JANUARY 1, 2015 TO DECEMBER 31, 2015

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1 DUTCHESS COUNTY RESOURCE RECOVERY AGENCY, NEW YORK ANNUAL INFORMATION STATEMENT FILED PURSUANT TO RULE 15C2-12 UNDER SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL PERIOD: JANUARY 1, 2015 TO DECEMBER 31, 2015 (DATE FILED JUNE 23, 2016)

2 Municipal Secondary Market Disclosure Information Cover Sheet This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange Commission rule 15c2-12 or any analogous state statute. Provide nine-digit CUSIP* numbers if available, to which the information relates: DUTCHESS COUNTY RESOURCE RECOVERY AGENCY, NEW YORK DS6 WHAT TYPE OF INFORMATION ARE YOU PROVIDING? (Check all that apply) A. Annual Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB.) Fiscal Period Covered: January 1 December 31, 2015 B. Audited Financial Statements or CAFR pursuant to Rule 15c2-12 Fiscal Period Covered: January 1 December 31, 2015 (FILED 5/24/16) I hereby represent that I am authorized by the issuer or obligor or its agent to distribute this information publicly: Issuer Contact: Name: Lindsay Carille Title: Executive Director Employer: Dutchess County Resource Recovery Agency Address: 96 Sand Dock Road City: Poughkeepsie State: NY Zip Code: Telephone: (845) Fax: (845) Address: wcalogero@dcrra.org Issuer Web Site Address Dissemination Agent Contact, if any: Name: Beth A. Ferguson Title: Vice President Employer: Capital Markets Advisors, LLC. Address: 1075 Route 82 Suite 4 City: Hopewell Junction State: NY Zip Code: Telephone: (845) Fax: (845) Address: bferguson@capmark.org Relationship to Issuer: Financial Advisor

3 DUTCHESS COUNTY RESOURCE RECOVERY AGENCY, NEW YORK ANNUAL INFORMATION STATEMENT FILED PURSUANT TO RULE 15c2-12 UNDER SECURITIES EXCHANGE ACT OF 1934 ISSUE INFORMATION Description of Issues: $ 16,140,000 Solid Waste System Revenue Bonds, Series 2007 Underwriters: DEPFA First Albany Securities LLC Date of Sale: October 29, 2007 Date of Delivery: November 14, 2007 Dated Date: November 14, 2007 Payment Dates: Principal January 1, Interest January 1 and July 1 OUTSTANDING MATURITIES, COUPON RATES AND CUSIP NUMBERS Year Amount Rates CUSIP 2017 $ 1,020, DS ,070, DT ,125, DU ,180, DV ,230, DW ,285, DX (Term Bond) 2,850, DY (Term Bond) 4,480, DZ0 COVENANT INFORMATION The Dutchess County Resource Recovery Agency (the "Agency") is filing its annual information statement pursuant to a Continuing Disclosure Agreement executed by the Agency, dated November 14, FINANCIAL INFORMATION (a) Audited Financial Statements The Agency s audtied financial statements as of and for the year ended December 31, 2015 with notes thereto and the auditors' report thereon were filed May 24, (b) Annual Financial Information and Operating Data. The Agency has covenanted in continuing disclosure certificates to annually provide information contained or cross-referenced in the Official Statement under the headings The Agency and in the form found in the Consulting Engineer s Report under the heading Resource Recovery Facility Operating Results. 1

4 I. THE AGENCY The Dutchess County Resource Recovery Agency (the Agency ) was established as a public benefit corporation on July 22, 1982 pursuant to Title 13-D of Article 8 of the Public Authorities Law and Chapter 43-A of the Consolidated Laws of the State of New York (the Act ) to perform the essential governmental function of solid waste management. The Act authorizes the Agency to collect, receive, transport, process and dispose of solid waste; to design, construct and operate, or to have designed, constructed and operated solid waste management - resource recovery facilities; to sell, directly or indirectly, energy produced by the Facility and materials recovered from the System; to contract with the United States of America and the State with regard to grants and loans and with other municipalities, public corporations, or persons with regard to the collection, processing, or disposal of solid waste and the sale of energy products; to acquire property with the consent of the County Legislature and County Executive by eminent domain; to employ persons and contract with consultants; and to borrow funds to finance the design, construction and operation of solid waste management - resource recovery facilities. The Agency owns and through