obtained. Unpaid vacation time is payable upon termination of employment. In general, employees are eligible to be paid for unpaid overtime and unused compensatory time upon termination of employment. All sick, vacation and overtime/compensatory time payments are made at the employee’s current wage rate. The liability is accrued by fund and is reported in the Statement of Net Position. The payments are made out of the same fund in which the liability is accrued. Typically, the General Fund has been used to liquidate compensated absences liabilities. At December 31, 2014, in accordance with GASB 16, the following liabilities associated with employees’ compensated absences have been recognized in the government-wide Statement of Net Position:
Governmental Business-TypeActivities Activities $ 40,122 $ 9,635
Interest on Long-Term Obligations. The following interest costs were incurred and expensed or capitalized as part of the cost of additions to capital assets:
MSD Interest Incurred $ 44,106Less Interest Capitalization (635)
Interest Expense $ 43,471
Other Long-Term Obligations. Other long-term obligations of the County consist of (1) four loans from the State of Ohio for road improvement projects, (2) a State loan to be used for the construction of an intermodal transit facility, (3) a State loan to be used for the Riverfront development, (4) loan contracts for the purchase of and improvement to various properties in the County, (5) a forgivable mortgage for renovation work on a building, (6) claims payable estimate for workers’ compensation and (7) MSD’s net pension and other post-employment benefits obligation. These are reported as part of Long-Term Liabilities in the government-wide Statement of Net Position. State Loans. In August 2006, the Hamilton County Engineer’s Office obtained an interest-free loan for $1,553 from the Ohio Public Works Commission. Repayment of the loan commenced in 2009, with final maturity in 2028. In April 2005, the Engineer’s Office obtained a loan for $1,619 from the Ohio Department of Transportation. In
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
subsequent years, additional disbursements were made, bringing the total loan amount to $3,346. Repayment of the loan commenced in 2005. The original maturity date of 2009 was extended to 2015. The interest rate for the first 12 months was 0%. For the remaining years, the interest rate is 3%. For the two loans established in 2014, the work has not been fully completed; therefore, the loan amount has not been issued in full and a final payment schedule is not available. During 2014, a liability was included for $537, which represents the amount of the loan used as of year-end. The proceeds of all of these loans are being used to finance road improvement projects. The loans will be repaid from the County’s permissive auto tax. In May 2009, the County obtained a loan from the State of Ohio in the amount of $11,685 to be used for the construction of an intermodal transit facility, which is secured by parking revenues, sales tax receipts, and, on a contingent basis, by other non-tax revenues of the County. The loan will be repaid in 2012–2019. Interest rates on the loan range from 3.00% to 4.25%. In October 2009, the County secured a loan for $5,475 from the State to be used for the riverfront development. The loan is secured by shared TIF (Tax Increment Financing) revenues of the County and the City of Cincinnati. Repayment of the loan will begin in 2015 and conclude in 2024. The interest rate for the first five years is 0%. Thereafter, the interest rate is 3%. Annual principal and interest requirements for the State loans are as follows:
Engineer Riverfront
Development Year Principal Principal Interest 2015 $ 106 $ 2,107 $ 442 2016 78 2,176 373 2017 78 2,256 296 2018 78 2,352 210 2019 77 1,477 117
2020-2024 388 2,942 230 2025-2029 271 - -
Total $ 1,076 $13,310 $ 1,668
Loan Contracts. The County’s loan contracts are made between the Hamilton County Mental Health and Recovery Services Board (MHRSB) and the Ohio Department of Mental Health (ODMH), for the purchase of and improvement to various properties in the County for use in providing mental health services. The terms of the contracts are essentially equivalent to a mortgage on the property, with MHRSB being obligated to provide mental health services for a period of 40 years from the inception of the contract. Should MHRSB discontinue mental health services at a particular facility, the balance of the contract would become due immediately. Failure to pay the balance could result in foreclosure by ODMH. The balance due is reduced on a month-by-month basis over the term of the contract as long as the facility is used for mental health services. The amount outstanding on these loan contracts at December 31, 2014, amounted to $3,340. There is no interest charged on these obligations.
Year Ending Loan ContractsDecember 31 Forgiveness
2015 $ 1752016 1762017 1752018 1752019 175
2020-2024 8772025-2029 8722030-2034 5612035-2039 1072040-2044 47
Total $ 3,340
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Forgivable Mortgage. In 2003, a forgivable mortgage in the amount of $1,697, to be used for improvement to a facility, was executed between Hamilton County Alcohol and Drug Addiction Services (now part of the Mental Health and Recovery Services Board—MHRSB) and Ohio Department of Alcohol and Drug Addiction Services. The contract provides that the property must be used to provide alcohol and other drug services for a period of 25 years from contract inception. Should MHRSB discontinue alcohol and other drug services at this facility, the balance of the contract would become due immediately. The balance on the mortgage will be reduced each month through February 2029. There is no interest charged on this obligation.
Year Ending Mortgage December 31 Forgiveness
2015 $ 682016 682017 682018 682019 68
2020-2024 3392025-2029 249
Total $ 928
Claims Payable. Claims payable represent the County’s estimated liability for workers’ compensation coverage for all employees. Claims will be paid from the Workers’ Compensation Reserve internal service fund (see note VI A). Net Pension Obligation and Net Other Post-Employment Benefits Obligation. MSD’s long-term liability for net pension and net other post-employment benefits obligations are $46,819 and $12,456, respectively. (See also notes VI F and G.) Conduit Debt Obligations. Periodically, the County issues Hospital Facility, Economic Development, Health-Care System or Facility, Multifamily Housing or Student Housing revenue bonds to provide financial assistance to private-sector entities for the acquisition and construction of facilities deemed to be in the public interest. These bonds are backed by the property financed and are payable solely from payment received on the underlying mortgage loans. The bonds do not constitute a debt or pledge of the full faith and credit of the County and, therefore, are not reported in the financial statements. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. As of December 31, 2014, the aggregate principal amount outstanding for these bonds was as follows:
Hospital Facilities $ 842,374Economic Development 111,547Health-Care Systems and Facilities 75,745Multifamily Housing 14,745Student Housing 48,210
Total $ 1,092,621
H. Leases Operating Leases—Lessee. At December 31, 2014, the County had entered into various long-term operating leases for office and storage space and for land for communications towers. The lease terms range from 2 years to 6 years. Operating lease payments are recorded in the period they are paid. These payments are made from the General Fund and from the Health and Human Services Levies and nonmajor special revenue funds. Sublease payments are made from nonmajor special revenue and enterprise funds.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Operating lease payments, excluding subleases, for 2014 amounted to $1,706. Sublease payments totaled $58. Future rental obligations are as follows:
Year Ending Operating Lease Sublease December 31 Payments Payments
2015 $ 1,436 $ 282016 1,322 42017 548 -2018 390 -2019 397 -
2020-2024 276 -Total $ 4,369 $ 32
Operating Leases—Lessor. The County has contractual agreements for the rental of properties, including stadia, office space, group homes, land and communications towers, to commercial and not-for-profit enterprises. These rentals are reported as operating leases for accounting purposes. Total rent received in 2014 was $216 in governmental funds and $70 in business-type funds. In June of 1999, the County entered into a 35-year lease agreement with the Cincinnati Reds. Terms of the lease state that the Reds will pay the County $2,500 a year for the first 9 years, beginning in 2003, and $1 (amount not in thousands) a year for the remaining 26 years. In 2009, the lease was amended. The new agreement calls for the Reds to pay the County $1,500 per year through 2011 and $1 (amount not in thousands) per year to 2037. Additionally, there was an annual utility reimbursement through 2011 of $625. In May of 1997, the County entered into a contract that binds the Cincinnati Bengals from the date of the newly constructed stadium to June 30, 2026. The Bengals in turn agreed to pay the County rent for the first 9 years after the stadium was completed. That final rental payment was received in 2009. Future rental revenues for other leases are as follows:
Operating Lease Revenues Year Ending Business-Type Governmental December 31 Activities Activities
2015 $ 31 $ 1442016 10 732017 3 742018 3 572019 - 21Total $ 47 $ 369
Assets and accumulated depreciation related to the operating leases, as of December 31, 2014, are included in the financial statements as follows:
Business-Type Governmental Activities Activities
Land $ 85,630 $ 39Buildings 731,590 3,322Less Accumulated Depreciation (348,730) (3,218)Total Net Book Value $ 468,490 $ 143
I. Segment Information
The Riverfront Development and Main Street Parking Garage funds, reported as nonmajor enterprise funds, have one or more bonds or other debt instruments outstanding with a revenue stream pledged in support of that debt. Riverfront Development accounts for the redevelopment of the County’s scenic riverfront. The Main Street Parking
86
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Garage affords citizens downtown parking. Summary financial information for these funds, for the year ended December 31, 2014, follows.
Main Street Riverfront Parking Condensed Statement of Net Position Development Garage Assets:
Current Assets $ 19,618 $ 431Capital Assets 129,310 6,447
Total Assets 148,928 6,878Liabilities:
Current Liabilities 4,299 494Noncurrent Liabilities 27,602 5,062
Total Liabilities 31,901 5,556Net Position:
Net Investment in Capital Assets 98,944 925Unrestricted 18,083 397
Total Net Position $ 117,027 $ 1,322
Main Street Condensed Statement of Revenues, Expenses Riverfront Parking and Changes in Fund Net Position Development Garage Charges for Services $ 11,322 $ 935Depreciation (7,578) (310)Other Operating Revenue (Expenses), Net (6,770) (319)
Operating Income (Loss) (3,026) 306Nonoperating Revenues (Expenses):
Sales and Use Tax 112 -Other Revenue 90 -Interest Expense (361) (238)Investment Earnings (30) -Debt-Related Costs (167) -
Capital Contributions 5,722 -Transfers In - 70
Change in Net Position 2,340 138Net Position at Beginning of Year 114,687 1,184Net Position at End of Year $ 117,027 $ 1,322
Main Street Riverfront Parking Condensed Statement of Cash Flows Development Garage Net Cash Provided (Used) by:
Operating Activities $ 4.757 $ 579Noncapital Financing Activities 118 70Capital and Related Financing Activities 2,601 (678)Investing Activities (30) -
Net Increase 7,446 (29)Cash and Cash Equivalents at Beginning of Year 12,065 423Cash and Cash Equivalents at End of Year $ 19,511 $ 394
VI. OTHER INFORMATION A. Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets; errors and omissions; injuries to employees; employee health claims; unemployment compensation claims; and environmental damage. The County purchases commercial insurance to cover losses due to theft of, damage to or destruction of assets and purchases general liability insurance for specific operations and professional liability insurance for certain operations. All other risks of loss are retained by the County. There has been no reduction in
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
insurance coverage or limits from coverage provided in 2013. Over the past three years, claim amounts from risks covered by commercial insurance have not exceeded the specific policy’s limit. The County retains risk of loss related to court judgments resulting from tort and general liability claims of County officials and employees. A portion of the General Fund balance has been assigned for paying potential, court-ordered judgments, and at December 31, 2014, this amounted to $806. Beginning in 1990, the County established an internal service fund titled Workers’ Compensation Reserve to account for and finance its workers’ compensation claims risk. All departments of the County participate in the program and make per capita payments to the internal service fund. The claims liability reported in the workers’ compensation internal service funds at December 31, 2014, is based on the requirements of Governmental Accounting Standards Board Statement No. 30, Risk Financing Omnibus, which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred but not reported claims, be reported. The County uses a retrospectively rated program provided under the Bureau of Ohio Workers’ Compensation to cover injured workers’ claims. The historical changes in claims payable during the past two years are as follows:
Claims and Beginning Changes in Claims Ending
Year Balance Estimates Payments Balance 2013 $ 2,067 $ 898 $ (1,560) $ 1,405 2014 1,405 800 (945) 1,260
The County provides employees’ health-care coverage through a self-insurance program. The County maintains a self-insurance internal service fund to account for and finance its uninsured risks of loss in this program. Humana reviews all claims for Humana plans, which are then paid by the County. The County purchases stop-loss coverage of $500 per employee and an aggregate limit of 120% of expected claims and a $5,000 lifetime (per member) maximum.
The County pays into the self-insurance internal service fund based on one of three plan options, according to the grid below (amounts not rounded). In 2014, the County collected the monthly Employer Cost of plans twice, once in February and once in September. The premium is paid by the fund that pays the salary for the employee and is based on historic cost information.
Medical Plan Name
Coverage Level
Monthly Administrative Services Only
Fee Paid by
Employer
Monthly Actuarial
Value
Monthly Employer
Cost
Monthly Employee
Contribution CoverageFirst 2500 Single $ 54.10 $ 420.95 $ 403.14 $ 17.81
Double 62.09 841.89 800.39 41.50 Family 70.88 1,322.08 1,253.55 68.53
CoverageFirst 1000 Single 54.10 451.02 414.76 36.26
Double 62.09 902.03 817.53 84.50 Family 70.88 1,417.34 1,277.74 139.60
POS 500 Single 54.10 521.06 386.92 134.14
Double 62.09 1,040.87 728.74 312.13 Family 70.88 1,635.04 1,119.47 515.57
Medical Expense Reimbursement Plan Single 17.50 94.64 - -
Double 17.50 198.75 - - Family 17.50 302.86 - -
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
A portion of the claims liability ($2,979) reported in the Medical Self-Insurance Fund at December 31, 2014, is estimated by the external actuarial and is based on the requirements of GASB 30, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The estimate was not affected by incremental claim adjustment expenses and does not include other allocated or unallocated claim adjustment expenses. Changes in the self-insurance fund’s claims liability payable during the past two years are as follows:
Claims and Beginning Changes in Claims Ending
Year Balance Estimates Payments Balance 2013 $ 4,165 $ 34,319 $ (33,240) $ 5,244 2014 5,244 35,126 (36,176) 4,194
The County participates in the Ohio Fire Marshall Underground Storage Tank Insurance program for environmental risks of underground fuel storage tanks. MSD is part of the City of Cincinnati Risk Management Program. The City purchases (1) commercial insurance to cover losses due to theft of, damage to or destruction of assets, (2) general liability insurance for specific operations and (3) professional liability insurance for certain operations. All other risks of loss are self-insured. Separately, MSD carries property insurance pursuant to an all-risk policy on MSD’s buildings and equipment per the revenue bond trust agreement. There has been no reduction in coverage since 2003. Insurance settlements for claims resulting from risks covered by commercial insurance have not exceeded the insurance coverage in any of the past three years. B. Related Party Transactions Cincinnati Water Works provides billing and collection services on customers’ accounts for MSD. Fees for these services for 2014 were $4,772. Fees are also paid to other municipalities and villages within the County for collection of sewerage bills. The City provides overhead services to MSD, such as check disbursement and investment and legal services. The fees for these services for 2014 were $2,867. In addition, the City’s Municipal Garage provides gasoline and repairs vehicles for MSD. Fees for these services were $1,678 for 2014. C. Jointly Governed Organizations The Southwest Ohio Council of Governments was created by the Board of Developmental Disabilities of Butler, Hamilton, Clermont, and Warren Counties. The Council consists of four members representing each of the four counties. Other County Boards of Developmental Disabilities may petition for membership to the Council; however, membership must be approved by a two-thirds vote of the Council members. The role of the Council is to coordinate the powers and duties of the member boards to better serve and benefit persons with developmental disabilities within the four counties. The council serves as its own taxing and debt issuance authority and is a jointly governed organization. In 2014, Hamilton County contributed $162 to the council, and the council is currently holding $1,488 in deposits that belong to the County and are represented by Cash and Cash Equivalents—Segregated Accounts—on the Statement of Net Position and the fund financial statements for the Health and Human Services Levies. Financial information for the Southwest Ohio Council of Governments may be obtained at 107 Oregonia Road, Lebanon, OH 45036. Hamilton County Mental Health and Recovery Services Board is a member of the Three C Recovery and Health Care Network Council of Governments (COG). The purpose of this Council is for creating a Shared Health care and Recovery Enterprise System (SHARES), to support management of client enrollment, benefit management, provider contracting, payment processes and utilization management for the member Boards, and for additional Boards that may join the COG in the future. The Three C Recovery and Health Care Network COG was created by the Hamilton County Mental Health and Recovery Services Board (Cincinnati); The Alcohol, Drug and Mental
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Health Board of Franklin County (ADMHBFC) (Columbus); and The Alcohol, Drug Addiction and Mental Health Services Board of Cuyahoga County (ADAMHSBCC) (Cleveland). The COG Board of Trustees consists of six members, two from each of the founding counties. Other Mental Health and/or Alcohol and other Drug County Boards may petition for membership to the COG; however, membership must be approved by a unanimous vote of all COG members in good standing at the time of the vote. In 2014, the HCMHRSB and the ADAMHSBCC contributed $251 and the ADMHBFC contributed $413 toward the operation of the COG. The contribution difference is caused by the receipt of an ADMHBFC contribution of $162 in 2014. On December 31, 2014, the account balance of the COG was $699, allocated as $233 per member. This amount is reported as Cash and Cash Equivalents—Segregated Accounts—on the Statement of Net Position and the fund financial statements for the Health and Human Services Levies. Financial information for the Three C Recovery and Health Care Network Council of Governments may be obtained at 2350 Auburn Avenue, Cincinnati, Ohio 45219. D. Significant Commitments and Contingent Liabilities The County has contracted construction commitments for the following:
Spent Remaining Project to Date Commitment Riverfront Development $ 197,086 $ 5,158
At year-end, valid outstanding encumbrances are reappropriated and become part of the subsequent year’s budget. The encumbrances as of December 31 are as follows:
General Fund $ 14,797 Public Assistance Fund 8,782 Health and Human Services Levies Fund 27,756 Nonmajor Governmental Funds 38,376 Total $ 89,711
The City of Cincinnati and the Board of County Commissioners of Hamilton County, Ohio, are parties to a Global Consent Decree, which was lodged in 2003 with the U.S. District Court for the Southern District of Ohio, Western Division. This decree focuses on combined sewer overflows, the implementation of the Sanitary Sewer Overflow Correction plan established in the Interim Partial Consent Decree, and other wet weather issues. The court approved the decrees on June 9, 2004. In August 2010, MSD’s Revised Wet Weather Plan was approved by the federal government. The Plan commits MSD to complete a Phase 1 group of projects totaling $1.145 billion (in 2006 dollars and including $526 million that MSD has already spent on projects [amounts not rounded]) by 2018 before scheduling future work (Phase 2). The consent decree documents are posted on the MSD website, msdgc.org, under Consent Decree. As part of MSD’s capital improvement program, MSD has entered into a number of contracts for construction, design and other services. Commitments under these contracts aggregate approximately $72 million as of December 31, 2014. Pursuant to a Memorandum of Understanding between the City and the County, dated September 30, 2002, a Cooperative Agreement between the City and the County, dated February 9, 2004, and a Project Service Agreement between the City and the CFA, dated February 3, 2004, the City and the County have agreed, among other things, that the City will (1) own the Duke Energy Center, (2) be responsible for the operation and maintenance of the Duke Energy Center and (3) manage the design and construction of the project. Construction of the improvements began in May 2004 and was completed in June 2006. The CFA entered into a lease with the City of Cincinnati for the existing and expanded Duke Energy Center for the term of the improvement bonds, issued through December 2033, for an amount sufficient to retire City Bond Anticipation Notes of $15,500. These notes were issued in anticipation of the revenue bond sale by the CFA. At the end of the lease, the City will own the existing and expanded Duke Energy Center. In addition, the City and
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
CFA have entered into a lease whereby the City will operate the existing and expanded Duke Energy Center for the term of the improvement bonds through December 2033. The County is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the County Prosecuting Attorney that resolution of these matters could fall within the scope of a material claim, though any dollar amount cannot be reasonably estimated at this time. E. Deferred Compensation Plan Employees of the County may elect to participate in a deferred compensation plan administered by one of the following: (1) The Ohio Public Employees Deferred Compensation Plan; (2) ING Financial Services, Inc.; or (3) The County Commissioners Association of Ohio. Under these plans, employees could defer up to 25% of their annual salary not to exceed $17,500 (amount not in thousands) in 2014. The deferred amounts, as well as any income related to the deferral, are not subject to federal or State income tax until actually received by the employee. In accordance with GASB Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, and Internal Revenue Code Section 457, assets of the aforementioned plans were placed in trust for the exclusive benefit of the participants and beneficiaries during 1999. The amounts held in all three plans are no longer reported as assets of the County. F. Employee Retirement Systems and Plans All County and MSD employees are covered by one of three pension systems. These are the Ohio Public Employees Retirement System (OPERS) and the State Teachers Retirement System of Ohio (STRS Ohio), which are State pension systems, and the City of Cincinnati Retirement System (CRS), a municipal pension plan. County employees hired after April 1, 1986, are also covered under the Federal Social Security Act for the Medicare portion only. Pension costs reflect a percentage of employees’ gross pay, as defined by the terms of pension plans in which employees participate. MSD’s policy is to fund pension costs accrued, this did not occur in 2014. OPERS administers three separate pension plans: (1) The Traditional Pension Plan is a cost-sharing, multiple-employer, defined-benefit pension plan. (2) The Member-Directed Plan is a defined-contribution plan in which the member invests both member and employer contributions (employer contributions vest over five years at 20% per year). Under the Member-Directed Plan, members accumulate retirement assets equal to the value of member and vested employer contributions plus any investment earnings thereon. (3) The Combined Plan is a cost-sharing, multiple-employer, defined-benefit pension plan. Under the Combined Plan, employer contributions are invested by the retirement system to provide a formula retirement benefit similar in nature to the Traditional Pension Plan benefit. Member contributions, the investment of which is self-directed by the members, accumulate retirement assets in a manner similar to the Member-Directed Plan. OPERS provides retirement, disability, survivor and death benefits and annual cost-of-living adjustments to members of the Traditional Pension Plan and the Combined Plan. Members of the Member-Directed Plan do not qualify for ancillary benefits. STRS Ohio administers three separate pension plans: (1) The Defined Benefit Plan is a cost-sharing, multiple-employer, defined-benefit pension plan. The plan provides service retirement, disability and survivor benefits; cost-of-living adjustments; and retiree health-care benefits.
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
(2) The Defined Contribution Plan is a defined-contribution plan in which members invest both member and employer contributions. These contributions represent 10% and 10.5% of the employee’s annual salary, respectively. Retirement income is based on the performance of the investment options selected. Members of the Defined Contribution Plan do not qualify for ancillary benefits. (3) The Combined Plan is a cost-sharing, multiple-employer retirement plan that includes features of the Defined Benefit and Defined Contribution Plans. The member contribution rate of 10% of annual salary funds a defined-contribution account. The employer contributions fund the defined-benefit portion of the plan to pay for a combination of service retirement, disability, survivor and retiree health-care benefits. CRS is a cost-sharing, multiple-employer, defined-benefit plan. The System provides retirement, disability and death benefits to plan members and beneficiaries. Benefits provided under the OPERS and STRS Ohio plans are established by the Ohio Revised Code. Benefits provided under the CRS plan are established by the Cincinnati Municipal Code. All three plans issue separate financial reports to the public that include financial statements and required supplemental information. These reports may be obtained by contacting each system as follows: Ohio Public Employees Retirement System, 277 East Town Street, Columbus, Ohio 43215-4642, telephone
(800) 222-7377 State Teachers Retirement System of Ohio, 275 East Broad Street, Columbus, Ohio 43215, telephone (800)
227-7877 City of Cincinnati Retirement System, 801 Plum Street, Cincinnati, Ohio 45202, telephone (513) 352-3227
The Ohio Revised Code provides OPERS and STRS Ohio statutory authority for employee and employer contributions. The Cincinnati Municipal Code provides this authority for CRS. The required, actuarially determined contribution rates for 2014 for the Hamilton County and MSD employees are as follows:
Retirement County Employee Employees of the County System Share Share Law Enforcement Officers OPERS 18.10% 13.00% Public Safety Officers OPERS 18.10% 12.00% All Other Eligible County OPERS 14.00% 10.00% County Board of DDS STRS Ohio 14.00% 12.00% MSD and Other Eligible County CRS 22.00%* 9.50% MSD and Other Eligible County CRS 14.00%* 9.50% MSD Other Eligible OPERS 14.00% 10.00%
*MSD’s employer contribution rate changed midyear per the City’s fiscal year (July 1-June 30) rates. The County’s contributions, representing 100% of employer contributions, for the year ended December 31, 2014, and for each of the two preceding years, are as follows:
Fiscal Year OPERS STRS CRS 2012 $ 28,192 $ 678 $ 6,8932013 27,986 566 7,2242014 29,323 486 6,487
G. Other Post-Employment Benefits (OPEB) In addition to the pension benefits described in note VI F, OPERS, STRS Ohio and CRS all provide post-retirement health-care coverage, commonly referred to as OPEB (other post-employment benefits). For OPERS
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COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
and STRS Ohio, and for CRS, the Ohio Revised Code and the Cincinnati Municipal Code, respectively, provide the authority for public employers to fund post-retirement health care through their contributions. OPERS. OPERS provides post-retirement health-care benefits to qualifying members of both the Traditional Pension and the Combined Plans. Members of the Member-Directed Plan do not qualify for post-employment health-care coverage. OPERS maintains a cost-sharing, multiple-employer, defined-benefit post-employment health-care plan that includes a medical plan, prescription drug program and Medicare Part B premium reimbursement. In order to qualify for post-retirement health-care coverage, age and service retirees under the Traditional 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 health-care coverage provided by OPERS meets the definition of an Other Postemployment Benefit (OPEB) as described in GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The ORC permits, but does not mandate, OPERS to provide post-employment benefits to its eligible members and beneficiaries. Authority to establish and amend benefits is provided in ORC Chapter 145. As noted above, in 2014, local government employers contributed at a rate of 14.00% of covered payroll, and public safety and law enforcement employers contributed at 18.10%. The ORC currently limits the employer contribution to a rate not to exceed 14.00% of covered payroll for local employers and 18.10% of covered payroll for law and public safety employers. Active members do not make contributions to the post-employment benefit plan. OPERS’ Post Employment Health Care plan was established under, and is administrated in accordance with, Internal Revenue Code 401(h). Each year, the OPERS Retirement Board determines the portion of the employer contribution rate that will be set aside for funding of post-employment health-care benefits, based on authority granted by State statute. The portion of employer contributions allocated to the health-care plan was 2.0% of covered payroll for 2014. The County’s actual contribution for the year ended December 31, 2014, used to fund OPEB, was $3,645. The County’s contribution for law enforcement and public safety officers for the year ended December 31, 2014, was $427 to fund OPEB. The OPERS Retirement Board is also authorized to establish rules for the payment of a portion of the health-care benefits provided, by the retirees or their surviving beneficiaries. Payment amounts vary depending on the number of covered dependents and the coverage selected. On September 19, 2012, the OPERS Board of Trustees adopted changes to the health care plan with a transition plan commencing January 1, 2013. With the recent passage of pension legislation under SB 343 and the approved health-care changes, OPERS expects to be able to consistently allocate 4% of the employer contributions toward the health-care fund after the end of the transition period. STRS Ohio. STRS Ohio provides post-employment health-care benefits to retirees and their dependents. Coverage includes hospitalization, physician fees, prescription drugs and reimbursement of monthly Medicare Part B premiums. All benefit recipients and sponsored dependents are eligible for health-care coverage. Pursuant to the Ohio Revised Code, the STRS Ohio Board had discretionary authority over how much, if any, of the health-care costs will be absorbed by STRS Ohio. All benefit recipients pay a portion of the health-care costs in the form of a monthly premium. By Ohio law, the cost of coverage paid from STRS funds shall be included in the employer contribution rate, currently 14.00% of covered payroll. Benefits are funded on a pay-as-you-go basis through an allocation of employer contributions to a Health-Care Reserve Fund, from which health-care benefits are paid. For STRS Ohio’s fiscal year ended June 30, 2014, the board allocated employer contributions equal to 1.00% of covered payroll to the Health-Care Reserve Fund. This totaled $.04 million for the County in 2014.
93
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
CRS. CRS provides hospital and surgical insurance to retired members who have earned 15 years credited service at the time of termination or terminate after age 60 with 5 years credited service. Those who are receiving survivor benefits of eligible members are entitled to have their hospital and surgical insurance premiums paid by the CRS. When benefits would be reduced by reason of the retired member’s eligibility for hospital and medical benefits under federal social security laws, CRS will pay whatever additional fees are required for the Federal medical coverage. The health-care coverage provided by the CRS is advance funded on an actuarial determined basis as a portion of the employer contribution requirement to the System. The Cincinnati Municipal Code provides authority for employer contributions. The actuarial assumptions used for the December 31, 2014, valuation included an assumption for hospital and surgical benefits recognizing adjusted premiums, based on experience from recent years, adjusted to current year by assumed annual increases in premium costs. The cost of coverage is recognized as an expense as claims are paid. CRS has 2,985 active contributing participants of which 552 are MSD employees. For 2014, MSD’s contribution was 18.9% of the total employers’ contribution. H. Subsequent Events The following occurred since December 31, 2014: The Board of County Commissioners approved a 6% sewerage rate increase for MSD effective January 2015.
The County entered into a capital lease in January 2015 in the amount of $7,500. An additional $238 lease
obligation was issued in September 2015. The proceeds of the lease obligations will be used to acquire and install a scoreboard at Paul Brown Stadium.
MSD issued $52,520 in Sewer System Refunding Revenue Bonds in March 2015 to be used to redeem all of
the 2005A Sewer System Refunding Revenue Bonds and the 2003A Obligations and Advance Refunded Obligations.
In April 2015, Various Purpose Improvement and Refunding general obligation bonds in the amount of
$25,230 were issued to be used to advance-refund portions of the 2006 Emergency Services Communication System Limited Tax General Obligation Refunding Bonds and to finance communications systems equipment, technology improvements for the Sheriff’s Office, improvements to the Courthouse, and the implementation of energy conservation measures in various County buildings.
In July 2015, the County issued $21,880 in Taxable Limited Tax General Obligation Improvement Bonds to be used to acquire, construct, equip, and improve parking infrastructure facilities and improvements in connection with Phase 3 of The Banks Development Project, as well as pay the costs of issuance.
Taxable Special Assessment General Obligation Bonds in the amount of $169 were issued in September 2015
for the purpose of acquiring and constructing sewer system improvements and paying the costs of issuance. I. Contingent Liabilities—Special Audit There is an ongoing matter involving the Hamilton County Department of Job and Family Services. In late 2004, both the Ohio Department of Job and Family Services (ODJFS) and the Ohio Auditor of State (State Auditor) commenced special audits of the Hamilton County Job and Family Services (HCJFS). The audits focused mainly on the use of federal funds utilized in programs administered by the HCJFS and the relationship of the cost pools that were utilized in administering the programs. In June 2006, the State Auditor issued her final report. The final report from the State Auditor in 2006 disclosed small findings for recovery against vendors, which have been addressed and resolved.
94
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
One issue raised by the State Auditor in 2004 involved the transfer of funds. At that time, the State Auditor disclosed that she could not make any final determination because the rules and regulations of ODJFS were unclear, and at that time, ODJFS was unable to provide any additional assistance to the State Auditor. The issue of the transfer of funds by HCJFS has again been raised by the Office of the Auditor of State. The dollar balance of the transfer issue has changed significantly since the State Auditor's report of 2006. The County had hoped to have the transfer of funds issue resolved prior to the release of the 2014 County audit. The Board of County Commissioners, by resolution dated October 19, 2015, indicated that it intended to book certain receivables/payables evidenced by promissory notes in an effort to begin to resolve this matter. The amounts of the promissory notes were based on evaluations performed by our outside consultant, Crowe Horwath, LLP ("Crowe"), and provided for a payable from the General Fund to the Public Assistance Fund and a payable from the Public Assistance Fund to the Health and Human Services Levies Fund—Children’s Services Subfund. The County Prosecutor and Crowe remain in discussions with the Office of the Auditor of State with regard to the resolution of the transfer issue. It is the intention of the County to continue to work with the State Auditor to bring a final resolution to these balances. ODJFS issued a draft audit report in September 2006 to HCJFS. The audit report of ODJFS covered the time period of July 1, 2000, through June 30, 2004. The summary of findings in the draft audit report addressed expenditures of approximately $1.8 billion, which amount represents a multiple of the total expenditures of HCJFS during the period in question. In doing so, the draft audit report specifically cautioned that “the dollar amount of questioned costs or findings may not represent the dollar amount subject to recovery.” A review of the draft audit report makes it clear that there are numerous duplications of costs and expenditures and, in the opinion of the County Prosecutor, in no way represents any potential or probable findings for recovery against the County. Subsequent to the issuance of the draft audit report by ODJFS, the County participated in numerous meetings and reviews with ODJFS, and through Crowe, the County's outside accounting firm retained for the purpose of reviewing the draft audit report, responded to all of the issues raised by ODJFS and provided an explanation and detail of the revenues and expenditures. In May 2008, ODJFS issued a Limited Review Report, which again addressed several issues with regard to expenditures by HCJFS. The Limited Review Report also contained portions of the responses of HCJFS that were prepared by the County with its outside accounting firm. Subsequent to the issuance of the Limited Review Report, the County, together with Crowe, continued to review the matter with ODJFS in an attempt to determine what, if any, would be the County's financial responsibility to the State of Ohio for participation in several federal programs. ODJFS, subsequent to May 2008, requested the assistance of the United States Department of Health and Human Services (HHS) to audit the records of HCJFS with particular regard to expenditures in federally funded programs. HHS commenced its audit of the programs established through ODJFS in which HCJFS participated. HHS commenced its work in September 2008. In November of 2010, HCJFS received a copy of a draft report issued by the Department of Health and Human Services Office of Inspector General titled Review of Ohio Department of Job and Family Services Claims for Costs Reported by the Hamilton County Department of Job and Family Services. In December of 2010, Hamilton County, through the Office of the Prosecuting Attorney, forwarded correspondence to the Director of the Ohio Department of Job and Family Services offering assistance through the resolution phase of the audit. In February 2012, the Office of the Hamilton County Prosecuting Attorney received a copy of the final report. The final report recommended that the Ohio Department of Job and Family Services refund approximately $59 million to the federal government for county agency costs inappropriately claimed through the administrative cost pools. The original finding amount of approximately $59 million has been reduced by the TANF (Temporary Assistance for Needy Families) portion of the finding. This had the effect of reducing the claimed amount to approximately $35 million. The remaining portion of the finding was appealed by ODJFS. In September 2015, the County Prosecutor received notification from ODJFS that the decision of HHS had been upheld by the Appeals Board. This had the effect of a finding against ODJFS in the approximate amount of $35 million plus interest.
95
COUNTY OF HAMILTON, OHIO NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2014 (Dollar Amounts Expressed in Thousands)
Subsequent to the County being advised of the decision of the Appeals Board, the County Prosecutor commenced discussions with ODJFS to determine what portion of the finding by HHS against the State of Ohio would be the responsibility of Hamilton County. The County Prosecutor continues to discuss and negotiate this matter with counsel for ODJFS. In terms of direct liability, ODJFS would have the first responsibility for the payment of any sums to HHS because of the contractual relationship between HHS and ODJFS. The office of the County Prosecuting Attorney has been advised that it is expected that Hamilton County will be obligated to repay a portion of the final amount due. The payment could be in the form of an outright payment or a payment plan. The County's financial obligation, and any impact on the County General Fund, is unknown at this time, and any attempt to quantify that number would be speculative. The County legal and accounting team will continue to vigorously defend the County's position on this matter. Because of the uncertainty of the exact dollar amount involved and the uncertainty of the method by which any overpayment would be recouped, the County Prosecutor, at the present time, cannot indicate that there is any probability to the claimed dollar amount of ODJFS with regard to the County funds.
96
COUNTY OF HAMILTON, OHIO
COMBINING AND INDIVIDUAL FUNDFINANCIAL STATEMENTS AND SCHEDULES
97
COUNTY OF HAMILTON, OHIO NONMAJOR GOVERNMENTAL FUNDS
COMBINING FINANCIAL STATEMENTS
NONMAJOR SPECIAL REVENUE FUNDS
The special revenue funds are used to account for specific governmental revenues (other than major capital projects)
requiring separate accounting because of legal or regulatory provisions or administrative action and to account for
expenditures for specified purposes.
ANNUALLY BUDGETED
Motor Vehicle Gas Tax To account for motor vehicle gas tax federal andState revenues that are distributed to various municipalities and townships for repair and building of streets and bridges.
Health and Community Services To account for revenues other than grants that are to Nongrants be used for health and community services.
Health and Community Services To account for revenues from the federal, State and Grants County governments and expenditures thereof as
prescribed under the various health and community service functions, including mental health and alcohol and drug programs.
Transportation Improvement To account for activity of the Transportation District Improvement District, a blended component unit of the
County.
98
MULTIYEAR BUDGETED
Judicial Services Grants To account for revenue from the federal, State and County governments and expenditures used to provide legal services to eligible County residents.
Public Safety Grants To account for revenue from the federal, State and County governments and expenditures thereof as prescribed under the various public safety functions.
Health Grants To account for revenue from the federal, State and County governments and expenditures used to provide health-related services to eligible County residents.
Environmental Control Grants To account for revenue from the federal, State and County governments and expenditures for the purpose of environmental protection for the community.
Economic Development Grants To account for revenue from the federal, State and County governments and expenditures used for economic development.
99
COUNTY OF HAMILTON, OHIO NONMAJOR GOVERNMENTAL FUNDS
COMBINING FINANCIAL STATEMENTS
NONMAJOR DEBT SERVICE FUNDS
The debt service funds are used to account for the accumulation of financial resources for, and the payment of, general long-term debt principal, interest and related costs.
General Obligation Nonvoted To account for the retirement of principal and interest of various bond issues not approved by the electorate. The revenue source for this fund is transfers from various other funds.
Special Assessments To account for the retirement of principal and interest on special assessment debt. The revenues are generated from special assessment tax collections.
NONMAJOR CAPITAL PROJECTS FUND
The Capital Projects fund is established to account for financial resources to be used for the acquisition of major
capital facilities (other than those financed by the proprietary funds).
