CITY OF COLUMBUS, OHIO

Transcription

1 THIS PRELIMINARY OFFICIAL STATEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION OR AMENDMENT IN A FINAL OFFICIAL STATEMENT. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the Bonds laws of any such jurisdiction. PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 22, 2014 Ratings: Moody s: APPLIED FOR Standard & Poor s: APPLIED FOR Fitch: APPLIED FOR New Issue Book-Entry Only (See RATINGS herein) In the opinion of Bricker & Eckler LLP, Bond Counsel, under existing law and assuming compliance with certain covenants, interest on the Series 2014 Bonds is excluded from gross income for federal income tax purposes, is not treated as an item of tax preference for purposes of the alternative minimum income tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended, and is exempt from certain taxes imposed by the State of Ohio. The Series 2014 Bonds are not private activity bonds. The City has not designated the Series 2014 Bonds as qualified tax exempt obligations within the meaning of Section 265(b)(3) of the Code. Interest on the Series 2014 Bonds may be subject to certain federal income taxes imposed on certain corporations, and certain taxpayers may have certain other adverse federal income tax consequences as a result of owning the Series 2014 Bonds. See TAX MATTERS herein. Dated: Date of Delivery OFFICIAL STATEMENT RELATING TO THE ORIGINAL ISSUANCE BY CITY OF COLUMBUS, OHIO of $199,800,000 * SEWERAGE SYSTEM REVENUE REFUNDING BONDS, SERIES 2014 Due: As shown on the inside cover herein The Sewerage System Revenue Refunding Bonds, Series 2014 (the Series 2014 Bonds ) will be issued under a Master Trust Agreement, dated as of January 1, 2008 (the Master Trust Agreement ), as supplemented by a First Supplemental Trust Agreement, dated as of January 1, 2008 (the First Supplemental Trust Agreement ), a Second Supplemental Trust Agreement, dated as of January 1, 2008 (the Second Supplemental Trust Agreement ), and a Third Supplemental Trust Agreement, dated as of November 1, 2014 * (the Third Supplemental Trust Agreement, and together with the Master Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement, the Trust Agreement ), between the City of Columbus, Ohio (the City ) and The Bank of New York Mellon Trust Company, N.A., Columbus, Ohio, as trustee (the Trustee ), providing for the issuance of the Series 2014 Bonds. Principal of and interest and any premium on the Series 2014 Bonds will be payable from Pledged Revenues generated by the ownership, operation, use, and services of the City s public utility municipal sanitary sewerage system (the Utility ). Principal of and interest and any premium on the Series 2014 Bonds will be secured under the Trust Agreement by a pledge of and lien on the Pledged Revenues and the Special Funds. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2014 BONDS herein. Interest on the Series 2014 Bonds will be payable semi-annually on June 1 and December 1 of each year, beginning June 1, The Series 2014 Bonds are issuable as fully registered bonds and, when issued, will be initially registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). Purchases of beneficial interests in the Series 2014 Bonds will be made in book-entry only form. Purchasers of beneficial interests ( Beneficial Owners ) will not receive certificates representing their interests in the Series 2014 Bonds. So long as the Series 2014 Bonds of an issue are registered in the name of Cede & Co., as nominee of DTC, references herein to the owners shall mean Cede & Co. and shall not mean the Beneficial Owners of that issue of the Series 2014 Bonds. Payment of the principal of and interest on the Series 2014 Bonds will be made directly to DTC or its nominee, Cede & Co., so long as DTC or Cede & Co. is the sole registered owner. Disbursement of such payments to DTC s Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of DTC s Direct Participants and the Indirect Participants, as more fully described under BOOK-ENTRY ONLY SYSTEM herein. The Series 2014 Bonds are subject to redemption prior to their stated maturity as set forth herein (see THE SERIES 2014 BONDS herein). THE SERIES 2014 BONDS AND THE INTEREST THEREON WILL BE SPECIAL OBLIGATIONS OF THE CITY AND WILL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES AND AMOUNTS IN THE SPECIAL FUNDS. NOTHING IN THE SERIES 2014 BONDS, THE TRUST AGREEMENT OR ANY OTHER DOCUMENT WILL REPRESENT OR CONSTITUTE GENERAL OBLIGATIONS, DEBT, OR BONDED INDEBTEDNESS OF THE CITY, THE STATE OF OHIO, OR ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS OR OWNERS THEREOF WILL NOT BE GIVEN THE RIGHT, AND HAVE NO RIGHT, TO HAVE EXCISE TAXES, AD VALOREM TAXES, OR OTHER TAXES LEVIED BY THE CITY OR BY THE STATE OF OHIO OR THE TAXING AUTHORITY OF ANY OTHER POLITICAL SUBDIVISION FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST OR ANY PREMIUM ON THE SERIES 2014 BONDS. NEITHER THE GENERAL CREDIT, FAITH, NOR RESOURCES OF THE CITY OR THE STATE OF OHIO, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST OR ANY PREMIUM ON THE SERIES 2014 BONDS. The Series 2014 Bonds are offered when, as and if issued and accepted by the Underwriters identified herein (see UNDERWRITING herein), subject to prior sale and to the approval of certain legal matters by Bricker & Eckler LLP, Bond Counsel, Columbus, Ohio, and certain other conditions. Certain legal matters will be passed upon for the Underwriters by their counsel, Peck, Shaffer & Williams, a Division of Dinsmore & Shohl LLP, Columbus, Ohio. See LEGAL MATTERS herein. PRISM Municipal Advisors, LLC, Powell, Ohio, has acted as Municipal Advisor to the City in connection with the issuance of the Series 2014 Bonds (see MUNICIPAL ADVISOR herein). This cover page contains certain information for general reference only. It is not a summary of the provisions of the Series 2014 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement has been prepared by the City in connection with the original offering for sale by it of the Series 2014 Bonds. It is expected that delivery of the Series 2014 Bonds in definitive form will be made through DTC on or about December 1, * This Official Statement is dated October, 2014 and the information contained herein speaks only as of that date. Stifel Nicolaus & Company, Incorporated PNC Capital Markets LLC Fifth Third Securities, Inc. Morgan Stanley RBC Capital Markets * Preliminary, subject to change.

2 $199,800,000 * CITY OF COLUMBUS, OHIO SEWERAGE SYSTEM REVENUE REFUNDING BONDS, SERIES 2014 Maturity Date (June 1) Principal Amount * Interest Rate Yield CUSIP 2023 $ 3,175,000 % % ,650, ,570, ,600, ,710, ,265, ,830, * Preliminary, subject to change. Copyright 2014, American Bankers Association. CUSIP data herein are provided by Standard & Poor s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of the holders of the Bonds only at the time of issuance of the Bonds and the City does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP Number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

3 REGARDING THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering of any security other than the original offering of the Series 2014 Bonds identified on the cover hereof. No person has been authorized by the City to give any information or to make any representations other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been given or authorized by the City. Statements contained in this Official Statement that involve estimates, forecasts, or matters of opinion, whether or not expressly described herein, are intended solely as such and are not to be construed as representations of facts. The information set forth herein has been obtained from the City and other sources that are believed to be reliable for purposes of this Official Statement. This Official Statement contains, in part, estimates, forecasts, and matters of opinion that are not intended as statements of fact, and no representation is made as to the correctness of such estimates, forecasts, and opinions or that they will be realized. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in the affairs of the City or in the information or opinions set forth herein, since the date of this Official Statement. All financial and other information presented in this Official Statement has been provided by the City from its official records, except for information expressly attributed to other sources. The presentation of information is intended to show recent historical information. It is not intended to indicate future or continuing trends in the financial or other positions of the City. No representation is made that past experience, as might be shown by financial and other information, will necessarily continue in the future. Certain statements contained in this Official Statement, including, without limitation, statements containing the words believes, anticipates, expects and words of similar import, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the City to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, general economic conditions, demographic changes, and existing government regulations and changes in, or the failure to comply with, government regulations. Certain of these factors are discussed in more detail elsewhere in this Official Statement. Given these uncertainties, readers of this Official Statement and investors are cautioned not to place undue reliance on such forward-looking statements. This Official Statement should be considered in its entirety and no subject discussed should be considered less important than any other subject by reason of its location in the text. Reference should be made to laws, reports or documents referred to for more complete information regarding their contents. References herein to provisions of Ohio law, whether codified in the Ohio Revised Code or uncodified, the Ohio Constitution, or federal law, are references to such provisions as they presently exist. Provisions of Ohio law and the Ohio Constitution and federal law may in the future, and from time to time, be amended, repealed or supplemented. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. UPON ISSUANCE, THE SERIES 2014 BONDS WILL NOT BE REGISTERED BY THE CITY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. THE SERIES 2014 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE ii

4 SECURITIES AND EXCHANGE COMMISSION, NOR HAS ANY OTHER FEDERAL, STATE, MUNICIPAL OR OTHER GOVERNMENTAL ENTITY OR AGENCY, EXCEPT THE CITY AUDITOR OF THE CITY, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2014 BONDS FOR SALE. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF, THE SERIES 2014 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2014 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITERS MAY OFFER AND SELL THE SERIES 2014 BONDS TO CERTAIN DEALERS, DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS. General INVESTMENT CONSIDERATIONS The Series 2014 Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the market for tax-exempt obligations or changes in the financial position of the City or the Utility. It is possible under certain market conditions, or if the financial condition of the City or the Utility should change, that the market price of the Series 2014 Bonds could be adversely affected. With regard to the risk involved in a downward revision or withdrawal of the ratings for the Series 2014 Bonds shown on the cover hereof, see RATINGS herein. With regard to the risk involved in a loss of the exclusion from gross income for purposes of federal income taxation of interest payable on the Series 2014 Bonds, see TAX MATTERS herein. Prospective purchasers of the Series 2014 Bonds should consult their own tax advisors prior to any purchase of the Series 2014 Bonds as to the impact of the Internal Revenue Code of 1986, as amended (the Code ), upon their acquisition, holding or disposition of the Series 2014 Bonds. Prepayments of Principal Certain of the Series 2014 Bonds are subject to prepayment without penalty. (See THE SERIES 2014 BONDS Redemption Provisions of the Series 2014 Bonds herein.) If such Series 2014 Bonds were to be prepaid before scheduled maturity, the investor would not receive the anticipated yield through the scheduled maturity date. In such a prepayment situation there is no guarantee that the investor could reinvest the proceeds and receive a comparable yield for the period remaining until the scheduled maturity of such Series 2014 Bonds. The investor, therefore, may receive a lower total return for the period beginning on the date of purchase through the scheduled date of maturity than anticipated. iii

5 BOND ISSUE SUMMARY The information contained in this Bond Issue Summary is qualified in its entirety by the entire Official Statement, which should be reviewed in its entirety by potential investors. Issuer: City of Columbus, Ohio Issues: $199,800,000 * Sewerage System Revenue Refunding Bonds, Series 2014 (the Series 2014 Bonds ) Dated Date: Interest Payment Dates: Principal Payment Dates: Redemption: Purpose: Security: Date of Delivery Interest on the Series 2014 Bonds will be paid each June 1 and December 1, beginning June 1, See Inside Front Cover. The Series 2014 Bonds are subject to optional redemption as set forth herein. See THE SERIES 2014 BONDS herein. See AUTHORIZATION AND PURPOSE herein. The Series 2014 Bonds are special obligations of the City and do not constitute a pledge of the full faith and credit of the City. The Series 2014 Bonds are being issued under the Trust Agreement and are payable solely from, and are secured by a pledge of and lien on, the Pledged Revenues and by a pledge and lien on the moneys and investments in the Special Funds created under the Trust Agreement, including the Bond Fund. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2014 BONDS herein. Credit Rating: The City has applied for a rating of the Series 2014 Bonds from Moody s Investors Service, Inc., Standard & Poor s Ratings Services, a division of The McGraw Hill Companies, Inc., and Fitch Ratings, Inc., which have rated the Series 2014 Bonds,, and, respectively. See RATINGS herein. Tax Matters: In the opinion of Bond Counsel, under existing law and assuming compliance with certain covenants, interest on the Series 2014 Bonds is excluded from gross income for federal income tax purposes, is not treated as an item of tax preference for purposes of the alternative minimum income tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended, and is exempt from certain taxes imposed by the State of Ohio. The Series 2014 Bonds are not private activity bonds. Interest on the Series 2014 Bonds may be subject to certain federal income taxes imposed on certain corporations, and certain taxpayers may have certain other adverse federal income tax consequences as a result of owning the Series 2014 Bonds. See TAX MATTERS herein. Bank Qualification: The City has not designated the Series 2014 Bonds as qualified tax exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Legal Opinion: Bricker & Eckler LLP, Columbus, Ohio Underwriter s Counsel: Peck, Shaffer & Williams, a Division of Dinsmore & Shohl LLP Trustee and Escrow Agent: The Bank of New York Mellon Trust Company, N.A. Municipal Advisor: PRISM Municipal Advisors, LLC, Powell, Ohio Verification Agent: Causey Demgen & Moore, P.C., Denver, Colorado Book-Entry Only System: The Series 2014 Bonds are being issued as fully registered bonds in book-entry form only, and book-entry interests therein will be available for purchase in the amounts set forth herein. Owners of book-entry interests will not receive physical delivery of bond certificates. The Depository Trust Company or its nominee will receive all payments with respect to the Series 2014 Bonds from the Trustee. The Depository Trust Company is required by its rules * Preliminary, subject to change. iv

6 Delivery and Payment: City Official: and procedures to remit such payments to its participants for subsequent disbursement to owners of the book-entry interests. It is expected that delivery of the Series 2014 Bonds in definitive form will be made through DTC on or about December 1, * The Series 2014 Bonds will be released to the Underwriters against payment in federal funds. Questions concerning the Official Statement should be directed to Hugh J. Dorrian, City Auditor, City of Columbus, Ohio, 90 West Broad Street, Columbus, Ohio Telephone: (614) [Balance of Page Intentionally Left Blank] * Preliminary, subject to change. v

7 TABLE OF CONTENTS Page REGARDING THIS OFFICIAL STATEMENT... ii INVESTMENT CONSIDERATIONS... iii General... iii Prepayments of Principal... iii BOND ISSUE SUMMARY... iv TABLE OF CONTENTS... vi INTRODUCTION... 1 AUTHORIZATION AND PURPOSE... 1 The Escrow Fund... 2 THE SERIES 2014 BONDS... 2 Form; Payment of Principal and Interest... 2 Redemption Provisions of the Series 2014 Bonds... 2 BOOK-ENTRY ONLY SYSTEM... 3 Revision of Book-Entry Only System - Replacement Bonds... 5 ESTIMATED SOURCES AND USES OF FUNDS... 6 DEBT SERVICE REQUIREMENTS... 7 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2014 BONDS... 8 General... 8 The Trust Agreement... 8 Funds... 8 Bankruptcy Covenants of the City THE UTILITY Management and Organization Employees The Service Area Customers and Billing Delinquencies Five Year History of Account Types Five Year History of Customers Annual Metered Billing Quantities (ccf) Largest Customers Treatment Plants and Facilities Columbus Treatment Plants 2013 Flow Report Columbus Treatment Plant Performance Operations, Maintenance, and Training Practices Electrical Power Redundancy Asset Management Assessment Solids Master Plan Sewerage Treatment Plant Improvements Capital Improvement Plan Rate Determination Sewer and Water Advisory Board Sewer Rates Rate History THE TRUST AGREEMENT UNDERWRITING FINANCIAL STATEMENTS INDEPENDENT AUDITORS RATINGS vi

8 MUNICIPAL ADVISOR VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS TAX MATTERS Original Issue Discount Amortizable Bond Premium LEGAL MATTERS LITIGATION CONTINUING DISCLOSURE MISCELLANEOUS APPENDIX A CITY OF COLUMBUS... A-1 OVERVIEW OF THE CITY... A-1 General Information... A-1 Organization... A-1 Principal Officials... A-2 Principal Governmental Services... A-2 Board of Trustees of the Sinking Fund... A-3 Principal City Facilities... A-4 Retirement System/Pension Plan... A-4 Labor Relations and Workforce... A-5 Risk Management... A-6 Cash Management and Investment Practices... A-7 ECONOMIC AND DEMOGRAPHIC INFORMATION... A-10 Population... A-10 Economic Factors and the 2014 General Fund Budget... A-10 The City of Columbus Accountability Committee... A-10 Development Strategies... A-11 Downtown Development... A-11 Other Economic Development Initiatives... A-12 Labor Force and Wage Information... A-14 Largest Employers... A-15 Business Indicators... A-16 APPENDIX B Selected Financial Statements of the Utility... B-1 APPENDIX C Selected Financial Information for the City of Columbus for Fiscal Year Ended December 31, C-1 APPENDIX D Summary of Certain Provisions of Trust Agreement... D-1 APPENDIX E Certificate of City Attorney... E-1 APPENDIX F Form of Opinion of Bond Counsel... F-1 APPENDIX G Form of Continuing Disclosure Certificate... G-1 vii

9 $199,800,000 * CITY OF COLUMBUS, OHIO Sewerage System Revenue Refunding Bonds, Series 2014 INTRODUCTION This Official Statement, including the cover page and the Appendices hereto, of the City of Columbus, Ohio (the City ), a municipal corporation and political subdivision of the State of Ohio (the State ), sets forth certain information with respect to the offering of $199,800,000 * principal amount of the City s Sewerage System Revenue Refunding Bonds, Series 2014 (the Series 2014 Bonds ). AUTHORIZATION AND PURPOSE The Series 2014 Bonds are authorized by an ordinance of the City Council (the Council ) of the City passed on October 6, 2014 (the Authorizing Legislation ), and the City is authorized and empowered by virtue of the Constitution and the laws of the State of Ohio, particularly Article XVIII of the Constitution of Ohio, and its Charter, to improve and expand the Utility; to issue the Series 2014 Bonds for such purpose and to refund bonds previously issued for such purpose; to pay all other necessary or incidental expenses thereto and to the issuance of the Series 2014 Bonds; to secure the Series 2014 Bonds by the Master Trust Agreement, dated as of January 1, 2008 (the Master Trust Agreement ), as supplemented by a First Supplemental Trust Agreement, dated as of January 1, 2008 (the First Supplemental Trust Agreement ), a Second Supplemental Trust Agreement, dated as of January 1, 2008 (the Second Supplemental Trust Agreement ), and a Third Supplemental Trust Agreement, dated as of November 1, 2014 * (the Third Supplemental Trust Agreement, and together with the Master Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement, the Trust Agreement ), between the City and The Bank of New York Mellon Trust Company, N.A., Columbus, Ohio, as trustee (the Trustee ); and to enact the Authorizing Legislation. The Series 2014 Bonds will be issued as Additional Obligations under the Trust Agreement, and will be secured on an equal and parity basis with the City s $390,000,000 Sewerage System Fixed Rate Revenue Bonds, Series 2008A, dated January 30, 2008 (the Series 2008A Bonds ), of which $170,085,000 * will remain outstanding after the issuance of the Series 2014 Bonds, and its $51,855,000 Sewerage System Adjustable Rate Revenue Bonds, Series 2008B, dated January 30, 2008 (the Series 2008B Bonds and, together with the Series 2008A Bonds, the Series 2008 Bonds ), and any Additional Obligations that may be issued pursuant to and in accordance with the Trust Agreement in the future. (See SUMMARY OF THE TRUST AGREEMENT Issuance and Delivery of Additional Obligations in APPENDIX D attached hereto.) The proceeds of the Series 2014 Bonds will be used to advance refund a portion of the Series 2008A Bonds, as identified below (the Refunded Bonds ): Maturity Date (June 1) Principal Amount Outstanding Before Refunding Principal Amount to be Refunded * Principal Amount Outstanding After Refunding * 2023 $5,660,000 $5,660, ,260,000 12,260, ,310,000 7,310, ,000,000 10,000, ,450,000 22,450, * Preliminary, subject to change.

