LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT

Transcription

1 This Preliminary Official Statement is in a form "deemed final" by the Issuer for purposes of SEC Rule 15c2-12(b)(1), but is subject to revision, amendment and completion 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 sales of these Series 2014 Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such jurisdiction. NEW ISSUES BOOK ENTRY PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 6, 2014 RATINGS: Moody's: "Aa1" Standard & Poor's: "AA+" Fitch: "AAA" See "RATINGS" herein. In the opinion of Bond Counsel, based upon laws, regulations, rulings and decisions, and assuming continuing compliance with certain covenants made by the Corporation, interest on the Series 2014 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, upon the conditions and subject to the limitations set forth herein under the caption "TAX MATTERS." Interest on the Series 2014 Bonds held by corporations is includable in the computation of such corporation's adjusted net book income, adjusted current earnings or modified alternative taxable income. Receipt of interest on the Series 2014 Bonds may result in other federal income tax consequences to certain holders of the Series 2014 Bonds. In the opinion of Bond Counsel, interest on the Series 2014 Bonds is exempt from income tax by the Commonwealth of Kentucky, and the Series 2014 Bonds are exempt from ad valorem taxation by the Commonwealth of Kentucky and any of its political subdivisions. LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT $11,130,000* General Obligation Bonds, Series 2014D Dated Date: Date of Issuance $19,330,000* General Obligation Refunding Bonds, Series 2014F $19,965,000* General Obligation Notes, Series 2014E Due: As set forth herein on the inside front cover The Louisville/Jefferson County Metro Government (the "Issuer" or "Louisville Metro") will issue (i) its $11,130,000* General Obligation Bonds, Series 2014D (the "Series 2014D Bonds"), (ii) its $19,965,000* General Obligation Notes, Series 2014E (the "Series 2014E Notes"), and (iii) its $19,330,000* General Obligation Refunding Bonds, Series 2014F (the "Series 2014F Bonds") [hereinafter the Series 2014D Bonds, the Series 2014E Notes and the Series 2014F Bonds shall be collectively referred to as the "Bonds"] in fully registered form, without coupons, and, when issued, the Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository of the Bonds. Individual purchases of beneficial ownership interests in the Bonds will be made in book-entry form only, in denominations of $5,000 or multiples thereof through DTC Participants. Interest on the Series 2014D Bonds will be payable semiannually on June 1 and December 1 of each year, commencing on June 1, Interest on the Series 2014E Notes will be payable semiannually on June 1 and December 1 of each year, commencing on June 1, Interest on the Series 2014F Bonds will be payable semiannually on May 1 and November 1 of each year, commencing on May 1, Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Payments of principal, premium, if any, and interest on the Bonds are to be made to purchasers by DTC through the Participants (as such term is herein defined). Purchasers will not receive physical delivery of Bonds purchased by them. See "THE BONDS -- Book-Entry Only System." The Bonds are direct general obligations of Louisville Metro. The full faith, credit and taxing power of Louisville Metro are irrevocably pledged for the prompt payment of the principal of, premium, if any, and interest on the Bonds. The Bonds are payable from taxes levied on all taxable property of Louisville Metro without limitation as to rate or amount. FOR MATURITIES, INTEREST RATES AND PRICES OR YIELDS, SEE THE INSIDE COVER The Bonds are offered when, as and if issued by Louisville Metro and accepted by the Underwriters, subject to the approval of legality and tax exemption by Rubin & Hays, Bond Counsel, Louisville, Kentucky. Certain legal matters will be passed on for Louisville Metro by the Office of the Jefferson County Attorney, Louisville, Kentucky. Electronic or sealed bids to be opened November 12, 2014, at 11:00 A.M. (E.T.) for the Series 2014D Bonds and the Series 2014E Notes and at 11:30 A.M (E.T.) for the Series 2014F Bonds in the office of the Louisville Metro Chief Financial Officer, 611 West Jefferson Street, Louisville, Kentucky. This Official Statement is deemed final for the purposes of SEC Rule 15c2-12(b)(1). Delivery of the Bonds is expected on or about December 3, * Preliminary, subject to adjustment J.J.B. HILLIARD, W.L. LYONS, LLC Financial Advisor

2 MATURITY SCHEDULE $11,130,000 * LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT GENERAL OBLIGATION BONDS, SERIES 2014D CUSIP Maturity 6/1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/2024 Amount* $195, , , , , , , , , , ,000 Interest Rate % Price or Yield CUSIP Maturity 12/1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/2034 Amount* $555, , , , , , , , , ,000 Interest Rate % Price or Yield $19,965,000 * LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT GENERAL OBLIGATION NOTES, SERIES 2014E CUSIP Maturity 6/1/ /1/ /1/2016 Amount* $1,920,000 3,785,000 3,935,000 Interest Rate % Price or Yield CUSIP Maturity 12/1/ /1/ /1/2019 Amount* 4,095,000 4,265,000 1,965,000 Interest Rate % Price or Yield $19,330,000 * LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT GENERAL OBLIGATION REFUNDING BONDS, SERIES 2014F CUSIP November 1 Year of Maturity Amount* $1,605,000 1,665,000 1,735,000 1,810,000 1,880,000 Interest Rate % Price or Yield CUSIP November 1 Year of Maturity Amount* $1,960,000 2,040,000 2,125,000 2,210,000 2,300,000 Interest Rate % Price or Yield *Preliminary, subject to change

3 REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesperson or other person has been authorized by Louisville Metro or the Financial Advisor to give any information or to make any representations other than those contained herein in connection with the offering of the Bonds described herein and, if given or made, such other information or representation must not be relied upon as having been authorized by Louisville Metro or the Financial Advisor. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which 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 fact. All quotations from and summaries and explanations or provisions of laws and documents herein do not purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. The information set forth in this Official Statement has been obtained from official sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. The Financial Advisor has not made any independent verification of the information contained herein. The information and expressions of opinion herein are subject to change without notice, and neither 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 Louisville Metro since the date hereof. CUSIP numbers have been assigned to the Bonds by S&P's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., and are included solely for the convenience of the bondowners. Neither Louisville Metro nor the Purchasers shall be responsible for the selection or correctness of the CUSIP numbers set forth above. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE BONDS, NOR SHALL THERE BE ANY SALE OF ANY OF THE BONDS, BY ANY PERSON IN ANY JURISDICTION IN WHICH OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute "forward-looking statements." In this respect, the words "estimate," "project," "anticipate," "expect," "intend," "believe" and similar expressions are intended to identify forward-looking statements. A number of important factors affecting Louisville Metro's business and financial results could cause actual results to differ materially from those stated in the forwardlooking statements. This Official Statement includes the front cover page immediately preceding this page and all Appendices hereto.

4 LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT Mayor Greg Fischer Louisville Metro Council Attica Scott Barbara Shanklin Mary C. Woolridge David W. Tandy Cheri Bryant Hamilton David James Kenneth C. Fleming Tom Owen Tina Ward-Pugh Jim King Kevin Kramer Rick Blackwell Vicki Aubrey Welch Cindi Fowler Marianne Butler Kelly Downard Glen Stuckel Marilyn Parker Jerry Miller Stuart Benson Dan Johnson Robin Engel James Peden Madonna Flood David Yates Brent Ackerson Steve Rowland, Chief Financial Officer Michael O'Connell, Jefferson County Attorney BOND COUNSEL Rubin & Hays Louisville, Kentucky FINANCIAL ADVISOR J.J.B. Hilliard, W.L. Lyons, LLC Louisville, Kentucky PAYING AGENT AND BOND REGISTRAR AND PAYING AGENT Old National Trust Company Evansville, Indiana

5 TABLE OF CONTENTS Page Introduction...1 The Issuer...2 The Bonds...2 Security for the Bonds...7 The Project and the Refunding...9 Sources and Uses of Funds...10 The Ordinance...12 Certain Risks Associated with the Bonds...22 Tax Matters...24 Legal Matters...27 Litigation...27 Disclosure Compliance...28 Ratings...30 Independent Auditors...30 Financial Advisor...30 Underwriting...30 Verification of Mathematical Accuracy...31 Miscellaneous...31 Appendix A Appendix B Appendix C Appendix D Appendix E Information Statement of Louisville/Jefferson County Metro Government Comprehensive Annual Financial Report of Louisville/Jefferson County Metro Government to include Audited Financial Statements for the Period Ended June 30, 2013 Louisville/Jefferson County Metro Government Outstanding Debt Service and Estimated Debt Service Payments Form of Bond Counsel Opinion Form of Continuing Disclosure Agreement

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7 OFFICIAL STATEMENT LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT $11,130,000* General Obligation Bonds, Series 2014D $19,965,000* General Obligation Notes, Series 2014E $19,330,000* General Obligation Refunding Bonds, Series 2014F INTRODUCTION This Official Statement, including the cover page and appendices, sets forth certain information relating to the issuance by the Louisville/Jefferson County Metro Government (the "Metro Government" or the "Issuer") of its (i) $11,130,000* Louisville/Jefferson County Metro Government General Obligation Bonds, Series 2014D (the "Series 2014D Bonds"); (ii) $19,965,000* Louisville/Jefferson County Metro Government General Obligation Notes, Series 2014E (the "Series 2014E Notes"); and (iv) $19,330,000* Louisville/Jefferson County Metro Government General Obligation Refunding Bonds, Series 2014F (the "Series 2014F Bonds"). The Series 2014D Bonds, the Series 2014E Notes and the Series 2014F Bonds (collectively, the "Bonds") are to be issued under and in full compliance with the Constitution and Statutes of the Commonwealth of Kentucky (the "Commonwealth"), according to authority of Chapters 158 and 159 of the Constitution of Kentucky and applicable laws, as amended, including Sections through of the Kentucky Revised Statutes, as amended (the "Act"). The Bonds will be issued pursuant to a bond authorizing ordinance enacted by the Metro Council of Louisville Metro (the "Metro Council") on October 23, 2014 (the "Ordinance," or the "Bond Ordinance"). The Bonds are direct general obligations of Louisville Metro. The full faith, credit and taxing power of Louisville Metro are irrevocably pledged for the prompt payment of the principal of, premium, if any, and interest on the Bonds. The Bonds are payable from taxes levied on all taxable property of Louisville Metro without limitation as to rate or amount. All financial and other information presented in this Official Statement have been provided by Louisville Metro from its records except for information expressly attributed to other sources. The presentation of information is intended to show recent historic information, and is not intended, unless specifically stated, to indicate future or continuing trends in the financial position or other affairs of Louisville Metro. No representation is made that past experience, as is shown by such financial and other information, will necessarily continue or be repeated in the future. This Official Statement should be considered in its entirety, and no one subject discussed should be considered less important than any other by reason of its location in the text. Reference * Preliminary, subject to adjustment