independent contractor, Wheelabrator Cutchess, LLC ( Wheelabrator ) operates a municipal waste combustion type resource recovery facility (the RRF or Facility ) and the Agency has contractual arrangements for the disposal of ash residue from incineration and materials that cannot be processed at the RRF. Through June 30, 2015, the Agency s Facility contract operator was Wheelabrator Hudson Valley Renewable Entergy, LLC ( CHVRE ). AGENCY BOARD AND STAFF Agency Board. All decision making power is vested within the Agency Board. The Board is composed of members appointed by the Dutchess County Executive and the County Legislature. The members of the Board are listed below: Name Joseph A. Small Wayne Nussbickel Rachel Flanagan Frost Thomas E. LeGrand Dave Petrovits Steve Tinkelman Title Chairman Treasurer/Secretary Member Member Member Member Agency Staff. Overall operations of the Agency are managed by the Executive Director of the Agency, who is appointed by the Agency Board. The Interim Executive Director is Lindsay Carille. Ms. Carille was appointed as Interim Executive Director in May The Agency employs 4 full-time individuals who are responsible for various administrative and operational duties. The Agency's finances are supervised by the contracted Certified Public Accountant who is assisted by an Account Clerk. Additional employees consist of a Facilities Operations Coordinator who is responsible for plant operations at the Waste-to-Energy Facility. DISCUSSION OF 2015 FINANCIAL OPERATIONS For the year ended December 31, 2015, the Agency recorded total revenue of $14,653,702 compared to $15,535,229 for the prior year (an decrease of $881,527). Tipping fee revenue decreased by $384,353 and energy sales revenue decreased $496,881 from the prior year. Total operating expenses for 2015 decreased by $1,616,295 from the prior year with decreases of $42,620 in disposal fees, $1,165,828 in operator service fees, $111,478 in administrative expense and $250,120 in depreciation and $46,249 in interest expense. Non operating revenue decreased by $428,137 from 2014 to The net effect of the above was a decrease in the net service fees received from the County from $999,439 in 2014 to $690,652 in The Agency s net assets were $10,710,149 at December 31, 2015 versus $12,037,935 at December 31, 2014, a decrease of $1,327,786 or 12.4% over the prior year. 2

5 The table below sets forth a summary of the Agency s Historical Operational and Financial Results and Debt Service Coverage: DUTCHESS COUNTY RESOURCE RECOVERY AGENCY SUMMARY OF HISTORICAL OPERATIONAL AND FINANCIAL RESULTS AND DEBT SERVICE COVERAGE Average Tip Fee ($/Ton) $ $ $ $ $ Tonnage Received at RRF 160, , , , ,033 Tonnage received at MRF 5,369 3, TOTAL TONNAGE RECEIVED 165, , , , ,033 FINANCIAL RESULTS: Operating Revenues: Tipping Fees $ 13,195,808 $ 12,957,726 $ 12,270,802 $ 11,092,208 $ 11,427,034 Recycled Metal Sales NA NA NA $ 1,263,926 $ 544,747 Energy Revenue 2,771,857 2,906,817 2,062,248 2,585,175 2,609,344 Energy Sale Rate Adjustments 588,590 67,540 Interest Income 230, , ,415 5,330 5,037 TOTAL OPERATING REVENUES 16,198,214 16,095,020 14,560,465 15,535,229 14,653,702 Operating Expenses: Residue Disposal Fees 2,662,917 2,963,907 2,022,181 2,173,728 2,131,108 Operator Service Fees 11,291,307 11,256,248 11,049,980 10,923,869 9,758,041 Administrative Expenses 1,440,599 1,563,578 1,693,794 1,970,130 1,858,652 Interest Expenses 1,295,778 1,128, , , ,388 Project Development: Depreciation 2,002,416 1,984,778 1,962,350 2,189,940 1,939,820 Amortization 94,552 94, TOTAL OPERATING EXPENSES 18,787,569 18,991,512 17,666,871 18,000,304 16,384,009 OPERATING INCOME (LOSS) (2,589,355) (2,896,492) (3,106,406) (2,465,075) (1,730,307) Other Income (Loss): County Net Service Fees 3,644,079 4,138, , , ,652 State Grants Other Income (Loss) (3,062) - 142, ,350 - TOTAL OTHER INCOME (LOSS) 3,641,017 4,138, ,507 1,118, ,652 INCREASE IN NET ASSETS 1,051,662 1,242,190 (2,251,899) (1,346,286) (1,039,655) Reserve and Contingency Fund $533,841 $533,848 $4,355,998 (b) $379,430 $379,430 Revenue Available For Debt Service (a) $4,978,249 $4,983,817 $5,005,015 $5,114,329 $1,975,983 Bond Debt Service $4,451,496 $4,444,241 $4,440,635 $4,435,601 $1,644,513 Debt Service Coverage (a) Total operating revenues plus total other income plus reserve and contingency fund less disposal fees, service fees and administrative expenses and adjustments. For 2013, reserve and contingency fund represents release of debt service reserve. (b) Includes release of MBIA GIC in the amount of $3,148,608. 3