10 Maturity Date (June 1) Principal Amount Outstanding Before Refunding Principal Amount to be Refunded * Principal Amount Outstanding After Refunding * ,700,000 32,700, ,405,000 53,405, ,925, $63,925, ,000, ,000, ,630,000 24,630, ,500,000 51,500, ,160, ,160,000 Total $390,000,000 $219,915,000 $170,085,000 The Escrow Fund Proceeds from the sale of the Series 2014 Bonds will be deposited into an escrow fund (the Escrow Fund ), established pursuant to the Trust Agreement and held by the Trustee, and will be used to advance refund the Refunded Bonds. The Escrow Fund will consist solely of cash and noncallable direct obligations of the United States of America, and will be applied by the Trustee to pay debt service on the Refunded Bonds and to redeem the Refunded Bonds on the earliest optional redemption date. Form; Payment of Principal and Interest THE SERIES 2014 BONDS The Series 2014 Bonds will be issued pursuant to the Trust Agreement in fully registered form without coupons. The Series 2014 Bonds will bear interest from their dated date until maturity or earlier redemption, at the rates per annum as set forth on the inside cover page hereof, payable on June 1 and December 1 of each year, beginning June 1, 2015, and will mature on June 1 in the years as indicated on the inside cover page of this Official Statement. The Series 2014 Bonds will be issued in denominations of $5,000 or any integral multiple thereof, provided that, so long as the Series 2014 Bonds shall be in book-entry form and held by a depository, each Bond will be of a single maturity, and will be numbered as determined by the Trustee. Principal of the Series 2014 Bonds will be payable at maturity in lawful money of the United States of America, at the office of the Trustee, which is the bond registrar, paying agent, and transfer agent for the Series 2014 Bonds. Interest on the Series 2014 Bonds will be payable to the person whose name appears as the registered holder thereof on the registration records maintained by the Trustee, on the Record Date (at the close of business on the 15th day next preceding that Interest Payment Date, unless such date falls on a non-business day, in which case the Record Date shall be the preceding business day) by check mailed to such registered holder at the address of such registered holder as it appears on the registration records. No deductions will be made for exchange, collection, or service charges. Redemption Provisions of the Series 2014 Bonds Optional Redemption The Series 2014 Bonds maturing after December 1, 2024 * are subject to redemption on or after December 1, 2024 * at the option of the City, in whole or in part at any time, in such order as the City * Preliminary, subject to change. 2

11 determines, at a redemption price equal to 100% of the principal amount redeemed, plus interest accrued to the date fixed for redemption. Redemption Procedures When partial redemption of any of the Series 2014 Bonds is authorized, the Trustee will select the Series 2014 Bonds or portions thereof by lot within a maturity in such manner as the Trustee may determine, provided, however, that the portion of any Bond so selected will be in the amount of $5,000 or an integral multiple thereof. The notice of the call for redemption of the Series 2014 Bonds is required to identify (i) by designation, letters, numbers or other distinguishing marks the Series 2014 Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable. From and after the specified redemption date, and provided that funds are on hand and available for the payment of interest due as of the redemption date, interest on the Series 2014 Bonds (or portions thereof) called for redemption will cease to accrue. Such notice is required to be sent by first class mail at the address shown in the Series 2014 Bond registration records on the 15th day preceding the date of mailing. Failure to receive such notice or any defect therein will not affect the validity of the proceedings for the redemption of any Bond. BOOK-ENTRY ONLY SYSTEM The information in this section concerning The Depository Trust Company ( DTC ) book-entry only system has been obtained from DTC and the City takes no responsibility for the completeness or accuracy thereof. The City cannot and does not give any assurances that DTC, Direct Participants or Indirect Participants will distribute to the Beneficial Owners (each as hereinafter defined) (a) payments of interest, principal, or premium, if any, with respect to the Series 2014 Bonds, (b) certificates representing ownership interest in or other confirmation of ownership interest in the Series 2014 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its partnership nominee, as the registered owner of the Series 2014 Bonds, or that they will so do on a timely basis or that DTC, Direct Participants or Indirect Participants will act in the manner described in this Official Statement. The current Rules applicable to DTC are on file with the Securities and Exchange Commission and the current Procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC will act as securities depository for the Series 2014 Bonds. The Series 2014 Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Series 2014 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, 3

12 banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of the Series 2014 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2014 Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2014 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2014 Bonds, except in the event that use of the book-entry system for the Series 2014 Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2014 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2014 Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series 2014 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2014 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series 2014 Bonds. For example, Beneficial Owners of the Series 2014 Bonds may wish to ascertain that the nominee holding the Series 2014 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2014 Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2014 Bonds unless authorized by a Direct Participant in accordance with DTC s MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those 4

13 Direct Participants to whose accounts the Series 2014 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions and dividend payments on the Series 2014 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts, upon DTC s receipt of funds and corresponding detail information from the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. Revision of Book-Entry Only System - Replacement Bonds The Authorizing Legislation provides for issuance of fully registered Bonds (the Replacement Bonds ) directly to owners other than DTC or its nominee only if DTC determines not to continue to act as security depository of the Series 2014 Bonds. In such event, the City may in its discretion establish a securities depository/book entry relationship with another qualified securities depository. If the City does not or is unable to do so, and after appropriate notice to DTC, the Trustee will authenticate and deliver fully registered Replacement Bonds, in the denominations of $5,000 or any multiple thereof, to or at the direction of and, if the event is not the result of City action or inaction, at the expense (including printing costs) of, any persons requesting such issuance. Replacement Bonds may be transferred, registered and assigned only in the registration books of the Trustee. [Balance of Page Intentionally Left Blank] 5

14 ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Series 2014 Bonds will be applied as follows: Sources Par Value of the Series 2014 Bonds $199,800, * Original Issue Premium Total Sources $ Uses Deposit to Escrow Fund $ Deposit to Bond Fund Costs of Issuance ** Total Uses $ * Preliminary, subject to change. ** Includes Underwriter s fees, municipal advisor fees, rating fees, printing and distribution costs, legal fees, and miscellaneous expenses. [Balance of Page Intentionally Left Blank] 6

15 DEBT SERVICE REQUIREMENTS The following schedule presents the Utility s actual debt service requirements for obligations currently outstanding, as of December 1, : Other Obligations 2 Series 2008A Bonds 4 Series 2008B Bonds Series 2014 Bonds Total Year Principal Interest3 Principal * Interest * Principal Interest3 Principal * Interest *5 Debt Service * 2014 $ 3,265,932 $ 571, $ 159, $ 3,996, ,204,084 47,947, $7,486, ,068, $ 9,990, ,696, ,791,076 45,845, ,486, ,063, ,990, ,177, ,856,957 42,659, ,486, ,107, ,990, ,100, ,435,928 39,284, ,486, ,068, ,990, ,265, ,389,912 35,982, ,486, ,068, ,990, ,917, ,647,034 32,812, ,486, ,063, ,990, ,999, ,156,744 29,555, ,486, ,067, ,990, ,256, ,021,766 26,247, ,486, ,068, ,990, ,814, ,697,856 23,086, ,486, ,108,296 $ 3,175,000 9,910, ,464, ,138,510 19,992, ,486, ,063,735 9,650,000 9,590, ,920, ,329,063 17,050, ,486, ,067,539 14,570,000 8,984, ,488, ,911,340 14,197, ,486, ,068,517 19,600,000 8,130, ,394, ,552,257 11,418, ,486, ,068,517 29,710,000 6,897, ,133, ,670,074 8,962, ,486, ,103,514 50,265,000 4,898, ,385, ,445,123 7,141,271 $63,925,000 6,048,013 $5,415,000 1,956, ,641, ,571, ,943,078 5,617,695 67,000,000 3,185,950 5,710,000 1,735, ,641, ,833, ,693,901 4,100, ,762, ,624,737 72,830,000 1,820, ,831, ,112,131 2,960,802 39,160, ,100 40,730, , ,646, ,364,414 1,913, ,277, ,111, , ,012, ,824,829 87, ,912,798 Total $1,340,563,227 $418,339,433 $170,085,000 $116,685,813 $51,855,000 $35,334,179 $199,800,000 $137,434,750 $2,470,097,402 * Preliminary, subject to change. 1 The debt service requirements for the Ohio Water Development Authority ( OWDA ) obligations currently outstanding are as of January 1, Includes the City s existing fixed and variable rate general obligation debt for which Utility revenues are pledged, as well as its obligations to the OWDA and the U.S. Environmental Protection Agency for improvements to the Utility. The City s general obligation debt and its obligations to the OWDA and the U.S. Environmental Protection Agency are subordinate to the Series 2008 Bonds and the Series 2014 Bonds. 3 Variable interest is assumed at 4.00%. 4 Includes the portion of the Series 2008A Bonds that will remain outstanding after the issuance of the Series 2014 Bonds and the defeasance of the Refunded Bonds. 5 True interest cost is assumed at approximately 3.15%. 7

16 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2014 BONDS General The Series 2014 Bonds will be payable solely from the Pledged Revenues and the Special Funds. Pursuant to the terms of the Trust Agreement, the City has pledged and assigned the Pledged Revenues and granted a lien on all of its right, title, and interest in the Special Funds to the Trustee to provide for the payment of the Debt Service on the Series 2008 Bonds, the Series 2014 Bonds and any Additional Obligations (collectively, the Outstanding Obligations ). THE SERIES 2014 BONDS AND THE INTEREST THEREON WILL BE SPECIAL OBLIGATIONS OF THE CITY AND WILL BE PAYABLE SOLELY FROM THE PLEDGED REVENUES AND AMOUNTS IN THE SPECIAL FUNDS. NOTHING IN THE SERIES 2014 BONDS, THE TRUST AGREEMENT OR ANY OTHER DOCUMENT WILL REPRESENT OR CONSTITUTE GENERAL OBLIGATIONS, DEBT, OR BONDED INDEBTEDNESS OF THE CITY, THE STATE OF OHIO, OR ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS OR OWNERS THEREOF WILL NOT BE GIVEN THE RIGHT, AND HAVE NO RIGHT, TO HAVE EXCISE TAXES, AD VALOREM TAXES, OR OTHER TAXES LEVIED BY THE CITY OR BY THE STATE OF OHIO OR THE TAXING AUTHORITY OF ANY OTHER POLITICAL SUBDIVISION FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST OR ANY PREMIUM ON THE SERIES 2014 BONDS. NEITHER THE GENERAL CREDIT, FAITH, NOR RESOURCES OF THE CITY OR THE STATE OF OHIO, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST OR ANY PREMIUM ON THE SERIES 2014 BONDS. The Trust Agreement Pursuant to the Trust Agreement, the Debt Service on the Series 2014 Bonds will be paid from the Bond Fund. Payment of the Debt Service on all of the Series 2014 Bonds has been secured by the City s irrevocable assignment and pledge of its interest in all of the Pledged Revenues, including all revenues received by or on behalf of the City from or in connection with the ownership, operation, use and services of the Utility, less the Operating and Maintenance Expenses thereof, and by a pledge of and lien on the Special Funds. The Special Funds are comprised of the Bond Fund, the Bond Reserve Fund, a fund or account relating to a Credit Support Instrument, the Sewer Operating Fund, the System Reserve Fund, and any other fund or account established under or identified in the Master Trust Agreement or a Series Ordinance or any Supplemental Trust Agreement and identified as a Special Fund. As of the date of this Official Statement, there is no Required Reserve for the Series 2014 Bonds. Funds Pursuant to the terms of the Master Trust Agreement, the City has created the Sewer Operating Fund, the Bond Fund, the Project Fund, the Bond Reserve Fund, the Rebate Fund, and the System Reserve Fund. The Bond Fund, the Bond Reserve Fund, the Sewer Operating Fund, and the System Reserve Fund (and the accounts and subaccounts within each of the aforementioned funds) are all Special Funds under the terms of the Master Trust Agreement. Sewer Operating Fund Pursuant to the Trust Agreement, the City is required to establish and maintain the Sewer Operating Fund separate and distinct from all other funds of the City, which Sewer Operating Fund is to be maintained in the custody of the City. So long as any of the Outstanding Obligations are outstanding, 8

17 all Revenues are to be deposited into the Sewer Operating Fund and used only for the purposes provided in the Trust Agreement. The Sewer Operating Fund is a Special Fund and is subject to the lien of the Trust Agreement, provided that any lien or pledge of funds, accounts, revenues and moneys not in the control of the Trustee (such as the Sewer Operating Fund) will be valid and enforceable only to the extent permitted by law. For information on the order and priority of the payment of funds out of the Sewer Operating Fund, see SUMMARY OF THE TRUST AGREEMENT Application of Sewer Operating Fund in APPENDIX D attached hereto. Bond Fund Pursuant to the Trust Agreement, the City is required to establish and maintain in the custody of the Trustee the City of Columbus Sewer Revenue Bond Fund (the Bond Fund ). Using moneys available from the Sewer Operating Fund, payments will be made no later than the last Business Day of each calendar month to the Trustee (a) beginning in the month that is twelve months prior to the month in which a principal payment or mandatory sinking fund payment is first due with respect to any Outstanding Obligation, an amount equal to 1/12 of the principal amount of Bonds maturing or subject to mandatory sinking fund redemption on the next succeeding Principal Payment Date to be deposited into the Principal Payment Account, and (b) beginning in the month that is six months prior to the month in which an interest payment is first due with respect to the Outstanding Obligations, an amount equal to the sum of (i) 1/6 of the amount of interest payable on or before the next succeeding Interest Payment Date, the interest on which is paid semi-annually, and (ii) the amount of interest payable during the next succeeding month, the interest on which is paid more frequently than semi-annually; provided, however, that the amount to be deposited in the Interest Payment Account of the Bond Fund each month shall be reduced by the Earnings Credit for such month. Bond Reserve Fund Pursuant to the Trust Agreement, the City is required to establish and maintain in the custody of the Trustee the Bond Reserve Fund. Using moneys available from the Sewer Operating Fund, deposits will be made by the City not later than the fifth Business Day after each Interest Payment Date the amount, if any, necessary to restore the balance in each account in the Bond Reserve Fund to the Bond Reserve Requirement for such account. The Bond Reserve Fund is a Special Fund and is subject to the lien of the Trust Agreement. As of the date of this Official Statement, there is no Required Reserve for the Series 2014 Bonds. Thus, the Bond Reserve Fund for the Series 2014 Bonds will have no moneys deposited therein on the date of issuance of the Series 2014 Bonds and may not have any deposits in the future. System Reserve Fund The System Reserve Fund will be maintained in the custody of the City as a fund separate and distinct from all other funds of the City. The System Reserve Fund shall be maintained in the custody of the City and moneys therein shall, to the extent necessary from time to time, be transferred to the Bond Fund to permit the payment of all obligations payable from the Bond Fund and, otherwise, may be used for any other Utility purpose. The City may, but shall not be required to, deposit moneys from any legally available source to the credit of the System Reserve Fund. Moneys deposited into the System Reserve Fund shall only be available to fund improvements to the Utility to the extent that such funds are not expected to be transferred to the Bond Fund for the payment of Debt Service on any Outstanding Obligations. Until so required or used for such purposes, moneys in the System Reserve Fund shall be invested in Investment Securities. The System Reserve Fund is a Special Fund and is subject to the lien of the Trust Agreement, provided that any lien or pledge of funds, accounts, revenues and moneys not in 9

18 the control of the Trustee (such as the System Reserve Fund) will be valid and enforceable only to the extent permitted by law. Bankruptcy Under Chapter IX of the Federal Bankruptcy Act and in certain circumstances described therein, an eligible entity, such as the City, may be authorized to initiate proceedings without prior notice to or consent of its creditors, which proceedings may result in material and adverse modifications or alteration of the rights of its secured and unsecured creditors, including holders of its bonds and notes. Covenants of the City Pursuant to the Trust Agreement, the City covenants with the holders of the Series 2014 Bonds that (a) it will charge such rates and limit such expenses to provide Net Revenues sufficient to make payments into the Bond Fund and the Bond Reserve Fund and to pay other obligations of the Utility, (b) to operate the Utility as a revenue producing facility, and (c) it will not grant a lien on the Pledged Revenues with a priority higher than or equal to the Series 2014 Bonds or any Additional Obligations. For further discussion, see SUMMARY OF THE TRUST AGREEMENT Covenants in APPENDIX D attached hereto. If an Event of Default occurs under the Trust Agreement, including any payment default on the Series 2014 Bonds, the Trustee may exercise certain remedies, including the right to accelerate the Series 2014 Bonds. The City has not covenanted to provide funds from any source other than those described herein to pay Debt Service on the Series 2014 Bonds which have been accelerated. (See SUMMARY OF THE TRUST AGREEMENT Events of Default in APPENDIX D attached hereto.) THE UTILITY The City s municipal sanitary sewer system (the Utility ) within the City s Department of Utilities (the Department ) serves the City and all or portions of 23 suburban municipalities (see The Service Area below). The primary services provided by the Utility include the collection and treatment of wastewater as well as programs for maintenance, repair, improvement, and expansion of physical facilities. The Division of Sewerage and Drainage (the Division ) within the Department monitors the character of industrial wastes discharged to the Utility to protect the community and watercourses from toxic and hazardous materials, and to comply with local, state, and federal environmental regulations. The Division maintains the Excellence in Management Platinum Recognition for excellence in utility management from the National Association of Clean Water Agencies (NACWA). NACWA is a national organization whose members are involved in all facets of water quality protection. As a key stakeholder in both the legislative and regulatory arenas, NACWA has established collaborative working relationships with Members of Congress, Presidential administrations and the Environmental Protection Agency (EPA). The Excellence in Management Platinum Recognition acknowledges that the Division has made significant achievements in the area of utility management. This award was based on the Division implementing and sustaining, for a continuous three-year period, successful programs to address the range of management challenges faced by public clean water utilities in today s competitive economic environment. 10