8 should be made to laws, reports or other documents referred to in this Official Statement for more complete information regarding their contents. There follows brief descriptions of Louisville Metro, the Bonds, the Ordinance, the purposes of the issue and other information and data, together with the Appendices, containing among other things financial and other information with respect to Louisville Metro. All descriptions contained herein of the Bonds and the Ordinance do not purport to be comprehensive or definitive and are qualified in their entirety by reference to such documents, all of which are available for inspection at the principal office of the Chief Financial Officer of Louisville Metro at 611 West Jefferson Street, Louisville, Kentucky or the office of the Financial Advisor, J.J.B. Hilliard, W.L. Lyons, LLC, 500 West Jefferson Street, Louisville, Kentucky, History of the Issuer THE ISSUER In the November 7, 2000 General Election, local voters approved a consolidation of the governmental and corporate functions of the City of Louisville, Kentucky (the "City") and the County of Jefferson, Kentucky (the "County") into a single political entity, and pursuant to legislation enacted by the Kentucky General Assembly, the Louisville/Jefferson County Metro Government commenced operations effective January 6, 2003, replacing and superseding the governments of the City and the County. Louisville Metro is a public body corporate and politic, duly created and existing as a political subdivision of the Commonwealth under the Constitution and laws of the Commonwealth. Louisville Metro is governed by an elected Mayor and a Metro Council composed of twenty-six council members elected from each of twenty-six council districts for four year terms. The issuance of the Bonds has been authorized by the Ordinance of the Issuer acting by and through its Metro Council. See "Appendix B - Comprehensive Annual Financial Report of Louisville/Jefferson County Metro Government to include Audited Financial Statements for the Period Ended June 30, 2013" to this Official Statement, which contain further information and data regarding Louisville Metro. Description of the Bonds THE BONDS Each series of Bonds will accrue interest from the date of the respective issuance of said Bonds. The Bonds will bear interest at the interest rates set forth on the inside front cover of this Official Statement. Interest on the Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. 2

9 The Series 2014D Bonds are payable on June 1 and December 1 of each year, beginning June 1, The Series 2014D Bonds will mature on December 1 in the years set forth on the inside front cover of this Official Statement. The Series 2014E Notes are payable on June 1 and December 1 of each year, beginning June 1, The Series 2014E Notes will mature on December 1 in the years set forth on the inside front cover of this Official Statement. The Series 2014F Bonds are payable on May 1 and November 1 of each year, beginning May 1, The Series 2014F Bonds will mature on November 1 in the years set forth on the inside front cover of this Official Statement. Denomination and Payment of Bonds The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as maybe requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. So long as the Bonds are held in the book-entry only system, DTC (or a successor securities depository) or its nominee will be the registered owner or holder of the Bonds for all purposes of the Indenture, the Bonds and this Official Statement. See "Book-Entry Only System" below. In the event that the Bonds are not held in a book-entry only system, the principal of and any premium on the Bonds will be payable when due to the persons in whose name the Bonds are registered (the "Holders") upon presentation and surrender thereof at the designated corporate trust office of the Paying Agent in Evansville, Indiana. The principal of and premium, if any, and interest on the Bonds are payable in any coin or currency of the United States of America. The principal of and premium, if any, on the Bonds will be paid upon surrender thereof at the principal corporate trust office of the Paying Agent. Interest on each Bond shall be paid by check mailed on the Interest Payment Date to the Person who is the Holder thereof as shown on the Bond Register, on the applicable Record Date, at the address of the Holder as it appears on the Record Date on the Bond Register. The Bonds will be issued in fully registered form in the denomination of $5,000 or any integral multiple of $5,000 ("Authorized Denominations"). Registration, Transfer and Exchange The Paying Agent shall maintain books (the "Bond Register") for the registration and for the transfer of the Bonds. Upon surrender for registration of transfer of any Bond at the principal office of the Paying Agent, the Paying Agent shall authenticate and shall deliver a new Bond or Bonds in the same 3

10 aggregate principal amount as the Bond surrendered. No transfer of any Bond shall be binding upon the Paying Agent unless made at such office and shown on the Bond Register. Unless and until the Paying Agent notifies the Bondowners in writing of any change of Paying Agent or of any change of the designated corporate trust office thereof, the Paying Agent's designated corporate trust office shall be One Main Street, P.O. Box 207, Evansville, Indiana 47702, Attention: Corporate Trust Administration. The Paying Agent shall not be required to exchange or transfer any Bond or portion thereof which has been called for redemption. Book-Entry Only System The following information about the book-entry only system applicable to the Bonds has been supplied by DTC. The Issuer, the Paying Agent, the Financial Advisor or the Underwriter make no representations, warranties or guarantees with respect to its accuracy or completeness. 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, 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("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 4

11 Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the 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 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 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the 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 registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 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 Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Issuer or the Paying Agent, 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 Paying Agent, or the Issuer, subject to 5

12 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 Issuer or the Paying Agent, 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. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. Redemption of the Bonds Optional Redemption. The Series 2014D Bonds maturing on and prior to December 1, 2024, shall not be subject to optional redemption prior to maturity. The Series 2014D Bonds maturing on and after December 1, 2025, are subject to optional redemption prior to maturity, upon notice mailed to the Registered Owners as provided hereinafter, in whole or in part, on any date on and after December 1, 2024, and in any order of maturities (less than all of a single maturity to be selected by lot), at a redemption price equal to 100% of the principal amount redeemed on the redemption date. The Series 2014E Notes are not subject to optional redemption prior to maturity. The Series 2014F Bonds maturing on and prior to November 1, 2024, shall not be subject to optional redemption prior to maturity. The Series 2014F Bonds maturing on and after November 1, 2025, are subject to optional redemption prior to maturity, upon notice mailed to the Registered Owners as provided hereinafter, in whole or in part, on any date on and after November 1, 2024, and in any order of maturities (less than all of a single maturity to be selected by lot), at a redemption price equal to 100% of the principal amount redeemed on the redemption date. Notice and Effect of Call for Redemption. The Paying Agent shall give notice of redemption by first class mail, postage prepaid, mailed not less than 25 nor more than 60 days prior to the redemption date to each Holder of Bonds to be redeemed or tendered at the address of such Holder appearing in the Bond Register, and also to such other Persons as the Issuer shall deem appropriate. 6

13 Neither the failure of any Holder to receive notice mailed as provided herein nor any defect in notice so mailed shall affect the validity of the proceedings for redemption in accordance with the Indenture. All notices of redemption shall state: (i) (ii) the redemption date; the redemption price (including premium, if any); (iii) the name of the Bonds to be redeemed, the principal amount of Bonds to be redeemed, and, if less than all Bonds are to be redeemed, the CUSIP identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) that on the redemption date, the redemption price, as appropriate, of each such Bond will become due and payable, that interest on each such Bond shall cease to accrue on and after such date, and that each such Bond will be deemed to have been redeemed; (v) the place or places where such Bonds must be surrendered for payment of the redemption price thereof; and (vi) appropriate. such additional information as the Issuer or the Paying Agent shall deem In the case for an optional redemption pursuant to the Indenture, the notice of redemption may state (i) that it is conditioned upon the deposit of moneys, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent no later than the redemption date or (ii) that the Issuer retains the right to rescind such notice on or prior to the scheduled redemption date (in either case, a "Conditional Redemption"), and such notice and optional or extraordinary redemption shall be of no effect if such moneys are not so deposited or if the notice is rescinded in writing, and disseminated to each Holder of the Bonds in accordance with the procedures set forth in this Section, no later than 7 days prior to the redemption date. Notice of redemption having been given as aforesaid, the Bonds so to be redeemed shall become due and payable on the redemption date at the redemption price specified, and on and after such date (unless the Issuer shall default in the payment of the redemption price) such Bonds shall cease to bear interest. Upon surrender of any such Bond for redemption in accordance with such notice, such Bond shall be paid at the redemption price thereof. SECURITY FOR THE BONDS The Bonds are being issued by Louisville Metro under authority of the Constitution of Kentucky, as amended, particularly Sections 158 and 159 thereof, Sections through

14 of the Kentucky Revised Statute as amended (the "Act"), and applicable decisions of the appellate courts of the Commonwealth of Kentucky, and are further being issued pursuant to the Ordinance. Under the terms of the Ordinance, the Bonds constitute general obligations of Louisville Metro and the full faith, credit and taxing power of Louisville Metro is irrevocably pledged to the prompt payment of principal of, premium, if any, and interest on the Bonds when due. The Louisville/Jefferson County Metro Revenue Commission (the "Revenue Commission") collects occupational taxes and any other amounts received by Louisville Metro. Prior to submitting collected taxes and other revenues to Louisville Metro, the Revenue Commission is authorized to apply revenues to the Bonds and all other general obligation debt, in the manner and subject to all the terms and conditions of the Ordinance summarized herein. In compliance with Section 159 of the Constitution of Kentucky and the Act, and for the purpose of providing funds required to pay the interest on the Bonds (as well as all other general obligation debt ("General Obligation Debt"), if any, of Louisville Metro) when due and in order to create a sinking fund to pay the principal thereof (and premium, if any) as the Bonds (and any other General Obligation Debt) become due, the Ordinance levies on all of the taxable property within the purview of the Louisville/Jefferson County Metro Government, beginning in 2015 and continuing in each year as long as any of the Bonds or any other General Obligation Debt is outstanding, a direct annual tax sufficient, to the extent other lawfully available moneys of Louisville Metro are not provided, for that purpose, which tax shall be unlimited as to rate or amount. The proceeds derived from the special annual tax levied from time to time, together with other lawfully available moneys of Louisville Metro provided for the purpose, shall be deposited and carried in the Bond Fund as a special account of Louisville Metro and shall be applied only for the purpose of paying the principal of and interest (and premium, if any) on the Bonds and other General Obligation Debt, if any. The proceeds of the special annual tax and the balances accumulated from time to time in the Bond Fund are irrevocably pledged for the purpose of paying the interest on (and premium, if any) and principal of the Bonds and such other General Obligation Debt and shall never be used for any other purpose. Louisville Metro covenants and pledges with the registered holders of the Bonds that Louisville Metro will levy the special annual tax in each year at whatever rates may be necessary from time to time in order to produce the amounts required in each year, to the extent funds are not otherwise provided, to pay the principal of, premium, if any, and interest on the Bonds and such other General Obligation Debt when due. If principal or interest (or premium, if any) on the Bonds or any other General Obligation Debt should fall due in any year at a time when there are insufficient funds on hand, collected by reason of the foregoing special tax levy, such principal and interest (and premium, if any) shall be paid from other available funds of Louisville Metro and reimbursement therefor shall be made out of the special tax provided by the Ordinance, when the same shall have been collected. The Ordinance also constitutes a continuing appropriation from such taxes and all other lawfully available Pledged Receipts, of the sum annually necessary to pay the principal of and interest (and premium, if any) on the Bonds and such other General Obligation Debt when due. The Revenue Commission is authorized in the Ordinance to collect occupational taxes and any other amounts received by or on behalf of Louisville Metro, and to apply the same to the payment of debt 8