6 2016 BUDGET The Agency anticipates that it will end the 2016 fiscal year in a balanced budget position. The budget is predicated on receiving 154,000 tons of municipal solid waste into the facility, producing tip fee revenues of $11,640,000; electric energy sales of $2,836,680; recycling fees of $175,000; and $1,000 interest earnings. The Net Service Fee to be received from Dutchess County for is estimated at $509,780. The 2016 Budget excludes depreciation and amortization of $2,174,952 as this is a non-cash item. The table below sets forth the Summary of the Agency s 2016 Budget: Revenue: 2016 BUDGET SUMMARY (1) Tipping Fees $11,640,000 Electric Energy Sales 2,836,680 Interest Earnings 1,000 Net Service Fees 509,780 Recycling Fees 175,000 Appropriate Fund Equity 0 Total Revenue $15,162,460 Expenses: Personal Services $ 571,120 Administration 71,450 Equipment 24,800 Vehicle Expense 10,000 Buildings/Grounds 852 Utilities 95,000 Travel/Conference 1,000 Insurance 35,600 Service Fees 10,299,000 Pass Throughs 0 Residue Disposal 1,968,000 Professional Services 418,000 Debt Service 1,667,638 Reserves 0 (1) Depreciation: 2,174,952 Total Expenses Less Depreciation 15,162,460 Budget Profit/(Loss) $ -0- (1) Does not include Covanta litigation which could increase professional services fee. II. THE SOLID WASTE MANAGEMENT SYSTEM The Dutchess County Solid Waste Management Plan, Re-Thinking Waste (the Plan ), describes the County s Solid Waste Management System (the System ). The Plan has been approved by the New York State Department of Environmental Conservation ( NYSDEC ), it is in full force and effect, and the Agency is acting in accordance with it. The System currently consists of (i) a Resource Recovery Agency-owned ( Agency ) waste-to-energy Resource Recovery Facility and ancillary equipment and structures; (ii) the Agency s contractual right to dispose of Process Residue (ash), (iii) the ability to dispose of non processible solid waste at landfills located outside the County; (iv) Agency recycling activities; (v) recycling, waste education and waste enforcement services provided by the County s Department of Solid Waste Management; and (vi) several private sector waste and recycling companies. The Agency continues to contract for disposal of ash residue, and employs private haulers to haul bypass waste and unacceptable waste. It is not likely that the Agency will site a landfill in the near future. Adequate landfill capacity can be contracted for at many facilities outside the County, although this may be at an increased cost. 4

7 RESOURCE RECOVERY FACILITY The Agency s waste-to-energy Facility is located on an 11.5-acre portion of a 48.5-acre parcel of land owned by the Agency. The parcel is located on the east bank of the Hudson River in the Town of Poughkeepsie, New York, approximately four miles south of the Mid-Hudson Bridge. The Facility is a municipal waste combustion (MWC) unit, as defined in Federal regulations. It uses a type of mass burn technology that uses combustion with a minimum of preprocessing of the incoming wastes, and includes a rotating combustor as the primary combustion element. Hot gases produced by combustion pass through a boiler, which turns the heat energy into highpressure steam. The steam is piped to a turbine, which in turn drives a generator to generate electrical energy. About one fifth of the energy is used to operate the Facility; the remainder is sold to Central Hudson Gas & Electric ( Central Hudson ). Steam exhausting from the turbine is condensed and returned to the boilers. The hot gases leaving the boiler are ducted to an emission control system, which removes any constituents that cannot be discharged to the atmosphere. The current emission control system consists of a spray dryer absorber system ( scrubber ). The Facility has a nominal capacity to process 450 tons of solid waste per day and is permitted by the NYSDEC to process 164,000 tons of solid waste per year. Construction of the Facility began in January 1985 and continuous commercial operation began in October The Facility is operated currently by Wheelabrator