19 This recognition is attributed to the hard-working dedication of the staff of the Department and the Division. The award signifies the continuing commitment of the City of Columbus to provide clean water for the environment. The wastewater treatment program is designed to meet environmental requirements for returning water to local rivers after treatment. The Utility operates two wastewater treatment plants, the Southerly Wastewater Treatment Plant and Jackson Pike Wastewater Treatment Plant. Combined, the two plants serve a population of just over 1 million. Together, the two facilities processed an average of million gallons per day ( MGD ) in The Utility utilizes five methods to handle wastewater biosolids removed in the treatment process: incineration, land application, hybrid poplar tree farm, distribution, and marketing of composted sewage biosolids and landfills when necessary. At present, the treatment plants achieve a 98.0 percent reduction of CBOD (i.e. a measure of material that can deplete oxygen from the receiving stream) and suspended solids removal of 97.0 percent, considerably higher than the 85.0 percent required by the EPA to meet the water quality standards of its National Pollutant Discharge Elimination System ( NPDES ) permit. The Division maintains 4,447 total miles of sanitary, storm, and combined sewers. The sewer collection system includes 12 sanitary pump stations, 15 storm pump stations, 18 regulators, 21 detention/retention basins, and various other infrastructure that are maintained by the Sewer Maintenance Operations Center staff. In 1994, the Division implemented a separate user fee to charge property owners for stormwater projects. This fee provides for the operation and maintenance of the stormwater system (the Storm Sewer System ) and the debt service costs associated with stormwater infrastructure. The costs associated with this program are not reflected within the revenue and expenditure statements for the Utility, but are shown in the financial statements of the Storm Sewer System. THE REVENUES OF THE STORM SEWER SYSTEM ARE NOT PLEDGED TOWARDS THE PAYMENT OF THE DEBT SERVICE ON THE SERIES 2014 BONDS. To protect the massive infrastructure included within the Utility, the Division conducts a preventive maintenance program designed to provide comprehensive examinations of the City s critical sewer lines. Additionally, the Division has implemented a condition assessment program for all sewers within the sanitary collection system. This program utilizes industry standard pipe rating nomenclature and allows the Division to prioritize capital improvement projects to address those sewers in need of replacement, relining, or other rehabilitative work based upon the condition ratings. Cleaning of all lines is done as part of the condition assessment program. The Division is currently in compliance with all sanitary licenses, permits, and requirements of the Ohio Environmental Protection Agency ( OEPA ) and the U.S. Environmental Protection Agency ( EPA ). In addition, the industrial waste pretreatment unit monitors local industries, enforcing federal, state, and local sewer use regulations, ensuring that those industries absorb any added costs associated with wastes generated through industrial processes. The Storm Water and Regulatory Management Section has responsibility for the oversight of the City s Storm Water NPDES permit issued by the OEPA. This section is also responsible for monitoring storm water runoff for water quality purposes within the City s corporate boundaries. In 2006, the Department created a Regulatory Compliance Section housed in the Director s Office. The section includes a staff of five who work with staff within the Department to develop a more robust and sustainable environmental program and to ensure that each division works toward the goal of 11

20 absolute compliance. Further, the Regulatory Compliance Section monitors changes in current regulatory requirements and proposed changes, including legislation, and notifies the Director and staff accordingly. The Department is currently in the process of applying for ISO certification in Environmental Management. The full onsite audit is scheduled for October The Department is largely meeting environmental requirements associated with its core functions of producing safe drinking water, collecting and effectively treating wastewater, and delivering reliable electric service. On August 1, 2002, the City and the State consented to the entry of a Consent Order (the 2002 Consent Order ) to resolve allegations associated with the City s separate sanitary sewer system. The 2002 Consent Order required the City to develop a plan and schedule for completing the work necessary to address the issues. The 2002 Consent Order does not require that the plan be completed in any specified time frame. Pursuant to the 2002 Consent Order, the Department developed the Wet Weather Management Plan (the 2005 WWMP ). The 2005 WWMP, submitted to OEPA on July 1, 2005, includes a comprehensive 40-year schedule to resolve the separate sanitary sewer overflows. The schedule submitted to the OEPA is fully supported by an affordability analysis, which demonstrates that the City can afford the proposed schedule. The affordability analysis was conducted in accordance with EPA guidance documents. On September 17, 2004, the City and State entered into a second Consent Order (the 2004 Consent Order ) to resolve issues associated with the City s combined storm and sanitary sewer system. The 2004 Consent Order included a requirement that interim improvements be made to the combined system by July 1, 2010 and that all improvements necessary for the combined sewer system be completed by July 1, The 2005 WWMP that the City submitted on July 1, 2005 included all the projects and the schedule necessary to meet both the interim date and the final completion date for the combined sewer system The 2005 WWMP, which addresses both the 2002 Consent Order and the 2004 Consent Order, is projected to cost approximately $2.5 billion in 2005 dollars. The Division met the 2004 Consent Order interim requirements by making substantial upgrades at both wastewater treatment plants as well as a number of collection system improvements. In 2012, the Department embarked upon a complete reevaluation of the 2005 WWMP. The reevaluation was due to numerous factors, including a change in guidance from USEPA, to focus on a broader set of Clean Water Act requirements rather than solely on sewer overflows. The new guidance from USEPA is called Integrated Planning. Stormwater requirements are expected to be more heavily regulated across the country in the future and the change in guidance from USEPA recognized this potential impact to communities with consent orders. As a result of reevaluating the proposed projects contained within the 2005 WWMP, it was the Division s position that the problems of sanitary sewer overflows and basement backups could be addressed in a much more beneficial manner. The 2005 WWMP proposed two large diameter tunnels to handle high flows in order to meet the approved level of service. The major problem with this solution is that the tunnels would be needed only a handful of times a year, but the cost of them would be over a billion dollars. It was decided that rather than build storage capability in these tunnels for stormwater, it was better to address the problem directly by eliminating the means by which the stormwater is getting into the sanitary sewers. The City s new approach to addressing sanitary sewer overflows and basement backups throughout the city is known as Blueprint Columbus. The key elements of Blueprint Columbus are 12

21 eliminating inflow and infiltration from both the public and private side of the sewer system, and the installation of green infrastructure for improved water quality and neighborhood enhancements. Preventing stormwater from getting into the sewer system will be accomplished by lining of all public mainline sewers and lining of all private sewer service laterals from the building to the City s mainline sewer. Redirecting roof-drainage away from the foundation of homes and businesses out to the street will further eliminate the possibility of stormwater entering foundation drains, which in many older neighborhoods are tied to sanitary sewer service laterals. Rather than addressing the symptom by simply building storage in tunnels for stormwater that shouldn t be getting into the sanitary sewers to begin with, Blueprint Columbus is addressing the problem by eliminating the source. Ohio EPA has given approval to proceed with developing a new plan to address sanitary sewer overflows (SSOs) and water in basement (WIBs) occurrences through the Blueprint Columbus approach. This plan is due to the agency in September of The City has committed to provide an updated affordability analysis for both the Blueprint Columbus plan and an update to the 2005 WWMP to the agency. The affordability analysis will build upon lessons learned across the country since the 2005 WWMP was submitted. The core objective of the affordability analysis is To ensure that any schedule for improvements is as expeditious as possible while maintaining affordable rates for all customers. Ultimately, the City will recommend a plan and schedule to Ohio EPA that meets the goals of the clean water act in the most affordable manner possible. Management and Organization The Division is responsible for performing the City s responsibilities to manage and operate its sanitary, combined and stormwater collection systems, two wastewater treatment facilities, and a compost facility. The head of the Division is the Administrator, who is primarily responsible for the administration of the collection system and wastewater treatment facilities, including design, construction, repair, maintenance and operation. The Administrator is supported by three Assistant Administrators who comprise the Administrative Office of the Division. These Assistant Administrators oversee the Treatment Engineering Section, the Sewer System Engineering Section, the Sewer Maintenance Operations Center, the Stormwater and Regulatory Management Section, the Wastewater Treatment Facilities Operations, and the Private Development Section. The Administrative Office is primarily responsible for coordinating the overall operation of the Division. The Administrative Office is responsible for the oversight of personnel, budgeting, safety and training matters, and coordination with the Department s support staff. The Treatment Engineering Section and the Sewer System Engineering Section are responsible for the planning, design and construction of the Division s Capital Improvements Program, with the goal of project completion on time and within budget. The Wastewater Treatment Facilities Operations have the responsibility for operating and maintaining the two wastewater treatment plants and the compost facility. The Stormwater and Regulatory Management Section is responsible for regulating industrial waste discharges, pretreatment and surcharge programs, sampling, and analytical laboratory operations. The Sewer Maintenance Operations Center is responsible for the maintenance and repair of the sanitary, combined and stormwater collection systems, including all pump stations, support facilities, and appurtenances. The Administrator of the Division reports to the Director of Public Utilities, who is appointed by the Mayor of the City. All employees of the Division are selected pursuant to the civil service rules applicable to City employees. Both the Department and the Division have identified the need and are developing an employee succession strategy to ensure that experienced, qualified personnel in key supervisory positions are filled when retirement or unplanned vacancies occur. 13

22 Mr. Greg J. Davies, Director, Department of Public Utilities, City of Columbus. Mr. Davies was named the City of Columbus Director of Public Utilities in December Prior to being named Director, he served as Deputy Chief of Staff to Mayor Michael B. Coleman for four years, where he was responsible for the management and tracking of the Mayor s priority projects, particularly focused on issues related to utilities, development and technology. In 2005, Mr. Davies was promoted to Deputy Director of the City of Columbus Development Department where he implemented the Mayor s regional growth and vacant and abandoned property strategies. He began his career at the City of Columbus in 1999 when he was named Executive Assistant to the Director of Public Utilities. In that role, Mr. Davies oversaw internal and external communications and was the department s liaison to the Mayor s Office and Columbus City Council. Mr. Davies is a graduate of The Ohio State University. Utility: The following individuals now exercise principal supervisory authority over the Division and the Mr. Dax J. Blake, P.E., Administrator, Division of Sewerage and Drainage, City of Columbus. Mr. Blake received a Bachelor of Science in Civil Engineering from Ohio University in 1996 and a Master of Science in Civil Engineering from The Ohio State University in He is a registered Professional Engineer in the State of Ohio since Mr. Blake joined the Division as Assistant Administrator in August 2005, after working approximately eight years as a project engineer with the nationally recognized environmental engineering firm of Malcolm Pirnie, Inc. He has extensive education, training and experience in the field of wastewater treatment plant evaluation, receiving stream characterization, and alternative development and evaluation. Mr. Blake is an active member and participant in national organizations that include the Water Environment Federation and the National Association of Clean Water Agencies and he is President of the Association of Ohio Metropolitan Wastewater Agencies. Mr. Stephen J. Salay, P.E., Assistant Administrator, Division of Sewerage and Drainage, City of Columbus. Mr. Salay received a Bachelor of Science in Civil Engineering from Ohio State University in 1982, and he has been a registered professional engineer in the State of Ohio since September of Mr. Salay has been in his current position since January of 2003 and has served as Sewer System Engineering Section Manager from January 1991 until his current appointment as Assistant Administrator. He has over 20 years of detailed experience in the City s collection system, and is directly responsible for the City s Capacity, Management, Operations and Maintenance (CMOM) Program addressing sanitary sewer overflows through the City s sanitary system and the City s combined sewer system. Mr. Tracey M. Phelps, P.E., Assistant Administrator, Division of Sewerage and Drainage, City of Columbus. 14

23 Mr. Phelps received a Bachelor of Science in Mechanical Engineering from The University of Akron in 1997, and has been a registered professional engineer since Mr. Phelps has been in his current position as Assistant Administrator since He joined the Division as Wastewater Plant Manager in 2011 after working twenty-one years for the Medina County Sanitary Engineers office where he served as Treatment Plant Operations Manager (4 years), Wastewater Plant Engineer (10 years), and Wastewater Plant Supervisor (7 years). Mr. Derek Anderson, Assistant Administrator, Division of Sewerage and Drainage, City of Columbus. Mr. Anderson received a Bachelor of Arts from Marshall University in Mr. Anderson has been in his current position since August 2012 and has served as Department Assistant Director from June 2011 until his current appointment as Assistant Administrator. He has over 20 years of experience in government, and is directly responsible for the operations functions within the Division of Sewer and Drains and the Sewer Maintenance Operations Center. Mr. Anderson is an active member and participant in national organizations that include the Water Environment Federation and he is Secretary of the Five Cities Plus Organization. Mr. Robert L. Ellinger, Sewer Maintenance Manager, Division of Sewerage and Drainage, City of Columbus. Mr. Ellinger began his service with the City as a Civil Engineering Associate II in the Sewer Maintenance Section in 1978, and he was steadily promoted to the position of Sewer Maintenance Manager in Mr. Ellinger has held a State of Ohio Class II Wastewater Collection License since 1992 and has completed numerous courses in the field of engineering and construction. He has been a member of the Water Environment Federation since 1995, a member of the Ohio Water Environment Association since 1995, and a member of the National Association of Sewer Service Companies for approximately 10 years. Mr. Gary L. Hickman, Jackson Pike Wastewater Treatment Plant Manager, Division of Sewerage and Drainage, City of Columbus. Mr. Hickman received a Bachelor of Science Biology Degree from the University of Notre Dame in Mr. Hickman holds a State of Ohio Class IV Wastewater Plant Operator Certification and a State of Ohio Class IV Wastewater Laboratory Analyst License. Mr. Hickman has 21 years of service with the Division. He began as a Wastewater Chemist II with the Jackson Pike Plant and was promoted to Plant Manager in He has extensive knowledge and responsibility for the City s NPDES Permit Sampling and Analysis, Plant Title V Regulatory Compliance, Plant 503 Regulatory Compliance, and the Plants Safety Program. Mr. Jeff Hall, Southerly Wastewater Treatment Plant Manager, Division of Sewerage Drainage, City of Columbus. Mr. Hall holds a State of Ohio Class IV Wastewater Plant Operator Certification Mr. Hall has 27 years of service with the Division He began as a Wastewater Plant Operator at the Jackson Pike WWTP, 15

24 was promoted to Supervisor I, then Supervisor II at Jackson Pike WWTP. He was then promoted to Assistant Wastewater Plant Manager at the Southerly WWTP. In 2013, Mr. Hall was promoted to Wastewater Plant Manager at the Southerly WWTP. He has extensive knowledge and responsibility for the City s NPDES Permit Sampling and Analysis, and Plant 503 Regulatory Compliance, and the Plants Safety Program. Employees The current authorized personnel level of the Division is 516 full-time positions and 16 part-time positions. Budget appropriations assume a five percent (5%) vacancy credit. The authorized personnel level in 2015 will decrease to 487 full-time and 14 part-time positions. This decrease is directly related to a Department-wide reorganization that will transfer GIS to the Director s Office. All employees of the Division are participants in the Ohio Public Employees Retirement System. The required employer contribution is fourteen percent (14%) of covered payroll. The required employee contribution is ten percent (10%) of coverage payroll. A portion of the employee contribution is pickedup and paid by the employer. Current rates are presented in the table below. Paid by City Percentage of covered payroll Employee Share Paid by Employee Total Employer Share Full time employees AFSCME Local 1632 hired on or after 05/15/ % 10.00% 10.00% 14.00% 24.00% AFSCME Local 1632 hired before 05/15/2011, eff. 08/01/ % 4.00% 10.00% 14.00% 24.00% Total CMAGE/CWA hired on or after 07/24/ % 10.00% 10.00% 14.00% 24.00% CMAGE/CWA hired before 07/24/2011, eff. 11/24/ % 5.00% 10.00% 14.00% 24.00% MCP hired on or after 01/01/ % 10.00% 10.00% 14.00% 24.00% MCP hired before 01/01/2010, eff. 03/16/ % 5.00% 10.00% 14.00% 24.00% Part time employees AFSCME 6.00% 4.00% 10.00% 14.00% 24.00% CMAGE/CWA 5.00% 5.00% 10.00% 14.00% 24.00% MCP 5.00% 5.00% 10.00% 14.00% 24.00% Approximately seventy-two percent (72%) of the Division s employees are members of AFSCME Local The remaining staff, predominately managers and senior supervisors, are members of the CMAGE/CWA Local Five administrators are not members of labor unions and are compensated based on the City s Management Compensation Plan ( MCP ). The City provides healthcare coverage for its employees on a self-insured basis with United Health Care acting as the administrator of the plan. As of April 1, 2014, AFSCME employees pay $71.50 per month for the single plan and $ per month for the family plan; CMAGE/CWA employees pay $66.24 per month for the single plan and $ per month for the family plan; and MCP employees pay $80.34 per month for the single plan and $ per month for the family plan. 16

25 The Service Area The Utility s service area encompasses the entire City and all or portions of 23 suburban municipalities in Franklin, Union, Delaware, Licking, Fairfield, and Pickaway Counties. The Columbus Metropolitan Facility Planning Area, which includes the City s entire service area and the contracting municipalities sewered and unsewered service areas, encompasses approximately 676 square miles and contains a residential service population of over one million people. Municipalities Served by the Utility Municipality Estimated Service Population (1) Service Agreement Dates Columbus 787,033 Bexley 13,057 03/13/2003 to 03/12/2043 Brice /08/1976 to 10/10/2004 (2) Dublin 41,751 04/13/1993 to 04/13/2043 Gahanna 33,248 07/26/2004 to 07/26/2044 Grandview Heights 6,536 06/29/1993 to 06/28/2023 Grove City 35,575 03/20/2001 to 11/30/2050 Groveport 5,363 12/01/2000 to 11/30/2050 Hilliard 28,435 10/27/1994 to 10/27/2043 Jefferson Township N/A (3) 08/02/2002 to 08/02/2042 Lockbourne /26/1995 to 12/31/2020 Marble Cliff /02/1994 to 11/02/2024 Minerva Park 1,272 12/27/2007 to 12/26/2047 New Albany 7,724 02/28/2012 to 10/12/2051 Obetz 4,532 10/30/2002 to 10/29/2052 Reynoldsburg 35,893 11/07/2002 to 11/06/2042 Riverlea /01/1997 to 11/01/2017 Shawnee Hills /04/2000 to 03/04/2040 Upper Arlington 33,771 08/12/1992 to 08/12/2020 Urbancrest /28/2002 to 10/27/2052 Valleyview /06/1988 to 06/06/2018 Westerville 36,120 03/04/1999 to 03/04/2049 Whitehall 18,062 01/23/2013 to 01/23/2020 Worthington 13,575 07/17/2000 to 06/30/2020 Total Estimated Service Population: 1,105,677 (1) Based on 2010 U.S. Census Data (2) Contract expired, terms of expired agreement apply (3) As of December 12, 2013, no customers are directly serviced by the Division, but the terms of the service agreement are still effective. Source: The Division A map of the extent of the Utility s service area is displayed on the following page. The 23 municipalities serviced by the Utility are highlighted. 17