15 charges on the Bonds and such other General Obligation Debt and all other obligations due or coming due under the Ordinance or otherwise with respect to such General Obligation Debt. As general obligations of Louisville Metro, the Bonds are declared pursuant to the Bond Ordinance to be payable in accordance with the Act from all lawfully available Pledged Receipts (including, but not by way of limitation, any moneys attributable to Bond proceeds or the income from the temporary investment thereof, moneys held in the Funds and Accounts established under the Ordinance and any other moneys held by the Paying Agent for the benefit of the Bonds); provided there shall be no impairment of the express contract rights, if any, of the holders of outstanding bonds of Louisville Metro. Payment of the principal of and interest (and premium, if any) on the Bonds and such other General Obligation Debt when due in accordance with the foregoing provisions is subject only to the prior application of the Pledged Receipts in accordance with the express contract rights, if any, of the holders of outstanding bonds of Louisville Metro as provided pursuant to the Act. For a more complete description of demographic and financial information of Louisville Metro, see "Appendix B - Comprehensive Annual Financial Report of Louisville/Jefferson County Metro Government to include Audited Financial Statements for the Period Ended June 30, 2013". Project THE PROJECT AND THE REFUNDING The proceeds from the sale of the Series 2014D Bonds will be applied by Louisville Metro for the purpose of financing the acquisition, construction and equipping of various public projects as described in the Issuer s Capital Project Budget set forth in the Issuer s Budget Ordinance No. 101, Series 2014 and the proceeds of the Series 2014E Notes will be applied by Louisville Metro for the purpose of financing the acquisition, installation and maintenance of equipment and vehicles for various departments and agencies of the Issuer (collectively the "Project"). Refunding The proceeds of the Series 2014F Bonds will be used to refund the outstanding Louisville/Jefferson County Metro Government General Obligation Bonds, Series 2006A maturing on and after November 1, 2017 (the "Refundable Bonds") issued for the purpose of paying the costs associated with various public projects described in the ordinance authorizing said Refundable Bonds. The refunding of the Refundable Bonds will be accomplished pursuant to an Escrow Agreement by and between Louisville Metro and Old National Trust Company, the paying agent for the Refundable Bonds (the "Escrow Agent") by depositing with the Escrow Agent a sum of initial cash and certain noncallable direct obligations of the United States Treasury (collectively, the "Government Obligations"). The funds needed to make the initial cash deposit and to purchase the Government Obligations will be provided from the proceeds of the Series 2014F Bonds. 9

16 The Government Obligations to be purchased and deposited with the Escrow Agent will bear interest at such rates and will be scheduled to mature at such times and in such amounts so that, when paid according to their respective terms, sufficient moneys, together with any amounts of cash then on deposit with the Escrow Agent, will be available to fully provide for: (i) the timely payment of the interest on the Refundable Bonds accruing from November 1, 2014 to and including November 1, 2016 (the earliest date on which such bonds can be redeemed prior to maturity); and (ii) to redeem on November 1, 2014 at a price equal to 100% of principal amount the Refundable Bonds which as of that date have not otherwise been redeemed, retired or otherwise paid. All moneys and Government Obligations on deposit with the Escrow Agent, including interest to be earned thereon, are pledged solely and irrevocably for the benefit of the holders of the Refundable Bonds. Inasmuch as the cash and Government Obligations on deposit with the Escrow Agent will be sufficient to fully provide for the payment of the principal of and interest on the Refundable Bonds, as specified above, said Refundable Bonds shall be deemed to be paid. Series 2014D Bonds SOURCES AND USES OF FUNDS The following is a summary of the sources of funds, and the uses of such funds in connection with the plan of financing for the Series 2014D Bonds: Sources of Funds: Principal amount of the Series 2014D Bonds $ Premium/Discount Uses of Funds: Total Sources of Funds $ Project and related costs $ Underwriters' Discount Costs of Issuance 1 Total Uses of Funds $ 1 Includes Financial Advisor, Bond Counsel and miscellaneous issuance costs. 10

17 Series 2014E Notes The following is a summary of the sources of funds, and the uses of such funds in connection with the plan of financing for the Series 2014E Notes: Sources of Funds: Principal amount of the Series 2014E Notes $ Premium/Discount Uses of Funds: Total Sources of Funds $ Project and related costs $ Underwriters' Discount Costs of Issuance 1 Total Uses of Funds $ 1 Includes Financial Advisor, Bond Counsel and miscellaneous issuance costs. Series 2014F Bonds The following is a summary of the sources of funds, and the uses of such funds in connection with the plan of financing for the Series 2014F Bonds: Sources of Funds: Principal amount of the Series 2014F Bonds $ Premium/Discount Uses of Funds: Total Sources of Funds $ Refunding of the Refundable Bonds $ Underwriters' Discount Costs of Issuance 1 Total Uses of Funds $ 1 Includes Financial Advisor, Bond Counsel and miscellaneous issuance costs. 11

18 THE BOND ORDINANCE The following is a summary of certain of the terms and provisions of the Bond Ordinance enacted by Louisville Metro authorizing the Bonds. This description is only a summary; it does not purport to be comprehensive or definitive and is qualified in its entirety by reference to the Bond Ordinance. Terms not otherwise defined herein shall have the meanings given in the Bond Ordinance. Definitions Set forth below are summary definitions of certain terms used in the Bond Ordinance and this Official Statement. "Act" means collectively, Sections through of the Kentucky Revised Statutes. "Bondholder", "Bondowner", "Holder" or "Owner" means the person in whose name a Bond is registered on the registration books maintained by the Bond Registrar. Notwithstanding this definition, with respect to any Bonds which are registered in Book-Entry Form, the Bond Registrar shall be entitled to rely on written instructions from a majority of the beneficial owners of the Bonds with reference to consent, if any, required from Bondholders under the Bond Ordinance. The Bond Registrar is authorized in the Bond Ordinance to treat for all purposes the person in whose name any Bond is registered on the Record Date, on the registration books kept by the Bond Registrar, as the absolute owner thereof. "Bond Ordinance" or "Ordinance" means the ordinance of the Issuer, authorizing and approving the Bonds, as amended or supplemented from time to time in accordance with the provisions thereof. "Bond Registrar" or "Paying Agent" means the initial Bond Registrar and Paying Agent appointed pursuant to the Bond Ordinance and any successor bond registrar or paying agent designated as such pursuant to the provisions of the Bond Ordinance. The Paying Agent shall also serve as paying agent for the Bonds and the interest thereon. "Bonds" or "Series 2014 Bonds" collectively refers to the Series 2014D Bonds, the Series 2014E Notes and the Series 2014F Bonds. "Book-Entry Form" means, with respect to the Bonds, a form or system, as applicable, under which (i) the ownership of beneficial interests in Bonds and bond service charges may be transferred only through a book entry and (ii) physical Bond certificates in fully registered form are registered only in the name of a Securities Depository or its nominee as Holder, with the physical Bond certificates in the custody of a Securities Depository. 12

19 "Disclosure Agreement" means the Continuing Disclosure Agreement of the Issuer dated as of the sale of the Bonds. "Fiscal Year" means any period of twelve (12) months commencing July 1 of any year and ending June 30 of the ensuing year, or any other fiscal year of the Issuer after recognition of such fiscal year by a supplement to the Bond Ordinance. "General Obligation Debt" means, collectively, the Bonds as may be Outstanding from time to time, as well as all other general obligation debt of the Issuer (including bonds, notes, commercial paper and any other debt instruments in writing, authorized by or issued as general obligations of the Issuer pursuant to or in accordance with the Act) and bond anticipation notes of the Issuer, if any, as may be issued and outstanding from time to time under the Act. "Interest Payment Date" or "Payment Date" means (i) with respect to the Series 2014D Bonds, each June 1 and December 1, commencing June 1, 2015; (ii) with respect to the Series 2014E Notes, each June 1 and December 1, commencing June 1, 2015; (iii) with respect to the Series 2014F Bonds, each May 1 and November 1, commencing May 1, 2015; (iv) any date set for the redemption of Bonds, as provided in the Bond Ordinance; and (v) with respect to any other General Obligation Debt (if any), the applicable payment dates set forth or approved in the Issuer's legislation authorizing issuance of the General Obligation Debt. "Investment Obligation" means any investment that the Issuer is authorized to acquire pursuant to the Kentucky Revised Statutes, as amended from time to time, and to the extent, if any, that the funds then proposed for investment are governed by an applicable formal investment policy of the Issuer, which complies with such investment policy. "Kentucky Revised Statutes" or "KRS" means the Kentucky Revised Statutes as in effect at the date of the adoption of the Bond Ordinance, and any future amendments thereof to the extent that the same will not unconstitutionally impair the obligations of contracts created under the provisions of the Bond Ordinance. "Outstanding", when used with reference to any Bonds, means, as of any date, all Bonds theretofore or then being authenticated and delivered under the Bond Ordinance, except (i) Bonds cancelled by the Bond Registrar at or prior to such date, (ii) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered and (iii) Bonds deemed to have been paid as provided in the Bond Ordinance. "Pledged Receipts" means receipts of the Issuer (including but not limited to ad valorem property taxes as permitted by law, occupational license fees, insurance premium taxes, excises, utility and service revenues and any other receipts from taxes, excises, permits, licenses, fines or other source of revenue of, or of revenue distributions to, the Issuer). "Record Date" means with respect to the Series 2014D Bonds, the Series 2014E Notes and the Series 2014F Bonds the fifteenth (15 th ) day of the month prior to each date established for 13

20 payment of principal, interest or premium on the Bonds, whether by maturity, acceleration or redemption. "Revenue Commission" means Louisville/Jefferson County Metro Revenue Commission, as successor in interest to the Louisville and Jefferson County Revenue Commission as previously established and operated under the provisions of City of Louisville Codified Ordinances through "Securities Depository" means any securities depository that is 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, operating and maintaining, with its participants or otherwise, a Book-Entry System to record ownership of beneficial interests in bonds and bond service charges, and to effect transfers of bonds in Book-Entry Form, and means, initially, The Depository Trust Company (a limited purpose trust company), New York, New York. "Securities Depository Nominee" means any nominee of a Securities Depository and shall initially mean Cede & Co., New York, New York, as nominee of The Depository Trust Company. "Series 2014D Bonds" refers to the Louisville/Jefferson County Metro Government General Obligation Bonds, Series 2014D, dated the date of issuance. "Series 2014E Notes" refers to the Louisville/Jefferson County Metro Government General Obligation Notes, Series 2014E, dated the date of issuance. "Series 2014F Bonds" refers to the Louisville/Jefferson County Metro Government General Obligation Refunding Bonds, Series 2014F, dated the date of issuance. Authorization, Amount and Designation of Bonds The Bond Ordinance has been adopted and approved, pursuant to the authority of Kentucky Revised Statutes, Sections through , the general laws and the Constitution of the Commonwealth of Kentucky and all applicable decisions of the appellate courts of Kentucky. Pledge of Pledged Receipts Louisville Metro pledges in the Bond Ordinance to the payment of the principal of, interest on, and any premium for the redemption of, the Bonds, the Pledged Receipts received by Louisville Metro and all Funds and Accounts established by and in accordance with the provisions of the Bond Ordinance, including the investment income, if any, of Funds and Accounts established by the Bond Ordinance, all in accordance with the terms and provisions of the Bonds and the Bond Ordinance. There is in the Bond Ordinance created in favor of the Bonds, a lien, pledge and charge on all of the Pledged Receipts over and ahead of all other bonds not contemplated by the Bond Ordinance payable from the Pledged Receipts which may be hereafter issued, and over and ahead of all other claims or obligations of any nature against the Pledged Receipts hereafter arising or hereafter 14