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101
Health and Health and TotalMotor Community Community Transportation Judicial Public Environmental Economic NonmajorVehicle Services Services Improvement Services Safety Health Control Development Special RevenueGas Tax Nongrants Grants District Grants Grants Grants Grants Grants Funds
ASSETSEquity in Pooled Cash and Investments 35,381$ 51,097$ 123$ 1,425$ 4,526$ 124$ 2,413$ 2,442$ 892$ 98,423$ Cash and Cash Equivalents—Segregated Accounts 125 - - - - - - - - 125 Accounts Receivable 211 1,090 - - 33 - - 89 250 1,673 Sales Taxes Receivable - 1,619 - - - - - - - 1,619 Intergovernmental Receivable 3 149 146 35 2,377 412 6,162 1,573 447 11,304 Real and Other Taxes Receivable 10,049 - - - - - - - - 10,049 Due from Other Funds 5 62 - - - - - 4 - 71 Inventories 293 - - - - - - - - 293 Special Assessments Receivable - - - - - - - - - - TOTAL ASSETS 46,067$ 54,017$ 269$ 1,460$ 6,936$ 536$ 8,575$ 4,108$ 1,589$ 123,557$
LIABILITIESAccounts Payable 1,321$ 1,279$ 1,032$ 33$ 889$ 87$ 1,202$ 36$ 661$ 6,540$ Accrued Wages and Benefits Payable 269 553 - - 157 25 31 80 10 1,125 Matured Compensated Absences Payable - 15 - - - - - - 44 59 Intergovernmental Payable 220 162 - 35 22 3 9 13 2 466 Retainage Payable 125 - - - - - - - - 125 Due to Component Unit - 1,619 - - - - - - - 1,619 Due to Other Funds 6 424 330 - 3 1 - - - 764 Advances from Other Funds - - - - - - - - - - Unearned Revenue 8,379 - - - 7,123 103 6,710 1,726 34 24,075 TOTAL LIABILITIES 10,320 4,052 1,362 68 8,194 219 7,952 1,855 751 34,773
DEFERRED INFLOWS OF REOURCESUnavailable Revenue - 3 52 269 1,319 8 462 2,113 TOTAL DEFERRED INFLOWS OF RESOURCES - 3 - - 52 269 1,319 8 462 2,113
FUND BALANCES (DEFICITS)Nonspendable 293 - - - - - - - - 293 Restricted 32,892 46,112 - - - 48 - 2,245 376 81,673 Committed 2,562 3,850 - 1,392 - - - - - 7,804 Unassigned (Deficit) - - (1,093) - (1,310) - (696) - - (3,099) TOTAL FUND BALANCES (DEFICITS) 35,747 49,962 (1,093) 1,392 (1,310) 48 (696) 2,245 376 86,671
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES (DEFICITS) 46,067$ 54,017$ 269$ 1,460$ 6,936$ 536$ 8,575$ 4,108$ 1,589$ 123,557$
COUNTY OF HAMILTON, OHIO
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
AS OF DECEMBER 31, 2014(Amounts in Thousands)
Special Revenue Annually Budgeted Multiyear Budgeted
102
Capital Projects
Total TotalGeneral Nonmajor Nonmajor
Obligation Special Debt Service Project GovernmentalNonvoted Assessments Funds Accounting Funds
ASSETSEquity in Pooled Cash and Investments 155$ 220$ 375$ 2,610$ 101,408$ Cash and Cash Equivalents—Segregated Accounts - - - - 125 Accounts Receivable - - - - 1,673 Sales Taxes Receivable - - - - 1,619 Intergovernmental Receivable - - - - 11,304 Real and Other Taxes Receivable - - - - 10,049 Due from Other Funds - - - - 71 Inventories - - - - 293 Special Assessments Receivable - 5,769 5,769 - 5,769 TOTAL ASSETS 155$ 5,989$ 6,144$ 2,610$ 132,311$
LIABILITIESAccounts Payable -$ -$ -$ 442$ 6,982$ Accrued Wages and Benefits Payable - - - - 1,125 Matured Compensated Absences Payable - - - - 59 Intergovernmental Payable - - - - 466 Retainage Payable - - - 914 1,039 Due to Component Unit - - - - 1,619 Due to Other Funds - - - - 764 Advances from Other Funds - - - 3,625 3,625 Unearned Revenue - - - - 24,075 TOTAL LIABILITIES - - - 4,981 39,754
DEFERRED INFLOWS OF REOURCESUnavailable Revenue 5,769 5,769 - 7,882 TOTAL DEFERRED INFLOWS OF RESOURCES 5,769 5,769 - 7,882
FUND BALANCES (DEFICITS)Nonspendable - - - - 293 Restricted 155 220 375 - 82,048 Committed - - - - 7,804 Unassigned (Deficit) - - - (2,371) (5,470) TOTAL FUND BALANCES (DEFICITS) 155 220 375 (2,371) 84,675
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES (DEFICITS) 155$ 5,989$ 6,144$ 2,610$ 132,311$
Debt Service
103
Health and Health and TotalMotor Community Community Transportation Judicial Public Environmental Economic Nonmajor
Vehicle Services Services Improvement Services Safety Health Control Development Special RevenueGas Tax Nongrants Grants District Grants Grants Grants Grants Grants Funds
REVENUES Property Taxes and Special Assessments 5$ -$ -$ -$ -$ -$ -$ -$ -$ 5$ Sales and Use Tax - 7,399 - - - - - - - 7,399 State Shared Taxes 21,926 - - - - - - - - 21,926 Charges for Services 3,460 23,893 - - 186 - - 360 - 27,899 Licenses and Permits - 4,957 - - - - - - - 4,957 Fines and Forfeitures 238 4,583 - - - - - - - 4,821 Intergovernmental 1,793 8,125 7,064 918 13,528 4,509 18,949 3,695 3,906 62,487 Investment Earnings (21) (72) - (1) (8) - (4) (4) (1) (111) Other 499 1,552 - - 99 263 - 258 709 3,380 TOTAL REVENUES 27,900 50,437 7,064 917 13,805 4,772 18,945 4,309 4,614 132,763
EXPENDITURES Current: General Government 1,292 11,754 - - 75 - - - 4,723 17,844 Judicial - 8,182 - - 13,480 - - - - 21,662 Public Safety - 4,332 - - - 4,367 - - - 8,699 Social Services - 11,272 7,152 - - - - - - 18,424 Health - 2,022 - - - - 18,306 - - 20,328 Public Works 29,000 - - 1,190 - - - - - 30,190 Environmental Control - 2,463 - - - - - 4,134 - 6,597 Economic and Community Development - 7,399 - - - - - - - 7,399 Capital Outlay - - - - - - - - - - Debt Service: Principal Retirement 244 - - - - - - - - 244 Interest and Fiscal Charges 7 - - - - - - - - 7 TOTAL EXPENDITURES 30,543 47,424 7,152 1,190 13,555 4,367 18,306 4,134 4,723 131,394
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (2,643) 3,013 (88) (273) 250 405 639 175 (109) 1,369
OTHER FINANCING SOURCES (USES) Transfers In - 250 - - - - - - - 250 Transfers Out - (1,700) - - - - - - - (1,700) Proceeds of OPWC Loan 537 - - - - - - - - 537 Proceeds from Sale of Bonds - - - - - - - - - - TOTAL OTHER FINANCINGSOURCES (USES), NET 537 (1,450) - - - - - - - (913)
NET CHANGE IN FUND BALANCES (2,106) 1,563 (88) (273) 250 405 639 175 (109) 456
FUND BALANCES (DEFICITS) AT BEGINNING OF YEAR 37,853 48,399 (1,005) 1,665 (1,560) (357) (1,335) 2,070 485 86,215
FUND BALANCES (DEFICITS)AT END OF YEAR 35,747$ 49,962$ (1,093)$ 1,392$ (1,310)$ 48$ (696)$ 2,245$ 376$ 86,671$
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Special RevenueAnnually Budgeted Multiyear Budgeted
COUNTY OF HAMILTON, OHIO
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
104
Capital Projects
Total TotalGeneral Nonmajor Nonmajor
Obligation Special Debt Service Project GovernmentalNonvoted Assessments Funds Accounting Funds
REVENUES Property Taxes and Special Assessments -$ 571$ 571$ -$ 576$ Sales and Use Tax 762 - 762 - 8,161 State Shared Taxes - - - - 21,926 Charges for Services - - - - 27,899 Licenses and Permits - - - - 4,957 Fines and Forfeitures - - - - 4,821 Intergovernmental 297 - 297 - 62,784 Investment Earnings - - - (4) (115) Other 310 - 310 275 3,965 TOTAL REVENUES 1,369 571 1,940 271 134,974
EXPENDITURES Current: General Government - - - - 17,844 Judicial - - - - 21,662 Public Safety - - - - 8,699 Social Services - - - - 18,424 Health - - - - 20,328 Public Works - - - - 30,190 Environmental Control - - - - 6,597 Economic and Community Development - - - - 7,399 Capital Outlay - - - 5,363 5,363 Debt Service: Principal Retirement 10,757 368 11,125 - 11,369 Interest and Fiscal Charges 2,757 202 2,959 - 2,966 TOTAL EXPENDITURES 13,514 570 14,084 5,363 150,841
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (12,145) 1 (12,144) (5,092) (15,867)
OTHER FINANCING SOURCES (USES) Transfers In 12,197 136 12,333 951 13,534 Transfers Out - - - (229) (1,929) Proceeds of OPWC Loan - - - - 537 Proceeds from Sale of Bonds - - - 326 326 TOTAL OTHER FINANCINGSOURCES (USES), NET 12,197 136 12,333 1,048 12,468
NET CHANGE IN FUND BALANCES 52 137 189 (4,044) (3,399)
FUND BALANCES (DEFICITS) AT BEGINNING OF YEAR 103 83 186 1,673 88,074
FUND BALANCES (DEFICITS)AT END OF YEAR 155$ 220$ 375$ (2,371)$ 84,675$
Debt Service
105
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 35,520$ 35,520$ 36,509$ 989$ Sales and Use Tax 68,391 68,391 74,146 5,755 State Shared Taxes 11,042 11,042 11,395 353 Charges for Services 46,098 46,098 47,628 1,530 Licenses and Permits 2,145 2,145 2,316 171 Fines and Forfeitures 7,679 7,679 7,737 58 Intergovernmental 12,864 18,364 20,088 1,724 Investment Earnings 7,980 7,980 4,953 (3,027) Other 8,466 8,466 8,173 (293) TOTAL REVENUES 200,185 205,685 212,945 7,260
EXPENDITURES
Current:
GENERAL GOVERNMENT
County Commissioners/County AdministrationPersonnel Services 3,118 3,228 3,167 61 Other Expenditures 1,264 1,119 1,070 49 Capital Outlay 5 - - -
Total County Commissioners/County Administration 4,387 4,347 4,237 110
County FacilitiesPersonnel Services 4,536 4,611 4,527 84 Other Expenditures 13,930 14,259 14,253 6 Capital Outlay 34 34 34 -
Total County Facilities 18,500 18,904 18,814 90
Non-DepartmentalsPersonnel Services 3,680 3,380 2,536 844
Other Expenditures 3,110 3,894 3,873 21 Capital Outlay 1 1 - 1
Total Non-Departmentals 6,791 7,275 6,409 866
Contracts and SubsidiesOther Expenditures 860 768 712 56
Total Contracts and Subsidies 860 768 712 56 (Continued)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
106
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
AuditorPersonnel Services 1,392$ 1,392$ 1,381$ 11$ Other Expenditures 1,279 1,277 1,191 86 Capital Outlay 27 27 21 6
Total Auditor 2,698 2,696 2,593 103
TreasurerPersonnel Services 215 215 215 - Other Expenditures 453 453 450 3
Total Treasurer 668 668 665 3
RecorderPersonnel Services 1,083 1,033 1,031 2 Other Expenditures 121 171 169 2
Total Recorder 1,204 1,204 1,200 4
Board of ElectionsPersonnel Services 4,948 4,948 4,643 305 Other Expenditures 4,163 4,111 3,271 840 Capital Outlay 108 158 137 21
Total Board of Elections 9,219 9,217 8,051 1,166
Planning and DevelopmentPersonnel Services 2,957 2,957 2,813 144 Other Expenditures 2,063 1,965 1,829 136 Capital Outlay 60 227 215 12
Total Planning and Development 5,080 5,149 4,857 292
TOTAL GENERAL GOVERNMENT 49,407 50,228 47,538 2,690
JUDICIAL
Juvenile CourtPersonnel Services 11,488 12,506 12,506 - Other Expenditures 1,444 1,453 1,451 2
Total Juvenile Court 12,932 13,959 13,957 2
Court of AppealsOther Expenditures 48 64 53 11 Capital Outlay 3 1 - 1
Total Court of Appeals 51 65 53 12 (Continued)
107
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Court of Common PleasPersonnel Services 2,388$ 2,388$ 2,388$ -$ Other Expenditures 6,294 6,553 6,553 -
Total Court of Common Pleas 8,682 8,941 8,941 -
Municipal CourtPersonnel Services 5,136 5,136 5,021 115 Other Expenditures 26 26 26 - Capital Outlay 2 2 2 -
Total Municipal Court 5,164 5,164 5,049 115
Domestic RelationsPersonnel Services 3,097 3,091 3,084 7 Other Expenditures 84 115 114 1 Capital Outlay 7 21 20 1
Total Domestic Relations 3,188 3,227 3,218 9
Probate CourtPersonnel Services 2,212 2,189 2,167 22 Other Expenditures 619 637 479 158
Total Probate Court 2,831 2,826 2,646 180
Clerk of CourtsPersonnel Services 8,664 8,679 8,672 7 Other Expenditures 2,727 2,916 2,832 84 Capital Outlay 89 189 138 51
Total Clerk of Courts 11,480 11,784 11,642 142
Public DefenderPersonnel Services 9,735 9,536 9,531 5 Other Expenditures 5,667 5,907 5,877 30
Total Public Defender 15,402 15,443 15,408 35
Court ReportersPersonnel Services 2,241 2,241 2,210 31 Other Expenditures 86 86 73 13 Capital Outlay 5 5 - 5
Total Court Reporters 2,332 2,332 2,283 49 (Continued)
108
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Adult ProbationPersonnel Services 5,977$ 5,893$ 5,834$ 59$ Other Expenditures 365 447 443 4
Total Adult Probation 6,342 6,340 6,277 63
TOTAL JUDICIAL 68,404 70,081 69,474 607
PUBLIC SAFETY
Communications CenterPersonnel Services 650 650 635 15 Other Expenditures 942 933 924 9 Capital Outlay 214 214 209 5
Total Communications Center 1,806 1,797 1,768 29
SheriffPersonnel Services 50,875 54,325 54,288 37 Other Expenditures 9,306 8,718 8,337 381 Capital Outlay 1,241 1,151 1,149 2
Total Sheriff 61,422 64,194 63,774 420
ProsecutorPersonnel Services 11,530 11,910 11,902 8 Other Expenditures 563 563 442 121 Capital Outlay 81 81 80 1
Total Prosecutor 12,174 12,554 12,424 130
CoronerPersonnel Services 3,512 3,892 3,884 8 Other Expenditures 388 410 410 -
Total Coroner 3,900 4,302 4,294 8
Emergency ManagementPersonnel Services 140 140 119 21 Other Expenditures 416 416 374 42 Capital Outlay - 40 5 35
Total Emergency Management 556 596 498 98
TOTAL PUBLIC SAFETY 79,858 83,443 82,758 685 (Continued)
109
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
SOCIAL SERVICES
Job and Family ServicesOther Expenditures 1$ 1$ -$ 1$
Total Job and Family Services 1 1 - 1
Veterans Service CommissionPersonnel Services 662 662 633 29 Other Expenditures 908 904 839 65
Total Veterans Service Commission 1,570 1,566 1,472 94
TOTAL SOCIAL SERVICES 1,571 1,567 1,472 95
PUBLIC WORKS
EngineerPersonnel Services 365 365 245 120 Other Expenditures 191 191 191 -
Total Engineer 556 556 436 120
Metropolitan Sewer DistrictPersonnel Services 459 409 397 12 Other Expenditures 2,146 2,781 2,777 4
Total Engineer 2,605 3,190 3,174 16
TOTAL PUBLIC WORKS 3,161 3,746 3,610 136
ECONOMIC DEVELOPMENT
Economic DevelopmentPersonnel Services 47 42 36 6 Other Expenditures 1,602 1,607 1,605 2
Total Economic Development 1,649 1,649 1,641 8
TOTAL ECONOMIC DEVELOPMENT 1,649 1,649 1,641 8
TOTAL EXPENDITURES 204,050 210,714 206,493 4,221
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (3,865) (5,029) 6,452 11,481
(Continued)
110
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
OTHER FINANCING SOURCES (USES)Transfers In 2,455$ 2,455$ 2,898$ 443$ Advances In - - 192 192 Transfers Out (14,228) (21,280) (20,574) 706 Advances Out - - (1,012) (1,012) TOTAL OTHER FINANCING SOURCES (USES), NET (11,773) (18,825) (18,496) 329
NET CHANGE IN FUND BALANCE (15,638) (23,854) (12,044) 11,810
FUND BALANCE AT BEGINNING OF YEAR 48,369 48,369 48,369 -
Prior-Year Encumbrances Appropriated 15,518 15,518 15,518 -
FUND BALANCE AT END OF YEAR 48,249$ 40,033$ 51,843$ 11,810$
111
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALPUBLIC ASSISTANCE—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESCharges for Services 29,318$ 29,318$ 27,963$ (1,355)$ Intergovernmental 62,319 62,319 55,976 (6,343) Other 2,026 2,026 1,766 (260) TOTAL REVENUES 93,663 93,663 85,705 (7,958)
EXPENDITURES
Current:
SOCIAL SERVICES
Job and Family ServicesPersonnel Services 40,188 40,188 38,713 1,475 Other Expenditures 58,413 54,788 43,936 10,852 Capital Outlay 1,456 1,073 882 191
Total Job and Family Services 100,057 96,049 83,531 12,518
TOTAL SOCIAL SERVICES 100,057 96,049 83,531 12,518
TOTAL EXPENDITURES 100,057 96,049 83,531 12,518
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (6,394) (2,386) 2,174 4,560
OTHER FINANCING SOURCESTransfers In 681 681 681 - Advances In - - 1,451 1,451 TOTAL OTHER FINANCING SOURCES 681 681 2,132 1,451
NET CHANGE IN FUND BALANCE (5,713) (1,705) 4,306 6,011
FUND BALANCE AT BEGINNING OF YEAR 8,680 8,680 8,680 -
Prior-Year Encumbrances Appropriated 8,139 8,139 8,139 -
FUND BALANCE AT END OF YEAR 11,106$ 15,114$ 21,125$ 6,011$
Budgeted Amounts
112
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113
COUNTY OF HAMILTON, OHIO
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUAL
HEALTH AND HUMAN SERVICES LEVIES—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 192,367$ 192,367$ 198,711$ 6,344$ Charges for Services 4,853 4,853 7,542 2,689 Intergovernmental 84,212 85,043 92,705 7,662 Other 7,995 11,221 7,741 (3,480) TOTAL REVENUES 289,427 293,484 306,699 13,215
EXPENDITURES
Current:
GENERAL GOVERNMENT
County Facilities Other Expenditures 2,822 2,822 2,822 - Total County Facilities 2,822 2,822 2,822 -
TOTAL GENERAL GOVERNMENT 2,822 2,822 2,822 -
JUDICIAL
Juvenile Court Other Expenditures 1,348 1,348 1,330 18 Total Juvenile Court 1,348 1,348 1,330 18
Municipal Court Personnel Services 278 278 274 4 Other Expenditures 3,486 3,486 3,486 - Total Municipal Court 3,764 3,764 3,760 4
Probation Other Expenditures 1,659 1,659 1,623 36 Total Probation 1,659 1,659 1,623 36
TOTAL JUDICIAL 6,771 6,771 6,713 58
PUBLIC SAFETY
Sheriff Personnel Services 5,174 5,474 5,381 93 Other Expenditures 8,632 8,632 8,544 88 Total Sheriff 13,806 14,106 13,925 181
CLEAR Other Expenditures 5,841 5,841 5,576 265 Total CLEAR 5,841 5,841 5,576 265
TOTAL PUBLIC SAFETY 19,647 19,947 19,501 446 (Continued)
Budgeted Amounts
114
COUNTY OF HAMILTON, OHIO
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUAL
HEALTH AND HUMAN SERVICES LEVIES—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
SOCIAL SERVICES
Job and Family Services Other Expenditures 85,527$ 99,664$ 72,652$ 27,012$ Total Job and Family Services 85,527 99,664 72,652 27,012
Senior Services Personnel Services 9 9 8 1 Other Expenditures 20,769 24,294 24,294 - Total Senior Services 20,778 24,303 24,302 1
TOTAL SOCIAL SERVICES 106,305 123,967 96,954 27,013
HEALTH
Health and Hospitalization Tax Personnel Services 283 283 144 139 Other Expenditures 23,668 30,663 30,167 496 Total Health and Hopitalization Tax 23,951 30,946 30,311 635
Developmental Disabilities Services Personnel Services 38,227 39,727 38,685 1,042 Other Expenditures 70,998 69,025 67,693 1,332 Capital Outlay 1,081 1,064 908 156 Total Developmental Disabilities Services 110,306 109,816 107,286 2,530
Mental Health and Recovery Services Personnel Services 1,728 1,728 1,298 430 Other Expenditures 48,986 46,341 42,198 4,143 Total Mental Health and Recovery Services 50,714 48,069 43,496 4,573
TOTAL HEALTH 184,971 188,831 181,093 7,738
RECREATIONAL ACTIVITIES
Zoological Gardens Personnel Services 5 5 4 1 Other Expenditures 6,714 7,124 6,959 165 Total Zoological Gardens 6,719 7,129 6,963 166
Cincinnati Museum Center Personnel Services 8 8 7 1 Other Expenditures 611 731 718 13 Total Cincinnati Museum Center 619 739 725 14
TOTAL RECREATIONAL ACTIVITIES 7,338 7,868 7,688 180 (Continued)
115
COUNTY OF HAMILTON, OHIO
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUAL
HEALTH AND HUMAN SERVICES LEVIES—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
TOTAL EXPENDITURES 327,854$ 350,206$ 314,771$ 35,435$
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (38,427) (56,722) (8,072) 48,650
OTHER FINANCING SOURCES (USES)Transfers In - - 2,910 2,910 Transfers Out (553) (3,384) (2,830) 554 TOTAL OTHER FINANCING SOURCES (USES), NET (553) (3,384) 80 3,464
NET CHANGE IN FUND BALANCE (38,980) (60,106) (7,992) 52,114
FUND BALANCE AT BEGINNING OF YEAR 157,176 157,176 157,176 -
Prior-Year Encumbrances Appropriated 23,329 23,329 23,329 -
FUND BALANCE AT END OF YEAR 141,525$ 120,399$ 172,513$ 52,114$
116
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALMOTOR VEHICLE GAS TAX—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 10$ 10$ 5$ (5)$ State Shared Taxes 21,530 21,530 21,819 289 Charges for Services 3,971 3,971 3,425 (546) Fines and Forfeitures 236 236 237 1 Intergovernmental 133 21,824 2,082 (19,742) Investment Earnings 22 22 35 13 Other 333 333 500 167 TOTAL REVENUES 26,235 47,926 28,103 (19,823)
EXPENDITURES
Current:
GENERAL GOVERNMENT
Planning and Development Personnel Services 1,111 1,111 976 135 Other Expenditures 322 322 241 81 Capital Outlay 83 83 83 - Total Planning and Development 1,516 1,516 1,300 216
TOTAL GENERAL GOVERNMENT 1,516 1,516 1,300 216
PUBLIC WORKS
County Engineer Personnel Services 11,240 10,640 9,024 1,616 Other Expenditures 10,263 9,613 8,435 1,178 Capital Outlay 5,262 36,973 23,181 13,792 Total County Engineer 26,765 57,226 40,640 16,586
TOTAL PUBLIC WORKS 26,765 57,226 40,640 16,586
TOTAL EXPENDITURES 28,281 58,742 41,940 16,802
DEFICIENCY OF REVENUES OVER EXPENDITURES (2,046) (10,816) (13,837) (3,021)
OTHER FINANCING SOURCES (USES)Proceeds of OPWC Loan - - 537 537 Transfers In 3,584 7,535 5,146 (2,389) Transfers Out (5,400) (7,243) (5,146) 2,097 TOTAL OTHER FINANCING SOURCES (USES), NET (1,816) 292 537 245
NET CHANGE IN FUND BALANCE (3,862) (10,524) (13,300) (2,776)
FUND BALANCE AT BEGINNING OF YEAR 28,748 28,748 28,748 -
Prior-Year Encumbrances Appropriated 4,927 4,927 4,927 -
FUND BALANCE AT END OF YEAR 29,813$ 23,151$ 20,375$ (2,776)$
Budgeted Amounts
117
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND COMMUNITY SERVICES NONGRANTS—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESSales and Use Tax 8,000$ 8,000$ 7,260$ (740)$ Charges for Services 28,264 28,264 23,665 (4,599) Licenses and Permits 4,714 4,714 4,946 232 Fines and Forfeitures 2,922 2,922 4,573 1,651 Intergovernmental 8,667 8,667 8,075 (592) Investment Earnings 11 11 11 - Other 6,206 6,206 4,203 (2,003) TOTAL REVENUES 58,784 58,784 52,733 (6,051)
EXPENDITURES
Current:
GENERAL GOVERNMENT
Auditor Personnel Services 4,319 4,319 3,297 1,022 Other Expenditures 10,993 10,813 9,703 1,110 Capital Outlay 500 500 50 450
Total Auditor 15,812 15,632 13,050 2,582
TreasurerPersonnel Services 1,265 1,216 1,149 67 Other Expenditures 3,617 3,024 2,987 37 Capital Outlay 15 34 33 1
Total Treasurer 4,897 4,274 4,169 105
RecorderPersonnel Services 203 203 150 53 Other Expenditures 117 117 33 84 Capital Outlay 104 104 70 34
Total Recorder 424 424 253 171
Law LibraryPersonnel Services 409 429 429 - Other Expenditures 750 722 635 87
Total Law Library 1,159 1,151 1,064 87
TOTAL GENERAL GOVERNMENT 22,292 21,481 18,536 2,945
JUDICIAL
Juvenile CourtPersonnel Services - 100 22 78 Other Expenditures 401 300 158 142
Total Juvenile Court 401 400 180 220 (Continued)
Budgeted Amounts
118
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND COMMUNITY SERVICES NONGRANTS—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
Court of Common PleasPersonnel Services 3,102$ 3,102$ 2,534$ 568$ Other Expenditures 2,303 2,303 1,548 755 Capital Outlay 2,795 2,795 2,483 312
Total Court of Common Pleas 8,200 8,200 6,565 1,635
Municipal CourtPersonnel Services 422 514 448 66 Other Expenditures 437 375 359 16
Total Municipal Court 859 889 807 82
Court of Domestic Relations Personnel Services 172 172 147 25
Total Court of Domestic Relations 172 172 147 25
Probate CourtOther Expenditures 774 771 406 365
Total Probate Court 774 771 406 365
Clerk of CourtsPersonnel Services 1,514 1,571 1,570 1 Other Expenditures 311 336 277 59 Capital Outlay 1 33 - 33
Total Clerk of Courts 1,826 1,940 1,847 93
ProbationPersonnel Services 968 968 735 233 Other Expenditures 875 873 770 103 Capital Outlay 91 91 91 -
Total Probation 1,934 1,932 1,596 336
TOTAL JUDICIAL 14,166 14,304 11,548 2,756
PUBLIC SAFETY
Dog WardenOther Expenditures 1,364 1,371 1,363 8
Total Dog Warden 1,364 1,371 1,363 8
SheriffPersonnel Services 179 179 155 24 Other Expenditures 320 320 170 150
Total Sheriff 499 499 325 174 (Continued)
119
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND COMMUNITY SERVICES NONGRANTS—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
ProsecutorPersonnel Services 1,251$ 1,281$ 1,279$ 2$ Other Expenditures 926 926 496 430
Capital Outlay 44 44 26 18 Total Prosecutor 2,221 2,251 1,801 450
CoronerOther Expenditures 139 148 132 16 Capital Outlay 30 21 20 1
Total Coroner 169 169 152 17
Communications CenterPersonnel Services 321 321 287 34 Other Expenditures 504 551 536 15 Capital Outlay 182 182 182 -
Total Communications Center 1,007 1,054 1,005 49
TOTAL PUBLIC SAFETY 5,260 5,344 4,646 698
SOCIAL SERVICES
Job and Family Services Personnel Services 5,544 6,294 6,169 125 Other Expenditures 6,798 5,772 5,515 257
Total Job and Family Services 12,342 12,066 11,684 382
TOTAL SOCIAL SERVICES 12,342 12,066 11,684 382
HEALTH
Mental Health and Recovery Services Personnel Services 61 61 60 1 Other Expenditures 9,527 9,509 5,379 4,130 Capital Outlay 16 16 16 -
Total Mental Health and Recovery Services 9,604 9,586 5,455 4,131
Hospital Commission Other Expenditures 32 32 32 -
Total Hospital Commission 32 32 32 -
TOTAL HEALTH 9,636 9,618 5,487 4,131 (Continued)
120
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND COMMUNITY SERVICES NONGRANTS—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
Budgeted Amounts
ENVIRONMENTAL CONTROL
Environmental Services Personnel Services 499$ 521$ 519$ 2$ Other Expenditures 2,388 2,224 2,192 32
Total Environmental Services 2,887 2,745 2,711 34
TOTAL ENVIRONMENTAL CONTROL 2,887 2,745 2,711 34
ECONOMIC DEVELOPMENT
Economic Development Other Expenditures 8,000 8,000 7,260 740
Total Economic Development 8,000 8,000 7,260 740
TOTAL ECONOMIC DEVELOPMENT 8,000 8,000 7,260 740
TOTAL EXPENDITURES 74,583 73,558 61,872 11,686
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (15,799) (14,774) (9,139) 5,635
OTHER FINANCING SOURCES (USES)Transfers In 803 803 250 (553) Transfers Out (1,700) (1,700) (1,700) - TOTAL OTHER FINANCING SOURCES (USES), NET (897) (897) (1,450) (553)
NET CHANGE IN FUND BALANCE (16,696) (15,671) (10,589) 5,082
FUND BALANCE AT BEGINNING OF YEAR 41,671 41,671 41,671 -
Prior-Year Encumbrances Appropriated 7,868 7,868 7,868 -
FUND BALANCE AT END OF YEAR 32,843$ 33,868$ 38,950$ 5,082$
121
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESIntergovernmental 5,788$ 8,181$ 6,918$ (1,263)$ TOTAL REVENUES 5,788 8,181 6,918 (1,263)
EXPENDITURES
Current:
SOCIAL SERVICES
Job and Family Services Other Expenditures 5,788 8,181 6,832 1,349 Total Job and Family Services 5,788 8,181 6,832 1,349
TOTAL SOCIAL SERVICES 5,788 8,181 6,832 1,349
TOTAL EXPENDITURES 5,788 8,181 6,832 1,349
EXCESS OF REVENUES OVER EXPENDITURES - - 86 86
NET CHANGE IN FUND BALANCE - - 86 86
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALHEALTH AND COMMUNITY SERVICES GRANTS—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
NET CHANGE IN FUND BALANCE 86 86
FUND BALANCE AT BEGINNING OF YEAR 37 37 37 -
FUND BALANCE AT END OF YEAR 37$ 37$ 123$ 86$
122
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESIntergovernmental -$ 737$ 883$ 146$ Investment Earnings - 4 - (4) TOTAL REVENUES - 741 883 142
EXPENDITURES
Current:
PUBLIC WORKS
Transportation Improvement District Other Expenditures 513 1,453 1,453 - Total Transportation Improvement District 513 1,453 1,453 -
TOTAL PUBLIC WORKS 513 1,453 1,453 -
TOTAL EXPENDITURES 513 1,453 1,453 -
EXCESS (DEFICIENCY) OF REVENUES
Budgeted Amounts
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALTRANSPORTATION IMPROVEMENT DISTRICT—SPECIAL REVENUE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (513) (712) (570) 142
NET CHANGE IN FUND BALANCE (513) (712) (570) 142
FUND BALANCE AT BEGINNING OF YEAR 1,284 1,284 1,284 -
Prior-Year Encumbrances Appropriated 380 380 380 -
FUND BALANCE AT END OF YEAR 1,151$ 952$ 1,094$ 142$
123
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALGENERAL OBLIGATION NONVOTED—DEBT SERVICE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESSales and Use Tax 757$ 757$ 761$ 4$ Intergovernmental 298 298 297 (1) Other 310 310 310 - TOTAL REVENUES 1,365 1,365 1,368 3
EXPENDITURES
Debt Service:Principal Retirement 10,757 10,757 10,757 - Interest and Fiscal Charges 2,820 2,808 2,807 1
TOTAL EXPENDITURES 13,577 13,565 13,564 1
EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (12,212) (12,200) (12,196) 4
OTHER FINANCING SOURCESTransfers In 12,158 12,158 12,197 39 TOTAL OTHER FINANCING SOURCES 12,158 12,158 12,197 39
NET CHANGE IN FUND BALANCE (54) (42) 1 43
FUND BALANCE AT BEGINNING OF YEAR 50 50 50 -
Prior-Year Encumbrances Appropriated 54 54 54 -
FUND BALANCE AT END OF YEAR 50$ 62$ 105$ 43$
Budgeted Amounts
124
COUNTY OF HAMILTON, OHIOSCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES—BUDGET AND ACTUALSPECIAL ASSESSMENTS—DEBT SERVICE FUND
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
Variance withFinal Budget
Actual PositiveOriginal Final Amounts (Negative)
REVENUESProperty Taxes and Special Assessments 496$ 496$ 571$ 75$ TOTAL REVENUES 496 496 571 75
EXPENDITURES
Debt Service:Principal Retirement 368 368 368 - Interest and Fiscal Charges 220 220 202 18
TOTAL EXPENDITURES 588 588 570 18
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (92) (92) 1 93
OTHER FINANCING SOURCESTransfers In 77 77 136 59 TOTAL OTHER FINANCING SOURCES 77 77 136 59
Budgeted Amounts
NET CHANGE IN FUND BALANCE (15) (15) 137 152
FUND BALANCE AT BEGINNING OF YEAR 83 83 83 -
FUND BALANCE AT END OF YEAR 68$ 68$ 220$ 152$
125
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126
COUNTY OF HAMILTON, OHIONONMAJOR ENTERPRISE FUNDS
COMBINING FINANCIAL STATEMENTS
The enterprise funds are established to account for operations that are financed and operated in a manner similar to business in the private sector. The expenses
(including depreciation) of providing goods and services primarily or solely to the general public are financed or
recovered primarily through user charges.
Riverfront Development To account for revenue received for the construction and operations of future riverfront developments.
Main Street Parking Garage To account for revenue received for the construction and operations of the Main Street Parking Garage.
Sales Tax Stabilization To set aside a reserve to meet future debt service payments.
Rotary To track the cost of various activities of the Sheriff’sDepartment within the County.
Communications Center To account for the financial activity relating to emergency 911 services for Hamilton County.
127
Main Street SalesRiverfront Parking Tax
Development Garage StabilizationASSETSCurrent Assets: Equity in Pooled Cash and Investments 19,498$ 394$ 6,955$ Cash and Cash Equivalents—Segregated Accounts 13 - - Restricted Cash, Cash Equivalents and Investments: Accounts Receivable 70 37 - Intergovernmental Receivable 37 - - Due from Other Funds - - - Total Current Assets 19,618 431 6,955
Noncurrent Assets: Capital Assets: Nondepreciable Capital Assets: Land and Improvements 3,638 1,827 - Construction in Progress 986 - - Total Nondepreciable Capital Assets 4,624 1,827 - Depreciable Capital Assets, Net: Buildings, Structures and Improvements 193,448 9,273 - Furniture, Fixtures and Equipment 68 - - Less Accumulated Depreciation (68,830) (4,653) - Total Depreciable Capital Assets, Net 124,686 4,620 - Total Capital Assets, Net 129,310 6,447 - Total Noncurrent Assets 129,310 6,447 - TOTAL ASSETS 148,928 6,878 6,955
LIABILITIESCurrent Liabilities: Accounts Payable 1,014 15 - Due to Other Funds - - - Accrued Wages and Benefits Payable 20 1 - Intergovernmental Payable 49 - - Accrued Interest Payable 3 18 - Accrued Interest Payable from Restricted Assets 54 - - Retainage Payable 39 - - Accrued Compensated Absences - - - Current Portion of State Loans Payable 2,107 - - Current Portion of Long-Term Debt 1,013 460 - Total Current Liabilities 4,299 494 -
Noncurrent Liabilities: Accrued Compensated Absences - - - State Loans Payable 11,203 - - Long-Term Debt 16,399 5,062 - Total Noncurrent Liabilities 27,602 5,062 - TOTAL LIABILITIES 31,901 5,556 -
NET POSITIONNet Investment in Capital Assets 98,944 925 - Unrestricted 18,083 397 6,955 TOTAL NET POSITION 117,027$ 1,322$ 6,955$
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF FUND NET POSITION
NONMAJOR ENTERPRISE FUNDSDECEMBER 31, 2014
(Amounts in Thousands)
Business-Type Activities
128
TotalNonmajor
Rotary Communications EnterpriseFunds Center Funds
-$ 1,996$ 28,843$ - - 13
828 292 1,227 - - 37 6 9 15
834 2,297 30,135
- - 5,465 - - 986 - - 6,451
- 21,662 224,383 40 8,972 9,080
(40) (13,899) (87,422) - 16,735 146,041 - 16,735 152,492 - 16,735 152,492
834 19,032 182,627
- 827 1,856 30 - 30 66 160 247 9 19 77 - - 21- - 54- - 39
10 31 41 - - 2,107 - - 1,473
115 1,037 5,945
276 468 744 - - 11,203 - - 21,461
276 468 33,408 391 1,505 39,353
- 16,735 116,604 443 792 26,670 443$ 17,527$ 143,274$
Business-Type Activities
129
Main Street SalesRiverfront Parking Tax
Development Garage StabilizationOPERATING REVENUES Charges for Services 11,322$ 935$ -$ Lease Rent Revenue - 16 -TOTAL OPERATING REVENUES 11,322 951 -
OPERATING EXPENSES Personnel Services 113 39 - Utilities, Fuel and Supplies 428 13 - Purchased Services 5,085 221 - Depreciation and Amortization 7,578 310 - Other 1,144 62 -TOTAL OPERATING EXPENSES 14,348 645 -
OPERATING INCOME (LOSS) (3,026) 306 -
Business-Type Activities
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITIONNONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
O G CO ( OSS) (3,0 6) 306
NONOPERATING REVENUES (EXPENSES) Sales and Use Tax 112 - - Other Non-Operating Revenues 90 - - Other Non-Operating Expenses - - - Interest Expense (361) (238) - (Loss) on Retirement of Capital Assets - - - Fiscal Charges on Long-Term Debt (167) - - Investment Losses (30) - (12)TOTAL NONOPERATING REVENUES (EXPENSES) (356) (238) (12)
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (3,382) 68 (12)
Capital Contributions 5,722 - -Transfers In - 70 -Transfers Out - - -
CHANGE IN NET POSITION 2,340 138 (12)
TOTAL NET POSITION—BEGINNING 114,687 1,184 6,967
TOTAL NET POSITION—ENDING 117,027$ 1,322$ 6,955$
130
TotalNonmajor
Rotary Communications EnterpriseFunds Center Funds
10,212$ 5,254$ 27,723$ - 57 73
10,212 5,311 27,796
9,380 4,770 14,30231 238 71085 1,050 6,441
- 884 8,77233 424 1,663
9,529 7,366 31,888
683 (2,055) (4,092)
Business-Type Activities
683 ( ,055) ( ,09 )
- - 112- - 90
(300) - (300)- - (599)- (1) (1)- - (167)- (3) (45)
(300) (4) (910)
383 (2,059) (5,002)
- 198 5,920- 2,561 2,631- (2,148) (2,148)
383 (1,448) 1,401
60 18,975 141,873
443$ 17,527$ 143,274$
131
Main Street Sales Riverfront Parking Tax
Development Garage StabilizationCASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers and Users 11,322$ 927$ -$ Lease Rent Revenue - 16 - Cash Payments to Suppliers for Goods and Services (5,268) (268) - Cash Payments for Personnel Costs (111) (39) - Other Operating Expenses (1,186) (57) - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 4,757 579 -
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Sales and Use Tax 112 - - Other Non-Operating Revenue 6 - - Other Non-Operating Expense - - - Transfers from Other Funds - 70 - Transfers to Other Funds - - - Negative Cash Balance Implicitly Financed from the General Fund - - -NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES 118 70 -
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal Payments on Long-Term Debt (2,495) (440) - Interest Payments on Long-Term Debt (395) (238) - Fiscal Charges on Long-Term Debt (159) - - General Obligation Bond Proceeds 1,059 - - Transfer In - - - Advance from Other Fund - - - Capital Contributions 10,745 - - Acquisition and Construction of Property, Plant and Equipment (6,154) - - NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES 2,601 (678) -
CASH FLOWS FROM INVESTING ACTIVITIES Investment Earnings (30) - (12) NET CASH (USED) BY INVESTING ACTIVITIES (30) - (12)
Net Increase (Decrease) in Cash and Equity in Pooled Cash and Investments 7,446 (29) (12) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 12,065 423 6,967 CASH AND CASH EQUIVALENTS AT END OF YEAR 19,511$ 394$ 6,955$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) (3,026)$ 306$ -$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation and Amortization 7,578 310 - Net Changes in Operating Assets and Liabilities: Accounts Receivable - (8) - Due from Other Funds - - - Operating Accounts Payable 191 (28) - Accrued Payroll and Other Related Withholdings 15 - - Intergovernmental Payable (1) (1) - Compensated Absences - - - Due to Other Funds - - - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 4,757$ 579$ -$
RECONCILIATION OF CASH AND CASH EQUIVALENTS Equity in Pooled Cash and Investments 19,498$ 394$ 6,955$ Cash and Cash Equivalents—Segregated Accounts 13 - - TOTAL CASH AND CASH EQUIVALENTS 19,511$ 394$ 6,955$
NONCASH INVESTING AND FINANCING TRANSACTIONS Contribution of Capital Asset from Government -$ -$ -$ TOTAL NONCASH INVESTING AND FINANCING TRANSACTIONS -$ -$ -$
COUNTY OF HAMILTON, OHIO COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDSFOR THE YEAR ENDED DECEMBER 31, 2014
(Amounts in Thousands)
Business-Type Activities
132
TotalNonmajor
Rotary Communications EnterpriseFunds Center Funds
9,390$ 5,553$ 27,192$ - 57 73
(123) (1,297) (6,956) (9,316) (4,781) (14,247)
(27) (251) (1,521) (76) (719) 4,541
- - 112- - 6
(300) - (300)- 1,960 2,030- (2,148) (2,148)
30 - 30(270) (188) (270)
- - (2,935) - - (633) - - (159) - - 1,059 - 601 601 - (601) (601) - - 10,745 - (114) (6,268) - (114) 1,809
- (3) (45) - (3) (45)
(346) (1,024) 6,035 346 3,020 22,821
-$ 1,996$ 28,856$
683$ (2,055)$ (4,092)$
- 884 8,772
(816) 244 (580) (6) 55 49 (1) 164 326 16 47 78 2 3 3
46 (51) (5) - (10) (10)
(76)$ (719)$ 4,541$
-$ 1,996$ 28,843$ - - 13 -$ 1,996$ 28,856$
-$ 198$ 198$ -$ 198$ 198$
Business-Type Activities
133
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134
COUNTY OF HAMILTON, OHIO INTERNAL SERVICE FUNDS
COMBINING FINANCIAL STATEMENTS
The internal service funds are established to account for the financing of goods or services provided by one department of the County to other departments
of the County on a cost-reimbursement basis.