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27 Customers and Billing The majority of the Department s customers are billed based on metered water consumption. Customers may purchase and maintain private meters that measure the usage that does not enter the sanitary sewer system. The Department will read these meters for a $2.00 reading fee. Usage from these meters is deducted from water consumption for purposes of billing sewer usage. Residential customers are billed quarterly, and large commercial customers are billed monthly. Five master meter communities receive one bill monthly and service their own accounts. Residential accounts comprise approximately ninety-one percent (91%) of total accounts, while commercial and industrial accounts account for the remaining nine percent (9%) of total accounts. All bills are due within twenty-eight (28) days from the date the bills are mailed. Delinquent notices are mailed thirty-five (35) days after the bill date, and, at that time, a ten percent (10%) penalty is added to the bill. If the account remains unpaid and the delinquent balance exceeds $50.00, a turn-off notice is mailed twenty-one (21) days after the delinquent notice. If the account continues to remain unpaid and the combined water/sewer balance totals $ or more, a postcard is mailed to the property warning the customer that the balance must be paid in full to prevent water service termination two days thereafter. The Department will grant payment extensions prior to the date a postcard is mailed, but the delinquent balance must be paid in full. If it is not paid in full, water service is terminated. The Department quarterly notifies property owners that sewer charges in excess of ninety (90) days delinquent will become liens on their properties. There are no pre-notices sent. The County Auditor places the lien amounts on property tax duplicates due in January of the subsequent year. Sewer liens must be satisfied before properties are sold. Title companies in the Central Ohio area are familiar with the City s lien policy. Per their request, the Department added unpaid sewer balance information to its website. Realtors and title companies can query this information by parcel number or property address. The information is updated nightly. This data has proved to be a valuable collection tool for the Department. Delinquencies Percentage of Total Water and Sewer Accounts Past Due (1) Days Past Due * 48% 50% 50% 54% (1) As of December 31. * Not all accounts in the 0-30 Days Past Due category are delinquent. Only those accounts unpaid beyond 28 days are technically past due; however, the software used by the City s Department of Technology to create such reports is not able to make this distinction. Source: DOT/500 Reports; The Division 19

28 Five Year History of Account Types Year Residential Accounts Commercial & Industrial Accounts Total Accounts Billable Wastewater Accounts Average Usage Per Account Ccf/Acct ,513 22, ,371 41,395, ,211 22, ,767 40,608, ,348 22, ,219 41,533, ,933 22, ,868 42,071, ,412 20, ,341 40,064, Source: CUBS/500 Report Five Year History of Customers The following table presents a listing for the past five years of the Utility s customer accounts. Fiscal Year ended December City of Columbus 200, , , , ,678 Suburban Accounts 67,752 68,088 69,130 69,285 69,663 Total Accounts 268, , , , ,341 Source: CUBS/500 Report Annual Metered Billing Quantities (ccf) Set forth in the table below is information on the annual metered billing quantities, in thousands of cubic feet of water used, for the City and the 23 suburban municipal accounts *. The Division bills customers based upon water usage. For a detailed discussion of the Division s billing practices, see THE UTILITY Customers and Billing herein. Fiscal Year ended December ** City of Columbus 32,407, ,906, ,700, ,802, ,051, Suburban Accounts * 8,988, , ,832, ,268, ,013, Total ccf 41,395, ,608, ,533, ,071, ,064, * Suburban accounts do not include individual accounts within each suburban master meter community. ** The fluctuation in the annual metered billing quantities is attributed to changes in precipitation amounts and conservation efforts of customers. Source: CUBS/500 Report; The Division 20

29 Largest Customers The Utility s Ten Largest Customers (Based upon 2013 Sales) Customer Account Total Charges (in thousands) % of Total Sanitary Sewer Charges Ohio State University Physical Facilities. $6, % Anheuser Busch Inc. 2, Abbott Laboratories 1, Franklin County Sanitary Engineer 1, UP Columbus MARS Petcare US Jefferson Water and Sewer District Columbus Regional Airport Authority Coca Cola USA Ohio Health Corp Total: $17, % Source: The Division Treatment Plants and Facilities The City owns and operates two wastewater treatment plants, numerous interceptor sewers, and other wastewater and storm water facilities to minimize the amount of pollution entering the principal waterways in the Columbus metropolitan area: the Scioto River, the Olentangy River, Alum Creek, Big Walnut Creek, and Blacklick Creek. The two wastewater treatment plants are Jackson Pike Wastewater Treatment Plant ( JPWWTP ) and Southerly Wastewater Treatment Plant ( SWWTP ). These facilities serve the City and the 23 contracting communities. The two plants are joined via the Interconnector Sewer. This interconnector allows flows generated in the Jackson Pike Service Area to be transported to Southerly Service Area. Therefore, if the flow rate at the JPWWTP exceeds the peak capacity of the plant, excess wastewater can be sent to the SWWTP by means of this interconnector. Upgrades and modifications to the treatment plants and its collection system have resulted in measurable improvements in the quality of the receiving waters since the inception of its first treatment facility at Jackson Pike in Jackson Pike Wastewater Treatment Plant ( JPWWTP ): The Jackson Pike Wastewater Treatment Plant is located on the south side of the City, just east of Interstate 71 and south of Frank Road, on approximately 90 acres. The current plant was built in the late 1930s. It was expanded in the mid-1950s, and renovated in the mid-1970s and early 1990s. This facility serves the areas of the City to the west of Interstate 71 and north of the southern rim of Interstate 270. After plant hydraulic improvements in 2010, the JPWWTP currently has a peak flow capacity of 150 MGD. 21

30 Since 1987, the JPWWTP personnel have received 25 awards for exceptional operation from NACWA. They include 2 Platinum awards; 16 Gold awards; and 7 Silver awards. Southerly Wastewater Treatment Plant ( SWWTP ): The Southerly Wastewater Treatment Plant is located on approximately 495 acres between the east side of the Scioto River and US Route 23, on the far south side of the City, north of Pickaway County. The City also owns an additional 435 acres on the west side of the Scioto River which also contains the City s Compost Facility. The SWWTP was constructed in the early 1960 s, expanded in the 1970 s, and underwent a significant expansion and upgrade in the late 1980 s. This facility serves the eastern half of Franklin County. After completion of major plant improvements in 2010, the SWWTP reached its current peak flow capacity of 330 MGD. Since 1987, the SWWTP personnel have received 27 awards for exceptional operation from NACWA. They include 2 Platinum awards; 13 Gold awards; and 12 Silver awards. The plant facilities and personnel at both the JPWWTP and SWWTP have consistently achieved effluent quality that meets NPDES permits. Treatment Plant Wastewater Flow Data: The design flows for the plants were calculated based on the 2013 average flow data from the JPWWTP and the SWWTP and are summarized below. The average flows presented are the average of the daily metered flows from each plant. The average design flows reflect the intended average flow for each plant, and the peak flow represents the maximum flow that each plant can handle under current conditions. Average Daily Treatment Plant Flows (MGD) Treatment Plant Average 2013 Flow Average Design Flow Peak Flow JPWWTP SWWTP Total System Source: The Division [Balance of Page Intentionally Left Blank] 22

31 Total Flow MG Columbus Treatment Plants 2013 Flow Report Daily Average Flow MGD Total Tons CBOD Removed Avg. Tons CBOD Removed Per Day Total Tons Suspended Solids Removed Avg. Tons Suspended Solids Removed Per Day Plant Jackson Pike 26, , , Southerly 35, , , All Plants 61, , , Source: The Division Columbus Treatment Plant Performance Suspended Solids Data (1) CBOD (1) Ammonia NITROGEN (1) FECAL COLIFORM Plant NPDES Permit Limits Monthly Average Results NPDES Permit Limits Monthly Average Results NPDES Permit Limits Monthly Average Results NPDES Permit Limits (2) Monthly Average Results Jackson Pike (JPWWTP) 16 Jun-Oct 26 May 30 Nov-Apr 5.5 Jun-Oct 3.9 May 6.8 Nov-Apr 8.0 Jun-Oct 13 May 20 Nov-Apr 2.0 Jun-Oct 2.0 May 2.2 Nov-Apr 1.0 Jun-Oct 2.5 May 4.5 Nov-Apr 0.2 Jun-Oct 0.16 May 0.17 Nov-Apr S W 126 No Limit 44 Southerly (SWWTP) 16 Jun-Oct 26 May 30 Nov-Apr 3.01 Jun-Oct 2.9 May 3.36 Nov-Apr 8.0 Jun-Oct 13 May 25 Nov-Apr 2.56 Jun-Oct 2.61 May 3.35 Nov-Apr 1.0 Jun-Oct 2.0 May 3.4 Nov-Apr 0.19 Jun-Oct 0.13 May 0.31 Nov-Apr S W 126 No Limit 42 (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). Source: The Division Interceptor Sewers: In addition to the operation of the two wastewater treatment plants, the City is responsible for a variety of related wastewater facilities and projects. The facilities all interact to provide wastewater conveyance and treatment for the Columbus metropolitan area. The collection system is arranged into three parts based on sewer type: separate sanitary sewers, combined sewers, and storm sewers. Both the separate and combined sewers are arranged into sewersheds based on system drainage areas ranging in size from 20 acres to 300 acres. The City has constructed a number of major interceptor and intercommunity relief sewer projects. These include, but are not limited to the Scioto Main Trunk Sewer, the Franklin-Main Interceptor Sewer, the Alum Creek Interceptor Sewer and Deshler Tunnel, the Big Run Trunk Sanitary Trunk Sewer, the Alum Creek Trunk Sewer, the Big Walnut Sanitary Trunk Sewer, the Blacklick Creek Trunk Sewer, the Big Walnut Sanitary Outfall, and the Big Walnut Augmentation/Rickenbacker Interceptor ( BWARI ). 23

32 The City of Columbus entered into the 2002 Consent Order and the 2004 Consent Order with the OEPA to address the operation and maintenance of its wastewater collection and treatment systems and the overflows which emanate from the system during wet weather events. Combined Sewer System: The City has approximately 5,000 acres of combined sewer runoff catchment areas with an additional 7,000 acres of separate sewer tributary to the combined sewer system. There are 29 regulated Combined Sewer Overflow ( CSO ) relief locations which consist of CSO regulators, manhole relief points, the Alum Creek Storm Tank, and the Whittier Street Storm Tanks. The City holds a NPDES permit for the CSOs, and is required to meet the requirements of federal CSO Policy. The requirements of the 2004 Consent Order have been substantially completed through capital improvement projects consisting of major WWTP upgrades and various projects throughout the combined sewer system. The last major capital improvement project addressing the CSO consent order is currently under construction. This is a twenty foot (20 ) diameter tunnel, approximately four and one-half miles in length, the Olentangy Scioto Intercepting Sewer (OSIS) Augmentation Relief Sewer, known as the OARS project. This project will provide storage and increased conveyance to the treatment plants resulting in a significant annual reduction of combined sewer overflow volume and providing a ten year level of service to almost all CSO regulators in the downtown area. A few smaller projects remain to complete the 2004 CSO Consent Order commitments. Separate Sanitary Sewer System: The vast majority of the City s wastewater collection system is separate sanitary sewers. The 2002 Consent Order required the City to develop a plan to address capacity issues resulting in SSOs and WIBs occurrences. The result was a number of capital improvement projects contained in the Wet Weather Management Plan (WWMP) submitted to OEPA in The projects contained in the WWMP consist of all gray solutions, two of which are large diameter tunnels estimated to cost over a billion dollars. Preliminary hydraulic modelling of the sewers indicates that these tunnels, the Olentangy Relief Tunnel (ORT) and the Alum Creek Relief Tunnel (ART), would only be utilized a few times a year. The City does not see this as a good use of ratepayer s money if the problem of SSOs and WIBs can be addressed in a better way. Blueprint Columbus: In 2012, the City approached the OEPA about an alternative solution for SSOs and WIBs. This proposal follows the Integrated Planning Approach guidelines put out by USEPA in June of The City s new approach to addressing SSOs and WIBs is known as Blueprint Columbus. Specifically, this approach includes a Green Infrastructure (GI) component which provides a stormwater quality benefit along with other benefits such as neighborhood beautification, and local job creation. Additionally, Blueprint Columbus goes after the source of the problem causing the SSOs and WIBs, which is excessive inflow and infiltration (I/I) of stormwater getting into the sanitary sewer system. Rather than constructing large tunnels to store and convey excessive amounts of stormwater that should not be present in the system, Blueprint Columbus will eliminate excessive I/I entering the sanitary system. This will be accomplished by lining of all public mainline sewers in the targeted areas and lining all private sanitary service laterals from the public mainline sewer to the structure served by that lateral. Roof drainage will be redirected to drain directly to the street and where possible directed to a green infrastructure facility such as a rain garden or bio-swale which provides a water quality benefit by removing pollutants through the facility s growing media and planted vegetation. The green infrastructure coupled with the aggressive inflow and infiltration removal will result in better water quality and get the City ahead of increasing stormwater regulations when compared to the all gray 2005 WWMP. The OEPA has given the City approval to move forward on pilot projects implementing Blueprint Columbus while allowing us to delay specific projects contained within the 2005 WWMP. The City is required to submit our new plan addressing SSOs and WIBs following the Blueprint Columbus approach 24

33 in September The City has committed to meeting the same level of service as provided for in the 2005 gray plan and will submit a revised gray plan at the same time taking into account all work done to date and additional knowledge gained since first submitted in Both the revised gray plan and the Blueprint Columbus plan will include an accompanying Affordability Analysis as required as part of the OEPA s approval. Operations, Maintenance, and Training Practices Operations: Both the JPWWTP and the SWWTP have their own Plant Manager and associated staffing. Staffing requirements are routinely reviewed and are adjusted to ensure the effective use of human resources. Real-time operating control is provided by the plant wide automation system. The treatment plants are supervised and operated by professionals having OEPA wastewater licenses. Wastewater Plant Operators receive cross training to operate all plant processes and equipment. Wastewater sampling is performed at the plants and required analyses are performed at the Division s Surveillance Laboratory, which is also responsible for monitoring the industrial discharges to the sewer system and manages the pretreatment program. Other sections include the Sewer Maintenance Operations center, which is responsible for the City s sanitary, combined and stormwater collection systems and pump stations. Maintenance: The City has a structured maintenance program of mechanical and electrical/instrumentation professionals. This staffing includes pairing skilled workers with less experienced employees to provide knowledge and experience. The Division is utilizing a computerized maintenance management system that tracks and documents both preventative and repair maintenance activities. This same system provides computerized tracking of the Division s purchasing and inventory control system that maintains the stock of replacement parts and equipment. Training: In order to protect the tremendous financial investment the City has committed to making in its wastewater infrastructure, the Division has contracted for the development of a comprehensive Maintenance and Operation ( M&O ) Online Courseware that uses information from three sources: M&O manuals, vendor training sessions, and the plant itself. By researching the initial and final M&O manuals, attending vendor training, and seeking input from plant management, the courseware developer has been able to develop specific training programs for plant operations, maintenance, and collection system maintenance personnel. Electrical Power Redundancy Jackson Pike Wastewater Treatment Plant: The JPWWTP has redundant power feeds for the plant from the Dublin Road Power substation. The Division continues to perform a comprehensive evaluation of the JPWWTP s power utilization requirements, and it has completed several upgrades including the replacement of medium voltage electrical distribution system, disposing of the Polychlorinated Biphenyl ( PCB ) transformers, and improving the reliability of the distribution system. Southerly Wastewater Treatment Plant: The SWWTP has redundant power feeds. The first 69kV feed is provided by American Electric Power ( AEP ). A second 69Kv feed comes from the City Division of Power (DOP) substation located at the main entrance to the plant to provide electricity to the plant only when the AEP service is not operating. Thus, the DOP service drop provides the plant with the backup 69kV electricity source required for the plant by the OEPA. As a result of the comprehensive evaluation of the SWWTP s power utilization requirements, the Division has completed numerous improvements to the electrical power system that includes the installation of new solid-state protective relays for all circuit breakers in the four existing switching stations, and reinstallation of 14.4 kv reactors. 25

34 Asset Management Assessment The DOSD began implementing the asset management business model in 2003 as part of its CMOM program, and asset management was formalized as a Department-wide program in DOSD has been actively implementing asset management principles across the entirety of its infrastructure in the areas of capital planning, operations, maintenance, and replacement planning. In addition, it has enhanced its business support systems, most notably its computerized maintenance management system (CMMS) to support data capture and a more data-driven approach to asset decision making. Business Case Evaluations (Capital Plan Review). DPU has implemented the business case evaluation (BCE) process, a rigorous early review for planning capital projects to ensure that projects deliver our customers the most value for their investment. Understanding that the greatest potential to reduce costs on a project occurs in the early phases, the process requires a formal alternatives generation phase to identify as many viable alternatives as possible. This is followed by an extensive alternatives evaluation, including detailed quantification of project risks and how they vary between alternative solutions. Using a standardized life-cycle cost analysis tool, projects are valued for their fiscal soundness in addition to any social and environmental benefits they provide. Only projects with a positive return on investment or that address unacceptable risks to the utility and its customers are placed on the capital plan, and projects with the highest benefit to cost ratio are prioritized. This process has resulted in significant capital reductions, social benefits, and environmental value while still exceeding customers expected levels of service. The process was recognized in 2012 as a leading practice capital review process by 42 global utilities participating in the Water Services Association of Australia asset management benchmarking. Treatment Plant / Facility Operations Improvements. In 2011, DOSD teamed with a treatment-facility operations consultant to evaluate the operations at both wastewater treatment plants to identify potential energy and chemical savings. This operations optimization process has both produced significant operating savings and become an ongoing, internal process. Potential opportunities to improve operations are evaluated based on an estimated rate-of-return and evaluation of any operating risks. An example of the benefits of the process involves a change in operations to increase the volume of solids produced at the wastewater treatment facilities processed through the sludge digesters. By working through some operational constraints, the increased digestion reduced the overall amount of solids to be disposed of by the facilities, a direct cost savings. Further savings are realized because the digestion process produces gas that can be used as a power source for other facility electrical needs. Digesting sludge also increases the portfolio of disposal options, including more cost-effective beneficial reuse alternatives. That leads to reduced reliance on incineration for sludge disposal, a change that immediately improves air quality and in the long-term may allow DOSD to reduce the number of incinerators it maintains and operates. Maintenance and Reliability Improvements. DOSD has focused even more effort in the areas of maintenance and reliability with the dedication of more staff and the on-boarding of a reliability engineer. Progress has been made to fulfill the goal of further shifting to a more proactive maintenance foundation and away from reactive maintenance. Proactive maintenance is shifting from predominantly calendar based to a combination of calendar-, condition-, and run-time based maintenance to ensure that maintenance is performed at the right time. The Department is now implementing a process called reliability-centered maintenance (RCM) to ensure the maintenance programs are optimized to accomplish these goals. The Department has applied RCM on several critical asset systems at both treatment plants and some pumping stations. These maintenance reviews improved system safety and provided valuable results in the form of new and 26