21 incurred. Louisville Metro covenants and agrees that such pledge under the Bond Ordinance shall be valid and binding from and after the date of the issuance, sale and delivery of the Bonds issued pursuant to the Bond Ordinance, and all such money and securities so pledged shall be subject to the lien of such pledge without any physical delivery thereof, or any further action by Louisville Metro. Bond Fund There is established and recognized in the Bond Ordinance and there shall be maintained, with the Revenue Commission, at any time while the Bonds are outstanding, a "Bond Fund," which shall constitute a "sinking fund" within the meaning of KRS (1) which is pledged for the retirement of the General Obligation Debt. Commencing as of the beginning of the Fiscal Year or as soon as practicable thereafter, Louisville Metro covenants and agrees that it shall set aside as received and pay into the Bond Fund, all or such portion of the Pledged Receipts as will be sufficient to pay when due, in immediately available funds, the principal of, premium, if any, and interest which comes due during the Fiscal Year on all Bonds Outstanding under the Bond Ordinance and all other General Obligation Debt (if any), in each of the foregoing cases at or before their maturity or earlier proceedings for redemption. No further payment need be made to the Bond Fund when, and so long as, the aggregate amount therein is sufficient to retire all of the Bonds then Outstanding, plus the amount of interest due and thereafter to become due on such Bonds on and prior to such retirement, together with redemption premium, if any. The Bond Fund shall be maintained for and on behalf of Louisville Metro by the Revenue Commission, as a separate and special fund, apart and distinct from all other funds of Louisville Metro or the Revenue Commission. Separate account statements with respect thereto shall at all times be kept and maintained. On each Payment Date, there is in the Bond Ordinance authorized and directed to be withdrawn and made available out of the Bond Fund a sufficient amount to pay the principal of, premium, if any, and interest on the Bonds and any other General Obligation Debt, if any, becoming due on such Payment Date, including Bonds redeemed pursuant to the optional or mandatory redemption provisions of the Bond Ordinance, if any. Investment of Funds Moneys from time to time in any Fund or Account, pending disbursement for the purposes of each Fund and Account, shall be invested or reinvested from time to time on order of Louisville Metro in Investment Obligations. Investments of moneys held in the Project Fund shall be made in such manner (i.e., maturing or subject to earlier redemption or retirement at the option of the holder thereof) as to make cash available in the Project Fund for disbursement as and when required to pay acquisition, construction, installation, equipping and related costs. Investments of moneys held in the Bond Fund shall be made in such manner (i.e., maturing or subject to earlier redemption or retirement at the option of the holder thereof) as to make cash available in the Bond Fund for disbursement as and when required to pay interest on and principal (and premium, if any) of the Bonds as and when the same become due. 15

22 Maximum Percentages of Net Indebtedness Louisville Metro covenants not to incur "net indebtedness" (within the meaning of the Act) to an amount exceeding any then applicable legal limit based on the value of taxable property within Louisville Metro's corporate limits and jurisdiction, as estimated by the last certified assessment previous to the incurring of the indebtedness. Events of Default Each of the following events is in the Bond Ordinance defined as and shall constitute an "Event of Default": (a) Failure to pay any installment of interest on the Bonds when the same shall become due and payable or within thirty (30) days thereafter (or within such period, shorter than thirty (30) days, if any, as may be permitted in the Bonds); (b) Failure to pay the principal of, or premium, if any, on any Bond when due and payable, at maturity or on redemption; and (c) Default by Louisville Metro in the due or punctual performance or observance of any other covenants, pledges, conditions, provisions or agreements of Louisville Metro contained in the Bond Ordinance or in the Bonds, and the continuance thereof for a period of thirty (30) days; provided that if such default can be corrected but not within such thirty-day period, it shall not constitute an Event of Default if corrective action is instituted by Louisville Metro within such period and diligently pursued until the default no longer exists. Enforcement of Remedies; Any Bondholder May Enforce and Compel Performance On the happening and continuance of any Event of Default, then and in every case any Bondholder, either at law or in equity, by suit, action, mandamus or other proceedings, may enforce and compel performance by Louisville Metro and its officers and agents of all duties imposed under the Act, under other applicable law, if any, under the Bonds, and under the Bond Ordinance, including the levying and collection of sufficient taxes and the application thereof to the payment of principal of and interest (and premium, if any) on the Bonds in accordance with the provisions of the Bond Ordinance and the Bonds. Notice of Default The Bond Registrar shall as promptly as practicable mail, to Louisville Metro and the Bondholders, written notice of the occurrence of any Event of Default known to the Bond Registrar. The Bond Registrar shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail any such notice. 16

23 Delay or Omission No delay or omission of any holder of the Bonds to exercise any right or power arising on any default shall impair any right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy afforded by the Bond Ordinance and every additional power and remedy, if any, afforded by the terms of the Bonds to the Bondholders may be exercised from time to time and as often as may be deemed expedient by the Bondholders. Waivers of Events of Default Any Bondholder, may on behalf of such Holder waive any past default under the Bond Ordinance or under the Bonds and the consequences thereof; and in case of any such waiver, Louisville Metro, the Bond Registrar and such Bondholder shall be restored to their former positions and rights under the Bond Ordinance and under the Bonds respectively, but no such waiver shall extend to any subsequent or other default, or impair any right consequent thereon. Termination of Proceedings If any Bondholder shall have proceeded to enforce any right due to any Event of Default and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Bondholder, then and in every case Louisville Metro, the Bond Registrar and the Bondholder shall, subject to any determination in such proceeding, be restored to their former positions and rights under the Bond Ordinance, and all rights of such Bondholder shall continue as if no such proceedings had been taken. Remedies Not Exclusive No remedy by the terms of the Bond Ordinance or the Bonds conferred on or reserved to the Holders of the Bonds is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Bond Ordinance as now or hereafter existing at law or in equity or by statute. Responsibilities of the Bond Registrar The Bond Registrar shall have no responsibility with respect to the validity of the Bonds in the Bond Ordinance authorized or the legal sufficiency of the proceedings for their issuance. The Bond Registrar shall not have any obligation, except as otherwise in the Bond Ordinance provided, to assure that any duties herein imposed on Louisville Metro or covenants or agreements herein contained on behalf of said Issuer are performed. All compensation to the Bond Registrar for services leading up to and including authentication of the Bonds may be paid from the proceeds of the Bonds. Compensation for any service, cost or expense, including fees of its counsel, thereafter rendered or incurred by the Bond Registrar, in its capacity as Bond Registrar, shall be billed to and paid by Louisville Metro from time to time. 17

24 No implied covenants shall be read in the Bond Ordinance against the Bond Registrar. The Bond Registrar may in good faith buy, sell, own, hold and deal in any of the Bonds, with like effect as if it were not the Bond Registrar. The Bond Registrar may act as depository for, or permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or the Bond Ordinance, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds outstanding. The Bond Registrar shall be protected and shall incur no liability in acting in good faith on any ordinance, order, resolution, notice, telegram, request, consent, certificate, affidavit, voucher, bond or other paper or document which it shall believe to be genuine and to have been passed or signed by the proper board or persons. The Bond Registrar shall not be bound to recognize any person as a holder of any Bond or to take any action at such person's request unless such Bond shall be submitted to the Bond Registrar for inspection, if required, and title thereto established to the satisfaction of the Bond Registrar, if disputed. The Bond Registrar may in relation to the Bond Ordinance act on the opinion or advice of any attorney, accountant or other expert, whether retained by Louisville Metro or by the Bond Registrar, and shall not be responsible for anything suffered or done by it in good faith in accordance with any such opinion or advice. On written request of Louisville Metro, the Bond Registrar, not less than annually, shall make a written report to Louisville Metro, which report shall list the then Outstanding Bonds and shall report in detail as to any redemptions in respect of the Bonds. If requested, said written reports shall be furnished not less than thirty (30) days prior to each July 1 so long as any Bonds remain outstanding. Louisville Metro in its discretion may request the Bond Registrar to furnish other reports. The Bond Registrar shall be under no obligation to institute any suit, or to take any remedial proceeding under the Bond Ordinance, or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the enforcement of any rights and powers under the Bond Ordinance, until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays and counsel fees and other reasonable disbursements, and against all liability. The Bond Registrar may, nevertheless, begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as Bond Registrar without indemnity, and in such case Louisville Metro shall reimburse the Bond Registrar from the Pledged Receipts for all costs and expenses, outlays and reasonable counsel fees and other reasonable disbursements properly incurred in connection therewith, as set forth in the Bond Ordinance. No Obligation to Insure The Bond Registrar shall be under no obligation to effect or maintain insurance or to renew any policies of insurance or to inquire as to the sufficiency of any policies of insurance carried by Louisville Metro, or to report, or make or file claims or proof of loss for, any loss or damage insured against or which may occur, or to keep itself informed or advised as to the payment of any taxes or assessments, if any, or to require any such payment to be made. The Bond Registrar shall have no responsibility in respect of the validity or sufficiency of the Bond Ordinance or the due execution or acknowledgment thereof, or in respect of the validity of the Bonds or the due execution or issuance thereof. The Bond Registrar shall be under no obligation to see that any duties herein 18