Workers’ Compensation Reserve To provide self-insurance to the County through a retrospective rating plan with the State of Ohio for workers’ compensation.
Auditor’s Computer Center To account for the financial activity relating to the data processing center.
Medical Self-Insurance To account for the financial activity of the County’s health-care coverage for its employees.
135
Workers' Auditor's Medical TotalCompensation Computer Self- Governmental
Reserve Center Insurance ActivitiesASSETSCurrent Assets: Equity in Pooled Cash and Investments 9,849$ 1,264$ 6,432$ 17,545$ Accounts Receivable 14 - - 14 Total Current Assets 9,863 1,264 6,432 17,559
Noncurrent Assets: Capital Assets: Depreciable Capital Assets, Net: Buildings, Structures and Improvements - 41 - 41 Furniture, Fixtures and Equipment - 533 - 533 Less Accumulated Depreciation - (379) - (379) Total Depreciable Capital Assets, Net - 195 - 195 Total Capital Assets, Net - 195 - 195 Total Noncurrent Assets - 195 - 195
TOTAL ASSETS 9,863 1,459 6,432 17,754
LIABILITIESCurrent Liabilities: Accounts Payable 2 - 33 35 Accrued Wages and Benefits Payable 2 37 6 45 Intergovernmental Payable - 5 1 6 Claims Payable 992 - 4,194 5,186 Compensated Absences - 14 - 14 Total Current Liabilities 996 56 4,234 5,286
Noncurrent Liabilities: Claims Payable—Net of Current Portion 268 - - 268 Accrued Compensated Absences - 150 - 150 Total Noncurrent Liabilities 268 150 - 418
TOTAL LIABILITIES 1,264 206 4,234 5,704
NET POSITIONNet Investment in Capital Assets - 195 - 195 Unrestricted 8,599 1,058 2,198 11,855 TOTAL NET POSITION 8,599$ 1,253$ 2,198$ 12,050$
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDSDECEMBER 31, 2014
(Amounts in Thousands)
Governmental Activities
136
Workers' Auditor's Medical TotalCompensation Computer Self- Governmental
Reserve Center Insurance Activities
OPERATING REVENUES Charges for Services 2,758$ 1,530$ 36,712$ 41,000$ TOTAL OPERATING REVENUES 2,758 1,530 36,712 41,000
OPERATING EXPENSES Personnel Services 74 1,321 195 1,590 Purchased Services 360 238 2,832 3,430 Utilities, Fuel and Supplies - 15 - 15 Claims 800 - 35,126 35,926 Depreciation - 38 - 38 Other - 124 30 154 TOTAL OPERATING EXPENSES 1,234 1,736 38,183 41,153
OPERATING INCOME (LOSS) 1,524 (206) (1,471) (153)
NONOPERATING REVENUES (EXPENSES)Investment Earnings (15) (2) 2 (15)
TOTAL NONOPERATING REVENUES (EXPENSES) (15) (2) 2 (15)
INCOME (LOSS) 1,509 (208) (1,469) (168)
CHANGE IN NET POSITION 1,509 (208) (1,469) (168)
NET POSITION—BEGINNING 7,090 1,461 3,667 12,218
NET POSITION—ENDING 8,599$ 1,253$ 2,198$ 12,050$
Governmental Activities
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2014(Amounts in Thousands)
137
Workers' Auditor's Medical TotalCompensation Computer Self- Governmental
Reserve Center Insurance Activities
CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Interfund Services Provided 2,758$ 1,530$ 36,712$ 41,000$ Other Operating Revenue 1,197 - - 1,197 Cash Payments to Suppliers for Goods and Services (1,115) (398) (2,824) (4,337) Cash Payments for Claims (1,400) - (36,176) (37,576) Cash Payments for Personnel Costs (73) (1,309) (196) (1,578) Other Operating Expenses - - (30) (30)NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,367 (177) (2,514) (1,324)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Property, Plant and Equipment - (69) - (69)NET CASH (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES - (69) - (69)
CASH FLOWS FROM INVESTING ACTIVITIESInvestment Earnings (15) (2) 2 (15)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (15) (2) 2 (15)
Net Increase (Decrease) in Cash and Cash Equivalents 1,352 (248) (2,512) (1,408)CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8,497 1,512 8,944 18,953CASH AND CASH EQUIVALENTS AT END OF YEAR 9,849$ 1,264$ 6,432$ 17,545$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) 1,524$ (206)$ (1,471)$ (153)$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Depreciation - 38 - 38 Net Changes in Operating Assets and Liabilities: Accounts Receivable (14) - - (14) Accounts Payable 2 (21) 8 (11) Claims Payable 4 - - 4 Accrued Payroll and Other Related Withholdings - 4 (1) 3 Compensated Absences - 8 - 8 Estimated Future Claims (149) - (1,050) (1,199)NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,367$ (177)$ (2,514)$ (1,324)$
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDSFOR THE YEAR ENDED DECEMBER 31, 2014
(Amounts in Thousands)
Governmental Activities
138
COUNTY OF HAMILTON, OHIO AGENCY FUNDS
COMBINING FINANCIAL STATEMENTS
The agency funds are established to account for assets received and held by the County acting in the capacity of an agent or custodian.
Undivided Tax To account for all undivided taxes collected by the County and their distribution to the proper beneficiaries.
Other Agency Funds To account for payroll taxes and other related payroll
deductions collected as custodian. To account for the collection of moneys held by the County agencies outside of the County Treasury.
139
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF ASSETS AND LIABILITIES
AGENCY FUNDSDECEMBER 31, 2014
(Amounts in Thousands)
Undivided OtherTaxes Agency Total
ASSETSEquity in Pooled Cash and Investments 40,841$ 39,788$ 80,629$ Cash and Cash Equivalents—Segregated Accounts - 28,624 28,624 Real and Other Taxes Receivable 1,287,105 - 1,287,105TOTAL ASSETS 1,327,946$ 68,412$ 1,396,358$
LIABILITIESIntergovernmental Payable 40,841$ 11,366$ 52,207$ Future Tax Collections to Be Distributed 1,287,105 - 1,287,105Other Current Liabilities - 57,046 57,046 TOTAL LIABILITIES 1,327,946$ 68,412$ 1,396,358$
140
COUNTY OF HAMILTON, OHIOCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDSFOR THE YEAR ENDED DECEMBER 31, 2014
(Amounts in Thousands)
Beginning EndingBalance Additions Deductions Balance
UNDIVIDED TAXESASSETSEquity in Pooled Cash and Investments 46,516$ 2,530,812$ 2,536,487$ 40,841$ Real and Other Taxes Receivable 1,267,413 1,287,105 1,267,413 1,287,105 TOTAL ASSETS 1,313,929$ 3,817,917$ 3,803,900$ 1,327,946$
LIABILITIESIntergovernmental Payable 46,516$ 2,530,812$ 2,536,487$ 40,841$ Future Tax Collections to Be Distributed 1,267,413 1,287,105 1,267,413 1,287,105 TOTAL LIABILITIES 1,313,929$ 3,817,917$ 3,803,900$ 1,327,946$
OTHER AGENCY FUNDSASSETSEquity in Pooled Cash and Investments 36,861$ 41,972$ 39,045$ 39,788$ Cash and Cash Equivalents—Segregated Accounts 30,535 174,061 175,972 28,624 TOTAL ASSETS 67,396$ 216,033$ 215,017$ 68,412$
LIABILITIESIntergovernmental Payable 10,680$ 101,473$ 100,787$ 11,366$ Other Current Liabilities 56,716 114,560 114,230 57,046 TOTAL LIABILITIES 67,396$ 216,033$ 215,017$ 68,412$
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142
Statistical
Section
The County of
Hamilton, Ohio
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COUNTY OF HAMILTON, OHIO STATISTICAL SECTION
STATISTICAL SCHEDULES This part of Hamilton County’s comprehensive annual report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the County’s overall financial health. CONTENTS PAGE Financial Trends……………………………………………………………………...................... 145
These schedules contain trend information to help the reader understand how the County’s financial performance and well-being have changed over time.
Revenue Capacity………………………………………………………………………………….. 150
These schedules contain information to help the reader assess the County’s most significant local revenue source, the property tax.
Debt Capacity……………………………………………………………………………………….. 156
These schedules represent information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.
Demographic and Economic Information……………………………………………………… 165
These schedules offer demographic and economic indicators to help the reader understand the environment within which the County’s financial activities take place.
Operating Information…………………………………………………………………………….. 167
These schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual reports for the relevant year.
143
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144
2005(1) 2006(1) 2007 2008 2009 2010(2) 2011(2) 2012 2013(2) 2014
GOVERNMENTAL ACTIVITIES Net Investment in Capital Assets 498,840$ 465,681$ 452,453$ 417,001$ 379,653$ 350,462$ 314,319$ 287,912$ 279,328$ 273,507$ Restricted 171,211 192,152 228,753 230,362 283,432 277,409 309,491 319,813 312,520 354,056 Unrestricted 61 8,442 (4,529) (5,980) (4,755) 17,777 25,282 37,346 37,575 40,899 TOTAL GOVERNMENTAL ACTIVITIES NET POSITION 670,112$ 666,275$ 676,677$ 641,383$ 658,330$ 645,648$ 649,092$ 645,071$ 629,423$ 668,462$
BUSINESS-TYPE ACTIVITIES Net Investment in Capital Assets 513,763$ 522,180$ 468,326$ 518,371$ 506,395$ 476,830$ 553,915$ 557,819$ 501,198$ 561,056$ Restricted 4,543 4,581 5,810 5,234 6,460 8,408 8,008 7,994 8,423 8,454 Unrestricted 223,663 219,627 297,381 267,350 317,285 344,945 294,252 335,165 410,079 436,451 TOTAL BUSINESS-TYPE ACTIVITIES NET POSITION 741,969$ 746,388$ 771,517$ 790,955$ 830,140$ 830,183$ 856,175$ 900,978$ 919,700$ 1,005,961$
PRIMARY GOVERNMENT Net Investment in Capital Assets 1,012,603$ 987,861$ 920,779$ 935,372$ 886,048$ 827,292$ 868,234$ 845,731$ 780,526$ 834,563$ Restricted 175,754 196,733 234,563 235,596 289,892 285,817 317,499 327,807 320,943 362,510 Unrestricted 223,724 228,069 292,852 261,370 312,530 362,722 319,534 372,511 447,654 477,350 TOTAL PRIMARY GOVERNMENT NET POSITION 1,412,081$ 1,412,663$ 1,448,194$ 1,432,338$ 1,488,470$ 1,475,831$ 1,505,267$ 1,546,049$ 1,549,123$ 1,674,423$
Source: Hamilton County Auditor's Finance Department.
(1) Unaudited. Due to the special audit of Hamilton County Job and Family Services, the 2005-2006 financial statement amounts were not audited in full.Agreed-upon procedures relative to fund balances were performed by the Auditor of State.
(2)As restated.
(Accrual Basis of Accounting) (Amounts in Thousands)
FISCAL YEAR
COUNTY OF HAMILTON, OHIONET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
145
2005(1) 2006(1) 2007 2008 2009 2010(4) 2011(4) 2012 2013 2014EXPENSESGovernmental Activities General Government 90,125$ 96,900$ 90,623$ 93,440$ 83,610$ 100,171$ 97,855$ 139,552$ 82,046$ 68,133$ Judicial 121,593 121,663 121,578 118,827 101,347 91,320 88,641 89,903 89,524 94,281 Public Safety 123,107 131,933 123,099 117,497 101,128 101,631 98,943 106,958 101,155 104,530 Social Services 298,921 285,437 351,580 297,627 271,457 167,874 140,044 143,950 146,298 143,149 Health 238,203 249,097 239,911 247,755 252,592 250,968 255,933 226,480 189,604 185,594 Public Works 55,499 50,038 51,020 49,839 43,870 50,330 48,673 37,656 40,973 42,979 Environmental Control 6,321 6,603 5,811 7,479 7,077 6,720 6,508 6,337 5,943 6,889 Economic Development 26,024 18,343 6,068 7,505 6,799 7,527 7,848 8,248 8,867 9,014 Parks and Recreation 8,346 8,695 7,475 7,628 8,446 8,481 7,679 7,834 8,179 7,159 Interest and Fiscal Charges 5,738 5,710 4,960 4,649 4,880 4,689 4,330 4,769 3,667 3,118 Total Governmental Activities Program Expenses 973,877 974,419 1,002,125 952,246 881,206 789,711 756,454 771,687 676,256 664,846 Indirect Expenses Allocation(3) 5,454 6,181 4,565 11,173 6,849 5,212 4,569 3,016 3,194 3,400 Indirect Expenses Reimbursement(3) (5,454) (6,181) (4,565) (11,173) (6,849) (5,212) (4,569) (3,016) (3,194) (3,400) Total Governmental Activities Expenses 973,877 974,419 1,002,125 952,246 881,206 789,711 756,454 771,687 676,256 664,846
Business-Type Activities Metropolitan Sewer District 140,037 152,267 155,209 159,071 167,871 194,947 202,666 190,006 245,944 219,566 Paul Brown Stadium(2) 48,774 46,954 40,517 41,980 39,836 45,582 46,063 44,364 44,642 44,276 Baseball Stadium(2) 27,076 26,580 26,436 28,071 25,932 29,671 31,056 29,873 29,731 30,276 Riverfront Development 10,642 11,475 13,524 11,649 9,771 41,780 27,025 14,356 14,984 14,876 Main Street Parking Garage 1,011 938 929 900 904 866 1,010 861 798 883 Rotary Funds 7,224 6,700 7,609 7,715 6,212 7,868 8,327 8,224 8,866 9,829 Communications Center(2) 7,180 7,453 6,714 7,183 8,034 7,004 7,107 7,448 6,645 7,367 Workers' Compensation Reserve for Stadiums(2) 294 161 167 - - - - - - - Total Business-Type Activities Expenses 242,238 252,528 251,105 256,569 258,560 327,718 323,254 295,132 351,610 327,073 Total Primary Government Expenses $ 1,216,115 $ 1,226,947 $ 1,253,230 $ 1,208,815 $ 1,139,766 $ 1,117,429 $ 1,079,708 $ 1,066,819 $ 1,027,866 $ 991,919
PROGRAM REVENUESGovernmental Activities Charges for Services General Government 55,883$ 57,622$ 54,450$ 51,564$ 42,938$ 41,937$ 43,542$ 51,993$ 49,759$ 44,309$ Judicial 39,141 36,089 36,191 37,118 24,723 28,518 28,240 28,335 27,438 26,321 Public Safety 17,252 14,798 14,985 16,944 16,245 16,139 15,365 15,407 16,685 17,123 Social Services 61,541 37,839 63,640 6,554 5,924 5,091 7,422 5,850 6,054 5,438 Health 22,084 27,987 9,507 9,738 6,579 8,188 12,164 11,091 8,328 9,534 Public Works 5,118 4,827 4,982 7,201 4,205 3,858 3,300 3,388 2,839 4,156 Environmental Control 3,390 3,449 3,547 3,722 3,536 3,502 3,278 3,198 2,764 2,743 Economic Development 721 559 417 1,706 (1,332) 43 39 42 64 32 Parks and Recreation 1,164 1,254 67 - - - - 112 - - Interest and Fiscal Charges - - - - - 3,180 2,174 - - - Operating Grants and Contributions 370,522 390,553 377,578 358,919 388,627 266,818 262,874 273,318 195,344 231,749 Capital Grants and Contributions 1,857 5,212 8,982 2,000 1,796 3,443 1,098 563 627 595 Total Governmental Activities Program Revenues 578,673 580,189 574,346 495,466 493,241 380,717 379,496 393,297 309,902 342,000
(Amounts in Thousands)
FISCAL YEAR
COUNTY OF HAMILTON, OHIOCHANGES IN NET POSITION
LAST TEN FISCAL YEARS(Accrual Basis of Accounting)
146
2005(1) 2006(1) 2007 2008 2009 2010(4) 2011(4) 2012 2013 2014
FISCAL YEAR
Business-Type Activities Charges for Services Metropolitan Sewer District $ 154,171 $ 163,647 $ 176,933 $ 189,069 $ 201,273 $ 217,915 $ 234,905 $ 245,614 $ 250,382 $ 257,465
Paul Brown Stadium 837 856 840 672 774 809 832 831 831 997
Baseball Stadium 1,061 547 1,171 1,163 980 1,071 1,240 1,211 1,278 1,458
Riverfront Development 6,219 6,764 6,481 6,664 5,731 6,493 6,291 8,895 12,181 11,322
Main Street Parking Garage 841 897 870 913 758 722 785 913 840 951
Rotary Funds 6,813 7,222 7,354 7,843 6,238 9,376 8,214 7,961 7,952 10,212
Communications Center 4,693 5,134 4,633 5,518 4,962 5,250 5,555 5,675 5,620 5,311
Workers' Compensation Reserve for Stadiums (2) 300 160 167 - - - - - - - Capital Grants and Contributions 27,633 26,083 21,234 25,075 12,385 23,684 29,751 7,175 14,921 9,679 Total Business-Type Activities Program Revenues 202,568 211,310 219,683 236,917 233,101 265,320 287,573 278,275 294,005 297,395 Total Primary Government Program Revenues $ 781,241 $ 791,499 $ 794,029 $ 732,383 $ 726,342 $ 646,037 $ 667,069 $ 671,572 $ 603,907 $ 639,395
NET EXPENSEGovernmental Activities (395,204)$ (394,230)$ (427,779)$ (456,780)$ (387,965)$ (408,994)$ (376,958)$ (378,390)$ (366,354)$ (322,846)$
Business-Type Activities (39,670) (41,218) (31,422) (19,652) (25,459) (62,398) (35,681) (16,857) (57,605) (29,678)
Total Primary Government Net Expense (434,874)$ (435,448)$ (459,201)$ (476,432)$ (413,424)$ (471,392)$ (412,639)$ (395,247)$ (423,959)$ (352,524)$
GENERAL REVENUES AND OTHER CHANGES IN NET POSITIONGovernmental Activities Taxes Property Taxes 258,880$ 263,625$ 259,345$ 248,073$ 241,924$ 238,961$ 236,518$ 226,392$ 228,717$ 235,070$ Sales and Use Taxes 63,428 64,701 66,671 64,923 67,072 72,029 75,345 72,929 77,921 81,242 Other Taxes 46,295 46,892 47,735 42,259 44,206 43,606 39,480 36,919 33,306 35,356 Grants and Entitlements not Restricted to Specific Programs - - 39,249 51,348 59,590 34,474 23,784 15,787 11,264 11,263 Gifts and Donations - - - - - 82 314 86 82 186 Unrestricted Investment Earnings 14,198 20,262 22,676 16,733 8,124 7,277 5,899 7,443 3,648 3,742 Gain on Sale of Capital Assets - - - - - 1,546 98 12,551 24 37 Other Revenue - 278 - - - - 299 2,280 1,619 497 Transfers (1,000) (1,500) 847 (1,850) (16,006) (1,663) (1,329) (18) (5,875) (5,508) Total Governmental Activities 381,801 394,258 436,523 421,486 404,910 396,312 380,408 374,369 350,706 361,885
Business-Type Activities Sales and Use Taxes 33,524 34,329 42,504 36,609 49,026 50,222 50,518 49,981 56,063 59,764 Unrestricted Investment Earnings 7,207 13,561 16,548 11,046 (391) 6,436 4,736 7,698 4,208 42,505 Gain on Sale of Capital Assets - - - - - 126 217 181 546 - Other Revenue - - - 12 - 3,994 4,867 3,782 9,070 8,162 Transfers 1,000 1,500 (847) 1,850 16,006 1,663 1,329 18 5,875 5,508 Total Business-Type Activities 41,731 49,390 58,205 49,517 64,641 62,441 61,667 61,660 75,762 115,939 Total Primary Government 423,532$ 443,648$ 494,728$ 471,003$ 469,551$ 458,753$ 442,075$ 436,029$ 426,468$ 477,824$
CHANGE IN NET POSITIONGovernmental Activities (13,403)$ 28$ 8,744$ (35,294)$ 16,945$ (12,682)$ 3,450$ (4,021)$ (15,648)$ 39,039$ Business-Type Activities 2,061 8,172 26,783 29,865 39,182 43 25,986 44,803 18,157 86,261 Total Primary Government (11,342)$ 8,200$ 35,527$ (5,429)$ 56,127$ (12,639)$ 29,436$ 40,782$ 2,509$ 125,300$
Source: Hamilton County Auditor's Finance Department.
(1)Unaudited. Due to the special audit of Hamilton County Job and Family Services, the 2005-2006 financial statement amounts were not audited in full.Agreed-upon procedures relative to fund balances were performed by the Auditor of State.
(2)Beginning in 2008, business-type internal service fund activity is consolidated with the activity of the appropriate business-type program. (3)In 2008, indirect costs increased for the social services function because oversight of building maintenance and other building costs, as well as human resource services, were restructured as part of the general government function and are now charged back to social services as indirect costs.(4)As restated.
147
2005(1) 2006(1) 2007 2008 2009 2010(2) 2011 2012 2013(2) 2014GENERAL FUND
Nonspendable 10,006$ 8,975$ 8,413$ 6,358$ 6,010$ 6,208$ 7,646$ 9,244$ 7,962$ 8,804$ Committed - - - - - - 284 203 217 302 Assigned 7,600 10,976 12,640 7,142 9,266 10,248 11,235 13,110 13,524 16,514 Unassigned 63,530 45,797 30,808 32,649 33,207 48,172 56,368 49,763 54,699 52,403
TOTAL GENERAL FUND 81,136$ 65,748$ 51,861$ 46,149$ 48,483$ 64,628$ 75,533$ 72,320$ 76,402$ 78,023$
ALL OTHER GOVERNMENTAL FUNDSNonspendable 2,248$ 2,406$ 2,033$ 3,026$ 3,671$ 2,948$ 3,575$ 4,889$ 4,961$ 293$ Restricted 148,057 138,294 182,098 192,421 203,565 235,680 268,118 266,517 266,882 303,190 Committed 3,681 8,809 8,809 5,946 5,770 6,042 14,086 19,996 15,375 8,309 Unassigned (11,686) (12,820) (16,491) (10,391) (9,810) (7,553) (12,193) (1,821) (4,257) (5,470)
TOTAL ALL OTHER GOVERNMENTAL FUNDS 142,300$ 136,689$ 176,449$ 191,002$ 203,196$ 237,117$ 273,586$ 289,581$ 282,961$ 306,322$
Source: Hamilton County Auditor's Finance Department.
(1)Unaudited. Due to the special audit of Hamilton County Job and Family Services, the 2005-2006 financial statement amounts were not audited in full.Agreed-upon procedures relative to fund balances were performed by the Auditor of State.
(2)As restated.
(Amounts in Thousands)
FISCAL YEAR
COUNTY OF HAMILTON, OHIOFUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS(Modified Accrual Basis of Accounting)
148
2005(1) 2006(1) 2007 2008 2009 2010(2) 2011 2012 2013 2014REVENUES Property Taxes and Assessments 258,873$ 262,442$ 256,338$ 248,088$ 240,272$ 235,018$ 239,045$ 229,347$ 232,710$ 235,796$ Sales and Use Tax 63,428 64,701 66,671 64,923 67,072 72,029 75,345 72,929 77,921 81,242 State Shared Taxes 45,894 46,892 47,735 42,350 44,547 43,606 39,480 36,919 33,306 35,356 Charges for Services 134,880 105,840 140,506 84,229 67,139 64,735 68,331 68,330 71,503 68,557 Licenses and Permits 5,679 5,249 6,124 4,995 4,949 6,407 7,037 6,973 7,561 7,257 Fines and Forfeitures 12,065 12,057 13,336 13,658 12,748 14,506 13,402 13,361 12,803 12,618 Intergovernmental 391,115 397,862 421,612 422,222 409,901 348,584 301,778 282,812 206,533 222,841 Investment Earnings 12,083 21,919 26,498 19,701 6,906 7,245 5,883 7,388 3,719 3,757 Other 28,248 30,546 26,447 27,966 21,243 27,205 32,906 32,405 25,274 21,863 TOTAL REVENUES 952,265 947,508 1,005,267 928,132 874,777 819,335 783,207 750,464 671,330 689,287
EXPENDITURES Current: General Government 61,087 82,703 72,074 69,956 63,451 74,294 76,461 115,470 64,317 54,301 Judicial 121,479 121,974 121,535 118,073 100,058 93,168 90,909 91,480 89,933 94,216 Public Safety 122,068 130,385 121,060 114,554 97,363 100,538 100,813 106,009 100,370 104,198 Social Services 301,568 288,547 352,722 307,296 279,070 175,546 150,843 142,046 149,918 145,870 Health 238,833 249,324 240,811 247,499 251,313 252,088 255,974 227,912 190,558 185,251 Public Works 38,582 39,356 34,056 29,118 26,313 32,903 24,984 26,046 26,295 32,998 Environmental Control 6,825 7,239 6,028 7,715 7,246 7,114 7,109 6,620 6,824 6,597 Economic Development 26,340 18,886 6,175 7,527 6,963 7,534 7,945 8,234 8,878 9,042 Parks and Recreation 8,597 8,927 7,604 7,638 8,455 8,470 7,925 7,845 7,670 7,687 Capital Outlay 4,098 625 2,083 326 699 378 1,480 8,431 9,431 5,363 Debt Service: Principal Retirement 12,715 30,785 12,779 12,419 13,485 11,419 11,651 11,439 11,790 11,369 Interest and Fiscal Charges 5,786 5,650 5,030 4,489 4,951 4,541 4,197 3,968 3,421 2,966 TOTAL EXPENDITURES 947,978 984,401 981,957 926,610 859,367 767,993 740,291 755,500 669,405 659,858
EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 4,287 (36,893) 23,310 1,522 15,410 51,342 42,916 (5,036) 1,925 29,429
OTHER FINANCING SOURCES (USES) Transfers In 20,136 44,992 28,311 28,906 21,429 24,449 15,185 5,787 13,761 16,043 Transfers Out (21,136) (46,492) (27,464) (30,756) (37,435) (26,112) (16,514) (5,805) (18,406) (21,353) Proceeds of Refunding Bonds 28,715 - 18,130 - - - - - - - Premium on Bonds Issued 1,482 202 193 112 249 - - 175 - - Payment to Refunded Bonds Escrow Agent (30,005) - (18,104) - - - - (7,112) - - Proceeds from Sale of Bonds 110 20,321 1,775 9,057 14,875 387 5,787 9,773 182 326 Proceeds from Loans - - - - - - - - - 537 Other - 278 (278) - - - - - - - Proceeds from Sale of Capital Assets - - - - - - - 15,000 - - TOTAL OTHER FINANCING SOURCES (USES), NET (698) 19,301 2,563 7,319 (882) (1,276) 4,458 17,818 (4,463) (4,447)
NET CHANGE IN FUND BALANCES 3,589$ (17,592)$ 25,873$ 8,841$ 14,528$ 50,066$ 47,374$ 12,782$ (2,538)$ 24,982$
DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES 2.0% 3.8% 1.8% 1.8% 2.2% 2.1% 2.2% 2.1% 2.3% 2.2%
Source: Hamilton County Auditor's Finance Department.
(1)Unaudited. Due to the special audit of Hamilton County Job and Family Services, the 2005-2006 financial statement amounts were not audited in full.Agreed-upon procedures relative to fund balances were performed by the Auditor of State.
(2)As restated.
FISCAL YEAR
COUNTY OF HAMILTON, OHIOCHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS(Modified Accrual Basis of Accounting)
(Amounts in Thousands)
149
TOTAL
Tax Total Estimated Assessed
Year/ Public Public Tax Taxable Direct Actual Value as a
Collection Residential Commercial Industrial Agricultural Utility Tangible Utility Exempt Assessed Tax Taxable Percentage of
Year Property Property Property Property Property Property(3) Property Property Value(1) Rate Value(2)(3) Actual Value(1)
2004/2005 11,543,391$ 3,761,655$ 872,915$ 38,513$ 4,162$ 1,698,978$ 757,438$ 3,495,870$ 18,677,052$ 20.03 55,246,408$ 33.81% 2005/2006 13,854,166 4,019,879 923,584 62,487 4,068 1,299,884 750,971 3,914,217 20,915,039 19.78 62,332,325 33.55% 2006/2007 13,921,087 4,017,471 922,763 60,717 4,019 1,002,703 718,505 4,245,482 20,647,265 19.15 63,101,926 32.72% 2007/2008 14,019,425 4,015,680 938,633 59,606 4,176 519,895 604,816 4,553,994 20,162,231 19.53 63,007,426 32.00% 2008/2009 14,206,751 4,300,440 990,862 59,429 7,148 61,888 608,626 4,760,067 20,235,144 19.60 57,734,995 35.05% 2009/2010 14,216,289 4,258,435 998,345 52,560 8,003 34,201 650,513 4,934,617 20,218,346 19.45 57,795,426 34.98% 2010/2011 14,158,842 4,074,153 989,564 53,209 8,000 - 683,436 5,088,595 19,967,204 19.45 56,463,352 35.36% 2011/2012 12,700,329 3,827,089 940,474 49,068 8,448 - 723,511 4,940,025 18,248,919 19.03 51,519,616 35.42% 2012/2013 12,671,139 3,717,857 932,521 47,004 9,026 - 773,714 5,075,748 18,151,261 19.03 51,197,562 35.45% 2013/2014 12,659,012 3,678,998 931,342 46,724 9,600 - 843,929 5,305,713 18,169,605 19.03 51,189,789 35.49%
Source: Hamilton County Auditor's Finance Department.
Note: Property in Hamilton County is reassessed every six years. In Ohio, taxable assessed value is 35% of appraised market value. Estimated actual value is calculated by dividing assessed value by that percent. Tax rates are per $1,000 of assessed valuation.
REAL PROPERTY PERSONAL PROPERTY
COUNTY OF HAMILTON, OHIOASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTYLAST TEN FISCAL YEARS
(Amounts in Thousands)
ASSESSED VALUES
(1)Excludes tax-exempt property.(2)Beginning in tax year 2006, values for telecommunication companies were reclassified from the Public Utility property class to the General Tangible Personal property class. (3)The tangible personal property tax for businesses was phased out over a three-year period starting in 2006 with the last tax due in 2008. Telecommunication companies paid the tangible personal property tax on a declining basis with the last tax due in 2010.
According to Ohio law, tax exempt property is classified separately and is not included in residential, commercial or industrial poperties until it is no longer exempt and its use is determined at a later date.