35 optimized operation and maintenance tasks. In some cases, efficiencies were found by eliminating or decreasing the frequency of low-value maintenance tasks. Over 600 different potential modes of failure have been examined to strengthen the maintenance program and avoid those means of failures proactively. The preventive maintenance optimization (PMO) process has recently been employed at the Southerly Wastewater Treatment Plan, and involves updating preexisting preventive maintenance plans based on data-driven experience with several major asset systems. There, PMO efforts reduced the number of hours necessary to maintain some equipment and shifted the focus onto other critical systems. The Division is increasingly utilizing advanced technologies (ultrasonics, thermography, vibration, and oil analysis) to detect deterioration or defects in critical mechanical assets well before the human senses could detect issues. This allows these problems to be addressed before they cause any significant consequences. For example, faulty wiring in almost 20 transformers at the Jackson Pike WWTP were detected by a plant electrician before a failure occurred using an ultrasonic meter. Management at that facility estimated the equipment savings at over $150,000 in avoided property damage, not including the potential for human injury. The Department is always implementing improvements to its inventory of assets and parts and supplies to ensure the most efficient use of resources. Generation of new inventory metrics has allowed inventory supply managers to have a better sense of rate of turnover, overall store-room value, monthly changes in value, and other inventory-based metrics designed to limit store-room value while providing the necessary parts and supplies to reduce the risk of treatment facility downtime. Replacement Planning. The Department is faced with a multitude of extensive, regulatory driven, capital improvement projects ( CIP ) that will affect resources and its customers user rates. In addition to implementing those CIPs, the City must be prepared fiscally to maintain its existing, aging infrastructure such that the overall program remains affordable and future CIPs and/or their schedules are not jeopardized due to lack of funds as the result of poor planning. To address this need, the Department has developed a Replacement Planning Model ( RPM ) that uses asset data to generate output for the purposes of allowing the City to: Estimate overall replacement value of the Division s collection system and treatment assets, a fundamental precursor to other asset management activities; Determine long-term cost estimates for future refurbishment and replacement costs for the Division s collection system and treatment assets; and Support the City s assessment of the affordability of its WWMP and other programs. This tool will facilitate decision-making pertaining to priorities as well as provide more reliable background data for future affordability analyses. 27

36 Solids Master Plan The City s two wastewater treatment facilities, JPWWTP and SWWTP, treat on average and million gallons of wastewater each day, respectively. The treatment process at the JPWWTP produces approximately 40 dry tons of sludge per day, while the SWWTP produces approximately 75 dry tons of sludge per day. However, the methods for solids processing are different at each plant. At JPWWTP, the solids are sent through thickening and anaerobic digestion processes in order to reduce sludge volume and stabilize the solids. Of the solids produced, 100% is beneficially reused through a Deep Row Hybrid poplar tree planting program, land application, composting, and Quasar Inc. for electricity generation. The JPWWTP also has the ability to send its sludge to a landfill, although this is not part of normal operations. The JPWWTP currently has two incinerators that were constructed in They are only operated if other outlets are not available for solids disposal. The SWWTP also sends its solids through thickening and anaerobic digestion processes for sludge volume reduction and stabilization of solids, and it then disposes of approximately 34% of the solids through incineration, 21% through Deep Row Hybrid poplar tree planting program, 12% through Quasar, 32% percent through composting, and 1% through liquid land application. The SWWTP also has the ability to dispose of sludge through landfilling, although this is not part of normal operations. The incinerators will be taken out of service on March 2016 due to their inability to meet future regulatory air permitting requirements. Currently, design efforts are underway to construct a new solids load-out facility at the SWWTP prior to March 2016 to increase the land application program. Sewerage Treatment Plant Improvements A total of $121 million is proposed for improvements at the SWWTP and the JPWWTP over the next six years. The major projects include: $8.8 million for the Bio-solids Land Application Facility Program at SWWTP; $72.3 million for the Chemically Enhanced Primary Treatment Process at SWWTP; $15.9 million for the Bio-solids Land Application Improvement Project at JPWWTP; and $8.9 million for Corrosion Prevention and Protective Coating Systems at JPWWTP. The Bio-solids Land Application Projects will increase plant capacity for land application of bio-solids and facilitate maximum beneficial agricultural use of the bio-solids. The corrosion projects at both plants will provide protective coatings on many structures, buildings, and process items and extend their useful life. The Chemically Enhanced Primary Treatment Process at SWWTP will provide additional treatment capacity to the plant during wet weather treatment events. This is a multi-phased project which includes upgrades such as: headworks expansion, construction of CEPT clarifiers, effluent piping, and chlorine disinfection and de-chlorination facilities and controls. These treatment plant improvements, together with the concurrent collection system improvements previously described, will result in compliance with the requirements of the approved Interim Combined Sewer Plan and the 2004 Consent Order, and will dramatically reduce the annual bacteriological load on the Scioto River. Collection system projects include: tunneling projects to increase capacity and storage in the collection system during wet weather events; inflow redirection projects in older areas of the city to reduce combined sewer overflows; inflow and infiltration studies that will identify capacity deficiencies and other infrastructure needs in various areas in the city; infrastructure renewal projects that will extend the service life of existing infrastructure at the lowest possible cost; and construction of new and improved stormwater infrastructure to mitigate flooding complaints across the City. Major projects include $61.5 million for construction of the Big Walnut/Rickenbacker Sanitary Interceptor; $85 million for construction of the Blacklick Creek Interceptor; and $14 million for the Big Walnut Outfall Rehabilitation project. 28

37 Capital Improvement Plan The Utility s adopted six-year capital improvement plan ( ) totals nearly $1.01 billion and can be categorized into two project areas: collection system improvements and sewerage treatment plant improvements. Within the collection system improvements, approximately $350 million is targeted to the Department s new Blueprint Columbus program. The goal of this program is to eliminate the cause of separate sanitary sewer overflows by targeting the source of stormwater entering the sanitary sewer system. Blueprint Columbus will rehabilitate mainline and house service connections where stormwater enters the pipes through cracks, open joints, and structural deficiencies. Mitigating this clean stormwater from entering the sanitary sewer system will not only address sanitary sewer overflows associated with the City s consent order, but will also address future stormwater regulations with green infrastructure. Collection System Improvements. Within the capital plan, over $890 million is proposed for sewer collection system projects. Many of these projects are major components of the WWMP that will address hydraulic deficiencies which result in SSOs and WIBs. Other smaller improvements include various sewer system inflow and infiltration remediation projects and sewer rehabilitation projects, as well as major design and construction projects in targeted neighborhoods associated with the $350 million Blueprint Columbus plan. Sewerage Treatment Plant Improvements. Within the capital plan, nearly $121 million is proposed for sewer treatment plant improvements. There are major improvements to the JPWWTP totaling $35 million and major improvements to the SWWTP totaling $86 million. [Balance of Page Intentionally Left Blank] 29

38 Captial Improvement Plan Uses and Sources of Funds (in thousands of dollars) Total USES OF FUNDS Sewage Treatment Plant Improvements Jackson Pike Plant $ 9,003 $ 17,957 $ 490 $ 610 $ 5,315 $ 2,165 $ 35,540 Southerly Plant 3,430 5,342 8,440 68, ,371 Sub-Total 12,433 23,299 8,930 68,969 5,715 2, ,911 Interceptors/Subtrunks 131,950 91,900 58,200 15,540 9,300 15, ,240 Blueprint Columbus 15,655 67,980 29,850 78,850 78,850 78, ,035 Other Projects 31,904 66,790 34,721 31,153 27,550 26, ,342 TOTAL $ 191,942 $ 249,969 $ 131,701 $ 194,512 $ 121,415 $ 122,989 $ 1,012,528 SOURCES OF FUNDS WPCLF/OWDA Loans $ 107,271 $ 158,465 $ 54,157 $ 140,959 $ 63,000 * $ 79,600 * $ 603,452 Bond Funding 84,671 91,504 77,544 53,553 58,415 43, ,076 TOTAL $ 191,942 $ 249,969 $ 131,701 $ 194,512 $ 121,415 $ 122,989 $ 1,012,528 * Funds above are included in the Capital Improvement Plan; if available, funding from WPCLF/OWDA Source: The Division Rate Determination Services provided by the Utility and debt service on all Utility general obligation and revenue bonds, as well as all OWDA loans, are funded solely from user fees. Section 120 of the City Charter empowers the Council to establish sanitary sewer rates in an equitable manner and in such amounts as will fully cover the costs of services. Rates include the cost of maintenance, operation and supply, and debt service. Rates are reviewed annually by the Advisory Board (See THE UTILITY Sewer and Water Advisory Board herein for a description of the composition and function of the Advisory Board), and approved by City Council. As part of the annual sanitary sewer rate adjustment procedure, the 30

39 Department of Finance & Management, in conjunction with the Department, projects Utility revenues and expenditures for a ten-year period. The Advisory Board is empowered to make a recommendation to the City Council regarding the appropriateness of a rate change for the next fiscal year. Effective for calendar year 2015, the Advisory Board recommended a rate increase of three percent (3%) for the Utility. Sewer and Water Advisory Board The Sewer and Water Advisory Board (the Advisory Board ) was established by City Code to provide advisory services and comment on proposed water, sanitary sewer, and storm sewer utility rates. The Advisory Board consists of the City Auditor, the Director of Public Utilities, the Director of the Department of Finance & Management, and six (6) citizen representatives appointed by the Mayor with the concurrence of the City Council; including one representative each for residential customers, low income residential customers, senior citizen residential customers, industrial customers, commercial customers and for a political subdivision other than the City. Sewer Rates The sewer charges consist of a monthly service charge and a commodity charge. The monthly service charge is calculated to recover the fixed billing cost only. For a customer account that is read and billed monthly (typically commercial accounts), the monthly service charge is $ A quarterly customer (typically residential) is charged a quarterly service charge of $3.69. The Commodity Charge is based upon the quantity of water used as measured by the water meter or meters in use. For every hundred cubic feet of water ( Ccf ) used, a residential customer would pay a Commodity Charge of $3.80. This is calculated to recover the cost of Operational & Maintenance, Capital, and Sewer Maintenance Charges. Additional cost is captured for Industrial and Extra Strength users. For every Ccf of water used an Industrial or Extra Strength customer would pay a Commodity Charge of $4.09. This is calculated to recover the cost of Operational & Maintenance, Capital, and Sewer Maintenance Charges related to Extra Strength treatment. A Residential Customer Quarterly Bill, for 3,000 cf, is calculated as follows: Monthly Service Charge (3.69 X 3) = $11.07 Commodity Charge (30 Ccf X 3.80) = Total Sanitary Charges $ Extra Strength Customer Monthly Bill, for 100,000 cf, is calculated as follows: Monthly Service Charge (11.08) = $11.08 Commodity Charge (1000 Ccf X 4.09) = 4, Total Sanitary Charges $4,

40 Rate History Sanitary Sewer Rates For Average Residential Inside- City Consumer Year Annual Cost * Percent Increase 2005 $ % Source: The Division * The Annual Cost amounts include the Wet Weather Clean River charge, a fee imposed to support the City s Consent Orders. THE TRUST AGREEMENT The Series 2014 Bonds will be issued under and secured by the Trust Agreement between the City and the Trustee. Principal of and interest and any premium on the Series 2014 Bonds will be payable from Pledged Revenues generated by the ownership, operation, use, and services of the Utility. Principal of and interest and any premium on the Series 2014 Bonds will be secured under the Trust Agreement by a pledge of and lien on the Pledged Revenues and the Special Funds. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS herein for a summary of the security for the Series 2014 Bonds, and see APPENDIX D attached hereto for a summary of the certain provisions of the Trust Agreement. UNDERWRITING Stifel Nicolaus & Company, Incorporated, as senior manager, and on behalf of itself and PNC Capital Markets LLC, Fifth Third Securities, Inc., Morgan Stanley & Co., LLC, and RBC Capital Markets, LLC (collectively, the Underwriters ) has agreed, pursuant to a Bond Purchase Agreement (the Bond Purchase Agreement ) with the City, dated October, 2014, and subject to certain conditions contained in the Bond Purchase Agreement, to purchase all, but not less than all, of the Series 2014 Bonds at a purchase price of $ (which equals the principal amount of the Series 2014 Bonds ($.00), plus original issue premium ($ ), less Underwriters discount ($ )). The Underwriters have agreed to purchase all of the Series 2014 Bonds if any are purchased. The Series 2014 Bonds are being offered for sale to the public at the prices shown on the inside cover page hereof. The Underwriters reserve the right to lower such initial offering prices as they deem 32

41 necessary in connection with the marketing of the Series 2014 Bonds. The Underwriters may offer and sell the Series 2014 Bonds, respectively, to certain dealers (including dealers depositing the Series 2014 Bonds into investment trusts) and others at prices lower than the initial public offering price or prices set forth in the Official Statement. The Underwriters reserve the right to join with dealers and other underwriters in offering the Series 2014 Bonds, respectively, to the public. The Underwriters may overallot or effect transactions which stabilize or maintain the market price of the Series 2014 Bonds at levels above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. Morgan Stanley, parent company of Morgan Stanley & Co. LLC, an underwriter of the Series 2014 Bonds, has entered into a retail distribution arrangement with its affiliate Morgan Stanley Smith Barney LLC. As part of the distribution arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the Series 2014 Bonds. The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage services. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the City, for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities, which may include credit default swaps) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the City. The Underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of this information. FINANCIAL STATEMENTS Management s Discussion and Analysis, Basic Financial Statements, Notes to the Financial Statements, and Required Supplemental Information of the City of Columbus for the fiscal year ended December 31, 2013 appear in APPENDIX C to this Official Statement. INDEPENDENT AUDITORS The Basic Financial Statements of the City of Columbus, Ohio as of and for the year ended December 31, 2013, included in APPENDIX C to this Official Statement have been audited by Plante & Moran, PLLC, independent auditors, as stated in their report appearing in APPENDIX C. 33

42 RATINGS As noted on the cover page, the City has applied for a rating of the Series 2014 Bonds from Moody s Investors Service, Inc., Standard & Poor s Ratings Services, a division of The McGraw Hill Companies, Inc. and Fitch Ratings, Inc., which have rated the Series 2014 Bonds,, and, respectively. Each such rating reflects only the views of such rating agency. Any explanation of the significance of a rating may only be obtained from such rating agency at Moody s Investors Service, Inc., 7 World Trade Center, New York, New York 10007, telephone (212) , website Standard & Poor s Ratings Services, a division of The McGraw Hill Companies, Inc., 55 Water Street, New York, New York 10041, telephone (212) , website and Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10041, telephone (212) , website The City furnished to the rating agencies certain information and materials, some of which may not have been included in this Official Statement, relating to the Series 2014 Bonds and the City. Generally, rating agencies base their ratings on such information and materials, as well as investigation, studies and assumptions by the rating agencies. Such ratings are not recommendations to buy, sell or hold the Series 2014 Bonds. There can be no assurance that a rating, when assigned, will continue for any given period of time or that it will not be lowered or withdrawn entirely by a rating agency if, in its judgment, circumstances so warrant. In addition, the City currently expects to provide to the rating agencies (but assumes no obligation to furnish to the Underwriters or the holders of the Series 2014 Bonds, other than the information required to be provided pursuant to the Continuing Disclosure Certificate, as described under CONTINUING DISCLOSURE herein) from time to time further information and materials that it or they may request. The City does not, however, obligate itself hereby to furnish such information and materials, and may issue unrated bonds and notes from time to time. Failure by the City to furnish such information and materials, or the issuance of unrated bonds or notes, may result in the suspension or withdrawal of a rating agency s rating on the Series 2014 Bonds. Any lowering, suspension or withdrawal of such ratings may have an adverse effect on the marketability or market price of the Series 2014 Bonds. MUNICIPAL ADVISOR The City has retained the services of PRISM Municipal Advisors, LLC, Powell, Ohio (the Municipal Advisor ) to advise the City concerning the terms, timing of sale, and other factors related to the sale of the Series 2014 Bonds. The Municipal Advisor has not audited, authenticated or otherwise verified the information in this Official Statement, or other information available to the City with respect to appropriateness, accuracy and completeness of disclosure of that information, and no guaranty, warranty or other representation is made by the Municipal Advisor respecting accuracy and completeness of that information or any other matter related to that information. 34

43 VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS Upon delivery of the Series 2014 Bonds, Causey Demgen & Moore, P.C., Denver, Colorado, certified public accountants (the Verification Agent ) will deliver reports on the arithmetical accuracy of certain computations contained in schedules provided to them by the Underwriters on behalf of the City relating to the computation of forecasted receipts of principal and interest on the securities held by the Trustee in the Escrow Fund to refund the Refunded Bonds. Such computations will be based solely on assumptions and information supplied by the Underwriters on behalf of the City, and the Verification Agent has restricted its procedures to examining the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which such computations are based. Accordingly, the Verification Agent has not expressed an opinion on the data used, the reasonableness of the assumptions, or the ability to achieve the forecasted outcome. TAX MATTERS In the opinion of Bricker & Eckler LLP, Bond Counsel, under existing law interest on the Series 2014 Bonds is excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the Code ), and is not treated as an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. Further, the Series 2014 Bonds are not private activity bonds as defined in Section 141(a) of the Code. Interest on the Series 2014 Bonds, the transfer thereof, and any profit made on their sale, exchange or other disposition, are exempt from the Ohio personal income tax, the Ohio commercial activity tax, the net income base of the Ohio corporate franchise tax, and municipal, school district, and joint economic development district income taxes in Ohio. The City has not designated the Series 2014 Bonds as qualified tax exempt obligations as defined in Section 265(b)(3) of the Code. Bond Counsel will express no opinion and make no representation regarding other federal, state or local income tax consequences resulting from the receipt or accrual of interest on the Series 2014 Bonds. The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications made by the City and others, and the compliance with certain covenants of the City, to be contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Series 2014 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel has not and will not independently verify the accuracy of such certifications and representations. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and remain excluded from gross income for federal income tax purposes some of which, including provisions for the rebate by the City of certain investment earnings to the federal government, require future or continued compliance after issuance of the obligations in order for the interest to be and continue to be so excluded from the date of issuance. Noncompliance with these requirements could cause the interest on the Series 2014 Bonds to be included in gross income for federal income tax purposes and thus to be subject to regular federal income tax retroactively to the date of their issuance. The City covenants in the Authorizing Legislation to take such actions that may be required of 35

44 it for the interest on the Series 2014 Bonds to be and remain excluded from gross income for federal income tax purposes, and not to take any actions which would adversely affect that exclusion. Under the Code, interest on the Series 2014 Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States of America, and a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes can have certain adverse federal income tax consequences on items of income or deductions for certain taxpayers, including among them financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, and those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other items of income and expenses of the owners of the Series 2014 Bonds. Bond Counsel will express no opinion and make no representation regarding such consequences. From time to time, legislative proposals are pending in United States Congress that would, if enacted, alter or amend one or more of the federal tax matters referred to above in certain respects or would adversely affect the market value of the Series 2014 Bonds. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Series 2014 Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2014 Bonds will not have an adverse effect on the tax status of interest or other income on the Series 2014 Bonds or the market value or marketability of the Series 2014 Bonds. Prospective purchasers of the Series 2014 Bonds should consult their own tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, as to all of which Bond Counsel expresses no opinion. Original Issue Discount Certain of the Series 2014 Bonds may be sold to the public at a price of less than 100% of their face amount (the Discount Bonds ). The following information, which has not been included in the opinion of Bond Counsel, may be helpful to prospective purchasers of the Discount Bonds. Under present federal income tax law, original issue discount (i.e., the difference between the issue price, as hereinafter defined, of a Discount Bond and the stated redemption price at maturity of such Discount Bond), is treated as accruing ( accreted ) over the term of such Discount Bond. The issue price is the price at which a substantial amount of the Discount Bonds are sold to the public (excluding bond house, brokers or similar persons acting in the capacity of underwriters or wholesalers). In general, the amount of original issue discount which is to be accreted in each accretion period will equal (i) the issue price of that Discount Bond, increased by the amount of original issue discount which has been accreted in all prior accretion periods, multiplied by (ii) the initial offering yield of that Discount Bond reflected on the inside cover page of this Official Statement (determined on the basis of compounding at the close of each accretion period and properly adjusted for the length of the accretion period), minus, with respect to the Series 2014 Bonds, interest actually paid during such accretion period. For these purposes, accretion period means a six-month period (or shorter period from the date the Discount Bond was issued) which ends on a day in the calendar year corresponding to the maturity date of that Discount Bond or the date six months before such maturity date. The amount of original issue discount so accreted in a particular accretion period will be considered to accrete ratably on each day of the accretion period. The amount of original issue discount so accreted in a particular accretion period will be considered to accrete ratably on each day of the accretion period. Such accreted amount is used for 36