25 imposed on Louisville Metro or any party other than itself, or any covenants herein or therein contained on the part of any party other than itself be done or performed, and the Bond Registrar shall be under no obligation for failure to see that any such duties or covenants are done or performed. The Bond Registrar shall not be liable or responsible because of the failure of Louisville Metro or any of the employees or agents thereof to make any collections or deposits or to perform any act herein required of Louisville Metro or because of the loss of any moneys arising through the insolvency or the act, default or omission of any other depositary in which such moneys shall have been deposited under the provisions of the Bond Ordinance. The Bond Registrar shall not be responsible for the application of any of the proceeds of the Bonds or any other moneys deposited with it and paid out, withdrawn or transferred under the Bond Ordinance, if such application, payment, withdrawal or transfer shall be made in accordance with the provisions of the Bond Ordinance. The immunities and exemptions from liability of the Bond Registrar under the Bond Ordinance shall extend to its directors, officers, employees and agents. Resignation and Discharge of Bond Registrar; Successor Bond Registrars The Bond Registrar may resign and thereby become discharged from the duties in the Bond Ordinance created by notice in writing given to Louisville Metro and to all Holders of Bonds, by first class mail at least thirty (30) days prior to the effective date of such resignation, provided that such resignation shall take effect only on the appointment of a successor Bond Registrar, and, provided further, such resignation shall take effect immediately on the appointment of a new Bond Registrar if such new Bond Registrar be appointed and qualified before the time limit established by such notice. The Bond Registrar may be removed at any time at the written request of Louisville Metro or by an instrument in writing signed by the Holders of not less than a majority of the principal amount of the Bonds then outstanding. If at any time the Bond Registrar shall resign, be removed, be dissolved or otherwise become incapable of acting or the offices of the Bond Registrar shall be taken over by any governmental official or board, or if the position of Bond Registrar shall become vacant for any reason, a successor shall be appointed by Louisville Metro; and unless such appointment be made within thirty (30) days after the vacancy shall have occurred, the Holders of a majority in principal amount of the Bonds then outstanding may make such appointment by an instrument in writing signed by any such Bondholders and filed with Louisville Metro, or the Bond Registrar may petition a court of competent jurisdiction for the appointment of a successor. Any Bond Registrar hereafter appointed shall (i) be a trust company or bank in good standing having trust powers and subject to examination by a federal or state authority and (ii) have a reported combined surplus and capital aggregating at least $75,000,000. Every successor Bond Registrar appointed under the Bond Ordinance shall execute, acknowledge and deliver to its predecessor and also to Louisville Metro an instrument in writing accepting such appointment under the Bond Ordinance, and thereon such successor Bond Registrar, without any further act shall become fully vested with all the rights, immunities, powers, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of 19

26 Louisville Metro, or of its successor, execute and deliver any instrument transferring to such successor Bond Registrar all the rights, powers and duties of such predecessor under the Bond Ordinance, and every predecessor Bond Registrar shall deliver all securities, moneys, documents and records held by it to its successor; provided, however, that before any such delivery is required or made, all fees and expenses of such predecessor shall be paid in full. Should any instrument in writing from Louisville Metro be required by any successor Bond Registrar for more fully and certainly vesting in such Bond Registrar the rights, powers and duties in the Bond Ordinance vested or intended to be vested in the predecessor Bond Registrar, any such instrument in writing shall and will on request be executed, acknowledged and delivered by Louisville Metro. Bond Ordinance is a Contract; Amendment Procedure In consideration of the purchase and acceptance of the Bonds by those who shall purchase and hold the same from time to time after the sale thereof, the provisions of the Bond Ordinance shall constitute a contract between Louisville Metro and the Holders from time to time of the Bonds, and such provisions are covenants and agreements with such Holders which Louisville Metro in the Bond Ordinance determines to be necessary and desirable for the security and payment thereof. After the issuance of the Bonds, no change, variation or alteration of any kind in the provisions of the Bond Ordinance shall be made in any manner except as provided herein until such time as all of the Bonds and the interest thereon have been paid in full. The provisions, covenants and agreements herein set forth to be performed on behalf of Louisville Metro shall be for the equal and ratable benefit, protection and security of the Holders of any and all of the Bonds, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof. No Bonds may be issued under the provisions of the Bond Ordinance except in accordance with the Bond Ordinance. If it shall appear desirable and to the advantage of both Louisville Metro and the Holders of the Bonds, Louisville Metro shall adopt an ordinance (a "Supplemental Ordinance") altering or amending the Bond Ordinance, but providing therein that the Supplemental Ordinance shall not become effective unless and until it has received the approval of the Holders of the Bonds as hereinafter set out. Immediately on adoption of a Supplemental Ordinance a copy of the Supplemental Ordinance (or brief summary thereof or reference thereto in form approved by Louisville Metro) together with a request to Bondholders for their consent thereto in form satisfactory to Louisville Metro, shall be mailed by the Bond Registrar to Bondholders promptly after adoption. A Supplemental Ordinance shall not be effective unless and until there shall have been filed with the Bond Registrar the written consents of the Holders of 66b%) of the principal amount of the Bonds then Outstanding. Any such consent shall be binding on the Holder of the Bonds after giving such consent and on any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor (whether or not such subsequent Holder thereof has notice thereof), unless such consent is revoked in writing by the Holder of such Bonds giving such consent or a subsequent Holder thereof by filing with the Bond Registrar, prior to the time when the written statement of the Bond Registrar to Louisville Metro described herein is filed, such revocation. At any time after the Holders of the required percentages of Bonds shall have filed their consent to a Supplemental Ordinance, the Bond Registrar shall make and file with Louisville Metro a written statement that the Holders of such required percentages of Bonds have filed such consents. Such 20

27 written statement shall be conclusive that such consents have been so filed. At any time thereafter, notice, stating in substance that the Supplemental Ordinance (which may be referred to as a Supplemental Ordinance adopted by Louisville Metro on a stated date, a copy of which is on file with the Bond Registrar) has been consented to by the Holders of the required percentages of the principal amount of the Outstanding Bonds and will be effective as provided in the Bond Ordinance, shall be given to Bondholders by Louisville Metro by mailing such notice, not more than ninety (90) days after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Ordinance and the written statement of the Bond Registrar hereinabove provided for is filed. Louisville Metro shall file with the Bond Registrar proof of the mailing of such notice. A transcript, consisting of the papers required or permitted by the Bond Ordinance to be filed with the Bond Registrar, shall be proof of the matters therein stated. Notwithstanding the foregoing, no such modifications, alterations or amendments shall be made which will (i) permit an extension of the time of payment at maturity of the principal of or payment of the interest on any Bond, or a reduction in the amount of principal or the rate of interest thereon without the written consent of the Holder thereof or (ii) reduce the percentage of Holders of Bonds required by the provisions of the applicable section of the Bond Ordinance for the taking of any action under such section. In addition to the foregoing, Louisville Metro may, without regard to the provisions hereinabove set forth, make any amendment or change herein (i) to evidence the succession of an institution as Bond Registrar or paying agent, (ii) to cure any ambiguity or to cure, correct or supplement any defective or inconsistent proceedings contained herein or in any ordinance or other proceedings pertaining to the Bond Ordinance, (iii) to grant to or confer on the Bond Registrar for the benefit of the Holders of the Bonds any additional rights, remedies, powers, authority or security which may lawfully be granted or conferred and which are not contrary to or inconsistent with the Bond Ordinance as theretofore in effect, (iv) to permit the Bond Registrar to comply with any obligations imposed on it by law, (v) to achieve compliance of the Bond Ordinance with any federal tax law, (vi) to maintain or improve any rating on the Bonds or (vii) for any other purpose not inconsistent with the terms of the Bond Ordinance which shall not impair the security of the Bondholders or otherwise materially adversely affect the rights of the Bondholders. Louisville Metro may adopt Supplemental Ordinances to accomplish the foregoing. Discharge of Bond Ordinance If Louisville Metro shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of all Bonds the total principal and interest due or to become due thereon, including premium, if applicable, at the times and in the manner stipulated therein and in the Bond Ordinance, then the pledge of the Bond Ordinance, and all covenants, agreements and other obligations of Louisville Metro to the Bondholders, shall thereon cease, terminate and become void and be discharged and satisfied. Whenever there shall be held in the Bond Fund or an escrow fund established for such purpose, either (i) moneys in an amount which shall be sufficient or (ii) Defeasance Obligations (as defined below) the principal of and interest on which when due (without consideration of 21

28 reinvestment income) will provide moneys which, together with other moneys, if any, then on deposit in the Bond Fund or such escrow fund, shall be sufficient to pay when due the principal of, interest and redemption premium, if applicable, on the Bonds or any part thereof to and including the date on which the Bonds or any of them will be redeemed in accordance with the Bond Ordinance, or the maturity date or dates thereof, as the case may be, then and in any of said events all such Bonds shall be deemed to have been paid within the meaning and with the effect expressed above, and the Bond Registrar shall and is in the Bond Ordinance irrevocably instructed to publish notice thereof, such notice to contain a statement that the cash and obligations as provided above are held in the Bond Fund or such escrow fund, that such Bonds are deemed to have been paid in accordance with the Bond Ordinance, and a statement of the maturities or redemption date or dates on which the moneys are or will become available for the payment of the amounts due. Thereafter the Bondholders shall be entitled only to payment out of the cash and obligations deposited as aforesaid. For purposes of the above provisions, "Defeasance Obligations" means (i) direct obligations of (including obligations issued or held in book entry form) the United States of America and (ii) pre-funded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and which are (1) rated, based on the escrow, in the highest rating category of Standard and Poor's Corporation and Moody's Investors Service or any successors thereto or (2) fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or obligations described in clause (i) above, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations described in the Bond Ordinance on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate. CERTAIN RISKS ASSOCIATED WITH THE BONDS The following is a discussion of certain risks that could affect payments to be made with respect to the Bonds. Such discussion is not, and is not intended to be, exhaustive and should be read in conjunction with all other parts of this Official Statement and should not be considered as a complete description of all risks that could affect such payments. Prospective purchasers of the Bonds should analyze carefully the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete Ordinance summarized herein, a copy of which are available as described herein. 1. Limitation on Enforcement of Remedies. Enforcement of the remedies under the Ordinance may be limited or restricted by laws relating to bankruptcy and insolvency, and rights of creditors under application of general principles of equity, and may be substantially delayed in the event of litigation or statutory remedy procedures. All legal opinions delivered in connection with the Bonds relating to the enforceability contain an exception relating to the limitations which may be imposed by bankruptcy and insolvency laws, and the rights of creditors under general principals of equity. 22

29 2. Suitability of Investment. An investment in the Bonds involves a certain degree of risk. The interest rate borne by the Bonds is intended to compensate the investor for assuming this element of risk. Prospective investors should carefully examine this Official Statement, including the Appendices hereto, and assess their ability to bear the economic risk of such an investment and determine whether or not the Bonds are an appropriate investment for them. 3. Additional Debt. Louisville Metro may from time to time issue additional general obligation bonds and/or notes. Such issuances of general obligation bonds or notes would increase debt service requirements and could adversely affect debt service coverage on the Bonds. 4. Construction Risk. Construction and development activities are subject to the usual risks associated with such projects, including, but not limited to, delays in the issuance of required permits or other necessary approvals, strikes, shortages of materials, adverse subsurface conditions and adverse weather conditions. 5. General Economic Conditions. Adverse general economic conditions may result in, among other adverse circumstances, reduction in occupational license fee and general tax revenues or declines in investment portfolio values, resulting in increased funding requirements; negatively impacting the results of operations and the overall financial condition of Louisville Metro. 6. Tax-Exempt Status of the Bonds. The tax-exempt status of the Bonds is based on the continued compliance by Louisville Metro and users of property financed or refinanced with proceeds of the Bonds with certain covenants relating generally to the use of the facilities financed or refinanced with the proceeds of such Bonds, arbitrage limitations and rebate of certain excess investment earnings to the federal government. Failure to comply with such covenants with respect to the Bonds could cause interest on the Bonds to become subject to federal income taxation retroactive to the original date of issue of the Bonds. In such event, an event of default of the covenants of the Ordinance may have occurred and the Bonds are subject to redemption solely as a consequence thereof, and the principal thereof may be accelerated by the Paying Agent. No additional interest or penalty is payable in the event of the taxability of interest on the Bonds. See "TAX MATTERS". 7. Bond Ratings. There is no assurance that the ratings assigned to the Bonds at the time of issuance will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for, and marketability of, the Bonds. See "RATINGS" herein. 8. Market for the Bonds. There is presently no secondary market for the Bonds and no assurance that a secondary market will develop. Consequently, investors may not be able to resell the Bonds purchased should they need or wish to do so for emergency or other purposes. 9. Opinions of Legal Counsel. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified, as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the constitutional powers of the Commonwealth of Kentucky and the United States of America and other governmental authorities, including police powers exercised for the benefit of the public health and welfare, and by 23