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151
2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014HAMILTON COUNTY DIRECT RATES:
General Operating 2.26 2.26 2.26 2.26 2.26 2.26 2.26 2.26 2.26 2.26
Debt (Bond Retirement) 0.15 0.14 0.13 0.13 0.14 - - - - -
Drake Hospital 0.84 0.84 0.84 0.84 0.84 - - - - -
For University of Cincinnati Hospital 5.39 5.32 4.49 4.49 4.49 4.49 4.49 4.07 4.07 4.07
For County Police Information Center 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54 0.54
For Developmental Disabilities Board 3.62 3.62 3.62 3.62 3.62 4.13 4.13 4.13 4.13 4.13
For Community Mental Health 2.74 2.74 2.74 2.99 2.99 2.99 2.99 2.99 2.99 2.99
For Support of Children Services 2.73 2.56 2.77 2.77 2.77 2.77 2.77 2.77 2.77 2.77
For Recreation/Zoological Purposes 0.40 0.40 0.40 0.40 0.46 0.46 0.46 0.46 0.46 0.46
For Senior Services 1.16 1.16 1.16 1.29 1.29 1.29 1.29 1.29 1.29 1.29
For Family Treatment & Services - - - - - 0.34 0.34 0.34 0.34 0.34
For Museum Center 0.20 0.20 0.20 0.20 0.20 0.18 0.18 0.18 0.18 0.18 Total Direct Rate 20.03 19.78 19.15 19.53 19.60 19.45 19.45 19.03 19.03 19.03
TOWNSHIP RATES(1):
Anderson 11.87 11.87 11.87 11.87 14.57 14.57 14.57 14.57 14.57 14.57
Anderson Township Park District 2.28 2.28 2.28 2.28 2.28 2.28 2.28 2.28 2.28 2.28
Colerain 16.18 16.18 16.18 17.33 17.33 17.33 18.26 18.26 18.26 18.26
Columbia 21.26 21.26 14.76 14.76 14.76 14.76 14.76 17.01 17.01 17.01
Crosby 9.24 9.24 9.24 10.24 10.24 10.24 10.24 10.24 10.24 10.24
Delhi 20.46 26.34 26.34 26.34 26.34 26.34 26.34 26.34 26.34 28.09
Green 8.31 9.81 9.81 9.81 11.71 11.71 11.71 11.71 11.71 11.71
Harrison 3.74 3.74 3.74 3.74 3.74 3.74 5.24 5.24 5.24 5.24
Miami 9.45 9.45 9.91 9.91 9.91 9.91 9.91 9.91 10.91 11.91
Springfield 20.30 20.30 20.30 20.30 20.30 22.80 22.80 22.80 23.80 23.80
Sycamore 7.75 7.75 8.75 8.75 8.75 8.75 8.75 8.75 8.75 8.75
Symmes 12.80 11.90 12.80 13.70 13.70 13.50 14.50 14.50 14.50 14.50
Whitewater 11.44 11.44 11.44 11.44 11.44 11.44 11.44 11.44 11.44 11.44
SCHOOL DISTRICT RATES(1):
Cincinnati 60.83 59.77 59.37 59.67 67.95 67.87 68.54 70.76 71.34 71.49
Deer Park 70.00 78.63 78.63 78.63 78.63 78.63 78.63 78.63 78.63 86.53
Finneytown 87.72 87.03 86.69 86.67 86.92 86.96 94.90 94.90 96.88 96.88
Forest Hills 55.84 55.66 61.36 61.46 61.65 61.65 61.65 61.65 65.55 65.55
Indian Hill 46.54 46.52 45.42 45.42 46.32 45.82 45.72 45.87 45.99 46.06
Lockland 52.69 52.69 52.09 51.59 51.59 50.79 48.59 48.59 48.59 47.19
Loveland 74.88 74.88 74.74 74.24 74.24 74.24 74.24 77.64 77.98 78.08
Madeira 86.34 85.67 94.77 94.77 95.39 94.02 94.02 101.27 101.94 101.82
Mariemont 90.78 90.57 90.37 97.87 97.87 97.72 106.47 106.97 107.77 107.77
Milford 69.10 69.10 69.10 69.10 74.60 74.60 74.60 75.05 75.05 79.65
Mt. Healthy 68.45 68.41 68.30 74.24 75.03 74.95 74.93 75.74 76.47 76.87
North College Hill 57.47 61.37 61.37 65.36 66.05 65.97 66.00 66.07 66.77 66.77
Northwest 49.64 49.64 49.50 53.39 53.56 53.57 53.60 54.22 59.57 59.57
Norwood 51.08 48.75 48.77 49.40 48.17 49.23 49.11 59.09 58.97 59.02
Oak Hills 46.68 46.68 46.35 46.35 45.90 45.83 45.80 46.02 46.05 50.97
Princeton 49.03 49.03 49.03 49.03 48.99 48.99 50.48 50.83 61.28 61.28
Reading 64.08 64.08 64.08 64.08 64.08 69.79 69.90 70.67 70.67 70.67
St. Bernard 44.63 40.73 46.93 49.17 53.20 52.87 53.01 58.68 58.28 57.34
Southwest 47.08 46.68 45.30 45.30 45.14 44.98 44.68 44.18 44.18 44.18
Sycamore 65.90 65.80 65.79 65.79 65.77 65.77 66.38 66.45 66.45 66.45
Three Rivers 39.95 44.90 44.90 44.90 44.90 44.90 49.87 49.87 49.87 49.87
Winton Woods 78.03 78.03 78.03 78.03 78.03 85.93 86.03 87.32 87.41 87.41
Wyoming 78.93 88.68 87.91 87.87 87.87 87.84 87.84 88.58 93.37 93.37
Great Oaks Joint Vocational 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70 2.70Butler Tech Joint Vocational - - - - - 1.93 1.93 1.93 1.93 1.93
(RATE PER $1,000 OF ASSESSED VALUE)
TAX YEAR/COLLECTION YEAR
COUNTY OF HAMILTON, OHIOPROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTSLAST TEN FISCAL YEARS
152
2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014CITY & VILLAGE RATES(1):
Addyston 7.59 7.59 7.59 7.59 7.59 7.59 7.59 7.59 7.59 7.59Amberley 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 17.00 17.00Arlington Heights 9.52 9.52 11.52 11.52 11.52 11.52 11.52 11.52 11.52 11.52Blue Ash 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08Cheviot 12.22 14.52 14.52 14.52 14.52 20.13 20.13 20.13 20.13 20.13Cincinnati 10.34 10.19 9.93 9.89 9.89 9.82 10.07 10.50 10.85 12.20Cleves 13.66 13.33 12.99 12.99 12.99 12.99 6.99 10.09 10.09 13.99Deer Park 3.55 3.55 3.55 10.45 10.45 10.45 10.45 10.45 10.45 10.45Elmwood Place 7.78 17.78 17.78 17.78 17.78 17.78 17.78 17.78 17.78 17.78Evendale 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Fairfax 2.76 2.76 2.76 2.76 2.76 2.76 2.76 2.76 2.76 2.76Fairfield 5.94 5.94 5.94 5.94 5.94 5.94 5.94 5.94 5.94 5.94Forest Park 12.76 12.76 12.76 12.76 12.76 12.76 12.76 12.76 12.76 12.76Glendale 21.83 21.39 21.18 21.03 20.08 20.08 20.08 20.08 21.58 21.58Golf Manor 24.52 30.52 38.52 38.52 38.52 38.52 38.52 38.52 38.52 38.52Greenhills 28.72 28.63 28.23 28.23 27.88 27.83 32.73 33.58 33.58 33.58Harrison 13.00 13.00 13.00 13.00 11.19 14.50 14.50 14.50 14.50 14.50Indian Hill 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.96Lincoln Heights 26.33 28.33 28.33 35.33 35.33 35.33 39.33 40.73 48.73 48.73Lockland 6.02 6.02 7.52 7.52 7.52 7.52 7.52 7.52 7.52 7.52Loveland 11.00 12.00 10.35 10.35 10.35 10.35 10.35 10.35 10.35 10.35Madeira 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50 7.50Mariemont 14.37 14.37 14.37 14.37 14.37 14.37 14.37 14.37 14.37 14.37Milford 12.00 12.00 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80Montgomery 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05 10.05Mt. Healthy 11.11 11.11 11.11 11.11 11.11 11.11 11.11 11.11 11.11 11.11Newtown 7.87 5.87 2.37 2.37 2.37 2.37 2.37 2.37 2.37 2.37North Bend 10.09 10.09 10.09 10.09 10.09 10.09 10.09 10.09 10.09 11.38North College Hill 7.98 7.98 7.98 7.98 7.98 7.98 7.98 7.98 7.98 12.88Norwood 11.40 11.40 11.40 11.40 11.40 11.40 11.40 11.40 11.40 11.40Reading 3.52 3.52 3.52 3.52 3.52 3.52 3.52 3.52 3.52 3.52St. Bernard 4.28 11.28 11.28 11.28 11.28 11.28 11.28 11.28 11.28 11.28Sharonville 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Silverton 8.15 8.15 8.15 8.15 8.15 8.15 8.15 8.15 8.15 8.15Springdale 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08 3.08Terrace Park 19.84 19.78 11.80 11.67 12.09 8.59 11.34 11.34 11.34 13.84Woodlawn 5.08 5.08 5.08 5.08 5.08 5.08 5.08 5.08 5.08 5.08Wyoming 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
SPECIAL DISTRICT RATES(1):
Deer Park/Silverton Joint Fire District 6.50 6.50 6.40 6.40 6.40 6.40 6.40 6.40 6.4 7.90Eastern Joint Ambulance District 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Little Miami Joint Fire District 2.50 2.50 9.75 9.75 9.75 12.05 12.05 12.05 12.05 12.05Western Joint Ambulance District 1.25 1.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25 2.25Hamilton County Park District 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03Public Library of Cincinnati & - - - - - 1.00 1.00 1.00 1.00 1.00 Hamilton County
Source: Hamilton County Auditor's Finance Department—Tax Year Data.
Note: The Ohio Constitution permits local governments, as a group within a taxing district, to levy up to 10 mills without a vote of the electorate. These levies, collectively called inside millage levies because they fall within the 10-mill limit, are also known as unvoted levies.The allocation of inside millage between entities is set by statute.
The County's special revenue levy property tax rates may be increased only by a majority vote of the County's residents. The bond retirement rate is adjusted annually to meet the principal and interest payments required each year. A state-mandated County-wide property reappraisal was implemented in 2011.
(1)Overlapping rates are those of local governments that apply to property owners within Hamilton County. Not all overlapping rates apply to all Hamilton County property owners.
LAST TEN FISCAL YEARS(RATE PER $1,000 OF ASSESSED VALUE)
TAX YEAR/COLLECTION YEAR
COUNTY OF HAMILTON, OHIOPROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
153
Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed AssessedName of Taxpayer Value Rank Value Value Rank Value
Duke Energy Ohio, Inc. (formerly Cinergy Corp.) $869,408 1 4.76% $555,407 1 2.97%City of Cincinnati 110,147 2 0.60% 65,904 6 0.35%Procter & Gamble 81,772 3 0.45% 160,703 2 0.86%Dayton Power & Light 29,050 4 0.16% - - –Duke Realty Ohio 27,556 5 0.15% 67,959 5 0.36%Fifth Third Bank 27,034 6 0.15% - - –Rookwood Commons LLC 26,936 7 0.15% - - –Emery Realty Inc. 26,113 8 0.14% - - –Columbia Development Corp. 20,039 9 0.11% - - –Rookwood Pavillion LLC 18,476 10 0.10% - - –Cincinnati Bell Telephone - - – 124,540 3 0.67%General Electric - - – 72,396 4 0.39%Thor Gallery - - – 62,916 7 0.34%Cognis Corporation - - – 45,779 8 0.25%Ford Motor Company - - – 44,892 9 0.24%Lanxess - - – 41,072 10 0.22%Total $1,236,531 6.77% $1,241,568 6.65%
Source: Hamilton County Auditor's Office.
COUNTY OF HAMILTON, OHIO PRINCIPAL PROPERTY TAXPAYERS
DECEMBER 31, 2014(Amounts in Thousands)
COLLECTION YEAR 2014 COLLECTION YEAR 2005
154
TotalTax Year/ Collections asCollection Current Delinquent Total Current Current Levy Delinquent Total a Percent of
Year Levy Levy Levy Collection Collected Collection Collection Current Levy 2004/2005 288,178,852$ 28,464,904$ 316,643,756$ 273,199,691$ 94.80% 13,903,872$ 287,103,563$ 99.63% 2005/2006 282,849,186 28,038,048 310,887,234 268,658,332 94.98% 14,813,792 283,472,124 100.22% 2006/2007 275,879,899 31,265,406 307,145,305 259,830,004 94.18% 17,578,853 277,408,857 100.55% 2007/2008 272,851,350 28,852,892 301,704,242 259,904,717 95.26% 13,535,836 273,440,553 100.22%2008/2009 268,405,061 24,986,543 293,391,604 255,494,652 95.19% 11,893,488 267,388,140 99.62%2009/2010 268,360,431 23,906,442 292,266,873 250,349,774 93.29% 9,796,207 260,145,981 96.94%2010/2011 269,901,539 23,031,728 292,933,267 256,290,793 94.96% 11,297,992 267,588,785 99.14%2011/2012 258,680,233 20,673,734 279,353,967 247,079,287 95.52% 11,218,173 258,297,460 99.85%2012/2013 260,889,847 21,610,582 282,500,429 252,048,232 96.61% 8,612,038 260,660,270 99.91%2013/2014 262,546,004 15,031,820 277,577,824 254,197,080 96.82% 8,252,965 262,450,045 99.96%
Totals 2,708,542,402$ 245,862,099$ 2,954,404,501$ 2,577,052,562$ 120,903,216$ 2,697,955,778$
Source: Hamilton County Auditor's Finance Department.
Includes the rollback, homestead and $10K personal property reimbursements from the State of Ohio.
Note: Delinquent collections of property taxes are not separable by tax year because the tax tracking system does not differentiate between tax years.
COUNTY OF HAMILTON, OHIOPROPERTY TAX LEVIES AND COLLECTIONS
REAL, UTILITY AND TANGIBLE TAXESLAST TEN YEARS
(Amounts Not in Thousands)
155
Metropolitan
General General Sewer Parking Metropolitan Riverfront
Obligation Obligation Special General District Facility Sales General Sewer Development Total Percentage
Fiscal Bonds Bonds Assessment Obligation Loan State Revenue Revenue Tax Obligation District State Primary of Personal Per
Year Voted Unvoted Bonds Notes Contracts Loans Bonds Bonds Bonds Bonds Loans Loans Government Income(1) Capita(1)
2005 10,400$ 94,790$ 3,970$ 19,490$ 5,353$ 1,619$ 536,335$ 22,970$ 606,122$ 8,580$ 28,503$ -$ 1,338,132$ 3.95% 1,580$ 2006 7,930 106,475 3,781 - 5,221 1,359 596,250 22,395 590,802 8,290 29,344 - 1,371,847 3.82% 1,618 2007 5,380 97,990 4,252 - 6,465 3,225 642,570 21,785 581,712 8,265 27,717 - 1,399,361 3.80% 1,635 2008 2,740 97,320 4,200 - 4,791 3,543 613,745 21,140 571,737 7,920 46,170 - 1,373,306 3.66% 1,609 2009 - 101,050 4,600 - 4,661 3,144 733,325 20,455 560,922 7,560 44,718 17,160 1,497,595 4.13% 1,751 2010 - 89,995 4,623 - 4,468 2,607 787,100 19,730 558,782 7,190 93,817 17,160 1,585,472 4.31% 1,976 2011 - 84,187 4,567 - 3,954 2,237 753,580 18,960 558,507 6,800 131,546 17,160 1,581,498 4.21% 1,976 2012 - 76,257 4,566 - 3,778 1,896 718,330 18,145 557,381 6,395 204,040 16,415 1,607,203 4.06% 2,004 2013 - 64,869 4,346 - 3,603 1,547 798,720 17,280 543,861 5,970 218,671 14,885 1,673,752 4.13% (2) 2,080 2014 - 54,112 4,304 - 3,340 1,613 737,080 16,365 528,146 24,460 222,999 13,310 1,605,729 3.80% 1,991
Source: Hamilton County Auditor's Finance Department.
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements.
(1)See the Schedule of Demographic and Economic Statistics on page 165 for personal income and population data.(2)2013, 2014: Estimated figure using prior-year state and county figures; CAFR-year data not available.
BUSINESS-TYPE ACTIVITIES
COUNTY OF HAMILTON, OHIORATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS(Amounts in Thousands, Except Per Capita Amount)
GOVERNMENTAL ACTIVITIES
156
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157
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Debt Limitation of Assessed Valuation 465,426$ 521,376$ 514,682$ 502,556$ 504,379$ 503,958$ 497,680$ 454,723$ 452,282$ 455,189$
Total Net Debt Applicable to Debt Limitation 78,554 93,289 85,365 84,827 88,756 80,541 71,537 69,648 66,892 76,894
Legal Debt Margin Remaining 386,872$ 428,087$ 429,317$ 417,729$ 415,623$ 423,417$ 426,143$ 385,075$ 385,390$ 378,295$
Total Net Debt Applicable to Debt Limitationas a Percentage of Debt Limitation 16.88% 17.89% 16.59% 16.88% 17.60% 15.98% 14.37% 15.32% 14.79% 16.89%
Legal Debt Margin Calculation for Fiscal Year 2014—Total Debt Limit
Assessed Valuation 18,267,540$
Debt Limitation of Assessed Valuation(1) 455,189
Debt Applicable to Limit: Outstanding Debt 1,591,898
Less: Debt Exempt from Calculation Metropolitan Sewer District Bonds 737,080 Metropolitan Sewer District Loans 222,999 Special Assessments 4,304 Waterline West Phase I 275 Waterline West Phase II 735 Sales Tax Supported Bonds 528,146 Parking Garage Revenue Bond 16,365 Urban Redevelopment 5,475 Total Debt Exempt from Calculation 1,515,379
Less: Available Funds in Debt Service Funds as of December 31, 2014 375
Total Net Debt Applicable to Debt Limitation 76,894
Legal Debt Margin Remaining 378,295$ Source: Hamilton County Auditor's Finance Department.
(1)The debt limitation is the sum of the following:
three percent (3%) of the first $100,000,000 of the assessed valuation 3,000$ plus one and a half precent (1.5%) of such valuation of $100,000,000 and not in exce 3,000 plus two and a half percent (2.5%) of such valuation in excess of $300,000,000 449,189
455,189$
FISCAL YEAR
COUNTY OF HAMILTON, OHIOLEGAL DEBT MARGIN INFORMATION—TOTAL DEBT LIMIT
LAST TEN FISCAL YEARS(Amounts in Thousands)
158
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Debt Limitation of Assessed Valuation 186,771$ 209,150$ 206,473$ 201,622$ 202,351$ 202,183$ 199,672$ 182,489$ 181,513$ 182,675$
Total Net Debt Applicable to Debt Limitation 68,154 84,359 79,985 82,087 88,756 80,541 71,537 69,648 66,892 76,894
Legal Debt Margin Remaining 118,617$ 124,791$ 126,488$ 119,535$ 113,595$ 121,642$ 128,135$ 112,841$ 114,621$ 105,781$
Total Net Debt Applicable to Debt Limitationas a Percentage of Debt Limitation 36.49% 40.33% 38.74% 40.71% 43.86% 39.84% 35.83% 38.17% 36.85% 42.09%
Legal Debt Margin Calculation for Fiscal Year 2014—Unvoted Debt Limit
Assessed Valuation 18,267,540$
Debt Limitation of Assessed Valuation(1) 182,675
Debt Applicable to Limit: Outstanding Debt 1,591,898
Less: Debt Exempt from Calculation Metropolitan Sewer District Bonds 737,080 Metropolitan Sewer District Loans 222,999 Special Assessments 4,304 Waterline West Phase I 275 Waterline West Phase II 735 Sales Tax Supported Bonds 528,146 Parking Garage Revenue Bond 16,365 Urban Redevelopment 5,475 Total Debt Exempt from Calculation 1,515,379
Less: Available Funds in Debt Service Funds as of December 31, 2014 375
Total Net Debt Applicable to Debt Limitation 76,894
Legal Debt Margin Remaining 105,781$ Source: Hamilton County Auditor's Finance Department.
(1)The debt limitation is one percent of the total assessed valuation.
COUNTY OF HAMILTON, OHIOLEGAL DEBT MARGIN INFORMATION—UNVOTED DEBT LIMIT
LAST TEN FISCAL YEARS(Amounts in Thousands)
FISCAL YEAR
159
Sewerage Less: Revenues Net RevenueFiscal Charges Operating Transferred Available forYear and Other Expenses to Surplus(1) Debt Service Principal Interest Coverage
2005 166,749$ 88,115$ 11,241$ 89,875$ 20,285$ 22,938$ 2.08 2006 181,167 97,005 9,049 93,211 23,130 26,218 1.89 2007 197,583 103,531 10,438 104,490 26,065 29,119 1.89 2008 202,406 101,033 15,716 117,089 28,825 31,037 1.96 2009 209,073 103,825 18,100 123,348 30,235 31,391 2.00 2010 227,040 120,368 18,418 125,090 31,845 37,546 1.80 2011 244,254 111,823 31,090 163,521 33,520 40,635 2.21 2012 260,388 101,418 36,535 195,505 35,250 38,553 2.65 2013 270,919 126,289 28,024 144,630 (2) 37,115 37,423 1.94 2014 276,941 120,018 33,513 156,923 42,435 26,575 2.27
Source: Audited MSD financial reports.
(1)Half of pledged revenues are transferred to a surplus account.(2)Revised formula per trust agreement.
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements. Sewerage Charges and Other includes sewerage service charges, sewer surcharges, all other operating revenues, interest income, capitalized interest income and tap-in/connection fees. Operating expenses do not include interest, depreciation or amortization expenses.
Debt Service
COUNTY OF HAMILTON, OHIOPLEDGED REVENUE COVERAGE—METROPOLITAN SEWER DISTRICT
LAST TEN FISCAL YEARS(Amounts in Thousands)
SEWER REVENUE BONDS
160
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161
Parking Less: Net Revenue
Fiscal Service Charges Operating Available for
Year and Other(1) Expenses Debt Service Principal Interest Coverage2005 6,219$ 4,307$ 1,912$ 540$ 550$ 1.75 2006 6,764 4,372 2,392 575 855 1.67 2007 6,481 4,503 1,978 610 816 1.39 2008 6,664 4,299 2,365 645 474 2.11
2009(2)(3) 5,731 3,641 2,090 685 93 2.69 2010 6,612 4,680 1,932 725 49 2.50 2011 6,482 4,667 1,815 770 36 2.25 2012 9,179 6,032 3,147 815 33 3.71 2013 12,221 6,408 5,813 865 39 6.43 2014 11,434 6,780 4,654 915 60 4.77
Source: Audited Hamilton County financial statements and Hamilton County Auditor's Finance Department.
Debt Service
COUNTY OF HAMILTON, OHIOPLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS(Amounts in Thousands)
ADJUSTABLE RATE PARKING SYSTEM REVENUE BONDS
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements. (1)Parking Service Charges and Other includes charges for services and sales and use tax revenues. Operating Expenses do not include interest, depreciation or amortization expenses.(2)In May 2009, the County obtained a loan from the State of Ohio in the amount of $11,685 for construction of an intermodal transit facility. The loan is secured by parking revenues, sales tax receipts, and by other non-tax revenues of the County on a contingent basis. The loan will be repaid in 2012–2019. Loan interest rates range from 3.00% to 4.25%. (3)In October 2009, the County secured a loan for $5,475 from the State of Ohio for riverfront development. The loan is secured by shared TIF (Tax Increment Financing) revenues of the County and the City of Cincinnati. The loan will be repaid in 2015–2024. Loan interest rates are 0% for the first five years and 3% thereafter.
162
Special Sales Assessment TaxCollections Principal Interest Coverage Collections(4) Principal Interest Principal Interest Coverage
481$ 300$ 217$ 0.93 64,030$ 1,325$ 18,691$ 2,675$ 10,589$ 1.92 491 265 201 1.05 64,022 1,698 18,631 3,427 10,468 1.87 468 279 191 1.00 66,232 2,567 17,243 6,523 9,063 1.87 485 314 217 0.91 65,381 2,955 17,522 7,019 9,002 1.79 467 310 216 0.89 60,630 3,219 17,372 7,595 8,659 1.65 512 364 225 0.87 62,172 2,140 17,201 - 8,269 2.25 498 331 224 0.90 65,044 73,418 (5) 15,752 1,273 8,285 0.66 502 374 216 0.85 66,642 180 16,843 945 8,339 2.53 543 402 212 0.88 69,637 7,009 16,896 6,511 8,344 1.80 571 368 200 1.01 74,141 10,590 16,485 5,125 7,976 1.85
(4)On March 19, 1996, voters of Hamilton County approved a ½% increase in the County's general sales tax. The County Commissioners approved by resolution that this additional tax be used for the development of the riverfront area, including construction of the football and baseball stadiums—Paul Brown Stadium and Great American Ball Park. The sales tax bonds are not a general obligation of the County. They are secured by the County's pledge and assignment of the revenue from the additional ½% sales tax. (5)2011 includes payment of principal on refunded bonds.
SPECIAL ASSESSMENT BONDS SALES TAX BONDS(4)
Paul Brown Stadium Baseball Stadium Debt Service Debt Service Debt Service
163
Less: Percentage of
Amounts Estimated
General Available in Actual Taxable
Fiscal Obligation Debt Service Value(1) of Per
Year Bonds Fund Total Property Capita(2)
2005 113,770$ 3,978$ 109,792$ 0.20% 129.60$ 2006 122,695 3,123 119,572 0.19% 141.06 2007 111,635 2,161 109,474 0.17% 127.90 2008 107,980 2,164 105,816 0.17% 123.98 2009 108 610 2 094 106 516 0 18% 124 57
COUNTY OF HAMILTON, OHIORATIOS OF NET GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS(Amounts in Thousands, Except Per Capita Amount)
2009 108,610 2,094 106,516 0.18% 124.57 2010 97,185 2,059 95,126 0.16% 118.56 2011 90,987 8,255 82,732 0.15% 103.37 2012 82,652 5,303 77,349 0.15% 96.44 2013 70,839 132 70,707 0.14% 87.89 2014 78,572 105 78,467 0.15% 97.28
Source: Hamilton County Auditor's Finance Department.
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements.
(1)See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property on page 150 for property value data.(2)Population data can be found in the Schedule of Demographic and Economic Statistics on page 165.
164
Per AnnualPersonal Capita Average
Fiscal Income(2)(5) Personal Unemployment MedianYear Population(1)
(Amounts in Thousands) Income Rate(3) Age(4)
2005 847,182 33,918,902$ 40,037$ 5.40% 37.62006 847,656 35,914,206 42,369 5.00% 37.82007 855,928 36,835,038 43,035 5.00% 38.02008 853,508 37,484,285 43,918 5.60% 38.62009 855,062 36,248,694 42,393 8.90% 36.82010 802,374 36,770,921 45,828 9.50% 37.12011 800,362 37,522,065 46,881 8.60% 37.32012 802,038 39,631,501 49,413 7.00% 37.32013 804,520 40,522,891 50,369 7.10% 37.12014 806,631 42,299,608 52,440 5.30% 37.4
Data Sources:
(1)U.S. Department of Commerce, Bureau of the Census, 2005��–2014 Census and Midyear Population Estimates(2)U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System (2005-2012)(3)Ohio Department of Job and Family Services, Labor Market Information(4)U.S. Department of Commerce, Bureau of the Census, 2005–2014 American FactFinder Fact Sheets(5)2013, 2014: Estimated figure using prior-year state and county figures; CAFR-year data not available.
COUNTY OF HAMILTON, OHIODEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
165
Percentage of Percentage of Number of Total County Number of Total County
Name of Employer(1)(2) Employees(1) Rank Employment Employees Rank Employment
Kroger Company 20,948 1 5.48% 14,000 2 3.53%University of Cincinnati 15,378 2 4.02% 15,400 1 3.89%Cincinnati Children's Hospital Medical Center 14,954 3 3.91% 8,102 6 2.04%TriHealth Incorporated 11,400 4 2.98% 7,648 7 1.93%City of Cincinnati 11,156 5 2.92% – – –Procter & Gamble Company 11,000 6 2.88% 12,000 4 3.03%UC Health (fna: Health Alliance of Greater Cincinnati Inc.) 10,000 7 2.61% 13,141 3 3.32%General Electric Aviation 8,670 8 2.27% 6,800 9 1.72%Mercy Health 8,210 9 2.15% 6,748 10 1.70%Fifth Third Bancorp 6,815 10 1.78% 8,964 5 2.26%Cincinnati Public Schools – – – 7,589 8 1.91%
Total Principal Employers 118,531 31.00% 100,392 25.33%
Total County Employed(2)382,500 396,300
Data Sources:(1)Cincinnati Business Courier 2014/2015 Book of Lists(2)Ohio Department of Job and Family Services, Labor Market Information(3)Cincinnati Business Courier 2006 Book of Lists
COUNTY OF HAMILTON, OHIO PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2014 2005(3)
166
2005 2006 2007 2008 2009(14) 2010(16) 2011(16) 2012 2013 2014
Function/Program
General Government(1)(2)(10)(15)(17) 477.45 478.27 494.52 522.21 499.69 427.13 413.50 417.02 359.78 359.53 Judicial(2)(10)(13)(16) 1,725.57 1,719.26 1,686.15 1,672.62 1,450.13 1,298.06 1,115.30 1,109.65 1,023.12 1,050.80 Public Safety(2)(10) 1,185.81 1,230.90 1,202.36 1,170.15 950.33 963.21 1,007.99 1,045.23 1,065.80 1,083.74 Social Services(2)(10)(16) 1,660.65 1,660.65 1,680.65 1,637.65 1,445.80 949.69 817.69 801.56 823.56 874.25 Health(2)(7)(9) 725.05 648.76 648.66 654.67 659.76 678.45 630.18 630.84 621.31 628.28 Public Works(15) 235.31 231.65 231.65 220.65 191.60 208.20 209.05 210.20 206.84 209.90 Environmental Control(2) 62.41 61.89 59.59 59.59 59.90 55.35 10.27 9.06 8.52 7.69 Economic and Community Development(2)(8)(15) 28.50 7.50 7.50 6.25 14.19 0.29 - - - 0.75 Recreational Activities - - - - 1.00 0.10 4.19 5.20 4.51 4.01 Metropolitan Sewer District(3) - - - - - - - - - - Paul Brown Stadium(4) 27.55 28.55 29.50 28.01 27.81 26.22 26.21 26.60 25.61 25.34 Baseball Stadium(5) 2.85 2.85 1.75 1.00 1.00 1.07 0.47 - - - Riverfront Development(6) - - - - - 2.47 0.60 0.87 1.02 0.87 Main Street Parking Garage(6) - - - - - - - - - 0.52 Rotary Funds(11) 107.00 109.00 107.00 108.00 106.00 103.00 35.00 - - - Communications Center 91.00 91.00 93.00 94.00 93.00 91.00 84.00 76.42 79.42 75.42 Workers' Compensation Reserve for Stadiums(12)(17) 2.00 2.00 2.00 2.00 2.00 2.00 2.00 - - -
Total 6,331.15 6,272.28 6,244.33 6,176.80 5,502.21 4,806.24 4,356.45 4,332.65 4,219.49 4,321.10
Sources: Hamilton County, Ohio 2005-2014 Budgets, Budgeted FTEsHamilton County, Ohio, Department of Budget and Strategic Initiatives
Method: An FTE is the equivalent of one full-time employee. To calculate a percentage of an FTE, for eachemployee a ratio is derived by dividing expected hours to be worked by 2,080 hours per year.
(1)Employees of certain agencies subsidized by the General Fund are included. (2)Employees funded by grants are included in certain departmental FTE counts.(3)Personnel in this agency are employed by the City of Cincinnati.(4)Paul Brown Stadium personnel are managed in part by Hamilton County and in part by Paul Brown Stadium, Ltd.(5)Great American Ball Park baseball stadium personnel are managed by the Cincinnati Reds.(6)Parking facilities personnel services are provided via management contract. (7)During 2006, the Alcohol and Drug Addiction Services and Community Mental Health Boards merged to form the Mental Health and Recovery Services Board.(8)In 2006, the Section 8 housing program transferred to the Cincinnati Metropollitan Housing Authority. (9)During 2006, the department functions of Treatment Alternatives to Street Crime transitioned to community-based agencies.(10)During 2007, the budget and small business sections transferred from Administrative Services to County Administration,
the facilities maintenance section of Juvenile Court transferred to County Facilities, and the child support legal services section of the Prosecutor transferred to Job and Family Services.
(11)The County is fully reimbursed for Sheriff's Township Patrol services.(12)Employees who service the Workers' Compensation Reserve for Stadiums internal service fund are employed by the Board of County Commissioners.(13)Court of Appeals staff are employees of the State of Ohio.(14)The 674.59 positions reduced in 2009 resulted primarily from budget reductions shared across most departments.(15)In 2009, Community Development, Building Inspections, Public Works, Regional Planning and Regional Zoning combined to form the Planning and Development Department (General Government).(16)The 695.97 positions reduced in 2010 and the 449.79 in 2011 resulted primarily from budget reductions in the Judicial and Social Services functions.(17)Starting in 2012, employees who service the Workers' Compensation Reserve for Stadiums internal service fund are reported with the General Government function.
FISCAL YEAR
COUNTY OF HAMILTON, OHIO FULL-TIME EQUIVALENT COUNTY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
167
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014FUNCTION/PROGRAM
Governmental Activities
General GovernmentAuditor
Non-Exempt Property Conveyances 23,304 22,132 19,509 16,772 15,060 14,649 14,349 14,333 17,554 16,331 Exempt Property Conveyances 12,501 12,079 11,974 11,038 10,217 9,403 10,066 10,688 11,603 11,466 Parcels Assessed or Reappraised at Market Value 341,932 (2) 343,479 345,712 347,481 (1) 347,587 348,148 348,360 (2) 348,362 347,492 348,535 Dog and Kennel Licenses Issued 58,744 57,764 56,781 58,942 61,833 59,316 60,298 59,045 58,051 55,414 Weights and Measures Inspections and Tests Performed 38,822 33,757 47,867 31,837 38,983 14,365 - (12) - - -
Board of ElectionsVoter Registrations and Changes Processed 49,893 77,300 52,283 177,515 (4) 50,294 43,490 82,037 146,758 (4) 94,519 84,081
Building InspectionsBuilding Inspections Performed 22,688 21,184 22,171 21,098 18,893 13,566 12,708 12,699 13,340 13,255 Building Permits Issued 6,933 4,847 4,402 3,960 9,361 10,125 9,942 9,263 10,619 10,653
RecorderDeeds Filed 36,013 34,272 31,314 27,952 25,206 23,758 22,788 24,053 28,413 26,637 Mortgages Filed 66,813 59,443 47,849 36,771 43,031 39,184 35,862 42,425 40,612 28,453
TreasurerTax Bills Processed 283,500 285,000 283,000 285,000 289,000 286,500 291,600 294,700 294,000 293,700
JudicialCourt of Appeals
Overall New Cases(5) 1,036 1,121 931 1,326 947 872 899 915 877 809 Criminal New Cases(5) 641 670 591 971 587 521 480 506 457 440 Civil New Cases(5) 239 291 227 221 229 234 276 266 420 346
Court of Common PleasOverall New Cases(5) 23,995 24,819 25,329 25,229 24,845 24,455 23,041 22,447 19,457 18,064 Criminal New Cases(5) 10,173 10,722 11,024 10,287 9,224 9,078 9,072 8,920 8,182 7,981 Civil New Cases(5) 13,822 14,097 14,305 14,942 15,621 15,377 13,969 13,527 11,275 10,083
COUNTY OF HAMILTON, OHIO OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
FISCAL YEAR
Court of Domestic RelationsOverall New Cases(5) 9,216 9,526 8,356 7,837 7,560 6,699 6,479 6,061 6,239 6,035
Juvenile CourtOverall New Cases(5) 47,668 48,647 40,204 37,681 33,199 30,681 28,355 28,109 30,379 24,816 Hearings Conducted 164,283 163,890 153,339 143,653 128,764 120,169 120,028 118,853 118,800 118,669
Municipal CourtOverall New Cases(5) 319,191 312,927 320,351 354,811 332,902 319,097 316,812 206,611 233,940 214,466
Probate CourtOverall New Cases(5) 6,508 6,829 6,584 6,697 6,564 6,458 6,606 6,632 6,552 6,029
Public SafetyCoroner
Autopsies Performed 1,032 997 1,026 1,000 898 860 922 909 936 796 Prosecutor
Criminal Misdemeanor and Felony Arraignments 42,982 43,000 43,200 43,300 44,184 40,719 41,426 39,384 34,410 34,917 Formal Opinions and Letters of Advice to County Agencies 107 102 100 105 49 37 42 26 48 24 Property Foreclosure Cases 3,300 3,750 3,750 3,750 4,767 7,843 5,848 5,833 4,262 3,350
SheriffInmates Housed 44,468 50,727 49,921 46,000 42,000 40,000 38,626 36,653 32,425 31,872 Prisoners Transported 4,916 4,815 4,815 4,482 3,615 3,333 3,059 3,077 2,820 4,954 Courtroom Security Provided (Hours) 49,842 51,576 53,123 51,928 46,126 43,960 55,472 55,038 49,628 49,202 Major Crime Cases Investigated 3,776 4,120 4,125 4,130 7,245 6,835 6,713 6,260 5,066 4,974
Social ServicesJob and Family Services—JFS
Cash Assistance Recipients (Monthly Average) 20,043 17,045 17,169 17,644 26,496 25,301 20,326 17,570 15,670 14,062 Food Stamp Assistance Recipients (Monthly Average) 74,898 77,123 72,419 76,057 119,189 137,148 129,281 135,280 135,898 126,984 Medicaid Participants (Monthly Average) 120,348 121,084 127,242 128,259 142,116 156,494 154,768 171,131 180,295 206,464 Subsidized Child Care Recipients (Monthly Average 2006-2009) 25,124 12,999 12,986 14,121 14,034 15,451 19,292 16,201 (3) 16,563 16,376 Children's Services Recipients 15,679 17,460 17,717 16,469 15,422 15,831 16,964 16,912 16,824 16,101 Child Support Collections (Millions) 152.4$ 155.0$ 142.0$ 154.6$ 143.0$ 126.0$ 129.6$ 129.6$ 130.0$ 127.8$ Workforce Development Admissions (Includes Reapplications)(6) 13,430 3,182 3,602 3,278 5,129 13,810 14,500 28,738 20,212 25,820
HealthDevelopmental Disability Services
Eligible Individuals Served(7) 5,679 5,638 7,243 7,931 16,051 15,443 16,585 16,689 15,893 13,982
168
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014FISCAL YEAR
Public WorksCounty Engineer
Bridges Constructed/Repaired 5 8 3 11 2 6 2 2 2 5 Landslides Stabilized 4 1 1 2 - - 5 8 3 2 Roads Resurfaced (Number) 28 20 20 - (8) 21 24 4 11 23 9 Roads Resurfaced (Miles) 18 14 10 - (8) 12 18 3 8 26 8
Public WorksPermits Processed for Storm Review and FEMA Regulations 2,395 2,048 1,879 2,000 1,461 1,783 1,610 1,732 2,190 1,763
Environmental ControlEnvironmental Services
Material Recycled (Tons) 34,342 33,496 31,985 34,500 36,615 39,885 45,498 43,590 40,935 40,350
FUNCTION/PROGRAM
Business-Type ActivitiesMetropolitan Sewer District
Sewer Connections 225,889 228,512 229,226 229,943 228,133 229,452 231,100 229,808 227,160 211,631 Wastewater Collected and Treated (Millions of Gallons)(9) 74,010 67,966 66,038 67,264 60,800 58,746 73,008 54,785 70,147 65,551
Paul Brown StadiumGame Attendance (Total) 524,468 527,870 526,320 516,663 575,718 482,917 394,009 489,504 593,800 525,372 Game Attendance (Average) 65,559 65,984 65,790 64,583 63,969 60,365 49,251 61,188 53,982 52,537
Baseball StadiumGame Attendance (Total) 1,943,157 2,134,607 2,058,593 2,058,632 1,747,919 2,060,550 2,213,498 2,347,251 2,492,059 2,476,664 Game Attendance (Average) 23,696 26,353 25,415 25,415 21,579 25,439 27,327 28,978 31,151 30,576
Riverfront DevelopmentParking Spaces Managed 6,317 6,317 6,317 6,317 6,317 7,077 7,641 7,768 7,401 7,085
Main Street Parking GarageParking Spaces Managed 700 700 700 700 700 700 694 694 692 693
Rotary FundsSheriff's Road Patrol Division
Jurisdictions Served 8 7 7 7 7 6 7 7 8 8 Central Warrants/Identification Division
Expungements Processed 1,338 2,095 2,184 2,565 1,846 1,862 2,847 3,566 3,212 4,352Warrants/Capias Processed 131,166 138,090 144,059 147,637 184,546 185,012 155,464 143,354 118,518 114,314Offender Fingerprints Processed 62,780 58,806 54,693 49,945 46,561 45,442 53,796 49,785 40,846 34,962Public Fingerprint Services Provided 14,350 14,498 15,755 27,079 26,240 20,537 19,215 26,240 23,773 20,537
Communications CenterEmergency 911 Telephone Calls Processed 897,327 899,202 900,000 902,000 766,452 589,542 745,139 688,817 681,755 658,761 Police, Fire and Rescue Unit Calls Processed 450,875 555,777 585,000 587,000 598,359 580,428 570,475 547,852 555,778 583,312
Workers' Compensation Reserve for StadiumsClaims Managed 16 (11) 10 (11) 5 (11) 8 (11) 6 (11) 5 (11) 4 (10) 4 (10) - 1
Sources: Hamilton County, Ohio, 2004-2008 BudgetsHamilton County AuditorVarious Hamilton County DepartmentsHamilton County Job and Family Services, 1996-2005Supreme Court of Ohiohttp://www.hcjfs.hamilton-co.org, 2006-2010http://www.hcso.org/GeneralInformation/AnnualReport.pdfhttp://www.sconet.state.oh.us/Publications/default.asphttp://www.bengals.com/team/historyhttp://www.baseball-reference.com/teams/CIN/attend.html
(1)Triennial reassessment, payable following year. Ohio law requires a mid-cycle value adjustment three years after the mass reappraisal to update the six-year mass reappraisal so values change gradually. (2)Mass reappraisal, payable following year. Ohio law requires counties to revalue all real property every three years. The Auditor’s Office is responsible for setting the value of properties, not the assessment of taxes. (3)Revised figure.(4)These are presidential election years.(5)The number includes new cases docketed, transferred in or reactivated as reported to the Supreme Court of Ohio.(6)Southwest Ohio Career Resource network became The Super Jobs Center in April of 2005; services changeover affected total individuals placed.(7)For fiscal years 2004–2008, the number of eligible individuals served is an unduplicated count of individuals served per year and does not represent the number of services provided to those individuals. For fiscal years 2009–2013, the number of eligible individuals served includes some individuals who received more than one service per year.(8)No resurfacing occurred due to budget constraints.(9)Yearly rainfall levels result in variances in amounts of wastewater collected and treated.(10)The number represents management of workers' compensation claims for Paul Brown Stadium and Great American Ball Park. (11)The number represents management of workers' compensation claims for Great American Ball Park. (12)Compilation of Activity Report ended in 2011.