Dutchess County LLC ( Wheelabrator ), a subsidiary of The Guarantor, Wheelabrator Technologies, Inc., pursuant to a Service Agreement dated April 15, 2014, and effective on July 1, 2014 (the Service Agreement ). The Service Agreement s initial term expires December 31, 2027, with several different options to extend through no later than June 30, Under the current Service Agreement, the Agency is committed to deliver or cause to be delivered and Wheelabrator is committed to process not less than 140,000 tons of Processible Waste per year. The Agency pays to Wheelabrator a service fee based on the net agency tons processed at the Facility and the amount of net recovered materials revenues recovered from the Facility. Recovered materials currently consist of ferrous metals. Wheelabrator is also entitled to supplemental electrical compensation, a portion of which may only be used by it for turbine maintenance and upgrades. Wheelabrator is permitted to pass through to the Agency certain costs such as charges for special waste, additional waste screening and uncontrollable circumstance expenses. The Service Agreement includes performance guarantees with respect to net energy generated, maximum in-house energy consumption, maximum ash production, maximum ash moisture, minimum ferrous metals recovery amounts, and the use of utilities. The current Service Agreement provides a mechanism for either the Agency or Wheelabrator to propose physical changes to the Facility. If Wheelabrator proposes a physical change it will prepare a change order, providing the purpose and description of the proposed change, the cost, and the operating and maintenance costs associated with the change. The Agency may negotiate with Wheelabrator on the change order, and after reaching agreement, the Agency will issue a notice to proceed to Wheelabrator. The Agency issued change orders to a predecessor Facility operator for Facility modifications to assure compliance with new clean air regulations, which modifications were completed in As of December 31, 2015, the Facility continues to be in compliance with EPA Promulgated Rules, 40 CFR 60 Subpart BBBB as adopted by the New York State Department of Environmental Protection. Wheelabrator is required to operate the Facility in compliance with the terms of the Service Agreement, including full compliance with all environmental permits and approvals. The Guarantor has provided the Agency with a Guarantee that irrevocably and unconditionally guarantees to the Agency the full and prompt performance and the punctual and full payment (subject to demand) by Wheelabrator of all of its obligations contained in the Service Agreement (collectively, the Guaranteed Obligations). The Guarantor has agreed that if, for any reason whatsoever, Wheelabrator does not perform any of the Guaranteed Obligations, unless performance is excused, the Guarantor shall promptly perform such obligations. The Guarantee is a guaranty of payment and performance rather than of collection. The Guarantor has delivered to the Agency a Letter of Credit in the amount of $10,000,000 issued by BNP Paribas as security for the Guarantee. The Letter of Credit is required to be maintained in full force and effect during the full term of the Service Agreement, unless the Agency otherwise agrees in writing. 5

8 MATERIALS RECOVERY FACILITY The Agency continued to use its Material Recovery Facility ( MRF ) throughout 2012 to receive recyclable materials which were then transferred out for processing and marketing. However, the Agency discontinued operation of the MRF at the close of business on December 28, The MRF property was sold by the County of Dutchess, and a large privately owned recycling facility currently operates in Southern Dutchess County. ASH RESIDUE AND BYPASS DISPOSAL AGREEMENT A new contract became effective January 1, 2013, along with beneficial use determinations issued by the NYSDEC, allowing the use of Agency ash residue as daily cover at the Colonie Landfill. The contract is currently effective through June 30, 2017 after execution of a one-year extension, and the Agency has the option to extend it for one additional one-year term. Under this Contract, which is also with Panichi Holding Corp., Panichi Holding Corp. hauls the Agency s ash residue to the Colonie Landfill. The Agency has the