30 bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions on the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. TAX MATTERS Based upon certain covenants, representations and certifications of Louisville Metro, which Bond Counsel has not independently verified, and assuming continuing compliance therewith, as set forth below, in the opinion of Bond Counsel interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative tax on individuals and corporations under existing laws, regulations, rulings and decisions in effect on the date of delivery of the Bonds. The Internal Revenue Code of 1986, as amended (the "Code"), requires that Louisville Metro comply on an ongoing basis with certain obligations in order for the Bonds not to be used in such a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and for the interest on the Bonds to be and remain excludable from gross income for federal income tax purposes. Failure to meet those obligations could result in the interest on the Bonds becoming subject to federal income taxation, retroactive to the date of the Bonds. Louisville Metro has covenanted to comply with all such obligations. Provisions of the Code applicable to corporations (as defined for federal income tax purposes), would impose an alternative minimum tax on a portion of the excess "adjusted current earnings" over "alternative minimum taxable income" and therefore could subject all or a portion of the interest on the Bonds received by corporations to alternative minimum taxation. Bond Counsel has not opined on any other federal income tax consequences arising for holders of the Bonds. Interest on the Bonds will be includable in effectively connected earnings and profits for purposes of computing the branch profits tax on certain foreign corporations doing business in the United States. In addition, the Code disallows certain federal income tax deductions of certain financial institutions and property and casualty insurance companies which acquire the Bonds. From time to time, legislation is proposed which, if enacted, could alter one or more of the federal tax matters referred to above or would adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any of such proposals may be enacted and whether, if enacted, such proposals will apply to obligations (such as the Bonds) issued prior to enactment. 24

31 Certain Federal Income Tax Consequences The following is a discussion of certain federal tax matters under the Code. This discussion does not purport to deal with all aspects of federal taxation that may be relevant to particular Bondowners. Prospective Bondowners, particularly those who may be subject to special rules, are advised to consult their own tax advisor regarding potential consequences arising under the laws of any state or other taxing jurisdiction. Alternative Minimum Tax on Corporation. Section 55 of the Code imposes an alternative minimum tax on corporations equal to the excess of the tentative minimum tax for the taxable year over the regular tax for such year. The tentative minimum tax is based upon alternative minimum taxable income, which is regular taxable income with certain adjustments and increased by the amount of certain items of tax preference. Interest on tax-exempt obligations, such as the Bonds, is treated as a preference item for purposes of computing the corporate alternative minimum tax. Financial Institutions. The Code denies banks, thrift institutions and other financial institutions a deduction for 100% of their interest expense allocable to tax-exempt obligations, such as the Bonds, acquired after August 7, Borrowed Funds. The Code provides that interest paid on funds borrowed to purchase or carry tax-exempt obligations during a tax year is not deductible. In addition, under rules used by the Internal Revenue Service for determining when borrowed funds are considered used for the purposes of purchasing or when carrying particular assets, the purchase of obligations may be considered to have been made with borrowed funds even though the borrowed funds are not directly traceable to the purchases of such obligations. Property and Casualty Insurance Companies. The deduction for loss reserves for property and casualty insurance companies is reduced by 15% of the sum of certain items, including the interest received on tax-exempt bonds, such as the Bonds. Social Security and Railroad Retirement Benefits. The Code also requires recipients of certain Social Security or a Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest that is exempt from federal income tax. Branch Profits Tax. Certain foreign corporations doing business in the United States may be subject to a branch profits tax on their effectively connected earnings and profits, including taxexempt interest on obligations such as the Bonds. S Corporations. Certain S corporations that have subchapter C earnings and profits at the close of a taxable year and gross receipts more than 25% of which are passive investment income, which includes interest on tax-exempt obligations, such as the Bonds, may be subject to a tax on excess net passive income. 25

32 Kentucky Tax Exemption Under present law, the Bonds are exempt from ad valorem taxation and interest thereon is exempt from income taxation by the Commonwealth of Kentucky and any political subdivisions thereof. Original Issue Discount The Bonds or a portion thereof ("Discount Bonds") may be offered and sold to the public at a discount ("OID") from the amounts payable at maturity thereon. OID is the excess of the stated redemption price of a bond at maturity (the face amount) over the "issue price" of such bond. The issue price is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of bonds of the same maturity are sold pursuant to that initial offering. For federal income tax purposes, OID on each Discount Bond will accrue over the term of the Discount Bond. The amount accrued will be based on a single rate of interest, compounded semiannually (the "yield to maturity") and, during each semi-annual period, the amount will accrue ratably on a daily basis. The OID accrued during the period that an initial purchaser owns a Discount Bond purchased at its issue price is added to the purchaser's tax basis for purposes of determining gain or loss at the maturity, redemption, sale or other disposition of that Discount Bond. In practical effect, accrued OID on the Bonds is treated as stated interest, that is, as excludable from gross income for federal income tax purposes. In addition, OID that accrues in each year to an owner of a Discount Bond is included in the calculation of the distribution requirements of certain regulated investment companies and may result in some of the collateral federal income tax consequences discussed above. Consequently, owners of any Discount Bond should be aware that the accrual of OID in each year may result in additional federal income tax consequences. Holders of Discount Bonds should consult their own tax advisors as to the treatment of OID and the tax consequences of the purchase of such Discount Bonds other than at the issue price during the initial public offering and as to the treatment of OID for state tax purposes. Original Issue Premium The Bonds or a portion thereof ("Premium Bonds") may be offered and sold to the public at a premium ("Acquisition Premium") from the amounts payable at maturity thereon. Acquisition Premium is the excess of the cost of a bond over the stated redemption price of such bond. For federal income tax purposes, the amount of Acquisition Premium on the Premium Bonds must be amortized and will reduce the Holder's adjusted basis in that Premium Bond. However, no amount of amortized Acquisition Premium on the Premium Bonds may be deducted in determining Bondholder's taxable income for federal income tax purposes. The amount of any Acquisition Premium paid on the Premium Bonds that must be amortized during any period will be based on the "constant yield" method, using the original Bondholder's basis in such Premium Bonds and compounding semiannually. This amount is amortized ratably over that semiannual period on a daily basis. 26

33 In addition, for any Premium Bonds that are callable prior to their stated maturity, the required amortization period for the Acquisition Premium will depend on which call date produces the greatest diminution in the yield to the holder. For any Premium Bonds not callable prior to their stated maturity date, the amortization period will end on the stated maturity date. Holders of any Premium Bonds, both original purchasers and any subsequent purchasers, should consult their own tax advisors as to the actual effect of any Acquisition Premium with respect to their own federal income tax situation and as to the treatment of the Acquisition Premium for state tax purposes. Future Tax Legislation Proposed, pending or future tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the federal or state level, may adversely affect the tax-exempt status of the interest on the Bonds subsequent to their issuance. Future legislation could directly or indirectly reduce or eliminate the value of certain deductions and exclusions, including the benefit of the exclusion of taxexempt interest on the Bonds from gross income for federal income tax purposes or the exemption of interest on the Bonds from Kentucky taxation. Any such proposed legislation, actions or decisions, whether or not enacted, taken or rendered, could also adversely affect the value and liquidity of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the forgoing matters. LEGAL MATTERS Legal matters incident to the authorization, issuance and sale and delivery of the Bonds is subject to the approving opinion of Rubin & Hays, Louisville, Kentucky, Bond Counsel. The proposed form of the approving opinion of Bond Counsel is set forth in Appendix D. Certain legal matters will be passed on for the Issuer by the Jefferson County Attorney's Office, Legal Counsel for Louisville Metro. The information contained in this Official Statement under the headings "THE BONDS", "SECURITY FOR THE BONDS", "THE BOND ORDINANCE" and "TAX MATTERS" has been reviewed by Bond Counsel to determine that such information conforms in substance to the proceedings and laws relating to the issuance of the Bonds that are summarized in such information; but Bond Counsel has not undertaken to review the accuracy or completeness of statements and data otherwise contained in this Official Statement, including the Appendices, and expresses no opinion thereon and assumes no responsibility in connection therewith. LITIGATION No litigation is pending or, to the knowledge of Louisville Metro, threatened in any court (i) to restrain or enjoin the issuance or delivery of the Bonds, or the collection of revenues pledged or to be pledged to pay the principal of and interest on the Bonds or (ii) in any way contesting or affecting the validity of the Bonds or the Bond Ordinance, or the power to collect and pledge the revenues to pay the Bonds, or contesting the power or authority of Louisville Metro to issue the Bonds. 27

34 Louisville Metro will deliver a certificate at closing to the effect that there is no action, suit or proceedings known to be pending or threatened restraining or enjoining the execution or delivery of the Bonds or the Ordinance or in any way contesting or affecting the validity of the foregoing. DISCLOSURE COMPLIANCE In accordance with the requirements of Rule 15c2-12 (the "Rule") promulgated by the Securities and Exchange Commission (the "SEC"), the Issuer has agreed has agreed in a Continuing Disclosure Agreement (the "Disclosure Agreement") to provide or cause to be provided through a designated agent (the "Agent"), in a timely manner not in excess of 10 business days after the occurrence of such event, to the Electronic Municipal Market Access system ("EMMA") at notice of the occurrence of any of the following events with respect to the Bonds: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) principal and interest payment delinquencies; non-payment related defaults, if material; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds; modifications to rights of the Bondholders, if material; Bond calls, if material and tender offers; defeasances; release, substitution or sale of property securing repayment of the Bonds, if material; rating changes; bankruptcy, insolvency, receivership or similar event of the Issuer or the borrowers; consummation of a merger, consolidation, or acquisition involving the Issuer or the borrowers or the sale of all or substantially all of the assets of the Issuer or the borrowers, other than in the ordinary course of business, the entry into a definitive agreement to undertake such action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and/or appointment of a successor or additional trustee or the change of name of a trustee, if material. The Issuer may from time to time choose to provide notice of the occurrence of certain other events, in addition to those listed above, if the Issuer determines that such other event is material with respect to the Bonds, but the Issuer does not undertake to commit to provide any such notice of the occurrence of any material event except those events listed above. The Issuer also agrees to provide to EMMA, in accordance with the Rule, its Annual Financial Report (the "Annual Report") which contains certain annual financial data of the Issuer. The financial data shall be available on or before 180 days after the end of each fiscal year (June 30), beginning with the fiscal year ending June 30, 2014 and each fiscal year thereafter. 28