45 purposes of determining the adjusted basis for federal income tax purposes of the holder of such Discount Bond but is not included in such holder s gross income for federal income tax purposes. Consequently, a purchaser who buys a Discount Bond in the initial offering at the issue price and holds such Discount Bond to its maturity would not realize any gain or loss for federal income tax purposes upon payment of the stated redemption price of that Discount Bond at maturity. Amortizable Bond Premium Certain of the Series 2014 Bonds may be sold at issue prices greater than the principal amount payable at maturity or earlier call date (the Premium Bonds ). The following information, which has not been included in the opinion of Bond Counsel, may be helpful to prospective purchasers of the Premium Bonds. Premium Bonds will be considered to be issuable with amortizable bond premium (the Bond Premium ). A taxpayer who acquires a Premium Bond in the initial public offering will be required to adjust his or her basis in the Premium Bond downward as a result of the amortization of the Series 2014 Bond Premium, pursuant to Section 1016(a)(5) of the Code. The amount of amortizable Bond Premium will be computed on the basis of the taxpayer s yield to maturity with compounding at the end of each accrual period. Rules for determining (i) the amount of amortizable Bond Premium and (ii) the amount amortizable in a particular year are set forth at Section 171(b) of the Code. No income tax deduction for the amount of amortizable Bond Premium will be allowed to a holder pursuant in Section 171(a)(2) of the Code. The amortization of Bond Premium may be taken into account as a reduction in the amount of taxexempt income for purposes of determining other tax consequences of owning the Premium Bonds. A purchaser of a Premium Bond at its issue price in the initial public offering who holds that Premium Bond to maturity will realize no gain or loss upon the retirement of such Premium Bond. PROSPECTIVE PURCHASERS OF THE DISCOUNT OR PREMIUM BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE PURCHASE, SALE, TRANSFER, REDEMPTION, PAYMENT, OR OTHER DISPOSITION OF THE DISCOUNT OR PREMIUM BONDS, INCLUDING, WITHOUT LIMITATION, MODIFICATIONS TO THE METHOD FOR ACCRETING ORIGINAL ISSUE DISCOUNT OR AMORTIZING PREMIUM FOR CERTAIN SUBSEQUENT PURCHASERS, AND INCLUDING THE EFFECT OF ANY APPLICABLE STATE OR LOCAL INCOME TAX LAWS. LEGAL MATTERS The legality and validity of the Series 2014 Bonds are being approved by Bricker & Eckler LLP, Bond Counsel, Columbus, Ohio. The approving opinions of Bond Counsel will be delivered with the Series 2014 Bonds in substantially the forms set forth in APPENDIX F to this Official Statement. LITIGATION To the knowledge of the appropriate City officials, no litigation or administrative action or proceeding is pending or threatened restraining or enjoining, or seeking to restrain or enjoin, the issuance and delivery of the Series 2014 Bonds, or the levy and collection of revenues to pay the debt service on the Series 2014 Bonds, or contesting or questioning the proceedings and authority under which the Series 2014 Bonds were authorized and are to be issued, sold, executed or delivered, or the validity of the Series 2014 Bonds. APPENDIX E to this Official Statement sets forth information regarding other litigation in which the City is a defendant. 37

46 CONTINUING DISCLOSURE The City has agreed for the benefit of the holders and Beneficial Owners of the Series 2014 Bonds to provide annual financial information (the Annual Information Statement ) and notices of certain events. Concurrently with the delivery of the Series 2014 Bonds, the City will deliver a certificate of the City Auditor, in the form attached hereto as APPENDIX G, describing the nature of the information to be provided, the persons and entities to whom such information will be provided and the times at which such information will be provided (the Continuing Disclosure Certificate ). The right to enforce the provisions of the Continuing Disclosure Certificate may be limited to a right of the holders or Beneficial Owners to enforce to the extent permitted by law (by mandamus, or other suit, action or proceedings at law or in equity) the obligations and duties under it. Any noncompliance with the Continuing Disclosure Certificate will not be or be deemed to be a failure, a default or an event of default under any of the Series 2014 Bonds. In the past five years, the City s Annual Information Statement contained some, but not all, of the information required by its continuing disclosure undertaking for the Series 2008 Bonds. In addition, the City did not timely file such Annual Information Statement in 2009, 2010 and All necessary notices related to such failures have been filed, and the City has put processes in place to assure full compliance with its continuing disclosure undertakings going forward. The City is currently in compliance with all of its continuing disclosure undertakings in connection with its outstanding bonds and notes, including the continuing disclosure undertaking for the Series 2008 Bonds. The Continuing Disclosure Certificate is being executed by the City to assist the Underwriters in complying with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission. Specifically, the City will agree to provide the Annual Report (as defined in the Continuing Disclosure Certificate) to the Municipal Securities Rulemaking Board (the MSRB ) in an electronic format, if required, and to provide notice of the enumerated events to the MSRB in an electronic format, if required. The City reserves the right to amend the Continuing Disclosure Certificate, and to obtain a waiver of noncompliance with any provision of the Continuing Disclosure Certificate, as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rules, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City. Any such amendment or waiver will not be effective unless the Continuing Disclosure Certificate (as amended or taking into account such waiver) would have complied with the requirements of the Rule at the time of the primary offering (within the meaning of the Rule) of the Series 2014 Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances, and until the City shall have received either (i) a written opinion of bond counsel or other qualified independent special counsel selected by the City that the amendment or waiver would not materially impair the interest of holders or beneficial owners of the Series 2014 Bonds, or (ii) the written consent to the amendment, or waiver, by the holders of at least a majority of the aggregate outstanding principal amount of the Series 2014 Bonds. [Balance of the Page Intentionally Left Blank] 38

47 MISCELLANEOUS The foregoing summaries or descriptions of provisions of the Series 2014 Bonds and all references to other materials not purporting to be quoted in full are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof, and reference is made to such documents for full and complete statements of their respective provisions. The Appendices attached hereto are a part of this Official Statement that, together with the Authorizing Legislation, may be obtained during the offering period upon request directed to the Underwriters and thereafter to the Director of Finance and Management of the City. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2014 Bonds. The City has duly authorized the execution and delivery of this Official Statement. CITY OF COLUMBUS, OHIO By: Director of Finance and Management 39

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49 APPENDIX A CITY OF COLUMBUS OVERVIEW OF THE CITY THE FOLLOWING SUMMARY INFORMATION REGARDING THE CITY IS PRESENTED FOR GENERAL INFORMATION PURPOSES, AND IT IS NOT THE BASIS ON WHICH THE SERIES 2014 BONDS ARE BEING OFFERED TO INVESTORS. THE SERIES 2014 BONDS ARE BEING OFFERED ON THE BASIS OF THE PLEDGED REVENUES AND SPECIAL FUNDS DERIVED FROM THE OPERATION OF THE UTILITY AND NOT ON THE BASIS OF THE FINANCIAL STRENGTH OF THE CITY. General Information The Ohio legislature established Columbus as a city in Columbus was first organized as a borough in 1816 and accepted its city status on March 3, 1834 as a home rule municipal corporation under the laws of the State. The City is governed by an elected Mayor and City Council. The City, the capital of the State, is located in the central part of the State primarily within the boundaries of Franklin County and, to a limited extent, Fairfield and Delaware Counties. The United States Bureau of the Census, as a result of the 2010 Census, ranked the City, with a population of 787,033, as the nation s fifteenth largest. The City is the most populous city in the State and largest in land area covering square miles at December 31, Organization The City operates under and is governed by its charter (the City Charter ), which was first adopted by the voters in 1914 and which has been, and may be further, amended by City voters from time to time. The City is also subject to certain general laws of the State that are applicable to all cities. Under the Ohio Constitution, the City may exercise all powers of local self-government and may adopt police, sanitary and similar regulations to the extent not in conflict with applicable general laws of the State. The City recently completed a comprehensive review of its City Charter to improve, clarify and modernize the document. The process for reviewing the City Charter is open to the public, and any recommendations to amend the document will require the approval of City voters. The City Charter provides for a Mayor-Council form of government. The Mayor is the chief executive officer of the City and is elected to a four-year term. The seven-member City Council (the Council ) is the City s legislative body. Members are elected at large to four-year terms at two-year intervals. The Council fixes compensation of City officials and employees and enacts ordinances and resolutions relating to City services, tax levies, appropriating and borrowing money, licensing and regulating businesses and trades and other municipal purposes. The presiding officer is the President of Council, who is elected by the Council to serve until a new President is elected. The City Charter establishes certain administrative departments and authorizes the Council, by a two-thirds vote, to establish divisions of those departments or additional departments. The Mayor may veto any legislation adopted by the Council. Any such veto may be overridden by as great a majority as required for the legislation s original adoption. A-1

50 Other elected officials include the City Auditor and the City Attorney. The City Auditor is the fiscal officer and chief accounting officer. He maintains the City s accounting records and arranges for the independent audit of the City s accounts once each year. The City Attorney is the City s legal advisor, prosecutor and solicitor. There are no term limits for the Mayor, Council Members, City Auditor, or City Attorney. Principal Officials The current elected officials of the City and some of its appointed officials are: OFFICIAL TITLE TERM BEGINNING TERM ENDING LENGTH OF CITY SERVICE TENURE IN POSITION Michael B. Coleman Mayor January 1, 2012 December 31, years 14 years Paul R. Rakosky Director of Finance August 1, 2009 Pleasure of Mayor 20 years 5 years and Management Hugh J. Dorrian City Auditor January 1, 2014 December 31, years 44 years Richard C. Pfeiffer City Attorney January 1, 2014 December 31, years 11 years Deborah Klie City Treasurer April 21, 2009 Pleasure of Council 18 years 5 years Andrea Blevins City Clerk June 30, 2003 Pleasure of Council 29 years 11 years David J. Irwin Secretary Sinking Fund April 1, 1999 Pleasure of Sinking 29 years 15 years Fund Trustees Andrew J. Ginther President of Council January 1, 2012 December 31, years 7 years Hearcel F. Craig Member of Council January 1, 2012 December 31, years 7 years Shannon Hardin Member of Council October 6, 2014 * December 31, years 0 years Zachary M. Klein Member of Council January 1, 2012 December 31, years 3 years Michelle M. Mills Member of Council January 1, 2012 December 31, years 3 years Eileen Y. Paley Member of Council January 1, 2014 December 31, years 5 years Priscilla R. Tyson Member of Council January 1, 2014 December 31, years 7 years *Appointed to Council on October 6, In addition to the elected officials and their administrative offices, a number of department heads within the City are appointed by the Mayor or by independent commissions. Department directors reporting to the Mayor consist of the Directors of the Departments of Finance and Management, Public Safety, Public Service, Public Utilities, Development, Technology, Equal Business Opportunity, Human Resources, Community Relations, and Education. Each director is responsible for the administration of that director s department and its respective divisions. Four department heads are appointed by independent commissions: the Director of Recreation and Parks, the Health Commissioner, the Secretary of the Sinking Fund and the Civil Service Executive Secretary. Principal Governmental Services The Department of Public Service is responsible for construction, operation and maintenance of the City s roadway systems. Services provided to City residents include construction and maintenance of all City and interstate roadways and expressways; traffic engineering services; trash collection and disposal. The Department of Public Utilities is responsible for provision of street lighting facilities and electric power for street lighting and limited governmental, commercial and residential usage; and provision of water distribution and treatment, wastewater collection and treatment and storm sewer services. A-2

51 The Department of Public Safety is responsible for all phases of public safety and law enforcement within the City, including investigation, apprehension and presentation of evidence in criminal and civil cases; firefighting; emergency medical services; and police and fire communications. The Department of Development provides physical and economic planning services, monitors physical development of the City and reviews zoning and annexation cases. The Department of Recreation and Parks provides for the planning, construction, equipping, custody, maintenance, control, operation and administration of all recreation facilities and public parks. It also provides recreation programs for all ages and coordinates with the Metropolitan Parks District and Franklin County. The Department administers senior citizens programs and centers for an eight county area as the State s designated Area Agency on Aging. The Department also operates six municipal golf courses. The Department of Health is responsible for safeguarding public health by providing health services and by enforcing City ordinances and State statutes pertaining to public health. Through contractual arrangements, the Department often provides services to suburban communities and Franklin County. The City Attorney provides legal services to the City, including prosecutions and defense actions on its behalf, acquisition of real property and internal rulings and advice on legal issues. The remaining departments of the City do not provide direct services to the public, but augment the administration and support of the government. The Department of Finance and Management coordinates the expenditure of City operating and capital funds and, along with the City Auditor, coordinates the sale of City bonds and notes. The Office of the City Auditor provides accounting and auditing services for all City entities and is responsible for the collection of City imposed taxes such as the municipal income tax. The City Treasurer collects any monies due the City and maintains a detailed register of receipts and disbursements. The City Clerk keeps a journal of the proceedings of the City. The Civil Service Commission administers personnel matters concerning the City s classified Civil Service employees. The Trustees of the Sinking Fund administer the bonded indebtedness of the City. The Director of Education serves as an ex-officio member on the Board of Education of the Columbus City School District and advises the City s administration on matters of education policy. Board of Trustees of the Sinking Fund The City Charter provides for the organization of a board of trustees of the Sinking Fund of the City (the Board of Trustees of the Sinking Fund ) to have custody, control and administration of a sinking fund for the payment of principal of and interest on bonds issued by the City. The Board of Trustees of the Sinking Fund consists of four trustees who are appointed by the Mayor and approved by City Council for four-year terms. The Board of Trustees of the Sinking Fund receives from the City Auditor all taxes, assessments and moneys collected for the purpose of paying debt service on the City s general obligation bonds and invests and disburses them as provided in the City Charter. On or before the first Monday in May of each year, the Board of Trustees of the Sinking Fund is required to certify to the City Council the amount of money necessary to provide a sinking fund for the future payment of bonds issued by the City and interest thereon. The City Council is required to place the several amounts so certified in the tax ordinance before and in preference to any other item and for the full amount certified. A-3

52 The Board of Trustees of the Sinking Fund is the authenticating agent, registrar, transfer agent and paying agent for the Series 2014 Bonds. Pursuant to a review of the City s Charter by the City s Charter Review Commission, recommendations were submitted to the Mayor and City Council proposing amendments to the City s Charter, including but not limited to, the repeal of the City s Sinking Fund, effective July 1, Furthermore, pursuant to City Charter Section 234, a special election has been called to place the amendments in question on the November 4, 2014 special election ballot. Principal City Facilities Existing Improvements. The City is intersected by two major interstate highways; I-70, running east west, and I-71, running north south. I-270 provides access to the City from all directions and serves as the outer belt. In conjunction with the State and federal governments, the City constructed I-670. A portion of I-670 connects downtown to Port Columbus International Airport ( Port Columbus ) in the northeast section of the City. City administrative offices are predominantly located in a one block area in downtown Columbus. The downtown municipal complex houses the Offices of the Mayor, City Council, City Attorney, City Auditor and several administrative agencies. Administrative offices for the utility divisions are located adjacent to the Dublin Road Water Treatment Plant site, approximately one mile west of the City Hall. Sixteen police substations, covering 20 precincts and 34 fire companies are located throughout the City. The Central Police Headquarters is located within the same block as City Hall. The City owns and operates parks and playgrounds, community recreation centers, athletic complexes, shelter houses and golf courses. City funded health services are provided primarily at five neighborhood health centers all of which receive a substantial amount of their funding from the City. A variety of health services are also provided at the Health Department building located immediately east of downtown. General Government Capital Improvements Program. Approximately $752.8 million in income tax supported capital improvements are planned during the period. Street, traffic and highway improvements represent approximately 42.0 percent of total costs. Major projects include intersection ramps, widening of major arterial streets throughout the City, bridge replacement and repair, and street resurfacing. Several fire stations are scheduled for renovation in the planning period. The replacement and expansion of large fire apparatus is also planned. Several recreation facilities renovation projects are planned. In addition, park and playground development and acquisition are also planned. Retirement System/Pension Plan The City is a participant in statewide programs that provide pension and retirement benefits to all eligible employees. The programs provide for the Ohio Police and Fire Pension Fund ( OP&F ) for uniformed police and fire employees and the Ohio Public Employees Retirement System ( OPERS ) for non-uniformed employees. Both OP&F and OPERS are cost sharing, multiple employer public employee retirement systems. The total payroll for the City s employees for the year ended December 31, 2013 was $559.2 million. Of this amount, $282.2 million was subject to OP&F contribution, $267.6 million was A-4

53 subject to OPERS contribution and $9.4 million, while received by members of the retirement systems, was not subject to pension benefit contributions. The City is current in all pension fund required contributions. For a further description of the City s participation in and contributions to these systems, see Note K in the Notes to the Financial Statements in the City s Comprehensive Annual Financial Report contained in APPENDIX C to this Official Statement. In September 2012, the Governor signed into law legislation amending the pension and retirement benefits provided to eligible employees under the OP&F and OPERS programs. Such amendments include increasing the retirement eligibility age and years of service requirements of employees, restricting cost of living increases, and increasing employee contribution rates. In addition, the amended law authorizes (i) the board of OP&F to make further adjustments to member contribution levels, age and service requirements to preserve the fund s fiscal integrity, and (ii) the board of OPERS to implement a contribution based benefit cap to limit the retirement allowance a retiree may receive. Labor Relations and Workforce The Ohio Public Employees Collective Bargaining Act (CBA) defines the rights of most government employees, including municipal employees, to bargain collectively, and provides mechanisms for investigating and remedying grievances, permits certain employees to strike and permits agreements requiring binding arbitration of unresolved grievances, agency shops and dues check-off provisions. The City s current contract with the American Federation of State, County and Municipal Employees (AFSCME) Local 1632 became effective April 1, 2014 and will expire March 31, The contract provides for three percent (3%) wage increases in April 2014, 2015 and AFSCME also agreed to accept a higher share of their pension costs. Historically, the City has paid all or a portion of the employee s share of the pension contribution. City-wide efforts to phase out the pension contribution for existing employees and discontinue the pension contribution for new employees have been ongoing. In August 2014, the City s contribution was reduced from 7% to 6%. In April 2015, the rate will change to 5% and in April 2016 to 4%. The contract covered 2,269 employees at September 13, 2014, and 1,841 of these employees were members of AFSCME Local The City s current contract with the American Federation of State, County and Municipal Employees (AFSCME) Local 2191, which represents solely certain employees within the City s Health Department, became effective April 1, 2014 and will expire March 31, The contract provides for three percent (3%) wage increases in April of 2014, 2015 and Historically, the City has paid all or a portion of the employee s share of the pension contribution. City-wide efforts to phase out the pension contribution for existing employees and discontinue the pension contribution for new employees have been ongoing. In August 2014, the City s contribution was reduced from 7% to 6%. In April 2015, the rate will change to 5% and in April 2016 to 4%. The contract covered 254 employees at September 13, 2014, and 194 of these employees were members of AFSCME Local The City s current contract with the International Association of Firefighters (IAFF) was extended effective November 1, 2011 through October 31, The IAFF has bargaining rights for all of the City s firefighters except for the chief and five assistant chiefs. Of the City s 1,548 firefighters at September 13, 2014, 1,529 were members of the IAFF. The extended contract provided a 2.25% wage increase effective January 1, 2012; a 2.75% wage increase effective January 1, 2013; and a 2.75% wage increase effective January 1, The IAFF also agreed to accept a higher share of their pension costs. Historically, the City has paid all or a portion of the employee s share of the pension contribution. Citywide efforts to phase out the pension contribution for existing employees and discontinue the pension A-5