ability to contract to haul and dispose of Agency bypass waste if necessary. The Agency bypassed no waste in FERROUS METAL DISPOSAL AGREEMENT The Agency contracted with Upstate Shredding LLC, for the disposal of ferrous metals recovered at the RRF from March 1, 2010 through February 28, 2015, which contract was extended through February 28, In 2015, this contract resulted in revenues of $544,747. COUNTY DISPOSAL SERVICE AGREEMENT The Agency and the County have entered into a Disposal Service Agreement dated as of December 1, 1984 (the Disposal Service Agreement ). The Disposal Service Agreement was extended by the County Legislature in October 2007 to July 1, 2027, six months after the last maturity date of currently outstanding Agency bonds. The Disposal Service Agreement assures the Agency of sufficient total revenues to pay operating expenses, including debt service. Pursuant to the Disposal Service Agreement, the Agency agrees to provide for the disposal of solid waste generated in the County. In return, the County has obligated itself to deliver or cause to be delivered to the Agency not less than 140,000 tons per year of processible solid waste and has covenanted to pay to the Agency a net service fee (the Net Service Fee ). The Net Service Fee is defined as the difference between Agency revenues, including tipping fees charged to carters for the use of Agency facilities and revenues from the sale of energy and recovered materials, and expenses, including payments to the operator of the Facility, administrative expenses and debt service. In 2016, the Agency has budgeted $509,780 for the payment of Net Service Fees by the County. The County has agreed in the Disposal Agreement to take all such action as may be necessary to provide for the timely payment of Net Service Fees to the Agency. The Net Service Fee could change fluctuate based actual revenues and expenditures. The Agency must notify the County of such Net Service Fees as are payable, for a particular calculation period, within ten business days after the end of such calculation period. Although calculation periods are the six-month periods ending on each September 30 and March 31, the amount of Net Service Fee is not due and payable until the tenth business day preceding the next interest payment date with respect to certain outstanding bonds of the Agency (January 1 or July 1, as the case may be). The County is authorized pursuant to the Local Finance Law to authorize the issuance of tax anticipation notes, revenue anticipation notes or budget notes to raise cash for the payment of Net Service Fees in the event of a cash shortfall. Budget notes, in particular, may be issued during any fiscal year for expenditures for which an insufficient amount or no provision is made in the annual budget for such fiscal year in an amount not to exceed five percent of the amount of such annual budget. 6

9 The following table reflects the payments of Net Service Fees by the County to the Agency for the last 10 years: Year Net Service Fees Paid POWER SALES AGREEMENT 2006 $2,124, ,921, ,496, ,946, ,012, ,644, ,138, , , ,652 The Agency entered into a Power Sales Agreement with Central Hudson. It provides for Central Hudson to purchase from the Agency any electrical energy generated that is in excess of that required to operate the RRF and for Central Hudson to provide backup power if the RRF turbine generator is out of service. Central Hudson pays the Agency its avoided costs for purchased energy, but in no case less than 6 cents per kilowatt hour. The Power Sales Agreement will be effective until at least January 14, 2019 unless terminated by the Agency as of January 14, ENVIRONMENTAL REGULATION The RRF operates under two major environmental permits from NYSDEC, a permit to operate a solid waste management facility under 6 NYCRR Part 360 and a Title V permit to discharge certain emissions to the atmosphere. The latter permit is part of a Federal program under the 1977 Clean Air Act, with the United States Environmental Protection Agency ( USEPA ) having delegated authority for air programs to NYSDEC. Both permits have five-year terms and permit renewal applications have been prepared and submitted to the NYSDEC. The permit applications are currently under review by the NYSDEC and, until such applications have been approved, the Agency