35 If the Issuer is unable to provide to EMMA an Annual Report by the date required in the Indenture, then the Issuer shall send a notice to EMMA notifying it of the inability, at that time, to file the Annual Report. If the Issuer's fiscal year changes, then the Issuer shall send a notice of such change to EMMA. If such change will result in the Issuer's fiscal year ending on a date later than the ending date prior to such change, the Issuer shall provide notice of such change to EMMA on or prior to the deadline for filing the Annual Report in effect when the Issuer operated under its prior fiscal year. Such notice may be provided to EMMA, along with the Annual Report, provided that it is filed at or prior to the deadline described above. As of the date of this Official Statement, the Issuer is in compliance with the reporting requirements of the Rule for all undertakings for which they are an "obligated person" as defined in the Rule. However for the year 2008 and 2009 there was no record or confirmation of a filing with a nationally recognized municipal securities information repository ("NRMSIR") designated by the SEC of the Issuer's Annual Report though the Issuer had procedures for filing and was in compliance with filings requirements for fiscal years prior to To provide the public with proper disclosure of the Issuer's Annual Reports, the Issuer has filed with EMMA it's Annual Reports for fiscal years 2008 and 2009, after the designated time requirement for filing, to provide a single filing location for the Issuer's Annual Reports for the fiscal years 2008 through The Issuer has policies to continue to ensure compliance with the Rule and timely filings in the future and the Chief Financial Officer of the Issuer has been designated as the party responsible for assuring that future filings are performed on a timely basis. Financial information regarding the Issuer can be obtained from the Chief Financial Officer of the Issuer, 611 West Jefferson Street, Louisville, Kentucky The obligations of the Issuer described above will remain in effect only for such period that (i) the Bonds are outstanding in accordance with their terms and (ii) that Issuer remains an obligated person with respect to the Bonds within the meaning of the Rule. The Issuer reserves the right to terminate its obligation to provide notices of material events, as set forth above, if and when the Issuer no longer remains an obligated person with respect to the Bonds within the meaning of the Rule. The Issuer acknowledges that its undertaking pursuant to the Rule described under this heading is intended to be for the benefit of the Bondholders (including holders of beneficial interests in the Bonds). The requirements for disclosure in the Disclosure Agreement may be amended, if the Issuer receives an opinion of independent legal counsel to the effect that: (i) such amendment is made in connection with a change in circumstances that arises from a change in legal requirements, a change in law or a change in the types of activities in which the Issuer is engaged; (ii) the amendment would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and 29

36 (iii) such amendment does not materially impair the interests of the Bondholders. In the event of a failure of the Issuer to comply with the disclosure requirements set forth in the Indenture, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Indenture. A default in compliance with the disclosure requirements under the Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under the Disclosure Agreement in the event of any failure of the Issuer to comply with the disclosure requirements shall be an action to compel performance. RATINGS The Bonds have been assigned a rating of "Aa1" by Moody's Investors Service ("Moody's); "AA+" by Standard & Poor's Rating Group ("Standard & Poor's") and "AAA" by Fitch Rating Service ("Fitch") based upon the underlying credit of the Issuer. This rating reflects only the views of Moody's, Standard & Poor's and Fitch, respectively, and any explanation of the significance of this rating must be obtained from Moody's, Standard & Poor's and Fitch. There is no assurance that this rating will continue for any given period of time or that it will not be revised or withdrawn entirely if, in the judgment of Moody's, Standard & Poor's and/or Fitch, as the case may be, circumstances so warrant. Bondowners or prospective Bondowners should contact the Underwriter for information on the then current ratings, if any, on the Bonds. INDEPENDENT AUDITORS The financial statements of Louisville Metro, as of and for the years ended June 30, 2013, included in this Official Statement in Appendix B have been audited by Crowe Horwath LLP, independent auditors, as stated in their report appearing herein. FINANCIAL ADVISOR Prospective bidders are advised that J.J.B. Hilliard, W.L. Lyons, LLC ("Hilliard Lyons") has been employed as Financial Advisor in connection with the issuance of the Bonds. Hilliard Lyons' fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery thereof. UNDERWRITING (" ") bid to purchase the Series 2014D Bonds from Louisville Metro at a purchase price equal to $, which represents the aggregate principal amount of the Series 2014D Bonds, less the original issue and Underwriter's discounts. is committed to purchase all of the Series 2014D Bonds if any are purchased. (" ") bid to purchase the Series 2014E Notes from Louisville Metro at a purchase price equal to $, which represents the aggregate 30

37 principal amount of the Series 2014E Notes and less the original issue and Underwriter's discounts. is committed to purchase all of the Series 2014E Notes if any are purchased. (" ") bid to purchase the Series 2014F Bonds from Louisville Metro at a purchase price equal to $, which represents the aggregate principal amount of the Series 2014F Bonds, less the original issue and Underwriter's discounts. is committed to purchase all of the Series 2014F Bonds if any are purchased. VERIFICATION OF MATHEMATICAL ACCURACY Chris D. Berens, CPA, PC (the "Verification Agent") will verify from the information provided to them the mathematical accuracy as of the date of the closing on the Bonds of (1) the computations contained in the provided schedules to determine that the anticipated revenues from the securities and cash deposits listed in the Financial Advisor's schedules, to be held in escrow, will be sufficient to pay, when due, the principal, interest and call premium payment requirements, if any, of the Refundable Bonds and (2) the computations of yield on both the securities and the Bonds contained in the provided schedules used by Bond and Tax Counsel in its determinations that the interest on the Bonds is exempt from gross income for federal tax purposes. The Verification Agent will express no opinion on the assumptions provided to them, nor as to the exclusion of interest from gross income on the Bonds. MISCELLANEOUS The references herein to the Act, the Indenture and the Lease are brief outlines of certain provisions thereof and do not purport to be complete. For full and complete statements of the provisions thereof, reference is made to the Act and the Bond Ordinance. Copies of such documents are on file at the office of the Paying Agent. Louisville Metro has approved and caused this Official Statement to be executed and delivered. The financial information supplied by Louisville Metro and reproduced herein is represented by Louisville Metro to be correct. Statements made in this Official Statement involving estimates, projections or matters of opinion, whether or not expressly so stated, are intended merely as such and not as representations of act. No dealer, broker, salesman or other person has been authorized by Louisville Metro or the Financial Advisor to give any information or representations, other than those contained in this Official Statement, and if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. Except when otherwise indicated, the information set forth herein has been obtained from Louisville Metro and believed to be reliable; however, such information has not been verified as to accuracy or completeness by, and is not to be construed as a representation by the Financial Advisor or by Bond Counsel. The delivery of this Official Statement at any time does not imply that information herein is correct as of any time subsequent to the date hereof. 31

38 THE PAYING AGENT HAS NOT PARTICIPATED IN THE PREPARATION OF THIS OFFICIAL STATEMENT AND HEREBY DISCLAIM ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF THE INFORMATION. The Cover Page hereof and the Appendices hereto are integral parts of this Official Statement and must be read together with all of the foregoing statements. LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT Attest: By Greg Fischer, Mayor By Steve Rowland, Chief Financial Officer 32

39 APPENDIX A Information Statement of Louisville/Jefferson County Metro Government

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41 Organization THE METRO GOVERNMENT General. In the November 7, 2000 General Election, local voters approved a consolidation of the governmental and corporate functions of the City of Louisville, Kentucky (the City ) and the County of Jefferson, Kentucky (the County ) into a single political entity, and pursuant to legislation enacted by the Kentucky General Assembly, the Louisville/Jefferson County Metro Government (the Metro Government or Metro Louisville ) commenced operations effective January 6, 2003, replacing and superseding the governments of the City and the County. Neither the City nor the County continues to exist as an independent governmental entity and the boundaries of the City of Louisville and Jefferson County are now co-extensive. All executive and administrative power of the consolidated local government is vested in the office of the Mayor. The Mayor of the consolidated local government possesses substantially all the power and authority possessed by the Mayor of the City of Louisville and the former Jefferson County Judge/Executive prior to the effective date. The legislative authority of the consolidated local government is vested in a consolidated local governmental council composed of twenty-six (26) council members elected from each of twenty-six council districts for staggered four-year terms. Fiscal Year The Metro Government operates on a fiscal year, which commences July 1 and ends June 30. Budgeting Procedures General. An annual appropriated budget is adopted for the General Fund on a cash basis (non- GAAP). This appropriated budget includes all transfers to capital projects funds for which transfers are designated for subsequent years capital expenditures or for transfer to other capital or debt service funds or accounts. Formal budgets are not adopted for the Special Revenue Fund or for the Debt Service Funds because bond indentures and other relevant contractual provisions require specific payments to and from these funds annually and transfers are budgeted in the General Fund to comply with these requirements. All annual appropriations from the General Fund lapse at year-end. Departments may request Metro Council authorization for budgetary carryforwards into the next fiscal year. When authorized, those are reported as committed fund balance. On or before June 1 of each year, pursuant to state statute, the Mayor proposes an Executive Budget to the Metro Council, incorporating an estimate of revenues and recommended appropriations from the General Fund. The Metro Council may hold hearings and discuss and amend the Executive Budget. On or before June 30 of each year, as required by state statute, the Metro Council adopts the Executive Budget, as it may have been amended, as the approved budget for the fiscal year beginning July 1. An affirmative vote of a majority of the Metro Council is required to change the proposed appropriations or to revise revenue estimates contained in the Executive Budget. An affirmative vote of the majority of the Metro Council is also required to amend the budget once it has been approved or to approve any supplemental appropriations. All budget adjustments at the department level must be approved by the Chief Financial Officer consistent with the approved budget. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriations, is utilized in the governmental funds. Encumbrances are not treated as expenditures or liabilities because the commitments will be honored during the subsequent year. A-1