169
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
FUNCTION/PROGRAM
Governmental Activities
General GovernmentProperties(1)(6) 7 6 8 8 8 8 8 5 5 5
JudicialProperties(1) 10 10 10 10 10 10 10 10 10 10
Public SafetyCoroner
Properties(1) 1 1 1 1 1 1 1 1 1 1Emergency Management
Office Building(2) 1 1 1 1 1 1 1 1 1 1Emergency Warning Sirens 189 189 195 195 195 195 199 199 200 199
SheriffDistrict Patrol Headquarters(3) 5 5 5 5 5 5 5 5 5 5Detention Facilities(4) 4 4 4 4 3 3 3 3 3 3
Social ServicesJob and Family Services
Properties(1) 4 4 4 4 4 4 3 3 3 3
HealthDevelopmental Disabilities Services
Properties(1) 12 13 13 13 13 12 12 12 12 12Mental Health and Recovery Services Board
Properties(1) 69 64 64 62 64 64 63 63 63 63
Public WorksPlanning and Development
Maintenance Facility 1 1 1 1 1 1 1 1 1 1Maintenance Vehicles and Equipment 30 30 30 30 29 30 31 31 30 31
County EngineerCounty Roads Maintained (Miles) 504 504 504 544 544 532 532 504 504 504Maintenance Facilities 7 6 6 6 6 6 6 6 6 7
COUNTY OF HAMILTON, OHIO CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
FISCAL YEAR
170
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014FISCAL YEAR
FUNCTION/PROGRAM
Business-Type Activities
Metropolitan Sewer DistrictMajor Wastewater Treatment Plants 7 7 7 7 7 7 7 7 7 7Combined and Sanitary Sewers (Miles) 3,050 3,050 3,050 3,050 2,994 2,994 2,994 2,990 2,991 2,994
Paul Brown StadiumPaul Brown Football Stadium 1 1 1 1 1 1 1 1 1 1Parking Garage 1 1 1 1 1 1 1 1 1 1
Baseball StadiumGreat American Ballpark Baseball Stadium 1 1 1 1 1 1 1 1 1 1Hall of Fame Museum 1 1 1 1 1 1 1 1 1 1Team Store 1 1 1 1 1 1 1 1 1 1
Riverfront DevelopmentParking Garages(7) 3 3 3 3 3 3 4 4 4 2Surface Parking Lots 5 5 5 5 5 5 5 5 5 5
Main Street Parking GarageAlms & Doepke Parkhaus Parking Garage 1 1 1 1 1 1 1 1 1 1
Communications Center911 Communications Center 1 1 1 1 1 1 1 1 1 1Radio Towers(5) 15 15 15 15 15 15 15 15 15 15Emergency Alert System - - - - - - 1 1 1 1
Sources: Hamilton County, Ohio, 2005-2008 BudgetsHamilton County AuditorVarious Hamilton County Departments
Note: No capital asset indicators are available for the following functions/programs: * the Environmental Control, Economic Development and Parks and Recreation functions* the Rotary fund
(1)Improved real properties are primarily buildings, County-owned unless otherwise indicated, presented in the function of the primary use(r).(2)The permanent Emergency Management Agency (EMA) office building, formerly housed in trailers at the Communications Center, was completed in 2005.
EMA shares space with the Homeland Security Division. The office building is leased from the City of Cincinnati.(3)Three District Patrol Headquarters are owned by townships. The Sheriff provides contracted police services.(4)The Queensgate Correctional Facility, formerly a leased property, closed in December 2008. The lease terminated 12/31/08.(5) Ten of the Communications Center towers are County-owned; the other five towers are leased.(6)Hamilton County sold Drake Hospital and the former Kahn's Meat Packing Facilities in 2012.(7)Three small garages were combined to become one large one.
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172
88 East Broad Street, Fourth Floor, Columbus, Ohio 43215-3506 Phone: 614-466-4514 or 800-282-0370 Fax: 614-466-4490
www.ohioauditor.gov
HAMILTON COUNTY FINANCIAL CONDITION
HAMILTON COUNTY
CLERK’S CERTIFICATION This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.
CLERK OF THE BUREAU CERTIFIED DECEMBER 31, 2015
APPENDIX A-2 AUDITED FINANCIAL STATEMENTS FOR HAMILTON COUNTY, OHIO
FOR THE YEAR ENDED DECEMBER 31, 2015
Neither the unaudited nor the auditedjinancial statements of the County for the year ended December 31,2015 are available at this time. It is expected that such auditedjinancial
statements will be released within the next two months.
APPENDIX A-3 AUDITED FINANCIAL STATEMENTS FOR THE METROPOLITAN SEWER
DISTRICT OF GREA TER CINCINNATI FOR THE YEAR ENDED DECEMBER 31, 2014 and 2015
The auditedjinancial statements a/the Metropolitan Sewer District a/Greater Cincinnati/or the year ended December 31, 2015 are not available at this time. It is expected that such audited
jinancial statements will be released within the next two months.
Dave Yost· Auditor of State
METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
TABLE OF CONTENTS
TITLE PAGE Independent Auditor’s Report ....................................................................................................................... 1 Management Discussion and Analysis ......................................................................................................... 5 Basic Financial Statements: Statement of Net Position ........................................................................................................................... 9 Statement or Revenues, Expenses, and Changes in Fund Net Position .............................................................................................................................. 11 Statement of Cash Flows .......................................................................................................................... 12 Notes to the Financial Statements .............................................................................................................. 13 Schedule of Federal Awards Expenditures ................................................................................................. 35 Notes to the Schedule of Federal Awards Expenditures ............................................................................ 36 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards ......................................................................................... 37 Independent Auditor’s Report on Compliance with Requirements Applicable to The Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 ........................................................................................ 39 Schedule of Findings ................................................................................................................................... 41
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1
INDEPENDENT AUDITOR’S REPORT Metropolitan Sewer District of Greater Cincinnati Hamilton County 1600 Gest Street Cincinnati, Ohio 45204 To the Hamilton County Board of Commissioners: Report on the Financial Statements We have audited the accompanying financial statements of the Metropolitan Sewer District of Greater Cincinnati, Hamilton County, Ohio (the District), as of and for the years ended December 31, 2014 and December 31, 2013 and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for preparing and fairly presenting these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes designing, implementing, and maintaining internal control relevant to preparing and fairly presenting financial statements 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 accordance with auditing standards generally accepted in the United States of America and the financial audit standards in the Comptroller General of the United States’ Government Auditing Standards. Those standards require us to plan and perform the audit to reasonably assure the financial statements are free from material misstatement. An audit requires obtaining evidence about financial statement amounts and disclosures. The procedures selected depend on our judgment, including assessing the risks of material financial statement misstatement, whether due to fraud or error. In assessing those risks, we consider internal control relevant to the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not to the extent needed to opine on the effectiveness of the District's internal control. Accordingly, we express no opinion. An audit also includes evaluating the appropriateness of management’s accounting policies and the reasonableness of their significant 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.
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov
2
Metropolitan Sewer District of Greater Cincinnati Hamilton County Independent Auditor’s Report Page 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Metropolitan Sewer District of Greater Cincinnati, Hamilton County, as of December 31, 2014 and December 31, 2013, and the changes in financial position and its cash flows for the years then ended in accordance with the accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 5 to the financial statements, during the year ended December 31, 2013, the District reclassified their Capital Assets categories. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require this presentation to include Management’s discussion and analysis listed in the table of contents, to supplement the basic financial statements. Although this information is not part of the basic financial statements, the Governmental Accounting Standards Board considers it essential for placing the basic financial statements in an appropriate operational, economic, or historical context. We applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, consisting of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, to the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not opine or provide any assurance on the information because the limited 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 District’s basic financial statements taken as a whole. The Schedule of Federal Award Expenditures presents additional analysis as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and is also not a required part of the financial statements. The schedule is management’s responsibility, and derives from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. We subjected the schedule to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling schedule directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves in accordance with auditing standards generally accepted in the United States of America. In our opinion, this schedule is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 25, 2015, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.
3
Metropolitan Sewer District of Greater Cincinnati Hamilton County Independent Auditor’s Report Page 3 That report describes the scope of our internal control testing over financial reporting and compliance, and the results 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 in considering the District’s internal control over financial reporting and compliance. Dave Yost Auditor of State Columbus, Ohio September 25, 2015
4
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THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI MANAGEMENT DISCUSSION AND ANALYSIS
(UNAUDITED)
5
This section of the Metropolitan Sewer District’s annual financial report presents our discussion and analysis of the District’s financial performance during the fiscal years ended December 31, 2014 (FY 2014) and December 30, 2013 (FY 2013). Please read it in conjunction with the District’s basic financial statements, beginning on page 10. The ending net position for December 31, 2013, has been restated to reflect the implementation of the People Soft Fixed Asset System. A discussion of these adjustments is included in Note 5. FINANCIAL HIGHLIGHTS FOR THE YEAR
Assets exceeded liabilities by $908,159,000 at the close of the 2014 fiscal year.
The District’s net position increased by $92.2 million, or 11.3%, during FY 2014 and by $23.6 million, or 2.9%, in FY 2013 (restated).
Total long-term liabilities had a net decrease of $26.5 million. There was an issuance of $162.7
million of refunding revenue bonds.
Current Liabilities –In fiscal year 2014, total current liabilities increased by $6.9 million
FINANCIAL STATEMENTS OVERVIEW Financial Reporting Entity– The Metropolitan Sewer District of Greater Cincinnati (District) is a Hamilton County enterprise fund managed and operated by the City of Cincinnati. The District is operated pursuant to the authority of the Revised Code authorizing the formation of joint sewer districts, agreements between counties and municipal corporations. The District provides sewage treatment within a service area of approximately 400 square miles and encompasses portions of four counties in southwestern Ohio. The District provides wastewater removal and treatment to over 220,000 residential, commercial, and industrial sewer connections and operates and maintains over 3,000 miles of sanitary and combined sewers, seven major wastewater treatment plants and 140 pump stations. As an enterprise fund, operations are reported on the full accrual basis of accounting: revenues are recognized when earned, and expenses are recognized when incurred. The County issues a separate Comprehensive Annual Financial Report which includes the District as a separate enterprise fund of the County. The financial statements of the District report information about the District using accounting methods similar to those used by private-sector companies. These statements provide both long-term and short-term information about the District’s overall financial status. Financial Statement Structure– In addition to the preceding report from the Auditor of the State of Ohio, the annual financial report consists of three segments:
The Management’s Discussion and Analysis provides explanations for and analysis of the Department’s financial activities based upon currently known facts, conditions, and decisions of the Department’s management. While primarily focused on current year results compared with prior years, this discussion also addresses certain long-term issues, which may, in management’s opinion, impact the District’s financial performance.
Basic Financial Statements, which depict the District’s financial position as of December 31, 2014 and 2013, along with earnings performance and cash flow information. These statements include the Statement of Net Position, the Statement of Revenues, Expenses, and Changes in Net Position and the Statement of Cash Flows.
The accompanying notes explain some of the financial statement data and provide more detailed
information.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI MANAGEMENT DISCUSSION AND ANALYSIS
(UNAUDITED)
6
Required Basic Financial Statements -- The Statement of Net Position is the first required statement; it includes the District’s assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and nature and extent of obligations (liabilities) with the difference being reported as net position. It also provides the basis for computing the rates of return, evaluating the capital structure of the District, and assessing the liquidity and financial flexibility of the District. Over time, increases or decreases in the District’s net position is one indicator of whether its financial health is improving or deteriorating. Other non-financial factors such as changes in economic conditions, population growth, and new or changed legislation also need to be considered in assessing the District’s financial condition. The Statement of Revenues, Expenses, and Change in Net Position is the second required financial statement which demonstrates the changes in net position from one fiscal period to the next by accounting for revenues and expenditures and measuring the financial results of operations. This statement measures the profitability (i.e. change in net position) of the District’s operations over the past year and can be used to determine whether the District has successfully recovered all of its costs through its user fees and other charges. The final required financial statement is the Statement of Cash Flows. The primary purpose of this statement is to provide information about the District’s cash receipts, cash payments, and net changes in cash and cash equivalents resulting from operations, investing, and capital and noncapital financing activities. It also provides information regarding sources of cash, uses of cash, and changes in cash balances during the reporting period. Notes to the audited financial statements contain information essential to understanding them, such as the District’s significant accounting policies and information about certain financial statement account balances. FINANCIAL ANALYSIS As can be seen in Table A, 54% of the District’s net positions reflect its investment in capital assets (e.g., buildings, sewer laterals, and equipment), less any related debt used to acquire those assets that is still outstanding. These capital assets are used primarily in the collection and treatment of wastewater throughout the District’s service area.
The related debt will be repaid with resources provided by system users through rates and fees. Long-term debt (net of the current portion) decreased by $41.8 million, or -4.5%, in FY 2014 and, increased by $97.1 million, or 10.6%, in FY 2013.
Net position increased $134 million in 2014. The increase is a combination of income before contributions and contributions in the form of connection fees, assessments and developer contributions.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI MANAGEMENT DISCUSSION AND ANALYSIS
(UNAUDITED)
7
Table B below shows that total operating revenues in FY 2014 totaled $265.2 million, (an increase of $5.9 million or 2.3%), compared with $259.3 million in FY 2013, (an increase of $10.2 million or 4.1% from the previous year) primarily due to increased revenues from sewerage service charges received from a January 2014 rate increase of 6% and a January 2013 increase of 5%. Meanwhile total expenses decreased by $63.9M, (or -25.5%) during 2014, while 2013 expenses increased 31.5 % (or $60.6M).
Operating expenses, excluding depreciation and amortization, decreased by $6.3 million to $120.0
million, or -5.0% primarily to decreased lower purchased services and other expenses. Operating expenses increased by 126.3% (or $24.9M) in 2013 primarily because of the increase in personnel and pension costs, contract costs originally approved as capital costs that were reclassified as operating expenses, and costs related to a one-time chemical remediation requirement.
Depreciation expenses decreased -10.8% or $6.8 million in 2014 and increased 15.8% or $8.7 million in 2013. The Fixed Assets are now in PeopleSoft Asset System.
Nonoperating expenses for 2014 decreased $50.9M (or -83.0%) due to change in interest expense
and change in the fair value of investments. 2013 increased by $27.0M (or 77.9%) due to increased interest expense from the 2013 bond issuance as well as change in the fair value of investments. $16M of the increase was due to a loss on impairment of assets.
CAPITAL ASSETS, DEBT AND RATES Change In Capital Asset Determination - -As of December 31, the District’s investment in capital assets (net of accumulated depreciation) amounted to $1,440 million and $1,404 million as shown in Table C for 2014 and 2013, respectively. In 2014, the District spent about $60.1 million on capital improvement projects and equipment replacement and received about $1.3 million in capital contributions. In 2013, the District spent about $121 million on capital improvement projects and equipment replacement and received about $5.0 million in capital contributions.
2014
Percentage
Increase
(Decrease)
over 2013
Restated
2013
Percentage
Increase
(Decrease)
over 2012
Operating revenues 265,211$ 2.3% 259,329$ 4.1%
Nonoperating revenues 9,548 ‐1.9% 9,734 11.4%
Total revenues 274,759 2.1% 269,063 4.3%
Depreciation and amortization expense 56,121$ ‐10.8% 62,938$ 15.8%
Other operating expenses 120,018$ ‐5.0% 126,289$ 24.5%
Nonoperating expenses 10,417 ‐83.0% 61,284 76.8%
Total expenses 186,556$ ‐25.5% 250,511$ 31.5%
Income before contributions 88,203$ 375.4% 18,552$ ‐73.1%
Capital contributions 3,957$ ‐21.4% 5,037$ ‐20.0%
Change in net position 92,160$ 290.7% 23,589$ ‐68.6%
Total Net Position, beginning 815,999 3.0% 792,410 10.2%
Total Net Position, ending 908,159$ 11.3% 815,999$ 2.9%
Condensed Summary of Revenues
(In Thousands)
Expenses and Changes in Net Position
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI MANAGEMENT DISCUSSION AND ANALYSIS
(UNAUDITED)
8
2014
Percentage
Increase
(Decrease)
over 2013 Restated 2013
Percentage
Increase
(Decrease)
over 2012
Land 6,481$ 0.0% 6,481$ 1.8%
Buildings 351,707 0.6% 348,490 4.8%
Equipment 489,492 5.1% 469,229 11.5%
Sewer Laterals 1,083,889 2.3% 1,057,847 4.8%
Construction in progress 319,389 10.1% 290,128 ‐9.4%
Subtotal 2,250,958$ 3.7% 2,172,175$ 0.2%
Less accumulated depreciation 810,543 5.6% 767,766 6.8%
Net capital assets 1,440,415$ 2.6% 1,404,409$ ‐3.2%
TABLE C
Capital Assets
(In Thousands)
Sewer replacement and improvement projects were about one-half of the program in 2014, and three-fourths of the program in 2013. Additional information on the District’s capital assets can be found in Note 5 to the financial statements. 2014 Bond Issuance The District finances its construction program through a combination of revenue bonds, state revolving loans through the State of Ohio and cash, with the primary source being tax-exempt revenue bonds. The District’s revenue bond rates are:
Moody’s Investors Services Aa2
Standard & Poor’s Corporation AA+ On November 19, 2014, the District completed a successful municipal issuance of $162.7 million in new tax exempt bonds and refinanced the 2003A, a portion of the 2005B, a portion of 2006A a portion of 2007A, and a portion of 2009A series bonds for a total of $181.9 million. In addition, the Eighteenth Supplemental Trust Agreement between Hamilton County, Ohio and U.S. Bank National Association, dated November 12, 2014, redefined the calculation for net income available for debt service. Revenue bond service Debt Coverage in 2014 was 202%, compared to an Agency policy of 150%, (25% higher than indenture requirements). The total debt coverage was 159% compared to the indenture requirement of 125%. Rate Increase – Effective January 9, 2015, the Hamilton County Commissioners approved an increase of the District’s sewer fee by 6%. This increase provides additional revenues necessary to ensure that all expenses (including debt service) are covered as well as meeting all bond indenture requirements. Debt service necessary to cover the issuance of municipal bonds required to pay for the District’s large capital program will require annual rate increases into the near future. Effective March 2015, MSD issued a Sewer System Refunding Revenue Bonds, 2015 Series A, in the amount of $52,520,000. For additional information on the Management Discussion and Analysis please contact:
Metropolitan Sewer District of Greater Cincinnati Office of the Director
1600 Gest Street Cincinnati, OH 45204
Restated2014 2013
ASSETS
Current assets: Cash, cash equivalents and pooled investments held by the City of Cincinnati (Note 2) 53,018$ 20,551$ Accounts receivable (Note 3) 75,634 49,462 Prepaid expenses and other 1,483 1,409Total current assets 130,135 71,422
Noncurrent assets: Restricted assets: Cash, cash equivalents, and pooled investments held by the City of Cincinnati Construction account (Note 2) 6,295 52,084 Amount to be transferred to surplus account (Note 2) 33,513 56,048 Held by trustee: (Note 4) Cash and cash equivalents (Note 2) 1,696 250 Investments - Held to maturity (Note 2) 404,431 373,450Total restricted assets 445,935 481,832
Other assets: Other 157 158Total other assets 157 158
Capital assets: (Note 5) Land 6,481 6,481 Buildings 351,707 348,490 Sewer Laterals 1,083,889 1,057,847 Equipment 489,492 469,229 Construction in progress 319,389 290,128Total capital assets 2,250,958 2,172,175
Less: Accumulated depreciation (810,543) (767,766)
Net capital assets 1,440,415 1,404,409
Total noncurrent assets 1,886,507 1,886,399
Total assets 2,016,642$ 1,957,821$
Deferred outflow of resources Deferred charges on refunding 15,283$ 1,510$
(Continued)
The notes to the financial statements are an integral part of the financial statements
Metropolitan Sewer DistrictStatement of Net Position
For The Periods Ended December 31, 2014 And December 31, 2013( All amounts expressed in thousands)
9
Restated2014 2013
LIABILITIES
Current liabilities: Payable from current assets: Current portion of long-term debt (Note 6) 61,765$ 55,759$ Current portion of compensated absences (Note 8) 3,786 3,761 Accounts payable 6,257 7,792 Accrued payroll expenses 2,633 1,320Total current liabilities payable from current assets 74,441 68,632
Payable from restricted assets: Construction accounts payable 9,552 8,556 Accrued interest payable 2,908 2,815Total current liabilities payable from restricted assets 12,460 11,371
Total current liabilities 86,901 80,003
Noncurrent liabilities: Accrued compensated absences (Note 8) 4,746 5,124 Long-term debt (Note 6) 972,844 1,008,612 Net Pension Obligation 46,819 37,957 Net Other Post Employment Benefit Obligation 12,456 11,636Total noncurrent liabilities 1,036,865 1,063,329
Total liabilities 1,123,766$ 1,143,332$
Net position: Net investment in capital assets 501,260$ 426,159$ Restricted 8,454 8,423 Unrestricted 398,445 381,417Total net position 908,159$ 815,999$
The notes to the financial statements are an integral part of the financial statements
Statement of Net PositionFor The Periods Ended December 31, 2014 And December 31, 2013
( All amounts expressed in thousands)
Metropolitan Sewer District
(Continued)
10
Restated2014 2013
REVENUES
Operating revenues: Sewerage service charges 237,346$ 231,958$ Sewer surcharges 20,119 18,424 All other revenues 7,746 8,947Total operating revenues 265,211 259,329
EXPENSES
Operating expenses: Personnel services 55,487 51,291 Purchased services 35,707 42,274 Utilities, fuel and supplies 19,668 20,579 Depreciation and amortization 56,121 62,938 Other expenses 9,156 12,145Total operating expenses 176,139 189,227Operating income 89,072 70,102
NONOPERATING
Nonoperating revenues (expenses): Interest income 9,548 9,445 Change in fair value of investments 33,010 (5,132) Interest expense (43,427) (40,049) Loss on impairment of assets 0 (16,103) Retirement of capital assets 0 289Total nonoperating revenues (869) (51,550)
Income (Loss) before contributions 88,203 18,552
Capital contributions 3,957 5,037Change in net position 92,160 23,589
Total net position, beginning - as restated (NOTE 5) 815,999 792,410Total net position, ending 908,159$ 815,999$
The notes to the financial statements are an integral part of the financial statements
Metropolitan Sewer DistrictStatement of Revenues, Expenses and Changes in Fund Net Position
For The Periods Ended December 31, 2014 And December 31, 2013( All amounts expressed in thousands)
11
Restated2014 2013
Cash flows from Operating Activities: Cash received from customers 262,681$ 245,155$ Cash payments for goods and services (58,550) (58,473) Cash payments for personnel costs (45,514) (46,047) Other operating revenues 3,346 8,267Net Cash Provided by Operating Activities 161,963 148,902
Cash Flows from Capital and Related Financing Activities: Principal and interest payments on long-term debt (96,536) (89,944) Acquisition and construction of capital assets (75,910) (105,688) Loan proceeds 2,434 9,287 Grant Proceeds 0 1,183 Transfer into construction account from trustee investment account 2013 Year (32,048) Transfer into construction account from trustee investment account 24,000 73,070 Transfer from operating cash account to trustee investment account (24,000) (73,070) Tap-in fees 2,855 3,056 Gain/loss from sale of property, plant and equipment 189 289Net Cash (Used) by Capital and Related Financing Activities (199,016) (181,817)
Cash Flows from Investing Activities: Purchase of government securities 1,446 122 Net increase in fair value of pooled cash and investments held by City of Cincinnati 209 (901) Interest earned on investments 989 1,096Net Cash Provided (Used) by Investing Activities 2,644 317Net Increase (Decrease) in Cash and Cash Equivalents (34,409) (32,598)Cash and Cash Equivalents at January 1 128,931 161,529Cash and Cash Equivalents at December 31 94,522$ 128,931$
Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Income from operations 89,072$ 70,102$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 56,121 62,938 Capital Expenses moved to Operating 5,130 10,879 Changes in assets and liabilities: Net change in customer accounts receivable 5,914 (4,451) Net change in other assets (74) (57) Net change in operating accounts payable (1,535) 4,327 Net change in accrued payroll and related expenses 960 (231) Net Pension Obligation 8,862 5,494 Net Other Post Employment Benefit Obligation 820 (99) Net Change in cash received from customers (1,617) 0 Net Change in Cash in Transit 36 0 Net Change in Accrued Payroll Change (307) 0 Net Change in OWDA Loan Forgiveness 2014 (841) 0 Net Change in Capital Expenses 7600 not moved to Fixed Assets in Fund 701 (578) 0Net Cash Provide by Operating Activities 161,963$ 148,902$
Non-cash Transactions: Structures donated as contributed capital in aid of construction 2,182$ 2,169$ Acquisition and construction of capital asset paid directly by WPCLF loan proceeds 16,955 16,182 Construction accounts payable related to acquisition of capital assets 9,552 8,556
Metropolitan Sewer DistrictStatement of Cash Flows
For The Periods Ended December 31, 2014 And December 31, 2013
12
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
13
NOTE 1 - ACCOUNTING POLICIES A summary of the significant accounting policies applied in the accompanying financial statements follows: Organization The Metropolitan Sewer District of Greater Cincinnati (MSD), an enterprise fund of the County of Hamilton, Ohio, collects and treats industrial and residential wastewater for municipalities and unincorporated areas of Hamilton County. MSD was formed on April 10, 1968, pursuant to resolutions of the Board of County Commissioners of Hamilton County and Ordinances of the City of Cincinnati, providing for a consolidation of the City Sewer Department and the County Sewer District. Under a contract with the City of Cincinnati, the Board designated the City as its agent for the maintenance and operation of MSD. The annual budget, prepared on a non-GAAP budgetary basis of accounting, is approved by the Board and administered by the City. Budgetary control is exercised at the divisional level, and between personnel and all other costs. The County issues a separate Comprehensive Annual Financial Report which includes MSD as a separate enterprise fund of the County. Basis of Accounting The accompanying financial statements were prepared on the accrual basis of accounting, whereby revenues and expenses are recognized in the period earned or incurred. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Statement of Cash Flows For purposes of the Statements of Cash Flows, all highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Pooled cash and investments held by the City of Cincinnati are considered cash equivalents by MSD. Investments MSD is required by Ohio law to invest in only United States obligations; federal agency securities; Ohio bonds and other obligations or such obligations of political subdivisions of the state, provided that the subdivisions are located within Hamilton County; time certificates of deposit or deposit accounts in an eligible institution; and no load money market mutual funds consisting only of investments mentioned above. Investments are required to mature within five years from the date of settlement, unless the investment is matched to a specific obligation or debt of MSD. Investment securities are stated at fair value, which is based on the quoted market prices or current share prices.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
14
NOTE 1 - ACCOUNTING POLICIES (Continued) Prepaids Payments made for services that will benefit periods beyond December 31, 2014, are recorded as prepaids using the consumption method. A current asset for the prepaid amount is recorded at the time of the purchase and an expense is reported in the year in which services are consumed. Inventory Supplies and materials are stated at the lower cost or market on a first-in, first-out (FIFO) basis. Capital Assets Capital assets include land, construction in progress, buildings, sewer laterals and studies, and equipment. Capital assets are defined as assets with an initial, individual cost of more than $5,000. Capital assets are stated at historical cost for assets acquired after MSD’s inception in 1968. Assets which were acquired prior to 1968 and not identifiable with specific historical costs are not included in the capital assets balance. Assets acquired by MSD through contributions, such as contributions from land developers and federal and state grants, are capitalized and recorded in the plant records at the contributors’ reported cost. Construction costs include interest capitalized on debt during the period of construction and the cost of in-force labor. See note 5 for more information on capital assets. Land acquired for MSD’s use is titled to either the City of Cincinnati or Hamilton County. The cost of this land has been recorded on the books of MSD since it has the full benefit of the land as an economical resource. Depreciation expense is computed on the straight-line method over the estimated useful lives of the respective assets. The estimated lives are as follows: Building 40 years Sewer Laterals 40 years Equipment 5-25 years Any gain or loss arising from the disposal of capital assets has been credited or charged to income. Unamortized Financing Costs The unamortized financing costs include insurance, consulting and attorney fees incurred in connection with the revenue bond obligations. These amounts are being amortized on the straight-line method over the lives of the revenue bonds. Bond premiums and discounts are being amortized on the interest method over the lives of the revenue bonds. Pension Plans Employees participate in either the City of Cincinnati’s Retirement System or the Public Employees Retirement System administered by the State of Ohio. Pension costs reflect a percentage of employees’ gross pay, as defined by the terms of pension plans in which employees participate. While MSD’s policy is to fund pension costs accrued, this did not occur in 2013 or 2014. See Note 9.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
15
NOTE 1 - ACCOUNTING POLICIES (Continued) Compensated Absences Compensated absences include accrued vacation time, sick leave, compensatory time and other related payments. Compensatory time and vacation time are paid out in full upon termination and are expensed in the year earned. Sick leave is paid out at various levels. The liability for sick leave is computed with the Termination Payment Method using an historical average of total years worked and total amount paid. The current amounts are an average of the annual expenditures. The entire compensated absence liability is reported on the financial statements. Net Position Net positions are the difference between assets and liabilities. Net investment in capital assets are capital assets less accumulated depreciation and any outstanding long-term debt related to the acquisition, construction or improvement of those assets. Net positions are reported as restricted when there are legal limitations that are imposed on their use by county legislation or external restrictions by other governments, creditors or grantors. Restricted net positions of the MSD relate to debt service. MSD applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net positions are available. MSD does not have net position restricted by enabling legislation. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the proprietary fund. For the District, these revenues are charges for services for wastewater treatment. Operating expenses are necessary costs incurred to provide the service that is the primary activity of the fund. Contributions of Capital Contributions of capital arise from outside contributions of capital assets or outside contributions of resources restricted to capital acquisition and construction. NOTE 2 - DEPOSITS AND INVESTMENTS Deposits State statues classify monies held by the District into three categories. Active deposits are public deposits necessary to meet current demands on the treasury. Such monies must be maintained either as cash in the District’s Treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts. Inactive deposits are public deposits that the District has identified as not required for use within the current two year period of designation of depositories. Inactive deposits must either be evidenced by certificates 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.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
16
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) Interim deposits are deposits of interim monies. Interim monies are those monies which are not needed for immediate use but which will be needed before the end of the current period of designation of depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than one year from the date of deposit or by savings or deposit accounts including passbook accounts. Protection of the District’s deposits is provided by the Federal Deposit Insurance Corporation (FDIC), by eligible securities pledged by financial institution as security for repayment, by surety company bonds deposited with the finance director by the financial institution or by a single collateral pool established by the financial institution to secure the repayment of all public monies deposited with the institution. Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. The District’s policy for deposits is collateral is required for demand deposits and certificates of deposit at 105 percent of all deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities, school districts, and district corporations. Obligations pledged to secure deposits must be delivered to a bank other than the institution in which the deposit is made. Written custodial agreements are required. The District is required to categorize deposits and investments according to GASB Statement No. 3 Deposits with Financial Institutions, Investments, and Reverse Purchase Agreements. The carrying value of the District’s deposits was $92,826,000 and $128,682,000 at December 31, 2014 and 2013, respectively. Amounts held by the City of Cincinnati are invested on MSD’s behalf in accordance with the Cincinnati Municipal Code. Amounts held by the City are collateralized as part of the City’s cash and investment balances. For GASB 40 disclosure requirements, refer to the financial statements as of June 30, 2014 for the City of Cincinnati. Although the pledging bank has an investment and securities pool used to collateralize all public deposits, which are held in the financial institution’s name, noncompliance with federal requirements could potentially subject the District to a successful claim by the FDIC. The deposits not covered by federal depository insurance are considered uninsured and uncollateralized and subject to custodial credit risk. Investments State Statute, board of county commissioners resolutions, and the 1985 Trust Indenture as amended authorize the District to invest in obligations of U. S. Treasury, agencies and instrumentalities, certificates of deposit, repurchase agreements, money market deposit accounts, municipal depository funds, super NOW accounts, sweep accounts, separate trading of registered interest and principal of securities, mutual funds, bonds and other obligations of this State, and the State Treasurer’s investment pool. Repurchase agreements are limited to 30 days and the market value of the securities must exceed the principal value of the agreement by at least 2 percent and be marked to market daily. Investments in stripped principal or interest obligations reverse repurchase agreements and derivatives are prohibited. The issuance of taxable notes for the purpose of arbitrage, the use of leverage and short selling are also prohibited. An investment must mature within five years from the date of purchase unless matched to a specific obligation or debt of the District, and must be purchased with the expectation that it will be held to maturity. Investments may only be made through specified dealers and institutions. Payment for investments may be made only upon delivery of the securities representing the investments to the finance director or, if the securities are not represented by a certificate, upon receipt of confirmation of transfer from the custodian. The District has no investment policy that addresses interest rate risk.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
17
Investment Type Fair Value % of Total
Investments held by the City of Cincinnati 93,172$ 18.66
U. S. Government Security 404,431 81.00
Money Market Funds 1,696 0.34
499,299$ 100.00
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Federal National Mortgage Association Notes, Federal Home Loan Mortgage Corporation Notes, and the Federal Home Loan Bank Notes are exposed to custodial credit risk in that they are uninsured, unregistered, and held by the counterparty’s trust department or agent but not in the District’s name. The District has no investment policy dealing with investment custodial risk beyond the requirement in state statute that prohibits payment for investments prior to the delivery of the securities representing such investments to the Treasurer or qualified trustee. Funds held by the trustee are eligible investments as defined by the Trust Agreement and are in the name of the trustee for the benefit of MSD. Investments made by MSD are summarized below. Trustee account investments are categorized according to credit risk into the following categories: (1) insured or registered, or securities held by MSD’s or its agent (bank trust department) in the MSD’s name; or (2) uninsured and unregistered, with securities held by the counterparty’s trust department or agent in the MSD’s name; or (3) uninsured, unregistered securities held by the counterparty, or its trust department or agent but not in MSD’s name. Money market funds are unclassified investments since they are not evidenced by securities that exist in physical or book entry form. As stated in GASB Statement No. 40, obligations of the U. S. government or obligations explicitly guaranteed by the U. S. government are not considered to have credit risk and do not require disclosure of credit quality. The money market funds are invested in a treasury obligation fund with a Moody’s credit rating of Aaa. Concentration of Credit Risk: The Metropolitan Sewer District uses the City of Cincinnati’s Investment Policy which addresses concentration of credit risk by requiring investments to be diversified to reduce risk of loss resulting from over concentration of assets in a specific issue or class of security. The following table includes the percentage of each investment type held by MSD at December 31, 2014.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
18
2014 2013
Sewer charges and surcharges:
Unbilled amount 25,026$ 23,795$
Billed amount 27,062 26,449
Less allowance for doubtful accounts (10,768) (9,717) Other 34,314 8,935
Total 75,634$ 49,462$
(all amounts in thousands)
The classification of cash and cash equivalents and investments on the financial statements is based on criteria set forth in GASB Statement No. 9. A reconciliation between the classifications of cash and investments on the financial statements and the classification per GASB Statement No. 3 is as follows: NOTE 3 - ACCOUNTS RECEIVABLE Accounts receivable consist of the following:
Cash and Cash
December 31, 2014 Equivalents Investments
GASB Statement No. 9 94,868$ 404,431$
Money Market Funds (1,696) 1,696
Total 93,172$ 406,127$
Cash and Cash
December 31, 2013 Equivalents Investments
GASB Statement No. 9 128,931$ 373,452$
Money Market Funds (249) 249
Total 128,682$ 373,701$
(all amounts in thousands)
(all amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
19
2014 2013
Held by trustee:
Reserve 81,848$ 81,020$
Replacement and improvement ‐ 5,665
Bond retirement 4,531 8,423
Surplus 319,748 278,593
Total 406,127$ 373,701$
(all amounts in thousands)
NOTE 4 - RESTRICTED ASSETS The Trust Agreement for the Series A Revenue Bonds (see Long-Term Debt Note) requires the establishment of certain trust accounts including a Bond Account, Bond Reserve Account, Replacement and Improvement Account, and a Surplus Account to be held by the Trustee. The Bond Account will be used to accumulate periodic principal and interest payments. The Bond Reserve Account will be funded in an amount equal to the highest annual future debt service requirement. The Surplus Account is available to be used for any other Sewer System purpose. The Trust Agreement also requires the creation of a Construction Account to be held by the City to pay for project costs. At December 31, 2014 and 2013 the following balances (at fair value) were maintained in the trust accounts:
NOTE 5 - CAPITAL ASSETS
December 31,2014
Beginning
Balance
12/31/13 Adjustment Reclassification
Revised Balance
12/31/13 Increase Decrease
Ending
Balance
12/31/2014
Capital Assets, not being depreciated:
Land 6,481$ 6,481$ ‐$ 6,481$
Construction in progress 290,128 290,128 90,808 (61,547) 319,389
296,609$ 296,609$ 90,808$ (61,547)$ 325,870$
Capital Assets, being depreciated:
Buildings & Structures 1,345,176 (1,345,176) 0 ‐ ‐ ‐
Buildings 348,490 348,490 3,217 351,707
Sewer Laterals ‐ 1,057,847 1,057,847 37,041 (10,999) 1,083,889
Process Systems 477,004 (477,004) 0 ‐ ‐ ‐
Office and service Equipment 52,831 555 (53,386) 0 ‐
Equipment 469,229 469,229 21,100 (837) 489,492
1,875,011 555 ‐ 1,875,566 61,358 (11,836) 1,925,088
‐
Total Capital Assets 2,171,620$ 555$ ‐$ 2,172,175$ 152,166$ (73,383)$ 2,250,958$
Less accumulated depreciation:
Buildings & Structures 488,036 (488,036) 0 ‐ ‐ ‐
Buildings 117,769 117,769 7,364 125,133
Sewer Laterals ‐ 368,120 368,120 23,901 ‐ 392,021
Equipment 281,877 281,877 12,349 (837) 293,389
Process Systems 235,632 (235,632) 0 ‐ ‐
Office and service Equipment 44,107 (9) (44,098) 0 ‐ ‐ ‐
Total Accumulated Depreciation 767,775 (9) ‐ 767,766 43,614 (837) 810,543
Net Capital Assets 1,403,845$ 564$ ‐$ 1,404,409$ 108,552$ (72,546)$ 1,440,415$
(all amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
20
NOTE 5 - CAPITAL ASSETS (Continued) Reclassifications The Fixed Asset record system was converted from Excel spreadsheet to the PeopleSoft Fixed Asset Computer System in 2014. As a result, capital asset classifications were updated to better align the assets with reality and accuracy. Adjustments During the implementation of the People Soft Fixed Asset System, the ending net position for 2013 was adjusted to correct the Peachtree General Ledger Capital Asset Balances to the 2013 Audit Report in the amount of $555 in Capital Assets and $9 in Accumulated Depreciation. Net Positions As a result of the capital asset adjustments, the net position was restated by $564,000, from $815,435,000 to $815,999,000. Ending Net Position at 12/31/13 $815,435 Restated Ending Net Position at 12/31/13 $815,999 Adjustments $ 564
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
21
NOTE 5 - CAPITAL ASSETS (Continued) The following summarizes the changes in capital assets during 2013:
Beginning Ending
Balance Increase Decrease Balance
Capital Assets, not being depreciated:
Land $6,364 117$ ‐$ $6,481
Construction in progress 320,353 130,278 (160,503) 290,128
326,717 130,395 (160,503) 296,609
Capital Assets, being depreciated:
Buildings and structures 1,294,889 50,287 ‐ 1,345,176
Processing systems 417,342 70,660 (10,998) 477,004
Office and service equipment 51,239 2,871 (1,279) 52,831
1,763,470 123,818 (12,277) 1,875,011
Total Capital Assets 2,090,187 254,213 (172,780) 2,171,620
Less accumulated depreciation:
Buildings and structures 456,714 31,322 ‐ 488,036
Processing systems 220,038 15,594 ‐ 235,632
Office and service equipment 41,795 3,580 (1,268) 44,107
Total Accumulated Depreciation 718,547 50,496 (1,268) 767,775
Net Capital Assets 1,371,640$ 203,717$ (171,512)$ 1,403,845$
(all amounts in thousands)
December 31, 2013
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
22
NOTE 6 - LONG-TERM DEBT Long-term debt consisted of the following:
Principal Interest Year ofIssue Rate % Maturity 2014 2013
Revenue Bonds2014 162,650$ 4.00‐5.00 2032 162,650$
2013 (a) 258,695 0.45‐5.00 2038 233,620 258,225$ 2010 (a) 130,675 2.00‐5.37 2035 122,690 123,5502009 (b) 149,815 4.00‐6.50 2034 143,025 149,815 2007 (c) 72,385 3.50‐5.25 2032 6,740 61,335 2006 (d) 83,045 4.00‐5.00 2031 5,265 68,360 2005 (e) 170,560 2.50‐5.00 2030 63,090 135,265 2004 (f) 46,385 2.00‐5.00 2017 ‐ 1,420 2003 (g) 215,575 1.50‐5.25 2028 ‐ 750 2001 (h) 76,000 2.30‐5.25 2026 ‐ ‐
737,080 798,720
Ohio Water and SewerRotary Commission ‐ ‐ ‐ 50 50
Ohio Public Works Commission ‐ 0.00‐3.00 2041 1,687 2,012 Water Pollution Control Loan Fund ‐ 2.50‐3.50 2037 221,262 216,609 Capital Lease Payable 15,000 2.00‐5.00 2029 12,135 12,735
Total obligations 972,214 1,030,126
Bond premiums 62,022 34,245 Deferred loss on defeasance (15,282) (1,510) Current maturities (61,765) (55,759)
Long‐term portion 957,189$ 1,007,102$
(all amounts in thousands except percents)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
23
NOTE 6 - LONG-TERM DEBT (Continued) Principal and interest payments on long-term debt for the next five years and thereafter are as follows:
Year Principal Interest Principal Interest Principal Interest Principal Interest
2015 43,470$ 34,900$ 17,136$ 7,477$ 330$ 27$ 620$ 495$ 2016 43,615 33,871 16,993 6,904 248 21 635 480 2017 45,330 32,648 16,958 6,396 252 17 650 462 2018 23,320 32,199 17,232 5,883 185 12 670 443 2019‐2023 137,595 137,011 66,462 22,262 470 22 3,790 1,779 2024‐2028 194,670 89,793 64,109 12,295 67 - 4,705 867 2029‐2033 164,795 39,686 45,402 3,152 52 - 1,065 48 2034‐2038 84,285 7,485 902 47 52 - - - 2039‐2042 ‐ ‐ ‐ 32 - - -
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 737,080$ 407,593$ 245,194$ 64,416$ 1,688$ 99$ 12,135$ 4,574$
* ‐ This amount represents the total amount of the loans, some of which have not been fully drawndown or finalized and includes OWDA Loans.