54 contribution for new employees have been ongoing. In January 2012, the City s contribution was reduced from 6.5% to 4.5%. In January 2013, the rate changed to 2.5%; in January 2014 to 1.0%; and, effective October 1, 2014, the City s contribution will be totally eliminated. Negotiations for a new contract are underway. The City s current contract with the Fraternal Order of Police (FOP) became effective December 9, 2011 and will expire December 8, The FOP has bargaining rights for all of the City s police officers except for the chief and her six deputy chiefs. Of the City s 1,894 police officers at September 13, 2014, 1,809 were members of the FOP. The contract provided for a 2.0% wage increase effective December 9, 2011; a 3.0% wage increase effective December 9, 2012; and a 4.0% wage increase effective December 9, The FOP also agreed to accept a higher share of their pension costs. Historically, the City has paid all or a portion of the employee s share of the pension contribution. City-wide efforts to phase out the pension contribution for existing employees and discontinue the pension contribution for new employees have been ongoing. In December 2012, the City s contribution was reduced from 5.5% to 4.5%. In December 2013, the rate was reduced to 3.5%. The Communications Workers of America (CWA, Local 4502) had bargaining rights for 1,296 employees at September 13, 2014; of these, 933 employees are members. The current contract was effective April 24, 2011 and expired April 23, Negotiations are underway for a new contract. Contracts remain in place until such time a new agreement is reached. The contract provided for a two percent (2.0%) increase effective April 2011, a two percent (2.0%) increase effective April 2012 and two and three-quarters percent (2.75%) increase effective April Historically, the City has paid all or a portion of the employee s share of the pension contribution. City-wide efforts to phase out the pension contribution for existing employees and discontinue the pension contribution for new employees have been ongoing. CWA has agreed to accept a higher share of their pension costs, contributing an additional three percent (3.0%) over three years that the City of Columbus had been paying. The City is in compliance with U.S. Department of Labor standards regarding the federal Fair Labor Standards Act as it applies to local government employees. The City reports that relations between the City and its employees are generally positive. The City has not experienced any work stoppages in over twenty-five (25) years. As of September 13, 2014, the City employed approximately 8,062 full-time and 709 part-time employees, including police officers and firefighters, a total of 8,771, in its general government and enterprise activities. Risk Management The City assumes the liability for most property damage and personal injury risks. Judgments and claims, including those incurred but not reported as of year-end, are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The City insures certain of its major buildings and stored vehicles. The policy has a $250,000 deductible for losses not associated with flooding. The City carries $5,000,000 in liability insurance associated with the operation of its compressed natural gas (CNG) fueling station located on its Fleet Management Operations site at 4211 Groves Road and at 2333 Morse Road. No losses occurred in 2011, 2012, 2013, or 2014 through the publication date of this official statement that exceeded insurance coverage. The City s Division of Police currently operates a fleet of five jet-powered helicopters. A sixth helicopter is owned but listed for sale in Ground Not in Motion (GNIM) status. Liability insurance for bodily injury and property damage is carried on all helicopters at $20,000,000 per loss occurrence and $1,000,000 per passenger seat. There is no deductible for the liability coverage. In addition, all five A-6

55 operating aircraft are insured against casualty loss (physical damage) with a deductible of 1 percent of the hull value for losses sustained while the unit is in motion and includes an extended engine endorsement for up to $300,000 and a replacement cost endorsement. One helicopter in the fleet is valued at $1,000,000, three are valued at $1,700,000 each, and one is valued at $2,100,000. Hull insurance is carried on all units at the unit s full value. In addition, the FLIR cameras used in the units during flight operations are also insured at full value. Additionally, the City provides medical, dental, vision and short-term disability coverage for its employees on a self-insurance basis. Expenses for claims are recorded on a current basis based on an actuarially determined charge per employee. The City accounts for such activity in an internal service fund. Cash Management and Investment Practices Investment Policies. The City records all its investments at fair value in accordance with Generally Accepted Accounting Principles (GAAP). The City pools its cash, except for that held by revenue bond trustees, fiscal and escrow agents and certain debt service and agency fund cash and investments, for maximum investing efficiency. Each fund type s portion of the pool is reported on the respective Statements of Net Position and Balance Sheet as Cash and cash equivalents with treasurer. Earnings on the pool are allocated at the discretion of the City Council after meeting revenue bond indentures and other requirements. The City Codes, Chapters 325 and 321, respectively, provide for a Treasury Investment Board and Depository Commission. Both consist of the City Treasurer, who serves as chairperson, the City Auditor and the Director of the Department of Finance and Management. Pursuant to these Code sections, the City does not purchase any form of derivatives. The City does not engage in reverse repurchase agreements, nor does it leverage its investment portfolio in any manner. Only eligible investments with remaining terms not greater than three (3) years until final maturity are purchased. Average days to maturity of the City s investments, exclusive of those held by bond trustees, as of December 31, 2012 were days; days at December 31, 2013; and days at September 26, The City purchases investments only through member banks of the Federal Reserve System or broker-dealers registered with the U.S. Securities and Exchange Commission. The City s investment code and practices have consistently protected the portfolio from unnecessary credit risks (safety) and market risks (liquidity) while providing a competitive yield. Chapter 325 of the Columbus City Codes prescribes permitted investments, which include: (A) Bonds, notes or other obligations of the United States government or its agencies for which the faith of the United States is pledged for the payment of principal and interest thereon. They are: Obligations of the United States government: United States Treasury Bills United States Treasury Notes United States Treasury Bonds United States Treasury Strips A-7

56 Obligations guaranteed by the United States government: Federal government agencies: Department of Housing and Urban Development Farmers Home Administration General Service Administration Government National Mortgage Association Maritime Administration Washington Metropolitan Area Transit Authority (B) Bonds, notes, debentures or other obligations issued by any of the federal government-sponsored enterprises listed below: Federal Farm Credit System Federal Home Loan Banks Federal Home Loan Mortgage Corporation Federal National Mortgage Association ; (C) (D) The Ohio State Treasurer s Asset Reserve Funds (Star Ohio) pursuant to Ohio Revised Code Bonds or other obligations of the City; (E) Obligations of the State of Ohio or any municipal corporation, village, county, township or other political subdivision of the State of Ohio, as to which there is no default of principal or interest and which have been approved as to their validity by nationally recognized bond counsel; (F) Certificates of Deposits (collateralized as described below) in eligible institutions applying for moneys as provided in Chapter 321 of Columbus City Codes; and (G) Repurchase agreements that are collateralized with legally authorized securities as defined in Chapter of Columbus City Codes and held in third-party safekeeping designated by the City Treasurer and in the name of the City. Except for STAR Ohio funds described under (C) above, the City is prohibited from investing in any form of derivatives and/or using reverse repurchase agreements. Safeguarding Activities. All of the City s investments, except for investments with STAR Ohio, certificates of deposits and demand savings are held in book-entry form at Federal Reserve banks for the accounts of certain member banks agents of the City who hold the investments in the City s name. The City follows criteria described in GASB Statement No. 40, Deposits and Investment Risk Disclosure, in identifying custodial credit risk. See Note C in the Notes to the Financial Statements contained in APPENDIX C to this Official Statement for full detail. The Master Trust Agreement for the Utility requires certain cash and investments to be maintained and managed by the respective trustees. The respective trustees invest these funds at the direction of the City Auditor pursuant to the Master Trust Agreement. The City deposits its funds only with major local commercial banks as approved by the City s Depository Commission, a local statutory commission comprised of the City Auditor, City Treasurer and the Director of Finance & Management. All deposits, except for deposits held by fiscal and escrow agents or trustees, are collateralized with eligible securities, as required by City ordinances, in amounts A-8

57 equal to at least 105 percent of the carrying value of the deposits. Such collateral, as permitted by State statutes and City ordinances, is held in single financial institution collateral pools at Federal Reserve Banks, or at member banks of the Federal reserve system, in the name of the respective depository bank and pledged as a pool of collateral against all of the public deposits it holds or as specific collateral held at a Federal Reserve Bank in the name of the City. The revenue bond agreement of the sewer enterprise requires certain cash and investments to be maintained and managed by a trustee. The respective trustee, bank trust department, invests these monies at the direction of the City Auditor pursuant to the revenue bond agreement. All of the City s deposits and investments comply with the State statutes and City ordinances and applicable bond indentures. [Balance of Page Intentionally Left Blank] A-9

58 ECONOMIC AND DEMOGRAPHIC INFORMATION Population The following table shows the population of the City, Franklin County, the Columbus Metropolitan Statistical Area (M.S.A.) and the State of Ohio for the years shown: COLUMBUS FRANKLIN COUNTY M.S.A. OHIO YEAR NO. % CHANGE NO. % CHANGE NO. % CHANGE NO. % CHANGE , , , ,730, , % 833, % 1,017, % 10,657, % , , ,088, ,797, , , ,345, ,847, , ,068, ,540, ,353, , ,163, ,812, ,536, SOURCE: U.S. Department of Commerce, Bureau of the Census, Final Population Counts, May 12, U.S. Census Bureau Internet Website, 2010 estimates for Franklin County and Ohio. Columbus Chamber of Commerce, 2010 estimates for M.S.A. Economic Factors and the 2014 General Fund Budget Structural balance in the General Fund was achieved in both 2012 and 2013, with current year revenues and transfers in exceeding current year expenditures and transfers out. The 2014 budget of $807.4 million is, with a few exceptions, a continuation level budget. The 2014 budget funds police and fire recruit classes that maintain 2013 uniformed strength levels by replacing projected retirements and other terminations on a one-to-one basis as well as funding one new fire recruit class of 40 fire fighters. Other important municipal services are funded at continuation levels in The 2014 budget includes a number of restorations that were previously cut from the General Fund (and may have been funded from other sources). Restorations include: the bulk pickup program, six recreation centers returning to fulltime hours, and vehicle purchases. Also, the City is allocating funds toward educational priorities consistent with the recommendations of the Columbus Education Commission. The General Fund balance in 2013 reached an all-time historic high on both the City s budgetary basis of accounting and GAAP. A portion of these fund balances will be used in The City continues to replenish the Economic Stabilization Fund (Rainy Day Fund). Deposits of $10 million in 2011, $6.725 million in 2012, $16.3 million in 2013 and a deposit of $7.6 million in 2014 have brought the balance in that fund to $63.9 million as of October 14, The City s new goal is a $75 million balance in the fund by the end of With the 2013 payment, the City met its commitment to rebuilding the fund to a $50 million balance a year earlier than originally promised. The City of Columbus Accountability Committee The Accountability Committee was formed in 2009 following voter passage of the City income tax increase from 2.0 percent to 2.5 percent. The mission of the Committee is to provide review and guidance to City leaders so that they can successfully implement the City s 10-Year Reform and Efficiency Plan. The plan was developed and finalized following recommendations by an Economic Advisory Committee, citywide review and the adoption of a resolution by City Council. Comprised of eleven action items and four study items, the goal was to save $ million in the General Fund over the period from Progress on Major Action Items: Phase out for existing employees and discontinue for new employees the practice of paying the employee share of retirement costs. This recommendation was first implemented in Efforts continue with each successive collective bargaining contract negotiation. A-10

59 Require higher employee contribution toward the cost of health care benefits. Employee contributions were increased in 2011, 2012, and Efforts continue with each collective bargaining contract negotiation. Conduct an audit of salary and benefits provided to employees and use the resulting information as a guide when negotiating labor contracts. Such audit was completed in Establish new policies that discourage excessive overtime. Additional overtime monitoring was put into place in 2009; however, overtime continues to be a major concern in the Divisions of Police and Fire. It is anticipated that recent recruit classes will help alleviate overtime in Civilianize certain sections of the divisions of police and fire. Implemented in 2011 and is ongoing. Increase efficiencies in the operations of Fleet Management, Facilities Management and increase energy efficiencies. All have made significant progress and are ongoing. Development Strategies From 1950 through 1975, the City s leadership pursued an aggressive annexation policy, which resulted in the City quadrupling its land area. Since 1975, annexation has slowed. Current Mayor Michael B. Coleman has extolled the philosophy of growing outward with a plan and inward with a passion as a part of his administration s growth policy. The City is now giving priority to municipal projects within its present boundaries and exploring intergovernmental agreements with adjoining communities and counties to spur economic development. In order to control residential land development so that the City can provide necessary services to all of its residents, the City has implemented a policy entitled Pay as You Grow which seeks to have the private sector shoulder its fair share of development costs by, among other things, requiring private sector developers to make equity contributions and self-finance development-related infrastructure costs. Additionally, the City s promotion of adaptive re-use of underutilized urban land has played a major role in the City s recent growth, beginning with the downtown area and including the redevelopment of several urban brownfield sites throughout the City. Mayor Coleman has focused on continued downtown development, especially as it relates to housing and the re-creation of a vibrant core central city. Downtown Development The City recognizes that the vitality of Downtown Columbus is essential to the overall economic health of the Central Ohio region. Since 2002, more than $405 million has been invested in new downtown residential projects resulting in nearly 5,000 new housing units and a substantial growth in residents living downtown. Office vacancy downtown has shrunk steadily over the last decade with vacancy rates now below suburban office within the region. Downtown continues to realize some of the highest square footage rental rates in the region and has seen a recent surge in new office development. Overall, downtown has seen nearly $2 billion in public and private investment over the last decade with a tremendous pipeline of projects over the next five-year horizon. In order to continue to stimulate the pattern of successful growth and build upon past planning efforts, the City implemented the 2010 Downtown Strategic Plan in This plan, created in connection with community stakeholders, established principles and goals for the future. One of the most significant downtown redevelopment projects during the past decade has been the development of the 75-acre Nationwide Arena District. Located on the site of the former Ohio State Penitentiary, the $500 million development is a mixed-use residential, office, and entertainment district anchored by the Nationwide Arena. The Arena District redevelopment has resulted in the creation of over A-11

60 10,000 new jobs since 2000 with over 515,000 square feet of new office being constructed since Construction is currently underway for two additional buildings, totaling approximately 275,000 square feet, for Columbia Gas of Ohio. The project is expected to be completed in the fall of The success of the Arena District is now generating new investment within the adjacent areas. The west side of the Arena District is home to The Condominiums of North Bank Park, a $50 million, 20- story residential structure. Franklin County completed construction on the $55 million Huntington Park baseball stadium in The stadium is home to the Columbus Clippers, a Triple-A minor league baseball team currently affiliated with the Cleveland Indians. In addition, construction has been completed on the 500-room Hilton Convention Center Hotel, a project that included a public-private investment of $140 million and the creation of 550 new jobs. Lastly, Nationwide Insurance has completed construction on an additional 200,000 square feet of office space to locate 1,400 of their employees. In 2004, the City released its master plan for the redevelopment of an approximately one-mile stretch of the Scioto riverfront, which runs through downtown. The City demonstrated its commitment to the plan, known as the Scioto Mile, with the opening of the City s first major riverfront park in several decades, the 11-acre North Bank Park, which was completed in the summer of 2011 at a cost of approximately $6 million. Today, the Scioto Mile consists of 145 acres of parkland, a 15,000 square foot fountain and a new Bicentennial Park and amphitheater. Currently, the City, through the leadership of the Columbus Downtown Development Corporation, is investing $35 million in the Scioto Greenways project. This improvement will create an additional 33 acres of parkland through the removal of a low head dam in the river. Planning is also underway on the Scioto Peninsula development which will create a mixed use civic, residential and retail district across the river from downtown. The River South District is a 25-acre area adjacent to the southern end of the Scioto Mile. The City is focusing on redevelopment of this under-utilized part of downtown into a mixed-use urban hot spot. The Lazarus Building, with over 1.2 million square feet of office and retail space, anchors the district. Demolition of the former City Center Mall has resulted in a 9-acre project known as Columbus Commons. This project includes a recently opened $50 million, mixed-use development called High Point that will add 300 apartments and 23,000 square feet of retail to the vibrant park space that is there today. Three additional mixed use residential, retail, and office projects, The Julian, 250 South High, and Trautman, are under construction, currently representing over $60 million in new development in the neighborhood. Other Economic Development Initiatives Through the prudent use of tax incentives, tax increment financing and other development incentives, the City has been able to leverage over $6.4 billion worth of private sector development while creating and retaining 103,232 new jobs since The following projects are some of the City s other recent economic development initiatives. IBM Data Analytics Center. In partnership with the State of Ohio, Columbus 2020, and many private sector participants, the City of Columbus landed the global headquarters of IBM s new Data Analytics practice. This project has created 500 new jobs within the City and has led to the acceleration of this fast growing industry within Central Ohio. Ohio State University has committed $52 million in facility upgrades to accommodate a new data analytics program and is hiring 50 top faculty members for the program. This investment builds off of the Columbus region s strengths in technology and financial services. A-12