will continue to operate in full compliance with the provisions of the prior permits. Pursuant to USEPA regulations, Emission Guidelines for Small MWC Units, promulgated on December 6, 2000, as 40 CFR 60 Subpart BBBB and the companion New York State Implementation Plans ( SIP ) and regulations at 6 NYCRR subpart (the Clean Air Regulations ), the Agency undertook a major air pollution control equipment modification of the Facility. It included installing a new spray dryer absorber with a continuous emissions monitoring system, and a carbon injection system to provide mercury emission controls, as well as the expansion of the Facility s combustion air handling system. This work was financed by the October 29, 2007 issuance of Solid Waste Revenue Bonds, Series 2007, in the amount of $16,140,000. Initial compliance testing of the improvements was completed in 2006, and the Agency has continued to be in compliance with these regulations. III. LITIGATION AND CLAIMS Other than as stated below, there are currently no pending contingencies or litigations which could have a material adverse effect on the financial position of the Agency. Town of Poughkeepsie The Town of Poughkeepsie has asserted a contractual claim against the Agency for Host Community fees. There is no litigation pending. The Agency is contesting the claim, but is also pursuing a settlement. The Town most recently issued an invoice dated February 16, 2016, seeking payment from the Agency for 2015 in the amount of $232,448, with an additional claim in the amount of $1,651,102 for years 2008 to The foregoing is prepared for informational purposes and is not intended as an expression in any way of the DCRRA s likelihood of success in the dispute should litigation commence. Covanta Hudson Valley Renewable Energy, LLC.: A lawsuit was commenced by Covanta Hudson Valley Renewable Energy, LLC ( Covanta ) against the Agency by the filing of a Summons & Complaint on June 25, 2014 in New York State Supreme Court, County of Dutchess, Index No In its Complaint, Covanta alleged causes of action for breach of contract, specific performance, quantum meruit, account stated, and breach of good faith and fair dealing against the Agency. The Agency filed an Answer and an Amended Answer, asserting 7

10 various counterclaims against Covanta. On October 6, 2014, Covanta amended its Complaint to include additional account stated causes of action against the Agency. The Agency filed an Answer to the Amended Complaint, and an Amended Answer to the Amended Complaint, where the total sum claimed in the counterclaims against Covanta is $6,797, In December 2014, the parties entered into two partial settlement agreements with respect to a portion of the account stated causes of action against the Agency. In March 2015, the parties participated in an unsuccessful mediation session. Shortly thereafter, on May 18, 2015, Covanta moved for summary judgment on its account stated and breach of contract causes of action, and to dismiss the Agency s counterclaims. In its motion for summary judgment, Covanta is seeking a damages award in the amount of $4,381,005.60, plus daily interest in the amount of $ per day from May 1, 2015 through the date of payment. The Agency opposed Covanta s motion and cross-moved to amend its Answer and to compel discovery. On March 1, 2016, the parties informed the Court that they are not able to reach a settlement and the Court issued a schedule for supplemental papers to be filed. The motion was deemed submitted on March 29, On April 8, 2016, Judge Pagones issued a Decision and Order for Covanta s motion for summary judgment and the Agency s cross-motion to amend its Answer and compel discovery. The Decision and Order granted Covanta s motion for summary judgment, and denied the Agency s cross-motion. Thereafter, on April 20, 2016, the Agency filed all necessary documents to appeal the Decision and Order and also filed an Affirmation of Kevin R. McAuliffe, which sought to automatically stay entry of final judgment pending the Agency s appeal. On May 26, 2016, Judge Pagones issued a Decision and Order, ordering that entry of a final judgment is stayed pending the determination of the appeal. The Agency s deadline to perfect its appeal is October 20, 2016, and it is currently in the process of compiling the Record on Appeal. 8