(all amounts in thousands)Capital LeaseRevenue Bonds WPCLF* OPWC
Bond discount, premium, loss on defeasance activity for the year:
Beginning EndingBalance Amortized Refunded Issued Balance
Bond premium 34,245$ (3,237)$ (5,815)$ 36,830$ 62,023$ Loss on defeasance (1,510) 1,177 ‐ (14,949) (15,282)
Total 32,735$ (2,060)$ (5,815)$ 21,881$ 46,741$
Beginning EndingBalance Amortized Refunded Issued Balance
Bond premium 23,801$ (3,288)$ (6,303)$ 20,035$ 34,245$ Loss on defeasance (3,019) 26 ‐ 1,483 (1,510)
Total 20,782$ (3,262)$ (6,303)$ 21,518$ 32,735$
December 31, 2014
December 31, 2013
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
24
NOTE 6 - LONG-TERM DEBT (Continued) Long-term debt activity for the year: Revenue Bonds a) Effective November 19, 2014, MSD issued $162,650,000 Series A, Sewer System Refunding
Revenue Bonds dated November 19, 2014. The proceeds from the 2014 Series A Bonds were used to defease portions of the 2003, 2005, and 2006 revenue bonds and pay for the cost of issuance. The 2014A bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on parity with the 1997, 2000, 2001, 2003A, 2003B 2004 2005A, 2005B, 2006, 2007 2009A, and 2009B bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited
in an irrevocable trust with an escrow agent to provide for all future debt service to refund $750,000 of outstanding 2003 Series A Bonds, $61,190,000, of outstanding 2005 Series B Bonds, $60,620,000 of outstanding 2006 Series A Bonds, $52,505,000 of outstanding 2007 Series A Bonds, and $6,790,000 of outstanding 2009 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet.
Although the refunding resulted in the recognition of an accounting loss of $14,949,000 in
accordance with GASB 23, Accounting and Financial Reporting for Refundings of Debt Reported by Proprietary Activities, MSD has, in effect, reduced its aggregate debt service payments by $70,966,000, and obtained a present value of savings of $24,543,000.
Beginning Ending
Balance Additions Reductions Balance
Revenue Bonds 798,720$ 162,650$ 224,290$ 737,080$
Ohio Water Development Authority ‐ ‐ ‐ ‐
Ohio Water and Sewer Rotary Commiss 50 ‐ ‐ 50
Ohio Public Works Commission 2,012 ‐ 325 1,687
Water Pollution Control Loan Fund 216,609 16,113 11,460 221,262
Capital Lease Payable 12,735 ‐ 600 12,135
Total 1,030,126$ 178,763$ 236,675$ 972,214$
Beginning Ending
Balance Additions Reductions Balance
Revenue Bonds 718,330$ 258,695$ 178,305$ 798,720$
Ohio Water Development Authority 136 ‐ 136 ‐
Ohio Water and Sewer Rotary Commiss 50 ‐ ‐ 50
Ohio Public Works Commission 2,328 ‐ 316 2,012
Water Pollution Control Loan Fund 201,526 25,468 10,385 216,609
Capital Lease Payable 13,325 ‐ 590 12,735
Total 935,695$ 284,163$ 189,732$ 1,030,126$
December 31, 2013
December 31, 2014
(all amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
25
NOTE 6 - LONG-TERM DEBT (Continued) b) Effective July 31, 2013, MSD issued $178,760,000 Series A, Sewer System Refunding Revenue
Bonds and $79,935,000 Series B, Sewer System Refunding Revenue Bonds dated July 31, 2013. A portion of the proceeds from the 2013 Series A and 2013 Series B Bonds were used to defease portions of the 2003 and 2004 revenue bonds and pay for the cost of issuance. The 2013A bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on parity with the 1997, 2000, 2001, 2003A, 2003B 2004 2005A, 2005B, 2006, 2007 2009A, 2009B, 2010A, and 2010B bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service to refund $112,720,000 of outstanding 2003 Series A Bonds, and $28,470,000 of outstanding 2004 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet. The remaining proceeds from the 2013 Series A and 2013 Series B bonds were used to permanently fund certain previous capital expenditures and fund the new bond reserve requirements.
c) Effective November 3, 2010, MSD issued $43,595,000 Series A, Sewer System Refunding
Revenue Bonds dated November 3, 2010. The proceeds from the 2010 Series A Bonds were used to defease portions of the 2000, 2001, and 2003 revenue bonds and pay for the cost of issuance. The 2010A bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on parity with the 1997, 2000, 2001, 2003A, 2003B 2004 2005A, 2005B, 2006, 2007 2009A, and 2009B bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited
in an irrevocable trust with an escrow agent to provide for all future debt service to refund $2,730,000 of outstanding 2000 Series A Bonds, $25,290,000 of outstanding 2001 Series A Bonds, and $17,035,000 of outstanding 2003 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet.
Although the refunding resulted in the recognition of an accounting loss of $3,379,000 in
accordance with GASB 23, the District in effect reduced its aggregate debt service payments by $8,824,000 and obtained and economic gain (difference between the present values of the old and new debt service payments) of $5,304,000.
Effective November 3, 2010, MSD issued $87,080,000 Series B Sewer System Improvement Revenue Bonds (Build America Bonds) dated November 3, 2010. The proceeds from the 2010 Series B bonds were used to permanently fund certain previous capital expenditures, fund the new bond reserve requirements and pay the cost of issuance. The 2010 Series B bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1997, 2000, 2001, 2003A, 2003B, 2004, 2005A, 2005B, 2006, 2007, 2009A, and 2009B bonds, secured equally and ratably under the Trust Agreement.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
26
NOTE 6 - LONG-TERM DEBT (Continued) d) Effective August 25, 2009, MSD issued $19,515,000 Series A Sewer System Improvement
Revenue Bonds dated August 11, 2009, and $130,300,000 Series B Sewer System Improvement Revenue Bonds (Build America Bonds) dated August 11, 2009. The proceeds from the 2009 Series A bonds and 2009 Series B bonds were used to permanently fund certain previous capital expenditures, fund the new bond reserve requirements and pay the cost of issuance. The 2009 Series A bonds and 2009 Series B bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1993, 1995, 1997, 2000, 2001, 2003A, 2003B, 2004, 2005A, 2005B, 2006 and 2007 bonds, secured equally and ratably under the Trust Agreement.
e) Effective December 20, 2007, MSD issued $72,385,000 Series A Sewer System Improvement
Revenue Bonds dated December 1, 2007. The proceeds from the 2007 Series A bonds were used to permanently fund certain previous capital expenditures, fund the new bond reserve requirements and pay the cost of issuance. The 2007 Series A bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1993, 1995, 1997, 2000, 2001, 2003A, 2003B, 2004, 2005A , 2005B and 2006 bonds, secured equally and ratably under the Trust Agreement.
f) Effective November 15, 2006, MSD issued $83,045,000 Series A Sewer System Improvement
Revenue Bonds dated November 1, 2006. The proceeds from the 2005 Series B bonds were used to permanently fund certain previous capital expenditures, fund the new bond reserve requirements and pay the cost of issuance. The 2006 Series A bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1993, 1995, 1997, 2000, 2001, 2003A, 2003B, 2004, 2005A and 2005B bonds, secures equally and ratably under the Trust Agreement.
g) Effective March 30, 2005, MSD issued $86,960,000 Series A, Sewer System Refunding Revenue
Bonds dated March 1, 2005. The proceeds from the 2005 bonds were used to defease portions of the 1997, 2000 and 2001 revenue bonds and pay for the cost of issuance. The 2005A bonds are special obligations of the District, payable solely form the net revenues of the District and were issued on parity with the 1993, 1995, 1997, 2000, 2001, 2003A, 2003B and 2004 bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited
in an irrevocable trust with an escrow agent to provide for all future debt service to refund $46,980,000 of outstanding 1997 Series A Bonds, $20,665,000 of outstanding 2000 Series A Bonds and $19,280,000 of outstanding 2001 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet.
Although the refunding resulted in the recognition of an accounting loss of $5,211,000 in
accordance with GASB 23, the District in effect reduced its aggregate debt service payments by $5,201,000 and obtained and economic gain (difference between the present values of the old and new debt service payments) of $3,748,000.
Effective November 9, 2005, MSD issued $83,600,000 Series B Sewer System Improvement
Revenue Bonds dated November 1, 2005. The proceeds from the 2005 Series B bonds were used to permanently fund certain previous capital expenditures, fund the new bond reserve requirements and pay the cost of issuance. The 2005 Series B bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1993, 1995, 1997, 2000, 2001, 2003A, 2003B, 2004 and 2005A bonds, secures equally and ratably under the Trust Agreement.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
27
NOTE 6 - LONG-TERM DEBT (Continued) h) Effective October 5, 2004, MSD issued $46,385,000 Series A, Sewer System Refunding Revenue
Bonds dated September 1, 2004. The proceeds from the 2004 bonds were used to defease portions of the 1995, 1997 and 2000 revenue bonds and pay for the cost of issuance. The 2004 bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on parity with the 1993, 1995, 1997, 2000, 2001, and 2003 Series A and 2003 Series B bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service to refund $34,215,000 of outstanding 1995 Series A Bonds, $6,280,000 of outstanding 1997 Series A Bonds, and $6,400,000 of outstanding 2000 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet.
Although the advance refunding resulted in the recognition of an accounting loss of $3,163,000 to
be amortized over future periods in accordance with GASB 23, the District in effect reduced its aggregate debt service payments by $3,850,000 and obtained an economic gain (difference between the present values of the old and new debt service payments) of $3,001,000.
i) Effective July 9, 2003 and September 4, 2003, MSD issued $160,065,000 Series A, dated June 1,
2003 and $55,510,000 Series B, dated September 1, 2003, respectively, County of Hamilton, Ohio Sewer System Improvement and Refunding Revenue Bonds. The proceeds from the 2003 bonds were used to permanently fund certain previous capital expenditures, defease portions of the 1993 and 1995 Series A bond issues, provide funds for new projects, fund the new bond reserve requirement and pay for the cost of issuance. The 2003 bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on parity with the 1993, 1995, 1997, 2000, and 2001 Series A bonds, secured equally and ratably under the Trust Agreement.
A portion of the proceeds was used to purchase U.S. Government Securities which were deposited in an irrevocable trust with an escrow agent to provide for all future debt service to refund $111,430,000 of outstanding 1993 Series A Bonds and $17,125,000 of outstanding 1995 Series A Bonds. As a result, these bonds are considered defeased and the liability for those bonds removed from the balance sheet.
Although the advance refunding resulted in the recognition of an accounting loss of $7,154,000 to
be amortized over future periods in accordance with GASB 23, the District in effect reduced its aggregate debt service payments by $19,250,000 and obtained an economic gain (difference between the present values of the old and new debt service payments) of $14,719,000.
j) Effective November 14, 2001, MSD issued $76,000,000 County of Hamilton, Ohio 2001 Series A
Sewer System Improvement and Refunding Revenue bonds dated November 1, 2001. The proceeds from the 2001 bonds were used to permanently fund certain previous capital expenditures, defease a portion of the 1991 Series A bond issue, fund the new bond reserve requirement and pay for the cost of issuance. The 2001 bonds are special obligations of the District, payable solely from the net revenues of the District and were issued on a parity with the 1993, 1995, 1997 and 2000 Series A bonds, secured equally and ratably under the Trust Agreement.
The 2010, 2009, 2007, 2006, 2005, 2004, 2003, and 2001 Bonds may be redeemed prior to their maturities in accordance with provisions of the bond resolutions. The redemption process for the bonds includes declining premiums up to 2 percent of principal.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
28
NOTE 6 - LONG-TERM DEBT (Continued) At December 31, 2014 and December 31, 2013, the amount of defeased debt outstanding was $181,855,000 and $141,190,000 respectively. Maturities for bonds over the next five years and thereafter are shown below: Under the terms of the amended revenue bond trust indenture, MSD has agreed to certain covenants, among other things, to restrict additional borrowing, maintain rates sufficient to meet debt service requirements, and maintain specified fund balances under trust agreements. The Revenue bond issues as discussed above contain covenants which require the MSD to maintain a level of debt service coverage. The following calculation reflects MSD’s debt service coverage.
2014 2013Revenues:Total operating revenues 265,211$ 259,329$ Interest income 9,548 9,445 Tap‐in/connection fees 2,182 2,145
Total pledged revenue 276,941 270,919
Total operating and maintenance expenses less depreciation andamortization (120,018) (126,289)
Net income available for debt service (a) 156,923$ 144,630$
Principal and interest requirement on revenue bonds (b) 77,646$ 74,538$
Principal and interest requirements on obligations (c) 98,527$ 93,005$
Debt service coverageRevenue bonds (a) divided by (b) 202% 194%All obligations (a) divided (c) 159% 156%Maximum debt service coverage required on revenue bonds 125% 125%
(all amounts in thousands)
2014 2013 2010 2009 2007 2006 2005 2004 2003
Year Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds Bonds
2015 26,215$ 425$ - 2,165$ 2,575$ 12,090$ - -
2016 2,120$ 23,300 3,440 - 2,245 2,690 9,820 - -
2017 5,170 23,895 1,935 - 2,330 12,000 - -
2018 7,675 3,090 7,785 - - 4,770 - -
2019 8,065 3,240 8,105 5,935 - 5,030
2020‐2024 53,560 36,890 37,375 36,920 - 16,655 - -
2025‐2029 60,440 55,920 30,880 44,925 - 2,725 - -
2030‐2034 25,620 30,605 26,815 55,245 - - - -
2035‐2038 30,465 5,930 - - ‐ - - -
162,650$ 233,620$ 122,690$ 143,025$ 6,740$ 5,265$ 63,090$ ‐$ ‐$
(all amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
29
NOTE 6 - LONG-TERM DEBT (Continued) Ohio Water Development Authority Contracts
All contracts between the Ohio Water Development Authority (OWDA) and the Metropolitan Sewer District require MSD to prescribe and charge such rates for sewer usage which are sufficient (after expenses of operation and maintenance) to pay principal and interest on OWDA contracts. The principal is repayable in equal semi-annual installments to maturity. Ohio Water and Sewer Rotary Commission Advances from Ohio Water and Sewer Rotary Commission represent tap-in fees and acreage assessments to be forwarded to the Commission upon collection from customers. Such advances do not bear interest unless they are determined to be in default. Ohio Public Works Commission The MSD has entered into agreements with the Ohio Public Works Commission (OPWC) for financing of certain qualified capital projects. As the projects progress the commitments are drawn down as funds are paid by OPWC directly to the contractors. The principal is repayable in semi-annual installments to the date of maturity for each project. Water Pollution Control Loan Fund The MSD has received low interest loan commitments from the Ohio Water Pollution Control Loan fund for certain qualified projects. As the projects progress the commitments are drawn down. The principal is repayable in semi-annual installments to the date of maturity for each project. Interest on Long-Term Obligations The following interest costs were incurred and expensed or capitalized as part of the cost of MSD’s additions to capital assets.
2014 2013
Interest incurred 44,106$ 41,849$
Less Interest capitalization (635) (1,048)
Interest expense 43,471$ 40,801$
(all amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
30
NOTE 7 – CAPITAL LEASE The District issued a capital lease for a new engineering building in FY2010. The District’s lease obligation meets the criteria of a capital lease. The leased assets have been capitalized for the amount of the present value of the minimum lease payments at the inception of the lease. The following is a schedule of the future minimum lease payments required under the capital lease and the present value of the minimum lease payments as of fiscal year end.
Fiscal Year Long‐TermEnding December 31, Debt
2015 1,115$ 2016 1,1152017 1,1122018 1,1132019 1,113
2020‐2024 5,5692025‐2029 5,571
Total Minimum Lease Payments 16,708Less: Amount Representing Interest (4,573)Present Value of Minimum Lease Payments 12,135$
(all amounts in thousands)
Capital assets acquired under capital leases are as follows: Buildings and Sewer Laterals $15,000,000 NOTE 8 – COMPENSATED ABSENCES Compensated Absences Compensated absences consist of vacation time, sick pay and compensatory time. The following is a summary of activity for 2014 and 2013. $3,786 is considered due within one year for compensated absences as of December 31, 2014.
Beginning Ending
Balance Increase Decrease Balance
2014 8,885$ 3,433$ 3,786$ 8,532$
2013 9,180$ 3,466$ 3,761$ 8,885$
(al l amounts in thousands)
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
31
NOTE 9 - PENSION AND RETIREMENT City of Cincinnati Retirement System The majority of MSD full-time employees participate in the Retirement System of the City of Cincinnati (CRS). CRS is a cost-sharing, single-employer, defined benefit, public employee retirement system. The plan provides retirement, disability and death benefits to plan members and beneficiaries. CRS also provides health care benefits to vested retirees. Benefits provided under the plan are established by the Cincinnati Municipal Code. CRS issues a separate, publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the City of Cincinnati Retirement System, 801 Plum Street, Cincinnati, Ohio 45202 or by calling (513) 352-3227. The Cincinnati Municipal Code provides statutory authority for employee and employer contribution rates. For 2014, there were two required contribution rates 22 and 14, percent for MSD and 9.0 percent for employees. For 2013, the required contribution rates were 20.0 percent for MSD and 9.0 percent for employees. MSD’s contributions to CRS for the years ending December 31, 2014, 2013 and 2012 were $6,487,000, $7,224,000, and $6,893,000, respectively. The full amount has been contributed for 2011 and 2010 and 98% of the required contributions for 2012. The City’s (and MSD’s) contribution rate for 2012, 2011 and 2010 was not equal to the required contribution rate based on the City’s actuarial report. Ohio Public Employees’ Retirement System A limited number of MSD employees participate in the Ohio Public Employee’ Retirement System administrated by the State of Ohio. OPERS is not material to the financial statements of MSD and additional disclosures concerning OPERS, including other post-employment benefit information, can be found in the plan’s annual financial statements. Interested parties may obtain a copy by written request to 277 East Town Street, Columbus, Ohio 43215-4642 or by calling (614) 466-2085. Other Postemployment Benefit Information CRS provides hospital and surgical insurance to retired members who have earned fifteen years credited service at the time of termination or terminate after age sixty with five years credited service. Those who are receiving survivor benefits of eligible members are entitled to have their hospital and surgical insurance premiums paid by the CRS. When benefits would be reduced by reason of the retired member’s eligibility for hospital and medical benefits under federal social security laws, CRS will pay whatever additional fees are required for the Federal medical coverage. The health care coverage provided by the CRS is advance-funded on an actuarial determined basis as a portion of the employer contribution requirement to the System. The Cincinnati Municipal Code provides authority for employer contributions. The actuarial assumptions used for the December 31, 2014 valuation included an assumption for hospital and surgical benefits recognizing adjusted premiums, based on experience from recent years, adjusted to current year by assumed annual increases in premium costs. The cost of coverage is recognized as an expense as claims are paid. CRS has 2,985 active contributing participants of which 552 are MSD employees. For 2014, MSD’s contribution was 18.9 percent of the total employers’ contribution.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
32
NOTE 10 - RELATED PARTY TRANSACTIONS Cincinnati Water Works provides billing and collection services on customers’ accounts for MSD. Fees for these services for 2014 and 2013 were $4,772,000 and $4,878,000 respectively. Fees are also paid to other municipalities and villages within Hamilton County for collection of sewerage bills. The City of Cincinnati provides “overhead” services to MSD, such as check disbursement, investment and legal services, etc. The fees for these services for 2014 and 2013 were $2,867,000 and $1,937,000 respectively. In addition, the City’s Municipal Garage provides gasoline and repairs vehicles for MSD. Fees for these services were $1,678,000 and $1,558,000 for 2014 and 2013, respectively. NOTE 11 - COMMITMENTS AND CONTINGENCIES The City of Cincinnati and the Board of County Commissioners of Hamilton County, Ohio are parties to a Global Consent Decree, which was lodged, in 2003, with the U.S. District Court for the Southern District of Ohio, Western Division. This decree focuses on combined sewer overflows, the implementation of the Sanitary Sewer Overflow Correction plan established in the Interim Partial Consent Decree, and other wet weather issues. The court approved the decrees on June 9, 2004. In August 2010, MSD’s Revised Wet Weather Improvement Plan was approved by the federal government. The Plan commits MSD to complete a Phase 1 group of projects totaling $1.145 billion (in 2006 dollars and including $526 million that MSD has already spent on projects) by 2018 before scheduling future work (Phase 2). The consent decree documents are posted on the MSD web site, msdgc.org, under consent decree. As part of MSD’s capital improvement program, MSD has entered into a number of contracts for construction, design, and other services. Commitments under these contracts aggregate approximately $72 million as of December 31, 2014. NOTE 12 - RISK MANAGEMENT MSD is part of the City of Cincinnati Risk Management Program. The City purchases commercial insurance to cover losses due to: theft of, damage to, or destruction of assets and purchases general liability insurance for specific operations and professional liability insurance for certain operations. All other risks of loss are self-insured. Separately, MSD carries property insurance pursuant to an all-risk policy on MSD’s buildings and equipment per the revenue bond trust agreement. There has been no reduction in insurance coverage from coverage in 2003. Insurance settlements for claims resulting from risks covered by commercial insurance have not exceeded the insurance coverage in any of the past four years. NOTE 13 – LOSS ON IMPAIRMENT OF ASSETS During the negotiation of the Wet Weather Improvement Program – Phase 1 ($1.2B, to be completed in 2018) there was a need for a large solution in the Lower Mill Creek. The submitted project was a large diameter tunnel and treatment facility with a total cost of more than $400M. The USEPA, during negotiations, allowed for an alternative project to be submitted. Due to the complexity of the projects and the mandated completion schedule, both the large diameter tunnel and the alternative projects had to be planned and designed concurrently knowing that one project would not go forward. Both projects started incurring planning and design costs in 2010. In May 2013, the USEPA approved the alternative which halted the tunnel project. Per GASB 42 this was recorded as an impairment loss of $16M, as the losses were permanent.
THE METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Continued)
33
NOTE 14 - SUBSEQUENT EVENTS The Hamilton County Board of Commissioners has approved a 6 percent sewerage rate increase effective January 9, 2015. Effective March 2015, MSD issued a Sewer System Refunding Revenue Bonds, 2015 Series A, in the amount of $52,520,000.
34
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Metropolitan Sewer District of Greater CincinnatiHamilton County
SCHEDULE OF FEDERAL AWARDS EXPENDITURESFOR THE YEAR ENDED December 31, 2014
FEDERAL GRANTOR Pass Through FederalPass Through Grantor Entity CFDAProgram / Cluster Title Number Number Expenditures
US Environmental Protection AgencyPassed Through Programs from Ohio Water Development Authority:
Capitalization Grants for State Revolving Funds CS392686-01 66.458 $788,900
Capitalization Grants for State Revolving Funds CS391525-0062 66.458 172,215
Capitalization Grants for State Revolving Funds CS391525-0063 66.458 1,143,064
Capitalization Grants for State Revolving Funds CS391525-0048 66.458 9,285
Capitalization Grants for State Revolving Funds CS391525-0089 66.458 175,944
Capitalization Grants for State Revolving Funds CS391525-0090 66.458 1,384,230
Capitalization Grants for State Revolving Funds CS391525-0110 66.458 5,254,723
Capitalization Grants for State Revolving Funds CS391525-0106 66.458 2,457,619
Capitalization Grants for State Revolving Funds CS391525-0098 66.458 1,698,514
Capitalization Grants for State Revolving Funds CS391525-0091 66.458 174,888
Capitalization Grants for State Revolving Funds CS391525-0093 66.458 2,250,343
Capitalization Grants for State Revolving Funds CS391525-0108 66.458 882,709
Capitalization Grants for State Revolving Funds CS391525-0088 66.458 562,124
Total Ohio Water Development Authority 16,954,558
Total US Environmental Protection Agency 16,954,558
Total Federal Awards Expenditures $16,954,558
The accompanying notes are an integral part of this schedule.
35
36
METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
NOTES TO THE SCHEDULE OF FEDERAL AWARDS EXPENDITURES
FISCAL YEAR ENDED DECEMBER 31, 2014
NOTE A - SIGNIFICANT ACCOUNTING POLICIES The accompanying Schedule of Federal Awards Expenditures (the Schedule) reports the Metropolitan Sewer District of Greater Cincinnati (the District’s) federal award programs’ disbursements. The schedule has been prepared on the cash basis of accounting.
NOTE F - MATCHING REQUIREMENTS Certain Federal programs require the District to contribute non-Federal funds (matching funds) to support the Federally-funded programs. The District has met its matching requirements. The Schedule does not include the expenditure of non-Federal matching funds.
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov37
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
REQUIRED BY GOVERNMENT AUDITING STANDARDS Metropolitan Sewer District of Greater Cincinnati Hamilton County 1600 Gest Street Cincinnati, Ohio 45204 To the Hamilton County Board of Commissioners: We have audited, in accordance with auditing standards generally accepted in the United States and the Comptroller General of the United States’ Government Auditing Standards, the financial statements of the Metropolitan Sewer District of Greater Cincinnati, Hamilton County, (the District) as of and for the years ended December 31, 2014 and December 31, 2013, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements and have issued our report thereon dated September 25, 2015 wherein we noted the District reclassified their Capital Assets.
Internal Control Over Financial Reporting As part of our financial statement audit, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures appropriate in the circumstances to the extent necessary to support our opinion on the financial statements, but not to the extent necessary to opine on the effectiveness of the District’s internal control. Accordingly, we have not opined on it. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Therefore, unidentified material weaknesses or significant deficiencies may exist. However, as described in the accompanying schedule of findings we identified a certain deficiency in internal control over financial reporting, that we consider a material weakness. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, when performing their assigned functions, to prevent, or detect and timely correct misstatements. A material weakness is a deficiency, or a combination of internal control deficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timely correct a material misstatement of the District’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, yet important enough to merit attention by those charged with governance. We consider finding 2014-001 described in the accompanying schedule of findings to be a material weakness. Compliance and Other Matters
As part of reasonably assuring whether the District’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 statement amounts.
Metropolitan Sewer District of Greater Cincinnati Hamilton County Independent Auditor’s Report on Internal Controls Financial Reporting and On Compliance and Other Matters Required by Government Auditing Standards Page 2
38
However, opining on compliance with those provisions was not an objective of our audit and accordingly, we do not express an opinion. The results of our tests disclosed no instances of noncompliance or other matters we must report under Government Auditing Standards. 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 District’s internal control or on compliance. This report is an integral part of an audit performed under Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Dave Yost Auditor of State Columbus, Ohio September 25, 2015
CorporateCentreofBlueAsh,11117KenwoodRoad,BlueAsh,Ohio45242Phone:513‐361‐8550or800‐368‐7419Fax:513‐361‐8577
www.ohioauditor.gov
39
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO THE MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Metropolitan Sewer District of Greater Cincinnati Hamilton County 1600 Gest Street Cincinnati, Ohio 45204 To the Board of County Commissioners:
Report on Compliance for Each Major Federal Program
We have audited the Metropolitan Sewer District of Greater Cincinnati’s (the District) compliance with the applicable requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133, Compliance Supplement that could directly and materially affect the Metropolitan Sewer District of Greater Cincinnati’s major federal program for the year ended December 31, 2014. The Summary of Auditor’s Results in the accompanying schedule of findings identifies the District’s major federal program. Management’s Responsibility The District’s Management is responsible for complying with the requirements of laws, regulations, contracts, and grants applicable to its federal program. Auditor’s Responsibility Our responsibility is to opine on the District’s compliance for the District’s major federal program based on our audit of the applicable compliance requirements referred to above. Our compliance audit followed auditing standards generally accepted in the United States of America; the standards for financial audits included in the Comptroller General of the United States’ Government Auditing Standards; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. These standards and OMB Circular A-133 require us to plan and perform the audit to reasonably assure whether noncompliance with the applicable compliance requirements referred to above that could directly and materially affect a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our compliance opinion on the District’s major program. However, our audit does not provide a legal determination of the District’s compliance.
Metropolitan Sewer District of Greater Cincinnati Hamilton County Independent Auditor’s Report on Compliance With Requirements Applicable to the Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Page 2
40
Opinion on Each Major Federal Program In our opinion, the Metropolitan Sewer District of Greater Cincinnati complied, in all material respects with the compliance requirements referred to above that could directly and materially affects its major federal program for the year ended December 31, 2014. Report on Internal Control Over Compliance
The District’s management is responsible for establishing and maintaining effective internal control over compliance with the applicable compliance requirements referred to above. In planning and performing our compliance audit, we considered the District’s internal control over compliance with the applicable requirements that could directly and materially affect a major federal program, to determine our auditing procedures appropriate for opining on each major federal program’s compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not to the extent needed to opine on the effectiveness of internal control over compliance. Accordingly, we have not opined on the effectiveness of the District’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, when performing their assigned functions, to prevent, or to timely detect and correct, noncompliance with a federal program’s applicable compliance requirement. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a federal program compliance requirement will not be prevented, or timely detected and corrected. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with federal program’s applicable compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
This report only describes the scope of our internal control compliance tests and the results of this testing based on OMB Circular A-133 requirements. Accordingly, this report is not suitable for any other purpose. Dave Yost Auditor of State Columbus, Ohio September 25, 2015
41
METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI HAMILTON COUNTY
SCHEDULE OF FINDINGS
OMB CIRCULAR A -133 § .505 DECEMBER 31, 2014
1. SUMMARY OF AUDITOR’S RESULTS
(d)(1)(i) Type of Financial Statement Opinion Unmodified
(d)(1)(ii) Were there any material control weaknesses reported at the financial statement level (GAGAS)?
Yes
(d)(1)(ii) Were there any significant deficiencies in internal control reported at the financial statement level (GAGAS)?
No
(d)(1)(iii) Was there any reported material noncompliance at the financial statement level (GAGAS)?
No
1AW2(d)(1)(iv) Were there any material internal control weaknesses reported for major federal programs?
No
(d)(1)(iv) Were there any significant deficiencies in internal control reported for major federal programs?
No
(d)(1)(v) Type of Major Programs’ Compliance Opinion Unmodified
(d)(1)(vi) Are there any reportable findings under § .510(a)?
No
(d)(1)(vii) Major Programs (list): Capitalization Grant for State Revolving Loan. CFDA # 66.458
(d)(1)(viii) Dollar Threshold: Type A\B Programs Type A: > $ 300,000 Type B: all others
(d)(1)(ix) Low Risk Auditee? Yes
2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GAGAS
FINDING NUMBER 2014-001
Material Weakness District management is responsible for preparing and fairly presenting their financial statements in accordance with accounting principles generally accepted in the United States of America; this includes designing, implementing, and maintaining internal controls relevant to preparing and fairly presenting financial statements that are free from material misstatement, whether due to fraud or error.
42
Metropolitan Sewer District of Greater Cincinnati Hamilton County Schedule of Findings Page 2
FINDING NUMBER 2014-001 (Continued)
We noted the following conditions related to the District’s financial statements (amounts in thousands):
The District failed to include $319,389 of Construction In Progress into their calculation of Net Investments in Capital Assets thereby understating Net Investments in Capital Assets and overstating Unrestricted Equity in the same amount.
The District incorrectly reported the defeasance of prior year debt, resulting in the Current Portion of
Long-Term Debt to be understated by $19,041 and the Long Term Portion of Debt to be understated by $24,163.
The District reclassified and adjusted [$555] their Capital Assets for fiscal year 2014; however the
District failed to properly report the changes in the comparative financial statements for 2013, and also failed to properly disclose the reclassification in the notes to the financial statements.
The District also failed to accurately update Note 2 Deposit and Investments, Note 5 Capital Assets,
and Note 6 Long Term Debt.
Lack of internal controls over accounting and financial reporting increases the risk that errors, theft or fraud could occur and not be detected in a timely manner.
We recommend that the District exercise due care when posting entries to the financial records and during financial statement preparation to accurately reflect the District’s financial activity and financial position, and to ensure that the notes to the financial statements are complete and accurate.
The District has posted audit adjustments to the financial statements and corrected the notes to the financial statements where appropriate. Officials’ Response: We did not receive a response from Officials to this finding.
3. FINDINGS FOR FEDERAL AWARDS None
88EastBroadStreet,FourthFloor,Columbus,Ohio43215‐3506Phone:614‐466‐4514or800‐282‐0370Fax:614‐466‐4490
www.ohioauditor.gov
METROPOLITAN SEWER DISTRICT OF GREATER CINCINNATI
HAMILTON COUNTY
CLERK’S CERTIFICATION
This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.
CLERK OF THE BUREAU CERTIFIED OCTOBER 20, 2015
III
APPENDIXB SUMMARY OF 2016 BUDGET APPROPRIATIONS
~~:00i~no~::::t~.Hartmann, seconded by Mr. Monzei the resolution was adOPte~~t~~;::~:;:""'_'~~. ~ VOL 2 "J .
~ DEC 1 G ZC15 ~
RESOLUTION #34 ~
?J \., ~ q ESTABLISHING APPROPRIATIONS TO DEFRAY PUBLIC EXPENSES li'fXlliJP ~J o FOR THE COUNTY OF HAMILTON, OHIO FOR THE FISCAL YEAR BEGINNING JANUARY 1,2016
BE IT RESOLVED by the Board of Commissioners of Hamilton County, Ohio that the sum of $207.05 million to defray the public expenses of Hamilton County} Ohio for the fiscal year beginning January 1,2016 as enumerated in Attachment A be appropriated in the county genera! fund; and
BE IT FURTHER RESOLVED that the sum of $700.88 million to defray the public expenses of Hamilton County, Ohio for the fjscal year beginning January 1,2016 as enumerated in Attachment A be appropriated across all county restricted funds; and
BE IT FURTHER RESOLVED that the Hamilton County Auditor is hereby authorized to transfer the subsidies contained herein to the appropriate funds as presented in Attachment A; and
BE IT FURTHER RESOLVED that the Clerk of the Board certify copies of this resolution to Christian Sigman, County Administrator; and Dusty Rhodes, County Auditor.
ADOPTED at a regularly adjourned meeting of the Board of Commissioners of Hamilton County, Ohio} in session this 16th day of December 2015.
Mr. Hartmann YES Mr. Monzel __ Y_E_S __ Mr. Portune NO
CERTIFICATE OF CLERK
IT IS HEREBY CERTIFIED that the foregoing is a true and correct transcript of a resolution adopted by the Board of Commissioners of Hamilton County, Ohio, the 16th day of December 2015.