61 Multimodal Rail Yard Development. Two national rail companies have recently spent over $120 million to establish state of the art multimodal facilities within the City of Columbus. CSX recently expanded the Buckeye Yard on the west side of Columbus through a $59 million investment that will double the yard s intermodal capacity. Norfolk Southern opened the $69 million Rickenbacker Intermodal Terminal in Columbus in 2009, which services the growing logistics industry in the Rickenbacker area. In addition, three of the world s largest air cargo companies (Amerijet, Kalitta, and Cargolux) have recently opened weekly service to the air freight terminal. This provides Columbus with a world class multimodal logistics and distribution operation, increasing the region s economic strength in this industry. The Ohio State University Wexner Hospital s ProjectONE. The Ohio State University hospital system is in the process of the largest facilities expansion project in The Ohio State University s history, which includes construction of a new state-of-the-art cancer hospital and a critical care center. A press release provided by OSU highlighted their purchase of a former Veterans Administration medical building as the first visible step in a major City/University partnership to revitalize health and housing on Columbus near Eastside. OSU estimates that the $1-billion ProjectONE investment will create 5,000 construction jobs over the next five years and upon completion (expected in late 2014), 10,000 new permanent full-time jobs, including 6,000 at the medical center and 4,000 indirectly in the community. It will also increase the medical center s economic impact on the local and state economy to more than $4 billion per year. Nationwide Children s Hospital Expansion. Nationwide Children s Hospital, which is located just outside of the core downtown area in an inner-city neighborhood, completed a major expansion of their current facility. The hospital has invested $740 million by adding almost 1 million square feet of space. The hospital estimates that approximately 1,160 new employees will be added, which will result in almost a billion dollars of new cash flow into the local economy. To see that this facility continues to grow its global reputation, the hospital s Board of Directors have committed to spending approximately $74 million to recruit and attract world class doctors, researchers, and nurses. [Balance of Page Intentionally Left Blank] A-13

62 Labor Force and Wage Information As indicated in the table below, the unemployment rates for Franklin County and the Columbus M.S.A. have been consistently below both that of the State of Ohio and the U.S.A., except for the U.S.A. rate in 2005, 2006 and ESTIMATED CIVILIAN LABOR FORCE AND ANNUAL AVERAGE UNEMPLOYMENT RATES (LABOR FORCE IN THOUSANDS) YEAR LABOR FORCE (2) FRANKLIN COUNTY COLUMBUS M.S.A. (1) OHIO U.S.A. UNEMPLOYMENT RATE (3) LABOR FORCE (2) UNEMPLOYMENT RATE (3) LABOR FORCE (2) UNEMPLOYMENT RATE (3) UNEMPLOYMENT RATE (3) % , % 5.4% , , , , , , , , , (1) The data for the Columbus Metropolitan Statistical Area prior to 2005 includes Delaware, Fairfield, Franklin, Licking, Madison and Pickaway Counties. Beginning in 2005, data for the Columbus Metropolitan Statistical Area includes Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Pickaway and Union Counties. Area was redefined by the U.S. Office of Management and Budget based on the 2000 standards and Census 2000 data. (2) Civilian labor force is the estimated number of persons 16 years of age and over, employed or unemployed, distributed by place of residence. (3) The unemployment rate is equal to the estimate of unemployed persons divided by the estimated civilian labor force. Source: Ohio Department of Job and Family Services, Bureau of Labor Market Information [Balance of Page Intentionally Left Blank] A-14

63 Largest Employers The largest employers in the Greater Columbus Area are shown in the following table: Employers Employees Employers Employees 1. Ohio State University 27, Battelle Memorial Institute 2, State of Ohio 23, Thirty-One Gifts LLC 1, JPMorgan Chase & Co. 19, Fairfield Medical Center 1, OhioHealth Corp. 19, Olentangy Local Schools 1, Kroger Co. 17, Dublin City Schools 1, Nationwide Mutual Insurance Co. 11, Hilliard City Schools 1, Mount Carmel Health System 8, Donatos Pizzeria LLC 1, City of Columbus 8, Licking Memorial Health Systems 1, Columbus City Schools 8, Wendy s Co. 1, Nationwide Children s Hospital 7, Safelite AutoGlass 1, L Brands, Inc. 7, Westerville City Schools 1, McDonald s Corp. 7, Chemical Abstracts Service 1, Honda of America Mfg., Inc. 7, Columbus State Community College 1, Franklin County 6, Worthington Industries, Inc. 1, Huntington Bancshares, Inc. 5, Boehringer Ingelheim Roxane, Inc. 1, Giant Eagle, Inc. 4, Goodwill Columbus 1, Cardinal Health, Inc. 4,165 42a. United Healthcare 1, Bob Evans Farms, Inc. 3,571 42b. EveryWare Global, Inc. 1, DLA Land and Maritime 3, Columbus Gas of Ohio 1, American Electric Power Company, Inc. 3, Scotts Miracle-Gro Co. 1, Excel Inc. 2, Delaware County 1, Abercrombie & Fitch Co. 2, Worthington City Schools 1, Group Management Services, Inc. 2, Arc Industries, Inc. 1, South-Western City Schools 2, Central Ohio Primary Care Physicians, Inc. 1, Alliance Data Systems Corp. 2, Big Lots, Inc. 1,076 Source: Top 100 Largest Area Employers, Business First of Columbus. Copyright 2013, Business First of Columbus, Inc. All rights reserved. Reprinted with permission. [Balance of Page Intentionally Left Blank] A-15

64 Business Indicators YEAR (1) AIR PASSENGERS (000) SCHEDULED AIRLINE FREIGHT NEW SALES (000 LBS.) (2) PASSENGER NEW SALES - TRUCK TELEPHONE ACCESS LINES ACTIVE GAS METERS AUTOMOBILE REGISTRATION PASSENGER COLUMBUS, FRANKLIN COUNTY OHIO (INCLUDES COLUMBUS) ,232 20,796 37,212 31, , , ,861 1,117, ,612 19,769 35,864 30, , , ,395 1,102, ,734 18,949 33,666 27, , , ,359 1,095, ,719 13,528 34,782 27, , , ,429 1,103, ,910 14,365 30,712 21, , , ,944 1,101, ,233 10,372 24,056 16, , , ,615 1,071, ,366 9,645 25,993 19, , , ,969 1,091, ,379 9,456 28,852 21, , , ,493 1,058, ,350 10,606 32,778 24, , , ,679 1,085, ,237 10,845 34,395 27, , , ,054 1,107,367 (1) Franklin County data unless otherwise indicated. (2) Includes cargo, freight and mail. Data representative of Columbus Regional Airport Authority Port Columbus only. A-16 SOURCES: Columbus Area Chamber of Commerce, Research Department; Columbia Gas of Ohio; AT&T; Columbus Regional Airport Authority; The Polk Company, Government Relations; and the State of Ohio, Bureau of Motor Vehicles.

65 COLUMBUS METROPOLITAN STATISTICAL AREA EMPLOYMENT (1) Nonagricultural Wage and Salary Employment in Selected Industries (2) Annual Average Data for (IN THOUSANDS, EXCEPT PERCENT) A-17 INDUSTRY % OF TOTAL 2012 EMPLOYMENT TOTAL (3) MANUFACTURING Durable Goods Nondurable goods NONMANUFACTURING CONSTRUCTION TRANSPORTATION AND PUBLIC UTILITIES WHOLESALE TRADE RETAIL TRADE FINANCE, INSURANCE AND REAL ESTATE SERVICES GOVERNMENT Federal government State government Local government (1) Columbus Metropolitan Statistical Area includes Delaware, Fairfield, Franklin, Licking, Madison, Morrow, Union and Pickaway Counties. (2) Nonagricultural employment excludes farm workers, proprietors, the self-employed, unpaid family workers and domestic workers. (3) Subtotals may not add due to rounding or exclusion of minor groups. SOURCE: Ohio Department of Job and Family Services, Labor Market Information Bureau.

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67 APPENDIX B Sanitary Sewer Enterprise Fund SELECTED FINANCIAL STATEMENTS OF THE UTILITY The City maintains a separate enterprise fund (known as the Sanitary Sewer Enterprise Fund) to account for operations relating to the Utility. Financial information for the Sanitary Sewer Enterprise Fund is presented herein: Statement of Net Position GAAP 2009 through Statement of Revenues, Expenses and Changes in Fund Net Position GAAP 2009 through Statement of Cash Flows GAAP 2009 through Sanitary Sewer Enterprise Revenue Bond Coverage 2009 through Pro Forma Operating Statements for Years 2014 to [Balance of Page Intentionally Left Blank] B-1

68 City of Columbus, Ohio Statement of Net Position Sanitary Sewer Enterprise Years Ended December 31 (amounts expressed in thousands) ASSETS Current assets: Cash and cash equivalents with treasurer $ 200, , , , ,660 Receivables (net of allowance for uncollectibles) 48,573 47,074 43,507 42,641 46,926 Due from other funds Inventory 8,543 7,674 6,687 6,333 6,114 Total current assets 257, , , , ,922 Noncurrent assets: Restricted assets: Cash and cash equivalents with treasurer and other 129, ,301 95, , ,869 Cash and cash equivalents with trustees 1,534 1,538 1,535 1,546 1,544 Deferred charges and other - - 3,824 4,017 3,899 Capital Assets: Land and construction in progress 291, , , , ,861 Other capital assets, net of accumulated depreciation 1,883,654 1,895,495 1,907,291 1,776,493 1,609,864 Total noncurrent assets 2,306,137 2,233,887 2,128,400 2,085,394 2,057,037 Total assets 2,563,474 2,476,714 2,358,267 2,301,456 2,254,959 DEFERRED OUTFLOWS OF RESOURCES - Note 1 6,945 8, LIABILITIES Current liabilities: Accounts payable 1,523 1,455 11,996 2,203 2,131 Due to other: Governments ,854 2,572 Funds 1, ,015 1, Others Payable from restricted assets: Accounts payable 8,303 7,334 6,117 7,717 22,592 Due to others Accrued interest payable 18,062 13,864 14,537 15,016 14,843 Unearned revenue and other Accrued interest payable - 3,816 2,750 3,115 1,429 Accrued wages and benefits 1,181 1, Accrued vacation and sick leave 2,803 2,658 2,543 2,508 2,457 Current portion of: Demand bonds 103, Bonds and loans payable 65,816 71,697 68,206 62,225 58,981 Total current liabilities 202, , ,727 97, ,949 Noncurrent liabilities: Bonds and loans payable, net 1,553,457 1,602,118 1,507,257 1,479,941 1,457,547 Total noncurrent liabilities 1,553,457 1,602,118 1,507,257 1,479,941 1,457,547 Total liabilities 1,756,152 1,704,924 1,615,984 1,577,379 1,564,496 NET POSITION Net investment in capital assets 583, , , , ,219 Restricted 1,534 1,538 1,535 1,546 - Unrestricted 229, , , , ,244 Total net position $ 814, , , , ,463 Note 1: The City implemented GASB 65 in Amount represents unamortized deferred amount on refundings, which netted against bonds and notes payable in prior years. SOURCE: City Auditor's Comprehensive Annual Financial Reports B-2

69 City of Columbus, Ohio Statement of Revenues, Expenses, and Changes in Fund Net Position Sanitary Sewer Enterprise Years Ended December 31 (amounts expressed in thousands) Operating revenue: Charges for service $ 230, , , , ,760 Other 1,484 2,645 3,381 3,019 3,229 Total operating revenue 231, , , , ,989 Operating expenses: Personal services 41,316 40,549 39,965 39,040 38,466 Materials and supplies 16,493 9,301 7,127 5,966 6,650 Contractual services 45,095 43,152 41,559 39,556 38,954 Depreciation 55,475 54,113 53,492 49,535 44,279 Other , ,226 Total operating expense 159, , , , ,575 Operating income 72,940 87,617 69,923 80,340 83,414 Nonoperating revenue (expenses): Investment income 948 1,331 2,112 3,121 3,538 Interest expense (45,548) (49,363) (55,111) (56,202) (51,551) Other, net 6,042 1,827 1,300 6, Total nonoperating revenue (expenses) (38,558) (46,205) (51,699) (46,698) (47,215) Income before transfers 34,382 41,412 18,224 33,642 36,199 Transfers in Transfers out - - (18) (28) - Change in net position 34,396 41,412 18,206 33,614 36,279 Total net position - beginning 779, , , , ,184 Net position - restated - Note 1 - (3,824) Total net position - ending $ 814, , , , ,463 Note 1: The City implemented GASB 65 in 2012, which resulting in a restatement of beginning net position for the write off of unamortized bond issuance costs. SOURCE: City Auditor's Comprehensive Annual Financial Reports B-3

70 City of Columbus, Ohio Statement of Cash Flows Sanitary Sewer Enterprise Years Ended December 31 (amounts expressed in thousands) Operating activities: Cash received from customers $ 237, , , , ,547 Cash paid to employees (46,712) (45,709) (45,349) (44,155) (43,214) Cash paid to suppliers (64,550) (55,679) (53,525) (45,951) (48,709) Other receipts 1,590 1,497 3,432 4,569 2,764 Other payments (144) (10,021) (294) (437) (1,784) Net cash provided by operating activities 127, , , , ,604 Noncapital financing activities: Subsidies 5,886 1,757 1,755 1,644 - Transfers in Transfers out - - (18) (28) - Net cash provided by (used in) noncapital financing activities 5,900 1,757 1,737 1, Capital and related financing activities: Proceeds from sale of assets Purchases of property, plant and equipment (111,312) (131,126) (158,458) (140,344) (245,097) Proceeds from issuance of bonds, loans and notes 116, ,153 95,667 82, ,726 Refunding bonds issued 72,875 52,410 9,911 4,254 3,280 Premium on bonds issued 19,114 12, Principal payments on bonds and loans (68,461) (67,258) (61,352) (58,601) (59,129) Payment on refunded bonds (86,483) - (10,246) (4,501) (3,410) Payment to refunded bond escrow agent - (57,267) Interest and fiscal charges paid on bonds, loans and notes (55,566) (55,964) (58,360) (56,270) (55,709) Net cash used in capital and related financing activities (113,617) (95,453) (182,780) (172,798) (231,252) Investing activities: Interest received on investments 897 1, ,869 4,785 Net cash provided by investing activities 897 1, ,869 4,785 Increase (decrease) in cash and cash equivalents 20,370 34,496 (50,135) (31,622) (103,783) Cash and cash equivalents at beginning of year 310, , , , ,856 Cash and cash equivalents at end of year $ 331, , , , ,073 SOURCE: City Auditor's Comprehensive Annual Financial Reports (continued) B-4

71 City of Columbus, Ohio Statement of Cash Flows Sanitary Sewer Enterprise Years Ended December 31 (amounts expressed in thousands) (continued) Operating income $ 72,940 87,617 69,923 80,340 83,414 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 55,475 54,113 53,492 49,535 44,279 Amortization, net - - (490) 1,749 (612) Decrease (increase) in operating assets and increase (decrease) in operating liabilities: Receivables (1,450) (3,625) (1,066) 3,819 (3,355) Due from other funds - 74 (167) Inventory 106 (987) (354) (219) (786) Accounts payable - net of items affecting property, plant, and (869) (9,905) 9, (1,146) Due to other funds 490 (96) (70) Unearned revenue 204 (649) (146) (148) (89) Accrued wages and benefits (6) Accrued vacation and sick leave Net cash provided by operating activitie $ 127, , , , ,604 Supplemental information: Noncash activities: Change in fair value of investments $ (200) (83) (2,061) SOURCE: City Auditor's Comprehensive Annual Financial Reports B-5

72 B-6

73 City of Columbus, Ohio Sewerage System Enterprise Fund Pro Forma Operating Statement for Years 2014 to A Gross revenue, including interest $ 242, , , , , , , , , , ,527 B O & M expenses -109, , , , , , , , , , ,260 C Net revenues (A - B) 133, , , , , , , , , , ,267 Cash balance, as of December 31 of the preceding fiscal year, in the Sewer operating Fund D and the system reserve fund 197, , , , , , , , , , ,804 E O & M expense reserve requirement (10% of preceding year) -10,451-10,982-11,677-12,064-12,469-12,890-13,338-13,795-14,420-14,738-15,224 F Sewer operating fund and system reserve fund available cash balance (D - E) 186, , , , , , , , , , ,581 G Adjusted net revenues (C + F) $ 319, , , , , , , , , , ,848 H Revenue bond principal ,175 9,650 I Revenue bond interest 18,450 19,545 19,540 19,584 19,545 19,545 19,540 19,544 19,545 19,505 19,140 J General obligation bond principal 26,573 27,935 29,724 34,897 37,157 38,724 41,137 44,173 47,142 49,354 53,314 K General obligation bond interest 14,873 16,322 19,482 20,391 22,496 24,486 25,446 26,159 27,937 29,604 31,094 L General obligation note interest M OWDA/EPA principal 43,243 57,019 60,567 62,033 63,621 67,485 70,950 81,517 87,463 88,821 86,736 N OWDA/EPA interest 22,614 31,602 31,268 29,085 28,303 29,408 28,023 32,704 37,039 35,787 33,359 O Total debt service $ 125, , , , , , , , , , ,293 Rate covenant tests: Adjusted net revenues vs. total debt service Required ratio of lines G O Actual ratio of lines G O Adjusted net revenues vs. revenue bond debt service Required ratio of lines G (H + I) Actual ratio of lines G (H + I) Assumptions: Interest on the Series 2014 Bonds is assumed at a true interest cost of 3.15%. Interest on the Series 2006 General Obligation Variable Rate bonds is assumed at 3.00%. Interest on the Series 2008B Variable Rate Revenue bonds is assumed at 2.5% for years 2014 through 2016, and at 4.00% for years thereafter. Interest on future general obligation bonds is assumed at 4.00%. Interest on future Ohio Water Development Authority (OWDA) obligations is assumed at 4.00%. B-7

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75 APPENDIX C Management s Discussion and Analysis, Basic Financial Statements, Notes to the Financial Statements, and Required Supplemental Information of the City of Columbus for Fiscal Year Ended December 31, 2013 Financial statements of the City have been audited by firms of certified public accountants since, and including, The City follows a mandatory rotation policy as prescribed by the State Auditor of Ohio. As a result of this policy and competitive proposals, Plante & Moran, PLLC, was selected to perform the audits for 2012 through All audits, 1979 through 2012, have been conducted in accordance with auditing standards generally accepted in the United States of America and, beginning in 1980, also the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Financial statements contained in this Official Statement have been extracted from the respective years Comprehensive Annual Financial Reports ( CAFRs ) of the City. CAFRs can be obtained by communicating with Hugh J. Dorrian, City Auditor, 90 West Broad Street, Columbus, Ohio 43215, telephone (614) , fax (614) , or may be viewed on the City s website at The following information has been extracted from the City s Comprehensive Annual Financial Report for the fiscal year ended December 31, 2013: TABLE OF CONTENTS Independent Auditors Report... C-3 Management s Discussion and Analysis... C-5 Basic Financial Statements... C-23 Statement of Net Position... C-25 Statement of Activities... C-26 Balance Sheet Governmental Funds... C-28 Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds... C-29 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds... C-30 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Governmental Funds... C-31 Statement of Net Position Proprietary Funds... C-32 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds... C-33 Statement of Cash Flows Proprietary Funds... C-34 Statement of Fiduciary Assets and Liabilities Fiduciary Funds... C-36 Notes to the Financial Statements... C-37 Required Supplementary Information... C-91 Budgetary Comparison Schedule General Fund... C-93 Notes to Required Supplementary Information... C-94 C-1

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77 Independent Auditor's Report The Honorable Hugh J. Dorrian, City Auditor City of Columbus, Ohio Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Columbus, Franklin County, Ohio, as of and for the year ended December 31, 2013 and the related notes to the financial statements, which collectively comprise the City of Columbus, Ohio's basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. C-3