11\1 WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Board of Commissioners of Hamilton County, Ohio} this 16th day of December 2015.
unty Commissioners amilton County, Ohio
Fund-Subfund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
2016 Budget Appropriations'
Department
02 Commissioners & County Admin
02 Commissioners & County Admin
02 Commissioners & County Admin
04 Economic Development
06 County Facilities
06 County Facilities
06 County Facilities
07 Communications Center
07 Communications Center
07 Communications Center
07 Communications Center
16 Non-Departmentals
16 Non-Departmentals
17 Contracts and Subsidies
17 Contracts and Subsidies
17 Contracts and Subsidies
20 Auditor 20 Auditor
21 Treasurer
21 Treasurer
22 Recorder
22 Recorder
24 Board of Elections
24 Board of Elections
29 Planning and Development
29 Planning and Development
29 Planning and Development 30 Sheriff
30 Sheriff
30 Sheriff
Page 1 of 8
~--------"~---,~~----~~~~--------------
Appropriation level
03 Personnel
04 Other Expenditures
05 Capital Outlay
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
05 Capital Outlay
07 Operating Transfers
03 Personnel
04 Other Expenditures
04 Other Expenditures
05 Capital Outlay
07 Operating Transfers
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
05 Capital Outlay
ATTACHMENT A
2016 Budget
$ 3,243,735.42 578,685.00
15,000.00
1,919,188.00
4,781,774.48
6,993,408.89 2,260.00
648,796.34 672J81O.00
13,000.00
3,303,250.00 2,585,171.94 2,372,600.00
239,790.00
25,000.00
2,556,812.00 1,478,398.07
648,216.02 258,937.00 398,560.00
1,066,804.76
31,305.70 5,478,471.09
4,425,228.79 2,610,163.84
402,590.00 40,000.00
52,104,034.04
'~S'065.00 ': ;_,~ 63,170.00
C) o. ~ .' ~St.~ 1 ~ ~~~I:' "~ :., ('.' {"j. 1 V'I t;f~: "-S) Je .. ~~<:;~ : .~ {
l: .. ~·~~",.,;;;:. ;t,;..;. ..... '.Ii:1'l .... "':'.:K:t.". -
Fund~Subfund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001*001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001~001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
001-001 General Fund
-~---~---~. ----~--------
2016 Budget Appropriations
Department
31 Prosecutor
31 Prosecutor
31 Prosecutor
32 Coroner
32 Coroner
40 Juvenile Court
40 Juvenile Court
40 Juvenile Court
41 Court of Appeals
Appropriation Level
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
42 Court of Common Pleas
42 Court of Common Pleas
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel 43 Municipal Court
43 Municipal Court 04 Other Expenditures
44 Court of Domestic Relations
44 Court of Domestic Re!ations
45 Probate Court
03 Personnel
04 Other Expenditures
03 Personnel
45 Probate Court
46 Clerk of Courts
46 Clerk of Courts
47 Public Defender
47 Public Defender
48 Court Reporters
48 Court Reporters
49 Probation
49 Probation
51 Debt Service
51 Debt Service
04 Other Expenditures
03 Personnel
04 Other Expenditures
• \ 03 Personnel ~.'~ C1 04 Other Ex;penditures t;t~ 1"" ,-,'
"\:m CJ ()~,~i 03 Personnel ~ -" r", 04 Other Expenditures
~ ~ 03 Personnel \ j ~;; 04 Other Expenditures
., 04 Other Expenditures ~::.:r.:-:..;::." t -o::~ .. ",-",~ .. ~. i¥ ;;:'."
07 Operating Transfers
03 Personnel
04 Other Expenditures
03 Personnel
ATIACHMENT A
2016 Budget
13,000,315.21
467,670.00
6,580.00
3,993,905.99
343,070.00
12,568,266.21
1,060,810.00
350,000.00
86,330.00
3,105,124.51
5,282,007.00
5,219,905.01
36,513.05
3,176,621.00
91,420.00
2,454,918.70
519,550.00
9,639,414.16
2,482,073.00
9,783,201.60
6,249,554.00
2,299,084.38
85,083.90
5,855,486.44
328,613.85
32,500.00
6,860,000.00
486,833.60
2,626,000.00
710,390.14
57 Metropolitan Sewer District
57 Metropolitan Sewer District
70 Veterans Service Commission
70 Veterans Service Commission 04 Other Expenditures 838,412.00
TOTAL GENERAL FUND 207,051,880.13
Page 2 of8
r':.""-v-:-r~~'1
.~ ;;
ji _ ;.!."":> a ~ ~~ c.:';) Dr !1:~~ C'-.J ~ ~ .:~"\I; I" '-l f
~~~ ;~~ ~ Fund-Subfund 002-001 Real Estate Assessment
[ '- :' =""""""",c<iOl""<':.
002-001 Real Estate Assessment
DOl-DOl Solid Waste Management Fund
DOl-DOl Solid Waste Management Fund
002-005 Dog & Kennel 002-005 Dog & Kennel 002-005 Dog & Kennel
002-006 Emergency Management Agency
002-006 Emergency Management Agency
002-007 Victims of Domestic Violence 002-007 Victims of Domestic Violence 002-008 Probate Court Conduct of Business 002-009 Bureau of Support
002-009 Bureau of Support
002-010 Treasurer's Delinquent Real Estate
002-010 Treasurer's Delinquent Real Estate
002-010 Treasurer's Delinquent Real Estate
002-011 Prosecutors Delinquent Real Estate
002-011 Prosecutors Delinquent Real Estate
002-011 Prosecutors Delinquent Real Estate 002-013 Indigent Guardianship
002-014 law Enforcement & Education
002-015 Clerk of Courts Automation
002-015 Clerk of Courts Automation
002-015 Clerk of Courts Automation 001-016 Probate Court Automation
002-017 Treasurers Optional Payment
002-017 Treasurers Optional Payment
002-018 Auto Title Administration 002-018 Auto Title Administration 002-018 Auto Title Administration 002-018 Auto Title Administration
------------------
2016 Budget Appropriations
Department
20 Auditor 20 Auditor
56 Environmental Services
56 Environmental Services
20 Auditor 20 Auditor 25 Dog Warden
33 Emergency Management
33 Emergency Management 45 Probate Court 46 Clerk of Courts 45 Probate Court
12 Job and Family Services
12 Job and Family Services
21 Treasurer
21 Treasurer 21 Treasurer
31 Prosecutor
31 Prosecutor
31 Prosecutor
45 Probate Court
30 Sheriff
42 Court of Common Pleas
42 Court of Common Pleas
42 Court of Common Pleas 45 Probate Court 21 Treasurer
21 Treasurer
46 Clerk of Courts 46 Clerk of Courts 46 Clerk of Courts 46 Clerk of Courts
Page 3 of 8
ATTACHMENT A
Appropriation Level 2016 Budget
03 Personnel 4,088,349.83 04 Other Expenditures 3,277,760.00 03 Personnel 511,471.74
04 Other Expenditures 1,992,869.00
03 Personnel 71,177.43 04 Other Expenditures 93,280.00 04 Other Expenditures - 1,645,080.00
03 Personnel 142,618.09
04 Other Expenditures 599,939.69 04 Other Expenditures 90,000.00 04 Other Expenditures 70,000.00
04 Other Expenditures 14,000.00 03 Personnel 6,879,937.15
04 Other Expenditures 5,607,497.35
03 Personnel 1,026,759.59
04 Other Expenditures 2,571,490.00 05 Capital Outlay 20,000.00
03 Personnel 611/974.03
04 Other Expenditures 542,730.00
05 Capital Outlay 6,000.00
04 Other Expenditures 185}000.00
04 Other Expenditures 57,500.00
03 Personnel 613,265.53
04 Other Expenditures 1}502,300.00
05 Capital Outlay 1,080,000.00
04 Other Expenditures 400,000.00 03 Personnel 9,188.76
04 Other Expenditures 6,000.00
03 Personnel 2,171,626.07 04 Other Expenditures 321,250.00 05 Capital Outlay 5,000.00 07 Operating Transfers 1,700,000.00
Fund-Subfund 002-019 Water Rotary 002-019 Water Rotary
002-019 Water Rotary
002-019 Water Rotary
~,-"",,--~
r"r~~: .. <' -0 ~ i~ "- _'" ~ I: , ;:) , ,~.,~ ,-...I ~
l':" (.J &. ! ,- ~
002-022 Probate Court Legal Research
002 -023 Public Assista nce
002-023 Public Assistance
002-023 Public Assistance
002-024 Permissive Auto Tax Municipal
002-025 Permissive Auto Tax County 002-025 Permissive Auto Tax County
002-026 Roads & Bridges
002-026 Roads & Bridges
002-026 Roads & Bridges
002-026 Roads & Bridges
002-026 Roads & Bridges
002-027 Common Pleas Legal Research
002-029 Court Delay Reduction
002-031 Administration of Justice
002-031 Administration of Justice
002-032 Probation Services
002-032 Probation Services
002-032 Probation Services
002-039 Family Fund
002-044 Municipal Court Special Projects
002-044 Municipal Court Special Projects
002-045 Mental Health Local Fund
002-045 Mental Health Local Fund
002-046 Common Pleas Mediation
002-046 Common Pleas Mediation
002-047 Mental Health and Recovery Services
002-047 Mental Health and Recovery Services
2016 Budget Appropriations
Department 29 Planning and Development 29 Planning and Development
29 Planning and Development
29 Planning and Development
45 Probate Court 12 Job and Family Services
12 Job and Family Services
12 Job and Family Services
50 County Engineer
50 County Engineer 50 County Engineer
50 County Engineer
50 County Engineer
50 County Engineer
50 County Engineer
50 County Engineer
42 Court of Common Pleas
43 Municipal Court
42 Court of Common pleas
42 Court of Common Pleas
49 Probation
49 Probation
49 Probation
12 Job arid Family Services
43 Municipal Court 43 Municipal Court
63 Mental Health & Recovery Svcs
63 Mental Health & Recovery Svcs
42 Court of Common Pleas
42 Court of Common Pleas 63 Mental Health & Recovery Svcs
63 Mental Health & Recovery Svcs
Page 4 of8
Appropriation level 03 Personnel 04 Other Expenditures
05 Capital Outlay
07 Operating Transfers
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
05 Capital Outlay
05 Capitat Outlay 07 Operating Transfers
03 Personnel
04 Other Expenditures
05 Capital Outlay
06 Debt Service
07 Operating Transfers
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
05 Capital Outlay
04 Other Expenditures
03 Personnel 04 Other Expenditures
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
ATTACHMENT A
2016 Budget 564,319.85
443,933.00
87,740.00
475,624.00
15,000.00 44,359,926.26
47,389,314.00
1,094,900.00
2,100,000.00
940,000.00 6,000,000.00
12,575,087.35
6,157,526.00
860,600.00
105,376.00
300,000.00
425,000.00
122,641.00
28,000.00
20,000.00
1,531,117.69
614,209.29
64,566.00
5,000.00
494,270.61 415,998.05
125,000.00
65,000.00
166,308.11
4,000.00 165,766.99
8,461,793.95
r'~~~·c~~
" u'":) c~
b~ ~ ~~. Fund-Subfund
.j~"", !;';
.~3"- ,~ !:q> Y ~hl ~v L.t.., d' '"
l C::J ~, 002-049 Probate Dispute Resolution
002~050 Sheriff's Parking Violations
002-051 Coroner's Out of County Fees
002-051 Coroner's Out of County Fees
002-054 Common Pleas SpeCial Projects 002-054 Common Pleas SpeCial Projects 002-054 Common Pleas Special Projects 002-057 Storm Water Oversight
----
002-057 Storm Water Oversight 002-058 Hotel/Motel Lodging Tax 002-058 Hotel/Motel lodging Tax
002-059 Sheriffs Concealed Handgun license
002-059 Sheriff's Concealed Handgun License
002-060 Workforce Investment
002-062 Citizen Reward Program 002-063 Wireless 911
002-063 Wireless 911
002-065 Juvenile Court legal Research
002-067 Tax Certificate Administration 002-067 Tax Certificate Administration
002-068 Domestic Relations Special Projects
002-069 Indigent Drivers
002-070 Sheriff Peace Officer Training
002-071 law Library
002-071 law library 002-072 Storm Water Management 002-072 Storm Water Management
002-072 Storm Water Management
002-073 Juvenile Court Special Projects 002-073 Juvenile Court Special Projects 002-073 Juvenile Court Special Projects
d!.
2016 Budget Appropriations
Department
45 Probate Court
30 Sheriff
32 Coroner
32 Coroner 42 Court of Common Pleas 42 Court of Common Pleas
42 Court of Common Pleas 50 County Engineer
50 County Engineer 04 Economic Development 04 Economic Development
30 Sheriff
30 Sheriff
12 Job and Family Services
46 Clerk of Courts 07 Communications Center
07 Communications Center 40 Juvenile Court
21 Treasurer
21 Treasurer
44 Court of Domestic Relations
49 Probation
30 Sheriff
36 law library 36 law library
29 Planning and Development 29 Planning and Development
29 Planning and Development
40 Juvenile Court 40 Juvenile Court
40 Juvenile Court
Page 5 of 8
----~---- -----, .. -~~.----,'~ .. -.--'
Appropriation Level
04 Other Expenditures
04 Other Expenditures
04 Other Expenditures
05 Capital Outlay
03 Personnel 04 Other Expenditures 05 Capital Outlay
03 Personnel 04 Other Expenditures 03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
04 Other Expenditures
04 other Expenditures
03 Personnel
04 Other Expenditures
04 Other Expenditures 03 Perso nnel
04 other Expenditures
03 Personnel
04 Other Expenditures
04 Other Expenditures
03 Personnel 04 Other Expenditures 03 Personnel 04 Other Expenditures
05 Capital Outlay 03 Personnel 04 other Expenditures
05 Capital Outlay
ATTACHMENT A
2016 Budget
44,910.00
10,000.00
173,000.00
30,000.00
1,128,630.12 239,000.00 125,000.00
95,344.31
2,303,936.32 41,004.83
14,002,230.00
224,947.37
184,000.00
5,255,397.00
10,000.00
333,137.03 703,438.00
40,000.00 144,666.88
86,835.00
219,203.80
60,500.00
70,000.00
447,167.28 615,300.00
1,169,920.38 245,097.00
105,760.00 150,000.01 150,000.00
35,000.00
Fund-Subfund
002-074 Recorder's Technology Fund 002-074 Recorder's Technology Fund
002-074 Recorder's Technology Fund
003-001 Children's Services
003-001 Children's Services
',',' ~ .. -",,",", , '-..-~~ r ,_~ ~c:'0, I' r,"~ I ,_.
II "':> ~ jl-z. _ """ ;
I:", ~~ .. ~ ,\.. 1'\ ~ ~:':' 0, ':'j \..Y"'" ~ ··f:;S"'" ~ L,(:.>::-~ ~:;,' [ r~ ~
003-002 Developmental Disabilities Levy 003-002 Developmental Disabilities Levy
003-002 Developmental Disabilities Levy
003-003 Mental Health Levy
003-003 Mental Health Levy
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-004 Indigent Health Care
003-005 CLEAR
003-006 Senior Services
003-006 Senior Services
003-008 Zoological Gardens
003-008 Zoological Gardens
003-009 Cincinnatr Museum Center
003-009 Cincinnati Museum Center
2016 Budget Appropriations
Department
22 Recorder
22 Recorder
22 Recorder
12 Job and Family Services
12 Job and Family Services
61 Developmental Disabilities Svc 61 Developmental Disabilities Svc
61 Developmental Disabilities Svc
63 Mental Health & RecoverySvcs
63 Mental Health & Recovery Svcs
30 Sheriff
30 Sheriff
30 Sheriff
40 Juvenile Court
43 Municipal Court
49 Probation
60 Hearth and Hospitalization Tax
60 Hearth and Hospitalization Tax
63 Mental Health & Recovery Svcs
63 Mental Health & Recovery Svcs
64 CLEAR
67 Senior Services
67 Senior Services
81 Zoological Gardens
81 Zoological Gardens 88 Cincinnati Museum Center
88 Cincinnati Museum Center
Page 6 of8
,-'---- --~-----~------.... -----
Appropriation Level
03 Personnel
04 Other Expenditures
05 Capital Outlay
04 Other Expenditures
07 Operating Transfers
03 Personnel 04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
04 Other Expenditures
04 Other Expenditures
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
04 Other Expenditures
03 Personnel
04 Other Expenditures
03 Personnel 04 Other Expenditures 03 Personnel
04 Other Expenditures
ATIACHMENTA
2016 Budget
189,103.79 80,380.00 64,094.10
71,203,530.00 928,706.83
35,797,55551 61,115,733.00
460,146.00
1,669,536.97
35,803,013.59 5,271,906.25 7,215,030.00
15,000.00
1,283,700.00
165,000.00 425,000.00
761 113.80
24,229,828.00
88,207.11 2,460,976,47
4,025,943,00 10,227,17
19,916,680.00 4,261.31
6,668,414.00 2,556.79
101,492.00
I
Fu nd-Subfund
.::")~ ~:'.). N ,:::~ ~'
...- " ........ : C) \...:..J ~
003-010 Family Services and Treatment levy
003-010 Family Services and Treatment levy
003-010 Family Services and Treatment Levy 003-010 Family Services and Treatment Levy
003-010 Family Services and Treatment levy
003-010 Family Services and Treatment Levy 003-010 Family Services and Treatment levy
003-010 Family Services and Treatment levy
003-010 Family Services and Treatment levy
003-011 Union Terminal Sales Tax 900-002 Unvoted General Obligation Debt Service 900-003 Special Assessment Debt Service
921-009 Special Assessment Debt Issuance
921-009 Special Assessment Debt Issuance
931-001 Sheriff's Rotary Fund
931-001 Sheriff's Rotary Fund
931-002 Central Warrant ID Unit
931-002 Central Warrant ID Unit
931-002 Central Warrant ID Unit
931-003 Worker's Compensation Reserve
931-003 Worker's Compensation Reserve
931-004 Auditor's Computer Center
931-004 Auditor's Computer Center
931-004 Auditor's Computer Center
931-005 County Communication Center
931-005 County Communication Center
931-005 County Communication Center
931-005 County Communication Center
931-010 Medical Self-Insurance Fund 931-010 Medical Self-Insurance Fund
2016 Budget Appropriations
Department
30 Sheriff
30 Sheriff
43 Municipal Court 43 Municipal Court
49 Probation
60 Health and Hospitalization Tax 60 Health and Hospitalization Tax
63 Mental Health & Recovery Svcs
63 Mental Health & Recovery Svcs 88 Cincinnati Museum Center 51 Debt Service
51 Debt Service
51 Debt Service
51 Debt Service
30 Sheriff
30 Sheriff
30 Sheriff
30 Sheriff
30 Sheriff 16 Non-Departmentals
16 Non-Departmentals
20 Auditor
20 Auditor
20 Auditor
07 Communications Center
07 Communications Center
07 Communications Center
07 Communications Center 16 Non-Departmentals 16 Non-Departmentals
Page 7 of8
Appropriation level
03 Personnel
04 Other Expenditures
03 Personnel
04 Other Expenditures
04 Other Expenditures
03 Personnel 04 Other Expenditures
03 Personnel
04 Other Expenditures 04 Other Expenditures 06 Debt Service 06 Debt Service
04 Other Expenditures
07 Operating Transfers
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel 04 Other Expenditures
03 Personnel
04 Other Expenditures
05 Capital Outlay
03 Personnel
04 Other Expenditures
06 Debt Service
07 Operating Transfers
03 Personnel 04 Other Expenditures
ATIACHMENT A
2016 Budget
791,967.82
25,000.00 332,102.53
2,521,688.47 872,730.00 220,523.25 110,000.00
48,318.79 1,266,273.75
32,059,567.55 10,935,000.00
600,000.00 480,000.00
20,000.00
10,170,000.00
330,000.00 2,525,934.27
231,416.00 850,000.00
65,678.43 4/685,000.00 1/633,937.89
598,250.00 102,000.00
5,436,772.46
1,263,633.00 684,000.00
2,055,000.00 266,736.92
46,924,810.00
':..-l r"'"'''-'' V·,·.".'~-' --""1 I~ '...':":l~'1 ~-:'::.... c ....... I, ::; \.
l':~·~'; .,.) ~
Fund-subfund:,;~';:' . 946-003 Paul Brown Stadium Operation \:;; &?I ~q
./:.;::, <" 946-003 Paul Brown Stadium Operation ~
946-003 Paul Brown Stadium Operation
946-003 Paul Brown Stadium Operations
946-005 Ballpark Stadium Operations
946-005 Ballpark Stadium Operations
946-005 Ballpark Stadium Operations 946-006 Parking & Public Improvement Operations
946-006 Parking & Public 1mprovement Operations
946-008 Main Street Parking Garage Operations
946-008 Main Street Parking Garage Operations
946-008 Main Street Parking Garage Operations
946-008 Main Street Parking Garage Operations
946-010 Paul Brown Capital Repair Fund
946-013 Parking Revenue Fund
946-013 Parking Revenue Fund
946-013 Parking Revenue Fund
946-013 Parking Revenue Fund
946-014 Ballpark Capital Reserve
946-015 Ballpark Operating Reserve
946-016 Repair and Improvement Account
946-017 Riverfront Loan Debt Service
2016 Budget Appropriations
Department
68 Stadiums
68 Stadiums 68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums 68 Stadiums
68 Stadiums
69 Parking Facilities
69 Parking Facilities
69 Parking Facilities 69 Parking Facilities
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
68 Stadiums
Page 8 of8
ATTACHMENT A
Appropriation Level 2016 Budget
03 Personnel 1,867,984.09
04 Other Expenditures 13,221,323.00
05 Capital Outlay 233,000.00
06 Debt Service 34,994,137.92
03 Personnel 106,438.12
04 Other Expenditures 6,017,650.18
06 Debt Service 13,280,177 .18
03 Personnel 563,314.90
04 Other Expenditures 575,000.00
03 Personnel 45,283.47
04 Other Expenditures 227,080.00
05 Capital Outlay 50,000.00 07 Operating Transfers 684,279.00
05 Capital Outlay 2,781,800.00
03 Personnel 122,523.62
04 Other Expenditures 7,408,000.00
05 Capital Outlay 50,000.00 06 Debt Service 3,745,599.22
05 Capital Outlay 931,500.00
04 Other Expenditures 1,154,960.10
05 Capita I Outlay 900,000.00
06 Debt Service 2,009,954.32
TOTAL RESTRICTED FUNDS 700,883,989.68
TOTAL ALL FUNDS 907,935,869.81
APPENDIXC FINANCIAL STATEMENT
FINANCIAL STATEMENT
HAVilL TON COUNTY
Section 133.07 O.R.c.
STATE OF OHIO, COUNTY OFHAA1ILTON
I, Dusty Rhodes. County Auditor of Hamilton County, Ohio do hereby certify that the (ollowing
statement concerning the finances of said County are true and COfrect as appear from the records in my office:
1 Ane~sed valuation of the taxable property of the county, as shown on the tax
dupUcate for the year 2016 , which Is the latest duplicate at the date hereof:
2 Totll illmount of all bonds, notes and certiffcates of indebtedness ("securiUes') Issued and outstanding
(do not Include Industrial development revenue bonds hsued pursuant to Sec . 140.06 O.R.C.),
and including the present Inue of S ]27,000,000
3 Exempt debt:
(I) Securities issued in anticipation of the levy or collection of special assessments (excluding County portIon)
(2) Securities described In Sec . 307.201 O.R.C for subways ..
[]j SeU Supporting Securitie51~sued for any purpose including, ... lithout limitation,
any of the following general purposes:
(1I) Water sy~tems or facilit ies
(b) Sanitary seWerllge systems or facillUe~, or suriace and storm water drainage and sewerage systems
or facilities, or a combination of those systems or facilities:
(c) County or joint county scrap lire collection, storage, monocell , monoftll, or recovery facilities, or any
combination of those systems or fac ili ties
(eI) Off·street parl<ing lots, laCllitles, or buildings, or On street parking facilities , Of any combinatIon
of off ·street or on street parking facilities:
(e) Facilities for the care or treatment of the sick Of Infirm, and for housing and 'or persons prOviding such
care or treatment and their famitles :
(f) Recreational, ~port s, convention, auditorium, museum, trade show, and other public att raction faCilities:
(g) FaciLities for natural resources exploration, development, recovery, u~e and sale:
(h) CQ(rectional and de tention facnities and related rehebilitation facHlties:
[4} Securities i s~ed for the purpose 0' purchaSing, constnxt1ng, improving, or extendin1 mter or sanitary or
surlace lind storm water sewerage ~ystems or f~cilit l e s, or a combination 0' those !.)"Stems or facilities, to
the extent that an lIgreemeot entered into with another subdiviSion requires the other subdIvision to pay
to the County amounts equivalent to debt charges on the securities:
(5) Voted generat obtisatlon securities Issued lor the purpose of permanent improvements 'or sanitary sewerage
or water systems or facilities to the extent that the total principal amount of voted securittes outstandlng
for the purpose does not exceed an amount equal to two percent of the CounlYs tax valuation:
(61 Securities issued for perm~nent Improvements to hou.e agencies, departments, boards, or commissions
of the County or any munklpal corporations located in whole or in part in the County, to the extent that
revenue~ other than revenues from unvoted County pfoperty taxes, derived from leased or other
agreementS between the County and these agencies, departments, boards , commissions, or municipal
corporations relattng\o the use of the permanent improvements are w fl icient to cover the cost 01 all
operating expenses of the permanent Improvements are sufficient to cover the cost of all operating
expenses of the permanent Improvements paid by the County and debt charges on the securities:
(7) Securities issued pursuant to Section 133.08 O.R.C, (Revenue Bonds)
(8) Securities issued for the purpo~ olllcquiring or constNCtins roads, highways, bridges, or viaducts
or a CQUIring or making other highway permanent improvements or 'or the purpose of procuring and
maintaining computer systems (or the office of the clerk of any county operated municipal court, 'or the
offtce 01 the clerk 0' the court of common pleas, or'or the offtce 01 the clerk of the probate,
juvenile, or domestic relations division 01 the court of common pleas to the extent that the legislation
authorizing the iuuance of the securi ties includes a covenant to appropriate from moneys distributed
to the county pursuant to division (B) of section 2101,162,2151 .541 ,215] .081,2301.0]1, or 2}01201
or Chapter .<1501, 4503, 450.<\ , or 5735 of the OhIo Revised Code a sufficient amount to cover debt
charges on and ftnancing costs rela ting to securities as they become due
(9) Securttle$lssued for the purpose of acquiring, constructing, Improving, and equipping a County or
multicounty jail, workhouse, juvenile detention facility, or correctlonlll facility
(101 Securities Issued lor the acquisition, const{\Jction, equipping, or repai r 0' lIny permanent Improvements
or any class or group of permanent improllements enumerated In a resolullon adopted pursuant to
division (0) 0' sec. 5739.026 O.R.C to the extent that the tegistaUonauthorlling the issuance
of securities includes a covenant to lIPpropriate from moneys received from taxes authonzed under
Sec. 5739.023 and division (AilS) 0' Sec 5739.026 O.R. C an amount sufficient to pay debt charges on
the securlUes and those moneys shall be pledged for that purpose.
18,348,375,650
1,525 ,925,918
S .<I,093,76b
S
6.<15,000
239,7)],130
S
6.205,000
4,998 ,000
S
S 703,715,000
s
(11) Securities issued fOf county or joint county sOlId waste or hazardous waste collectIon, transfer dIsposal
facilities, or re~our" recovery and soLid or hazardovs waste recycling faciliti es, or any combination of
those facilities: .................................................................................................. .
(121 Securities iswed for the aCQuIsition, constructIon, and eQuippIng 01 a port authority, educational and
cultural facility Section 307.671 of the O.R.C.. . ............................................ .
(131 Securities issued the acquhltlon constructIon, equIpping and improving 01 a municipal educational and cultural facility under division (8)( I) of Secllon )07.672 of the O.R.C.:
(14) Securities issued for energy conservation measures under Section 307 .04 O.R.C.:
(lSI Securities issued fOf the acquisition, connruction. equipping, improving, or repair of a sports facUity
under Seclion 307.673 O.R.C.: ............ .
[16) Securities issued in antIcipation of the colLection of current revenues for the fiscal year or other
period not to exceed twelve consecutive months, or securities issued in anticipation of the
collection of the proceeds from a specifically identified voter approved tax levy: ...
[17] Securities Issued for purposes described in Section 1 ll.23, O.R.C
(1 8] Securities issued under Chapters 122 .72S or 761 or Section Ill .23 O.R .C.:
(19] Securities issued to pay final judgments or court approved settlements under authori,ing
laws and securities Issued under Section 2744 .081, O.R.C.:
s
[20) Sal es tax supported bonds Issued pursuant to O.R.C. Section 133.081: 5 459,076.000
4 Total of items in 3: .................... ..
5 Total securities subjec t to direct limitation (2 minus 4): .. Amount in sinking lund or bond retirement fund applicable to principal thereof:
b. Net amount subject to overall debt limitation (5 minus Sa):
6 Securities indude in item 5 above but issued WITHOUT AUTHORITY OF AN ELECTION: .. b.
c. d.
Amount in sinking fund or bond retirement fund applicable to princIpal thereof: ....................... .
line 6a minus Line 6b:
Amount of Line 1 times .01: .. ...... ................... ..
Line 6c must be greater than line 6b:
I further cert ify that the income, after covering the cost of alL operating expenses of the facilities
described in item 3 is sufficient to pay interest on and retire the securities for each use.
The net indebtedness of the county, without a vote of the electors, issued for the purpose of paying
the County's share of the cost of the construction, improvements, maintenance or repair of the state highways:,
shall not exceed an amount equal to .005 times the amount of Line 1.
1,418,465,896
2,485,200
104,974,822
The amount on Sb shall never exceed without the vote of the electors, an amount equal to one of the (ollowlng limitations
that applies to the County:
(I) a county wilh a valuation not exceeding SIOO,Ooo,ooO, 3:( or that tax valuation:
(2) a county with a valuation exceeding S100,000,000, but not exceeding SlOO,OOO,OOO, S3,000,000 plus 1-112t
of that valuation in excess of Sf 00,000,000, and
(3) a county with a tax valuation exceeding SlOO,OOO,OOO, $6,000,000 plus 2·112:( of that tax vaLuation in excess
of 5300,000,000.
7 Amount of bonds or notes listed in 2 Issued in current year: ........ ................ .
8 Total amount 01 bonds or notes expected to be issued in the current year:
9 Amount of bonds or notes issued in current year for organizations described in Sec . 501(c)(3)
of the Internal Revenue Code (I.e. non-profit hospital , nursing home or hOUSing corporations) by the
County or any of its agencies (I.e. county hospitaL commission):
10 Capitali,ed leases entered into by the County during the current year:
PROPERTY LEASED
FACE AMOUNT
OF LEASE
11 Total amount capitalized {eases to be entered into by the County during the current year:
12 Total of 8,9,and 10: .............. .. .......... ...................... ..
IN WITNESS THEREOF, I have hereunto set my hand this day July 15, 2016
Dusty Rhodes,
327,000,000
0.00
107,460,022
107,460,022
2,485,200
104,974,822
S 183,483,757
78,508,934
327,<m,OOO
0.00
0.00
s 327,000,000
APPENDIXD TEN MILL CERTIFICATE
TEN MILL CERTIFICATE
FOR POLITICAL SUBDIVISIONS ISSUING UNVOTED GENERAL OBLIGATION BONDS AND NOTES
The undersigned Coun ty Auditor of Hamilton County, Ohio hereby certifies in connection with a proposed issue of 0 of the in the principal amount of $ , dated July 2016 ,that the tax rates required to produce the highest annual debt charges for the
proposed issue and all other issues of said subdivision and the subdivisions overlapping it, which are payable from taxes subject to the 10 mill limitation of Article XII,
Section 2, Ohio Constitution, based upon the fa cts hereinafter set forth and assuming that all levi es were to be made therefor on the general tax duplicate are as follows:
OVERLAPPING
SUSDIVISION
Hamilton County
Village of Silverton
Cincinnati CSO
DATED:
$
ASSESSED VALUATION
18,348,375,650 (al Special Assessment bonds
& notes in original or refunded form :
(b) All other bonds & notes payable from or secured by taxes
inside the 10 mill limitation:
S 82,693,340 (al Special Assessment bonds
$
& notes in original or refunded
form :
(b) All other bonds & notes
payable from or secured by ta xes inside the 10 m\lllimitation:
6,054,466.250 (a)Bonds & notes payable from taxes inside the 10 mill limitation:
___________ (a)80nds & notes payable from
taxes inside the 10 mill limitation:
__________ (al Special Assessment bonds
& notes in original or refunded
form :
(b) All other bonds & notes
payable from or secured by taxes
inside the 10 mill limitation:
Proposed Issue:
• .I ~~~ Ie, 3:::)l C •
o
Debt Charges for fiscal year in which
Present they will total the highest to wit,
Principal
Amount For Principal
$ 4,093.766 $ 367, 432 $
$ 108,105,022 $ 9.380.851 $
$ $ $
$ 2,620,000 $ 123,333 $
$ 153,035,000 $ 14,846,682 $
$ $ $
$ $ $
$ $ $
$ $
For Interest
169,514
4,350,251
136,285
7, 239,792
$
TOTAl
County of Hamilton
Required Tax
2017 Rate for Two
Previous
Columns
0 .029 M ills
0.748 Mills
Mills ----
3.140 Mills
3.648 Mills
Mill s -----
_______ MillS
Mills ----Mills
7.565 Mills
07/19/2016
APPENDIXE 2016 TAX RATE TABLE
'Rates of Taxation on one ($1.00) dollar in the various townships, cities, villages and school districts of Hamilton County for the tax year 2015, as prepared by Hamilton County Auditor Dusty Rhodes.
GREAT PARKS CINTI- RESIDENTIAL COMMERCIALHAMILTON OF HAMILTON HAMILTON SPECIAL CITY JOINT TOTAL RESIDENTIAL COMMERCIAL AGRICULTURAL INDUSTRIALCOUNTY COUNTY COUNTY DISTRICT TOWNSHIP SCHOOL VILLAGE VOCATIONAL FULL AGRICULTURAL INDUSTRIAL EFFECTIVE EFFECTIVE
TAX RATE RATE LIBRARY RATE RATE RATE RATE RATE RATE REDUCTION REDUCTION RATE RATEDTE DISTRICT SPECIAL CITY TOWNSHIP SCHOOL RATE FACTORS FACTORS
CODE NUMBER DISTRICT VILLAGE MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS1110 001 Cincinnati Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 12.10 0.00 103.13 0.274709 0.150161 74.799317 87.6439790020 002 Anderson Park Anderson............. Cincinnati........... 18.85 1.03 1.00 2.28 14.57 70.15 0.00 0.00 107.88 0.304582 0.157820 75.021786 90.8544180210 003 L.M.J. F. & R. D.* Columbia............. Cincinnati........... 18.85 1.03 1.00 12.05 18.61 70.15 0.00 0.00 121.69 0.260267 0.136509 90.018173 105.0782450230 004 Silverton FD Columbia............. Cincinnati........... 18.85 1.03 1.00 0.00 25.31 70.15 0.00 0.00 116.34 0.274704 0.149425 84.380961 98.9559280220 005 Ridge FD Columbia............. Cincinnati........... 18.85 1.03 1.00 0.00 25.38 70.15 0.00 0.00 116.41 0.268867 0.141129 85.111209 99.9811940150 006 L.M.J. F. & R. D.* Columbia............. Cincinnati........... 18.85 1.03 1.00 12.05 18.61 70.15 0.00 0.00 121.69 0.260267 0.136509 90.018173 105.0782450240 007 L.M.J. F. & R. D.* Fairfax Cincinnati........... 18.85 1.03 1.00 12.05 0.00 70.15 1.80 0.00 104.88 0.274611 0.150271 76.078839 89.1196140340 008 Delhi.................... Cincinnati........... 18.85 1.03 1.00 0.00 30.58 70.15 0.00 0.00 121.61 0.307655 0.188999 84.196133 98.6258350430 009 Green................... Cincinnati........... 18.85 1.03 1.00 0.00 14.66 70.15 0.00 0.00 105.69 0.295317 0.162439 74.477964 88.5219161115 010 Cincinnati Green................... Cincinnati........... 18.85 1.03 1.00 0.00 15.27 70.15 10.34 0.00 116.64 0.267593 0.147189 85.427964 99.4719160850 011 Springfield........... Cincinnati........... 18.85 1.03 1.00 0.00 23.80 70.15 0.00 0.00 114.83 0.247880 0.134970 86.365997 99.3314430980 013 Sycamore............ Cincinnati........... 18.85 1.03 1.00 0.00 8.75 70.15 0.00 0.00 99.78 0.297710 0.161657 70.074502 83.6499390625 014 Norwood Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 11.40 0.00 102.43 0.327603 0.178842 68.873637 84.1112830680 015 D.P.S.J.F.D.+ Silverton Cincinnati........... 18.85 1.03 1.00 7.90 0.00 70.15 8.15 0.00 107.08 0.272899 0.149921 77.858080 91.0265640550 016 Madeira Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 7.50 0.00 98.53 0.287534 0.157171 70.199317 83.0439790010 017 Amberley Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 17.00 0.00 108.03 0.262249 0.143350 79.699317 92.5439791100 018 Wyoming Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 10.00 0.00 101.03 0.280419 0.153282 72.699317 85.5439790070 019 Cheviot Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 20.13 0.00 111.16 0.272958 0.150716 80.818060 94.4064700495 020 Indian Hill Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 0.96 0.00 91.99 0.307976 0.168345 63.659317 76.5039790557 021 Mariemont Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 14.37 0.00 105.40 0.343505 0.194844 69.194639 84.8635450280 022 Golf Manor Cincinnati........... 18.85 1.03 1.00 0.00 0.00 70.15 43.52 0.00 134.55 0.216884 0.115116 105.368376 119.0612000990 025 Sycamore............ Deer Park........... 18.85 1.03 1.00 0.00 8.75 86.53 0.00 2.70 118.86 0.398161 0.309750 71.534652 82.0431160690 026 D.P.S.J.F.D.+ Silverton Deer Park........... 18.85 1.03 1.00 7.90 0.00 86.53 8.15 2.70 126.16 0.371289 0.291220 79.318230 89.4197410320 027 D.P.S.J.F.D.+ Deer Park Deer Park........... 18.85 1.03 1.00 7.90 0.00 86.53 10.45 2.70 128.46 0.360886 0.281975 82.100596 92.2376101130 031 Cincinnati Finneytown......... 18.85 1.03 1.00 0.00 0.00 96.93 9.78 2.70 130.29 0.303096 0.209387 90.799680 103.0090010740 032 Springfield........... Finneytown......... 18.85 1.03 1.00 0.00 23.80 96.93 0.00 2.70 144.31 0.274574 0.189132 104.686360 117.0164650745 033 Wyoming Springfield........... Finneytown......... 18.85 1.03 1.00 0.00 23.21 96.93 7.54 2.70 151.26 0.261958 0.180442 111.636360 123.9664651150 041 Cincinnati Forest Hills......... 18.85 1.03 1.00 0.00 0.00 70.50 10.96 2.70 105.04 0.333071 0.182786 70.054241 85.8401630030 042 Anderson Park Anderson............. Forest Hills......... 18.85 1.03 1.00 2.28 14.57 70.50 0.00 2.70 110.93 0.356201 0.186960 71.416710 90.1906020600 043 L.M.J. F. & R. D.* Newtown Forest Hills......... 18.85 1.03 1.00 12.05 0.00 70.50 2.37 2.70 108.50 0.326786 0.179486 73.043763 89.0257980035 044 L.M.J. F. & R. D.* Newtown Anderson............. Forest Hills......... 18.85 1.03 1.00 12.05 12.76 70.50 1.19 2.70 120.08 0.329900 0.174999 80.465703 99.0662371025 059 Indian Hill Symmes............... Indian Hill........... 18.85 1.03 1.00 0.00 14.35 46.06 0.65 2.70 84.64 0.367241 0.329665 53.556788 56.7372210305 060 Terrace Park Indian Hill........... 18.85 1.03 1.00 0.00 0.00 46.06 13.28 2.70 82.92 0.322035 0.294193 56.216870 58.5255590160 061 L.M.J. F. & R. D.* Columbia............. Indian Hill........... 18.85 1.03 1.00 12.05 18.61 46.06 0.00 2.70 100.30 0.296782 0.254439 70.532808 74.7798250215 062 L.M.J. F. & R. D.* Columbia............. Indian Hill........... 18.85 1.03 1.00 12.05 18.61 46.06 0.00 2.70 100.30 0.296782 0.254439 70.532808 74.7798250200 063 L.M.J. F. & R. D.* Columbia............. Indian Hill........... 18.85 1.03 1.00 12.05 18.61 46.06 0.00 2.70 100.30 0.296782 0.254439 70.532808 74.7798250940 064 Sycamore............ Indian Hill........... 18.85 1.03 1.00 0.00 8.75 46.06 0.00 2.70 78.39 0.354649 0.319410 50.589137 53.3515191020 066 Symmes............... Indian Hill........... 18.85 1.03 1.00 0.00 15.00 46.06 0.00 2.70 84.64 0.367241 0.329665 53.556788 56.7372210540 067 Madeira Indian Hill........... 18.85 1.03 1.00 0.00 0.00 46.06 7.50 2.70 77.14 0.342573 0.316236 50.713952 52.7455590490 068 Indian Hill Indian Hill........... 18.85 1.03 1.00 0.00 0.00 46.06 0.96 2.70 70.60 0.374307 0.345531 44.173952 46.2055590275 069 Milford Indian Hill........... 18.85 1.03 1.00 0.00 0.00 46.06 13.80 2.70 83.44 0.320278 0.292360 56.716064 59.045559
RATES OF TAXATION FOR TAXES PAID IN 2016The sales tax credit for tax year 2015 is calculated at .767666 times the owner occupied credit.
'Rates of Taxation on one ($1.00) dollar in the various townships, cities, villages and school districts of Hamilton County for the tax year 2015, as prepared by Hamilton County Auditor Dusty Rhodes.
GREAT PARKS CINTI- RESIDENTIAL COMMERCIALHAMILTON OF HAMILTON HAMILTON SPECIAL CITY JOINT TOTAL RESIDENTIAL COMMERCIAL AGRICULTURAL INDUSTRIALCOUNTY COUNTY COUNTY DISTRICT TOWNSHIP SCHOOL VILLAGE VOCATIONAL FULL AGRICULTURAL INDUSTRIAL EFFECTIVE EFFECTIVE
TAX RATE RATE LIBRARY RATE RATE RATE RATE RATE RATE REDUCTION REDUCTION RATE RATEDTE DISTRICT SPECIAL CITY TOWNSHIP SCHOOL RATE FACTORS FACTORS
CODE NUMBER DISTRICT VILLAGE MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS
RATES OF TAXATION FOR TAXES PAID IN 2016The sales tax credit for tax year 2015 is calculated at .767666 times the owner occupied credit.
0520 071 Lockland Lockland............. 18.85 1.03 1.00 0.00 0.00 47.09 7.52 2.70 78.19 0.188586 0.055337 63.444471 73.8632060040 072 Arlington Hts Lockland............. 18.85 1.03 1.00 0.00 0.00 47.09 20.52 2.70 91.19 0.194939 0.070239 73.413601 84.7849380370 073 Evendale Lockland............. 18.85 1.03 1.00 0.00 0.00 47.09 0.00 2.70 70.67 0.208654 0.061226 55.924471 66.3432061030 081 Symmes............... Loveland............. 18.85 1.03 1.00 0.00 15.00 82.09 0.00 2.70 120.67 0.370160 0.303702 76.002852 84.0223740525 082 Loveland Loveland............. 18.85 1.03 1.00 0.00 0.00 82.09 12.10 2.70 117.77 0.344316 0.282710 77.219972 84.4752561035 083 Loveland Symmes............... Loveland............. 18.85 1.03 1.00 0.00 15.27 82.09 10.52 2.70 131.46 0.343886 0.279957 86.252808 94.6569181120 091 Cincinnati Madeira.............. 18.85 1.03 1.00 0.00 0.00 101.55 12.03 2.70 137.16 0.411177 0.288671 80.763090 97.5659120530 092 Madeira Madeira.............. 18.85 1.03 1.00 0.00 0.00 101.55 7.50 2.70 132.63 0.425220 0.298531 76.233090 93.0359120500 093 Indian Hill Madeira.............. 18.85 1.03 1.00 0.00 0.00 101.55 0.96 2.70 126.09 0.447276 0.314015 69.693090 86.4959120120 101 Columbia............. Mariemont.......... 18.85 1.03 1.00 0.00 18.61 113.92 0.00 2.70 156.11 0.420706 0.239051 90.433605 118.7918490180 102 L.M.J. F. & R. D.* Columbia............. Mariemont.......... 18.85 1.03 1.00 12.05 18.61 113.92 0.00 2.70 168.16 0.393357 0.223553 102.013127 130.5674840190 103 L.M.J. F. & R. D.* Columbia............. Mariemont.......... 18.85 1.03 1.00 12.05 18.61 113.92 0.00 2.70 168.16 0.393357 0.223553 102.013127 130.5674840250 104 L.M.J. F. & R. D.* Fairfax Mariemont.......... 18.85 1.03 1.00 12.05 0.00 113.92 1.80 2.70 151.35 0.418079 0.242757 88.073793 114.6088530505 105 Indian Hill Mariemont.......... 18.85 1.03 1.00 0.00 0.00 113.92 0.96 2.70 138.46 0.453602 0.263375 75.654271 101.9932180555 106 Mariemont Mariemont.......... 18.85 1.03 1.00 0.00 0.00 113.92 14.37 2.70 151.87 0.465401 0.273374 81.189593 110.3527840300 107 Terrace Park Mariemont.......... 18.85 1.03 1.00 0.00 0.00 113.92 13.84 2.70 151.34 0.416829 0.240960 88.257189 114.8732180270 108 Milford Mariemont.......... 18.85 1.03 1.00 0.00 0.00 113.92 13.80 2.70 151.30 0.417077 0.241024 88.196383 114.8332180260 111 Milford Milford................ 18.85 1.03 1.00 0.00 0.00 80.00 13.80 2.70 117.38 0.341694 0.210439 77.272014 92.6787750090 121 Colerain............... Mt. Healthy......... 18.85 1.03 1.00 0.00 20.21 75.26 0.00 2.70 119.05 0.294206 0.240881 84.024786 90.3731500830 122 Springfield........... Mt.Healthy.......... 18.85 1.03 1.00 0.00 23.80 75.26 0.00 2.70 122.64 0.256877 0.213467 91.136712 96.4605280595 124 Mt.Healthy Mt.Healthy.......... 18.85 1.03 1.00 0.00 0.00 75.26 11.11 2.70 109.95 0.285312 0.239246 78.580032 83.6449751170 125 Mt.Healthy Springfield…………Mt.Healthy.......... 18.85 1.03 1.00 0.00 24.18 75.26 9.61 2.70 132.63 0.237528 0.198429 101.126712 106.3124390800 134 Springfield........... No.College Hill... 18.85 1.03 1.00 0.00 23.80 66.77 0.00 2.70 114.15 0.279020 0.211486 82.299887 90.0089670610 135 No.College Hill No.College Hill... 18.85 1.03 1.00 0.00 0.00 66.77 12.88 2.70 103.23 0.314453 0.234982 70.769111 78.9728770080 141 Colerain............... Northwest........... 18.85 1.03 1.00 0.00 20.21 58.87 0.00 1.93 101.89 0.308174 0.211235 70.490230 80.3672960440 142 Green................... Northwest........... 18.85 1.03 1.00 0.00 14.66 58.87 0.00 1.93 96.34 0.317894 0.214811 65.714123 75.6451470790 143 Springfield........... Northwest........... 18.85 1.03 1.00 0.00 23.80 58.87 0.00 1.93 105.48 0.264296 0.180370 77.602156 86.4546740615 145 No.College Hill Northwest........... 18.85 1.03 1.00 0.00 0.00 58.87 11.58 1.93 93.26 0.305476 0.205248 64.771380 74.1185840410 146 Forest Park Northwest........... 18.85 1.03 1.00 0.00 0.00 58.87 16.83 1.93 98.51 0.281642 0.193004 70.765476 79.4972100395 147 Fairfield Forest Park.......... Northwest........... 18.85 1.03 1.00 0.00 0.00 58.87 5.94 1.93 87.62 0.323086 0.218689 59.311254 68.4585211160 151 Cincinnati Norwood............. 18.85 1.03 1.00 0.00 0.00 59.98 11.98 2.70 95.54 0.248923 0.157365 71.757921 80.5053480620 152 Norwood Norwood............. 18.85 1.03 1.00 0.00 0.00 59.98 11.40 2.70 94.96 0.305474 0.188157 65.952241 77.0926521140 161 Cincinnati Oak Hills............. 18.85 1.03 1.00 0.00 0.00 51.15 9.73 2.70 84.46 0.255050 0.211120 62.918478 66.6288660330 162 Delhi.................... Oak Hills............. 18.85 1.03 1.00 0.00 30.58 51.15 0.00 2.70 105.31 0.290806 0.240522 74.685294 79.9807220450 163 Green................... Oak Hills............. 18.85 1.03 1.00 0.00 14.66 51.15 0.00 2.70 89.39 0.273218 0.218293 64.967125 69.8768030720 170 Springfield........... Princeton............ 18.85 1.03 1.00 0.00 23.80 62.58 0.00 2.70 109.96 0.272304 0.146845 80.017562 93.8129780960 172 Sycamore............ Princeton............ 18.85 1.03 1.00 0.00 8.75 62.58 0.00 2.70 94.91 0.328564 0.176784 63.726067 78.1314740510 173 Lincoln Hts Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 48.73 2.70 134.89 0.220989 0.119613 105.080882 118.7555141080 174 Woodlawn Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 10.08 2.70 96.24 0.316107 0.172156 65.817923 79.6717580670 175 Sharonville Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 0.00 2.70 86.16 0.345974 0.187262 56.350882 70.0255140420 176 Glendale Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 21.58 2.70 107.74 0.278636 0.150509 77.719778 91.5242620050 177 Blue Ash Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 3.08 2.70 89.24 0.334034 0.180799 59.430882 73.1055140710 178 Springdale Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 3.08 2.70 89.24 0.334034 0.180799 59.430882 73.1055140360 179 Evendale Princeton............ 18.85 1.03 1.00 0.00 0.00 62.58 0.00 2.70 86.16 0.345974 0.187262 56.350882 70.025514
'Rates of Taxation on one ($1.00) dollar in the various townships, cities, villages and school districts of Hamilton County for the tax year 2015, as prepared by Hamilton County Auditor Dusty Rhodes.
GREAT PARKS CINTI- RESIDENTIAL COMMERCIALHAMILTON OF HAMILTON HAMILTON SPECIAL CITY JOINT TOTAL RESIDENTIAL COMMERCIAL AGRICULTURAL INDUSTRIALCOUNTY COUNTY COUNTY DISTRICT TOWNSHIP SCHOOL VILLAGE VOCATIONAL FULL AGRICULTURAL INDUSTRIAL EFFECTIVE EFFECTIVE
TAX RATE RATE LIBRARY RATE RATE RATE RATE RATE RATE REDUCTION REDUCTION RATE RATEDTE DISTRICT SPECIAL CITY TOWNSHIP SCHOOL RATE FACTORS FACTORS
CODE NUMBER DISTRICT VILLAGE MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS MILLS
RATES OF TAXATION FOR TAXES PAID IN 2016The sales tax credit for tax year 2015 is calculated at .767666 times the owner occupied credit.
0910 181 Sycamore............ Reading.............. 18.85 1.03 1.00 0.00 8.75 78.15 0.00 2.70 110.48 0.347749 0.144174 72.060796 94.5517280630 182 Reading Reading.............. 18.85 1.03 1.00 0.00 0.00 78.15 3.52 2.70 105.25 0.351966 0.145219 68.205611 89.9657680390 183 Evendale Reading.............. 18.85 1.03 1.00 0.00 0.00 78.15 0.00 2.70 101.73 0.364145 0.150244 64.685611 86.4457680310 191 W.J.A.D.# Crosby................. Southwest........... 18.85 1.03 1.00 2.25 10.24 44.18 0.00 2.70 80.25 0.353915 0.254718 51.848374 59.8088880470 192 Harrison............... Southwest........... 18.85 1.03 1.00 0.00 5.24 44.18 0.00 2.70 73.00 0.364327 0.273170 46.404158 53.0586210480 193 Harrison Harrison............... Southwest........... 18.85 1.03 1.00 0.00 0.06 44.18 16.90 2.70 84.72 0.350408 0.254313 55.033439 63.1746511070 194 W.J.A.D.# Whitewater........... Southwest........... 18.85 1.03 1.00 2.25 11.44 44.18 0.00 2.70 81.45 0.346756 0.250178 53.206724 61.0730521075 195 Cleves Whitewater........... Southwest........... 18.85 1.03 1.00 0.00 0.00 44.18 13.63 2.70 81.39 0.327138 0.244864 54.764302 61.4605250475 196 Harrison Harrison............... Southwest........... 18.85 1.03 1.00 0.00 1.87 44.18 15.09 2.70 84.72 0.350408 0.254313 55.033439 63.1746511171 197 Harrison Crosby................. Southwest........... 18.85 1.03 1.00 0.00 8.37 44.18 15.09 2.70 91.22 0.338826 0.239888 60.312335 69.3374530650 201 St.Bernard St.Bernard.......... 18.85 1.03 1.00 0.00 0.00 58.56 11.28 2.70 93.42 0.082903 0.032265 85.675240 90.4058920350 202 Elmwood Pl St.Bernard.......... 18.85 1.03 1.00 0.00 0.00 58.56 17.78 2.70 99.92 0.077510 0.030166 92.175240 96.9058920970 210 Sycamore............ Sycamore........... 18.85 1.03 1.00 0.00 8.75 66.37 0.00 2.70 98.70 0.426253 0.255070 56.628852 73.5246481010 211 Montgomery Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 10.05 2.70 100.00 0.426926 0.254861 57.307487 74.5139881040 212 Symmes............... Sycamore........... 18.85 1.03 1.00 0.00 15.00 66.37 0.00 2.70 104.95 0.432144 0.267172 59.596503 76.9103500060 214 Blue Ash Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 3.08 2.70 93.03 0.437454 0.263693 52.333667 68.4986880660 215 Sharonville Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 0.00 2.70 89.95 0.452433 0.272722 49.253667 65.4186880380 216 Evendale Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 0.00 2.70 89.95 0.452433 0.272722 49.253667 65.4186880527 217 Loveland Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 12.03 2.70 101.98 0.404358 0.242075 60.743623 77.2932320485 218 Indian Hill Sycamore........... 18.85 1.03 1.00 0.00 0.00 66.37 0.96 2.70 90.91 0.447656 0.269842 50.213667 66.3786880560 221 Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 13.41 49.22 0.00 2.70 86.21 0.247340 0.108583 64.886887 76.8491370570 222 Addyston Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 0.68 49.22 8.09 2.70 81.57 0.270083 0.115606 59.539342 72.1400480580 223 Cleves Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 0.68 49.22 13.99 2.70 87.47 0.243827 0.107018 66.142466 78.1091370590 224 North Bend Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 2.93 49.22 11.38 2.70 87.11 0.244517 0.108057 65.810192 77.6972320585 225 Cleves Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 8.66 49.22 10.90 2.70 92.36 0.231111 0.101352 71.014636 82.9991370593 226 North Bend Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 9.76 49.22 9.44 2.70 92.00 0.231714 0.102313 70.682362 82.5872320565 227 Cleves Miami................... Three Rivers....... 18.85 1.03 1.00 0.00 2.61 49.22 12.05 2.70 87.46 0.243855 0.107031 66.132466 78.0991370770 233 Springfield........... Winton Woods.... 18.85 1.03 1.00 0.00 23.80 87.81 0.00 2.70 135.19 0.287022 0.178648 96.387612 111.0386400750 234 Wyoming Springfield........... Winton Woods.... 18.85 1.03 1.00 0.00 23.21 87.81 7.54 2.70 142.14 0.272988 0.169913 103.337612 117.9886401095 236 Wyoming Winton Woods.... 18.85 1.03 1.00 0.00 0.00 87.81 10.00 2.70 121.39 0.318553 0.198854 82.720932 97.2511760460 237 Greenhills Winton Woods.... 18.85 1.03 1.00 0.00 0.00 87.81 30.86 2.70 142.25 0.317006 0.197854 97.155941 114.1053600715 238 Springdale Winton Woods.... 18.85 1.03 1.00 0.00 0.00 87.81 3.06 2.70 114.45 0.337869 0.210912 75.780932 90.3111760400 239 Forest Park Winton Woods.... 18.85 1.03 1.00 0.00 0.00 87.81 18.51 2.70 129.90 0.297684 0.185827 91.230932 105.7611761090 241 Wyoming Wyoming............ 18.85 1.03 1.00 0.00 0.00 93.28 10.00 2.70 126.86 0.435800 0.363295 71.574538 80.772419
*L.M.J.F. & R. D.= Little Miami Joint Fire & Rescue District +D.P.S.J.F.D.= Deer Park/Silverton Joint Fire District
#W.J.A.D.= Western Joint Ambulance District
APPENDIXF COUNTY INVESTMENT POLICY
Objectives:
HAMlLTON CoUNtY
INVESTMENT POUCIBS
1) T-o jnve.st all ,county m~)lleys in ac.C(>rd~ce with the gUidelines. of O.R.C. section 135, with the priorities peing: Safyty~ UqJJidity, )'leld, in that order .
. 2) To .secure all securities in accord.ance with the UC.C. section 9,.305, as codified in IObioin O.R..C. s~ction·1309.~4.
3) To limit market riSk and insur~ reliab~ retqm ORin vestments through .diver::;ity and manag.c::rne»t .ofthe investment portfolio. .'
4) To safeguard R:epur~hase .Agr.eement (Repo) transacuans so as to avoid .a11s.ecl:lIity risk, and to limit and 4'apk matket D$k. .
1) The T~er'5 911nes are outlined in U1.eO~RC .• spccificallY'liection 135.35 .dea1in,g with Investments.
2) Th.e Treasurer,s Office is hound by the 'State Law to manage all county fu.nds. Thus, the Inv9stme:nts under this Investment P.plicy refer to aU :fu;ru:is, general;md ,spe6ial. In particular, ALL Trust F1JIld mone~ are-jny~ted in the .same typl; sec:uiities as the Gtmeral Ftmd. All Trust Fund .Invest:tmmts are ~egrega(ed.
Policie{3;
1) In order-to invest all county mon~s in .ac.cordance with the guidel;i.nesof.O.R.C. sectio:l1l35, the Treasurer's Office continuously monitots new l~gislation -in the investment arena. Further, the rrea$ur~ is r.esponsible for se~ing that·all investments are .in accordance with the provisions ofO.R.C, section 135:35 dealing with Eligible deposits or investments for county moneys.
Daily rooor~ of aU investments are kept by the Treasurer, and p;:I.Ontbly stl.l1trnaries,. detaUing all changes In tbe portfplio,.are given to the Hanillton .county Auditor's Office. All +e.co;rd.s·~ 9P~.to inspection of the State Exa;mi:aers, and ar~ audited annua:1.1y.
2) All investments shall h.ave a m.a:x.imum maturity of five (5) years from ·thedate of $ettl(;H).entpursuant to O.'R.C. l35.35.(C). .
3) O.R.C. section 1309.24 Specifies tl,tat a .security int:erost in "instrumemts~; may be "perfected" by the "takingpossessiQu of the eollateral."" O.RC .. secUon 1309.01 defines ''Jnst:n:rti:lent'' in p,art, ~ a security as d~ed in section 1;308,01 of the Rrnsed Code, wbichsection,defincs a security (O.R.C. 130$.01 (A) 0»). In order for the Treasur.er'/3 Office to periept a .Security interest in all govemment s~ties fi~hase4. or accepted as repp pollateral (seeobje.ctive and polley 4), (h~ Treasurer's Office takes POSSe!I$iM of the securities. .
4) In order to limit m..arket ril3k &ni'l msure reliablereturn oninv~stIilents, tb~ Tre.llSU@f's Office win continually monitor and fl'ack aU investt;nents, and wiJlqiversifyand mamige the investment portfolio .. Through the pu.rch~ing ofv.ariQU$ Treasury securities - Bills and Notes,,. and the pun;b,ase of othertlecurities as permiftedby O-R.e. section 13~.35, . the Treasure.r'.s Of/lce,~an lopk in yield andCOllppn flow In 9!der tp limit tn~kct ril'lk. !Jlld ~an spread th~ :maturity of the p<ritfQlio along the yi e1d curve, in order to enslJ;lXl a reliahle return.
It is an expn:ss policy of the Treasurer's Office to yalue overa111ong ter:rn portfolio perfonnancepver'the short term needs of the county. this entails two asp~ts of the Inveshl;lent Policy. Firat, the Treasurers Offipe wil1 not i:p.vest funds that ~e lleWedon a shoJi. term bll$is, in in.s~ents with a longtenn maturity. Even though an interest rate move is predicted •. short teIm funds will be hivested in shorttl!rm lns,/:rtunents s.o as not to expose the transaction to .market fluctuations: Secondly, while the intl'I'e.st of.the Budgetary Departments is to set overall int~ .earned goals, the !nvestrnent.t)~artrnent will not sacrifice the long teon portfolio gQals for .th~ iti.terest of ~.shprt term monetary needs.
5) Repurchase Agreementll, or Repos, area safe investment vehlcle when they are don~ properly. ]~order to safeguard the ttanaactiQIl,. it is vital that that the Treasurer's Office per.fect a s~urity interes.t in the collateral, and traok and preV&:m.t any ma:dret risk. A~ long as these two risks are handled prop!'ltly (the sepurity risk .and market risk) the T~asurer's
. Office will be secured in the Rep!'! transaction.
Security Risk is alleViated by the Treasur.er' sOfflce perfecting a security interest by talcing possessiOn oIthe collatcnl (see O.R'C. 1309.24 and objective ,policy 2 above). The Tieas.urer~.s Office:tak~ po~~sion of the .repo collater.a;1 in a thlr4~p~ di$interested tru~~bank.and said bank m8:ynotbe in control or qualify.as an agent fQr th(, repo dealer .Or ,tb~ rep<> bank pamcipant.·
Mark~ nskis allev.iated by daily tracking of prices of the entire set.of repp collateral. Two indices a;r¢ re.t - one uo longer than 5 years at:!.d no sborte:r than 4 yem-s, lind another no l()1lg~r than 2 years and n() shorter than on'e year. If the .daily closi»;g pid .. Bide price as found in the Wali Street .Jeumal is lower than or .equal to the weight~ !1vera,ge price or ~ repo ,collateral, steps must t:e taJct,n to re;.prioe or add more .collateral to the portfolio. The longcrtenu i:ij.dex is used a;; ~ first guide to put the Treasurer' s Offi~ on notice, whi1~ the ·second shorter terril iJID~x is dispositive as 10 the need for more collateral. If, within the Investment officer',s .4iseretion. the a:vera~e maturii;Y of the aggregate of the
rcpo coUatex:al is better represeI;lted by the long~ tenn index, re-priping PT additional ·collateral may be required. . .
.6) Th.e lnvestmentAiIthority may for the limited purpoa~ ~et forth n O.RC. 135.80 (Linked bep.osit Authorized Lo~),acpept CP~ at :1es~ than m;arket rate.
7) All ~ntitie.s that hold ortra:hsact funds with Hamilton Coooty shall sign tbis p.olicy, acknowlepge their agr.eement to api4~ by the policy's,conte:nts, and acknowledg!:rtheir c.omprehension ~D.I;1 receipt ofthls investment p.olicy.
Adopted with amendment: 5/24/04
APPENDIXG COUNTY DEBT POLICY
. . .. , .
\
.. ~ r a>.M~~ .S
1 .. !IOI!.~ I ..,... .. tlFJ 2ZmS . , ..... a708 ' ..
BESOL11tION ADOPTING A DEBT POLICY
WJiEREAS, Thea~d of CoMty Co~oner.s ofHllmilton CoUnty, 'Om9 maintains the l-·.Il.<' ·auth· 'tv •. -~.-- .•• .:4.'1..... on·j"'I to _ ... _LU";;" ado...t • d . . ... . .• . l&'WY,U,l,l. .on~ .. 11l aceo~" 'n'.l\.,\-t .!U~ ~V. ~\.tW~ .. l'~ reVlse am modify poliCies •. procedur.esand other ·rnleS Df debt management under the Board·s jurisdiction; and
pollcy.; and
WII.E~ th~ debt -poUey has been fo~.~ed tp the .coun~y'~1»nd. ~1, the County Auditor, the C.ounty Tr~ and V~Oll$ 'investment bankers for cOJIl1Ucnts; and
. WHEREAS, ~ propaS«l .debt policy hqs beep :~at staff ·and JJi\)d.ifications have 'been made bas&:l on: these discussions.
NOW, ~ORE,BE If USOLVED 'by' 1he SO.ard of Co'Qllty C-oJllQiissioners ·of Hamilton Comlty, OlUo that the debt pnlicy ,~ed to this ~lution be ad~pted;~
. BE tt FUR.11lItR RESOLVED that·the Clerk of this Bo.ilr.rl be . .and heteby is .:authPrlze(l m1,~ to .certify copies oftbis resolution to .the Colmty Administrator ... the ~unty Auditor~ tbeCopnty ~, the Director of AdminisI.'rmiv.e S=vi~ and John Fischet from. ·Peek. ~ &. WUliJD,Ds, the County's bondoo~1.
ADOPTED .ala .arly .adjoUrned meeting .of the Board of Co~ Commiss'iODl;:rfl of Hamilton County, Ohio f:M; l2.nd. day of F~\lruary *, • 1995.
Mr. Bediugh.aus. AYE, Mr. Dow!in.AYE Mr. Gueken'betger. AY.=
gc~TIFICATE OF .~
IT IS HEREBY CERTIFiEUtlmt .the foregoing IS .a true $4 'P9rrect tt8llscrlpt 9f a .resolp.tiou. adopted by the I:k>ard of C(l~ Commissiono.rs .in -session the 22nd iiayof' F~ruary. 1995. . .
:IN WlT.NF.SS WB;E.REOFJ I have hereunto set my :hand tmd. affixed the ,official seal {If tlu:: om~ of CwP.ty Comn1ission~s of 'Hamilton C~untyt Ohio this .22nd day .of
February 1995. I, . (' .. , ,
• PaniOtb. Clerk ,County Commissioners
Hanti1lon County. Ohip ,
>-
~ .
-- I fEB 221995 I~' .:t70ez
'. j
'Xh,i~ P~QP~.s~ is intended to be used for ·the pllrJi'OsE,!;Q;f making r~co~en4at~on$ to ·the nCAr,a regarding tp,e l.-s.eiuanceof deJ;it •. It ie und,:rf;ltoQd. that th~ ,Bpa~Q. of County QprtJm1$$ioners makes the f.tnal decl-sloon. .
.1. Hami.l.tonOounty will not_ 'uee long-term de:Pt 1:0 finance Cur1:ent o.pera.tions .
. 2 • i'be economio hanefit:s of purchaJ;Je .ye. l~ase pm:.chase' vs. straight lease will be revi-ewed ,at the time of 'acquisition for rO:ll.t,i,ne pUX'cb~ses,. TheSe if!.5t.allmentf;J, i:f .used, will not $xoeed five years ;i.n d~at;.ion. '
.3.. Ha'lllil'tpn county wi;11 .USe lOI),g ~erm dept to finan~e capital,. improvementprojectB that Cannot be 'fi,~ced from currentrev.enlle 'sources or which l,.ogioallyshould be paid for bymult::.iple generation,$, of t~ayerB. .
4 • T.he ,total t4lvoted general obl1ga.t:.iond@t ,ser'Vi~e o:f the' 'Hamilton County ,generAl :fUnd wil,l not .e~ceed 10 per.oe.m: of the total ;general £und operat:.ing budget. :lJe'bt for all oth.er restri.oted funds w1ll 1:;Ie issued .after ac;:::as,e by case deeeTminatipn thiif,t debt service can be paid from tJ;le restricted fJmd withbutge:nElral fund $Upplement.ation ..
S. Hamilton Couuty w;'ll not incurun'VOted nee debt ',or totalnf;!.t de}:ltexceeding t]'l;~ ,limitation's . in Section .l~l. 07 of tJ'leO,hio Rev-ised Code, a copy·o,£ whioh is attache.d.
6. DePt for obli9at~pns having a duration of five years .or .less roay be 'funded thrc;ugh :t;h. \lse .of .short term notes i£ ·,t.b.~ COUIl.l:y Administratoranil Di,:t;eeeo:rof .,Admini-at-X:ilt':i:ve servic~s -adVise that tA) .the projected interest' rates ~lil.ltive to th~ costs as.Qociae!lJd with h9nd~<I ~bt i:ssuance are to the advantage of tb.eco~ty, and tB) such analysis is .made .at ea¢h renewal. .
7 .Coristr.uctic::m'p~jfi!lot·s havi:ng debt obl'igatipIl$ ,of more than £tve years may I on the.adV"'ice of the Count:yMmitd.stra tor and the Directo~ ~f .Administra.tive Services I .be funded through ·short term notes d:uring const,rudtion to he .£01 lowed, by 'lon9~r term bpnding whe:n th.e proj'ect 1$ ¢ompleter;i~ The CO'!J.!lty Admini.strator and the Di:tE!ctor of ,Admi;n;i.r;,trati va Se.rvi~e.$ will '~se thepe,lpho~ ,Bpn,p. Index, the ocmd.;l.ti(;m of the boil~ yiel~ curve, and the advic~ of investment counf.;Jelors ,tn .dete:-rmining .apprQPriate del;>ti.ssuanoe in each instanoe.
s . l?~oj·ectsnot. imrolv~g conl'l·truct;ion having debt oblig-ations of t'no~e than five year~ will be funded. tnxPughbonding at .the time .of
acquisition.
'.9 • Not:es to beiJ3$ued ~n ,an ,amoUn;t of '$~SO ,.000 .in pr~nc.iJ?a:l .pr less ~Y. 1$ pUrchafl'ec:l tb.r¢USh an 1nfo~lbl.d proC::.ess involving ,all ,muo7ci:J;lal Wl~~iters ~yin~ an offi~e' in Hamilton Co.unty li~ted l.n the IIBcmd BUYerlii Muniqj.pa:1M~ketplace .• • If, .in the .opinion ot the Director of ,Ad.tn1nistrati~Servic~.s,it ,isc;ietermineq ~t :market or 'other ¢onitit;i~ms dictat~ that the info.J;:trta;J,. process .1$ .not. appropriate# a .fo,z:mal pr.pces~ may be UfJed.. .
1.0. Notes tp Pe is.sued ina,n arp.olU11: gr.eate~ than $2$O~.QP(> in pr'i:nci;pal ,sh~;I.l be p\lIchased through a ~pnnalcompetit:i-'iT¢ h.id p~oce.ss involving~:I.l, fi:rtn$. .
ll. All Gener~l Obligation Bonds wil'! be lssued with .all .mat~itie$ and. interest r~tes :sUbj.ect tp .a formal '·Competitive .bid p:;-oceS!;l unless the Board of County 'cpmrnissione:1:'S dire~t's .otherwis$.
1.2 • AbSent compelling argUtnenta. on ,a case by c~se basis, ail .General opli,gaj:,l.on. B.onds wil.,1 ,be issued with a cali f~ture with ,the exeeptiQno£ .special asses.sjnentbonds . Excepti<lns 'tn\1st :be approved by the Board. o~ County commiss1:oners.
13 . 'R.e'Venue Bonds may be iS~:l'ue<i thr9~h a negotia·te,dsale 'afte.X" c~sid.erationof the follow:i-ng factor~ as enumerated i'n tlle c.liforn·iapebt AdvisoltyCommission Issue BrieiNc). 1 dated Septeml:ler,19.92;
A. Issuer 9ha:r~9teristica 1. Ma.rket familiarity 2. Cred.it:st~eng.tlt 3. pol:i,eygoals
B. FiI1.ancing cbaracterie;tic$ 1. Type of ~pt instrument .~. I$=;Iue ~b;e ' . 3. Complexity of the iS~h,1.e 4. 'Market .conditions 5. Story bonds .
. and if fa) theun~~i·t:;;er ,Cs) have Qef!n chQs~i'!. thro\.1.gb. .a ¢(::impeti~i-ve P~Pf:'!SS w:lthin tl1e preceding five ye;;u::s; Jb) no siglIific~t changes ;i.i1: the market place have taken pla.ce which would 'like'ly .result in ai,gn:Lficantly improved perfprmance by altex:nativ~ unde:rwriter,(s'), .and (0) t.b.113Policydoea ,not d,onflict with other' polic1~ :whic.h maybe .mandat.ed,by law or .adop}:eci py t~ Coramissioner.s.
14. ~vetl.ue Banda un(ie:rw'!='itj.I:lg serviaes w,illbe sallc.itedfrottlaU m.aj!;);rand local .:l.nve$tltient banlting firms. All firms eXprs !5lsingan U:1\:eJ:e.st inprovidill9' tl1.$ service will be allowed to $lart.id.pate in '1;:b.~proce.ss indiv.idually 'OJ: aapa:rt of a grpu~. Fl.,ms will he all.owed to subm:i.t multiple propP.sds imlivid:aally Qr asa part of on~ or ,tnOre gr9AP'" . Ind!v,idQal 'bid~, multiple 'b;i.d proposals, and any combiilati-on of the~e henefiai~l to the county 'will be evaluated by the County Administrator, the oir.ector 0,£ :,Miministrative Serviees, and the .af'£e~teQ· department based on c.rite'ria attached,
. , ..
and ·t'ecQmmendea to the So~~ for .app-rova..l .•
COM'RSMlli •.• VOL. ~
fE'B 221995 . fMAQ~' .a.
1.S.. Investment pf capital .fund,s wil;L be' done ,by the Hamllt<;>n ,Co);lnty ~e.asu.rer in :a 1IijlJ'Uler .e(m$istent. wi.th tJle tIniform Depository Aet, section ,13'S oftlie .Qh:io 'Reyised code, s\lbj eel:. to r.e'Vie~ by the County' sln..vestment AdV:L~o:ryCommit.ee establisheci by Section .1.3S.34l of t.ho ·Ohio. .ie:v~$.eQ. Cooe.. ,
~~. All bond$., afJpr.escribeq by ohio law, will .be fi~anced for a per.iod not to ex('!~e(itbe axpected ~aeful .life of· the '~roj ect •
;1.7 ~ ;No bQnQ.1iJ w:ill be issueq. wb.i~h provide fo.r .ba1.1ponp;ri.ncipal :paymen.ts at! t.h~ end of the term of issuance ~ce'p't :that lev.al de1;lt se:t;'V~ee a';! .definedm QRe 133 .• 2l i's permissable.
'la.· NO .bon.d.sw:J.ll b.e issueq involving variab'1e .. rate debt.
19.. Hamilton .count.y wi:U l!l2li'ntain 90.0d~ommunica:tions with bQr,J..d :rat'ing agencies abo'i1t its financial cond.it:ion al)d will follow a' pp~icy of fUll d1scloau.re on .~very f.i1l$1lcial report and bon4 pr<:>Bp.ectus.
20,0 For e.ach ;i.saue of debt, Hamilton County -w:Ul consul,t bdnd cOJlIlsel.
2/22/95
,
J
· p WI
APPENDIXH AUTHORIZING RESOLUTION
On motion of Mr. Monzel, seconded by Mr. Deters the following resolution was adopted .•
RESOLUTION NO. 23 AUTHORIZING AN ANNUAL INFORMATION STATEMENT
FOR HAMILTON COUNTY, OHIO, FOR THE YEAR ENDED DECEMBER 31,2015
WHEREAS, it is the practice ofthe Board of County Commissioners to prepare an Annual Information Statement ("AIS" ) in conjunction with the County Auditor, as fiscal officer ofthe County, setting forth summary operating, demographic, economic and financial data with respect to the County and the Metropolitan Sewer District of Greater Cincinnati; and
WHEREAS, the AIS is supplied on an annual basis to the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access system to meet the requirements of Securities and Exchange Commission Rule 15c2-12; and
WHEREAS, the AIS is also supplied to rating agencies which have rated bonds and notes issued by the County and to investment banks and other financial institutions which have underwritten or which hold bonds and notes issued by the County; and
WHEREAS, the AIS for the year ended December 31, 2015 (with certain updated information for 2016) has been prepared by County staff in conjunction with the County Auditor in accordance with Government Finance Officers Association guidelines, and has been presented to this Board of County Commissioners for approval;
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of Hamilton County, Ohio:
SECTION 1. That the AIS for the year ended December 31, 2015 is hereby approved by this Board, and this Board hereby determines that the information set forth in the AIS is true and correct in all material respects and the AIS does not omit any information in order to make the statements therein, in light ofthe
circumstances under which they are made, not misleading in any material respect; and the AIS shall be executed on behalf of the County by the County Administrator and the County Auditor.
SECTION 2. That the County Administrator is hereby authorized and directed to file the AIS with the appropriate persons referred to in the preambles to this resolution.
SECTION 3. That it is found and determined that all formal actions of this Board of County Commissioners concerning and relating to the passage of this resolution were taken in an open meeting of this Board; and that all deliberations ofthis Board of County Commissioners and of any of its committees that resulted in such formal action, were in meetings open to the public, in compliance with the law.
SECTION 4. That the Clerk of this Board is hereby directed to file a copy of this resolution with the County Auditor of Hamilton County, Ohio,
ADOPTED at a regularly adjourned meeting of the Board of Commissioners of Hamilton County, Ohio this 10th day of August 2016,
M r. Deters YES Mr. Monzel YES Mr, Portune YES
CERTIFICATE OF CLERK
IT IS HEREBY CERTIFIED that the foregoing is a true and correct transcript of a resolution adopted by the Board of Commissioners of Hamilton County, Ohio this 10th day of August 2016,
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Board of Commissioners of Hamilton County, Ohio, this 10th day of August 2016,
oar Commissioners amilton County, Ohio
RECEIPT
The undersigned County Auditor of Hamilton County, Ohio hereby acknowledges receipt on
A~'T (t • ,2016 of a certified copy ofthe foregoing resolution ,
Dusty Rhodes, Auditor Hamilton County, Ohio
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