42 Capital Improvements Budget. The capital improvements budget and program for the Metro Government is prepared annually to include a program of proposed capital expenditures for the ensuing fiscal year. The Mayor submits the capital improvements budget, based on information from all officers, departments, boards, commissions and other agencies requesting funds from the Metro Government for capital improvements, to the Council and recommends those projects to be undertaken during the ensuing fiscal year and the method of financing them. The Mayor s recommendation notes the impact of proposed projects on the debt structure of the Metro Government and includes in the appropriate current operating budget any projects to be financed from current revenues for the ensuing fiscal year. The Council has the power to accept, with or without amendment, or reject, the proposed program and proposed means of financing. The Council cannot authorize an expenditure for the construction of any building, structure, work or improvement, unless the appropriation for such project is included in its capital improvements budget, except to meet a public emergency threatening the lives, health or property of the inhabitants, when passed by two-thirds vote of the membership of the Council. Accounting Pursuant to Kentucky statute, independent auditors annually audit the financial statements of the Metro Government. The Basic Financial Statements and other financial information are prepared in accordance with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board. In addition to meeting the requirements set forth in state statutes, Metro Government audits are also designed to meet the requirements of the federal Single Audit Act of 1984 and the Single Audit Amendments of 1996, and related OMB Circular A-133. Copies of the Comprehensive Annual Financial Report ( CAFR ) are available through the Chief Financial Officer, Office of Management and Budget, Metro Government, 611 West Jefferson Street, Louisville, Kentucky and at The Metro Government manages its financial reporting through the use of categories of fund types and account groups. Funds are classified into three categories: governmental, proprietary, and fiduciary. The Metro Government reports the following major governmental funds: The General Fund is the Government s primary operating fund which accounts for all of the activities of the general operations of the Government, except those required to be accounted for in another fund. The Special Revenue Fund is used to account for the collection and disbursement of earmarked money, primarily federal and state grant money. The Capital Projects Fund is used to account for the acquisition or construction of general capital assets. The Metro Government reports the following non-major governmental funds: The Debt Service Fund is used to account for resources set aside to meet current and future debt service requirements on general long term debt. The Capital Projects Fund of certain blended component units accounts for the acquisition or construction of general capital assets. Proprietary funds distinguish operating revenues and expenses from non-operating items. The Internal Service Fund, a proprietary fund, accounts for the cost of purchased insurance, the operation and administration of the Metro Government s self-insurance programs, and the cost of administering and collecting the Metro Government s occupational tax. A-2

43 Revenues All other Metro Government proprietary activities qualify and are reported as discretely presented component units: The Louisville and Jefferson County Riverport Authority ( Riverport ) is a legally separate entity that was established in order to develop and maintain an industrial riverport complex on a self-supporting basis utilizing a rate structure designed to produce revenues sufficient to fund debt service requirements, operating expenses and adequate working capital. The Louisville Water Company ( LWC ) is a legally separate entity that provides water services to customers on a self-supporting basis utilizing a rate structure designed to produce revenues sufficient to fund debt service requirements, operating expenses and adequate working capital. The Parking Authority of River City, Inc. ( PARC ), a non-profit corporation, provides parking services to customers on a self-supporting basis utilizing a rate structure designed to produce revenues sufficient to fund debt service requirements, operating expenses and adequate working capital. The Transit Authority of River City ( TARC ) is a legally separate entity that operates the mass transit system in the metropolitan area. Metro Government does not provide any funding to TARC, but it does administer the Mass Transit Trust Fund, which receives occupational tax revenues and remits those amounts to TARC. The Metropolitan Sewer District ( MSD ) is a legally separate entity that operates to provide sewer services to the residents of the metropolitan area on a self-supporting basis utilizing a rate structure designed to produce revenues sufficient to fund debt service requirements, operating expenses and adequate working capital. The Kentucky Science Center, Inc. ( KSC ) provides museum exhibits and scientific programs to the public. Financial support is received from admissions, merchandise sales, memberships, parking fees, donations, and an appropriation from the Metro Government. Additionally, the Metro Government reports the following fund types: Waterfront Development Corporation ( WDC ) is a legally separate entity that provides planning, construction services, maintenance and event production and coordination for public parks along the Ohio River waterfront in the Louisville Metro area. Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments. Metro Government reports the following fiduciary funds: Agency Funds, which are custodial in nature, are used to account for assets held by elected officials and other departments as agents for individuals, governmental entities and others. The Private Purpose Trust is used to account for a discount loan program. Pension Benefit and Trust Funds are used to account for the Firefighters Pension Fund and the Policemen s Retirement Fund. The Metro Government derives its revenues from a direct tax levy on real and personal property, occupational tax, bank and franchise taxes, earned income, fees, and Commonwealth of Kentucky (the Commonwealth ) and Federal payments. Financial data for the fiscal year ended June 30, 2013 indicate that occupational taxes accounted for 55.8% of all revenues available to the General Fund. Property tax collections totaled 24.5% for the fiscal year ended June 30, A description of each major revenue category follows: A-3

44 Taxes These include occupational taxes, ad valorem property taxes, the levy of which is statutorily limited, bank and life insurance shares, franchises, public service corporations, agricultural products, whiskey, deeds and other miscellaneous taxes. Intergovernmental Under this revenue category are payments to the Metro Government by other public divisions (Federal, Commonwealth or other governmental units or agencies). Licenses and Permits This category includes charges for licenses and permits issued by departments, agencies, boards and commissions of the Metro Government. Fines and Forfeitures This category includes collections of obligations imposed by the courts, law enforcements and agencies charged with the care of prisoners. Charges for Services These are fees and charges for activities and services provided by agencies of the Metro Government. Donations - Revenue received from various sources for specific purposes. Dividends - Revenue received from the Louisville Water Company stock that is wholly owned by Metro Government. Investment Income Interest on investments. Miscellaneous Revenue Includes (i) commissions and fees collected by certain officials for certain activities of the Metro Government; (ii) proceeds from confiscation of property; (iii) compensation for loss, sale or damage to property; and (iv) miscellaneous. Major sources of revenue include the occupational tax and ad valorem property taxes. The occupational tax is levied at the statutory rate of 1.25% on employee withholdings and business net profits. Occupational taxes are collected by the Louisville & Jefferson County Revenue Commission. In addition, a 5.0% license tax on the amount of premiums written by insurance companies doing business within Metro Louisville is also collected by the Revenue Commission. After setting aside sufficient funds to cover General Obligation annual debt service requirements and annual Revenue Commission operating expenses, the balance of collections is remitted monthly to the Metro Government. The property tax is levied each August or September by the Metro Council on the assessed value listed as of the prior January 1 for all real and certain personal property within the Metro Government. Taxable values are assessed periodically by the Property Valuation Administrator who is required by law to maintain total assessments at approximately 100% of fair market value. The Property Valuation Administrator must provide an official assessment for each class of property each year. The State Local Finance Officer must certify to the Metro Government the maximum permissible ad valorem tax rates on the basis of that assessment and the Metro Government may levy the maximum permissible rate or a lower rate. However, if a tax rate is levied on real property which will produce more revenue than the maximum permissible rate, the excess levy is subject to a recall vote. The Metro Government is not currently at the maximum tax rate. INVESTMENT PRACTICES The funds of the Metro Government are managed and invested pursuant to applicable standards of the Metro Council, the Kentucky Revised Statutes (KRS ) and respective bond indentures which allow investment in the following types of securities: Obligations of the United States and of its agencies and instrumentalities, including repurchase agreements; obligations backed by the full faith and credit of the United States, United States government agency, or of any corporation of the United States A-4

45 government; certificates of deposit issued by any bank or savings and loan institution which are insured by the Federal Deposit Insurance Corporation; highly rated uncollateralized certificates of deposit, bankers acceptances, and commercial paper; bonds or certificates of indebtedness of the Commonwealth of Kentucky and its agencies and instrumentalities; highly rated securities issued by a state or local government, or any instrumentality or agency in the United States; and mutual funds which include the above eligible investments. The investments of the Metro Government are managed to accomplish the following hierarchy of objectives: (1) preservation of principal; (2) maintenance of liquidity; and (3) maximization of returns. PENSION PLANS Metro Government, LWC, TARC, MSD and Riverport contribute to the County Employees Retirement System ( CERS ), which is a cost-sharing, multiple-employer defined benefit pension plan administered by Kentucky Retirement Systems, an agency of the Commonwealth of Kentucky. PARC and WDC participate as part of Metro Government s contribution. The CERS provides for retirement, disability and death benefits to plan members and beneficiaries. The contribution requirements of plan members and Metro Government are established and may be amended by the CERS Board of Trustees. Members of the CERS Board of Trustees closely observe the future costs of both benefit improvements and changes in pension trends of employees. Recommendations of actuaries are carefully considered and appropriate measures are taken to ensure that the pension plans are actuarially sound. Most of the former City s firemen and policemen transferred to CERS in 1989 and 1986, respectively. For those who did not transfer, Metro Government contributes to the Firefighter s Pension Fund and the Policemen s Retirement Fund (the Funds ). Both of these are single employer defined benefit pension plans. The Funds provide retirement benefits and both Funds include death and disability benefits whereby the surviving spouse or disabled employee is entitled to receive certain benefits. Membership of each plan consisted of the following at June 30, 2013: Firefighter s Pension Fund Policemen s Retirement Fund Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Vested active plan participants 0 1 In June 2012, the Governmental Accounting Standards Board ( GASB ) issued Statement No. 67, Financial Reporting for Pension Plans, and Statement No. 68, Accounting and Financial Reporting for Pensions. These statements will be implemented by Metro Government as applicable during fiscal years 2014 and 2015 respectively. PUBLIC EMPLOYEES REPRESENTATION As of September 1, 2014, Louisville Metro Government has 5,401 full-time employees of which 4,124, or 76.4%, are represented by unions. Metro government currently has 24 collective bargaining units. Of these 5 have expired contracts, 8 have contracts expiring on June 30, 2015, and 11 are settled. The largest contract the FOP Lodge 614 LMPD Officers & Sergeants--was settled in 2013 and will remain in effect until June 30, That contract provides that all new hires after July 1, 2013, under the contract will be provided access to the general Metro health plans rather than being eligible for an FOP only health plan. Metro government has moved to a labor strategy based on standardizing the definition of overtime eligible labor throughout all contracts and limiting the growth in total compensation (Cost of Living Adjustments, step increases, or other terms of compensation) not to exceed overall average revenue growth. A-5

46 ECONOMIC AND DEMOGRAPHIC PROFILE OF LOUISVILLE AND JEFFERSON COUNTY Introduction The Louisville/Jefferson County Metro Government ( Metro Louisville ), as created in January 2003 with the merger of the City of Louisville and Jefferson County, is located in the north central part of Kentucky on the south bank of the Ohio River and encompasses more than 385 square miles. It is located in the geographic center of the Ohio River Valley region at a focal point where railroads, highways and the Ohio River converge, offering excellent accessibility to all major markets and is close to the population center of the United States. Metro Louisville, the largest municipality in the state, is a commercial, industrial, medical, educational, cultural and financial center for the greater metropolitan area. Louisville is widely known as the Derby City, because of the running of the famed Kentucky Derby each May at Louisville s Churchill Downs race track. Population Growth The following table sets forth information concerning population growth in Louisville and Jefferson County. Comparison with the Commonwealth of Kentucky and the United States serves to illustrate relative growth. THE METRO GOVERNMENT OF LOUISVILLE AND JEFFERSON COUNTY DEMOGRAPHIC STATISTICS % Change Estimated % Change Area Louisville/Jefferson County 693, , % 604, , % Kentucky 4,041,769 4,339, % 4,379,730 4,395, % United States 281,421, ,745, % 313,914, ,128, % Source: Bureau of the Census website Per Capita Personal Income Jefferson County $34,622 $36,042 $37,062 $39,651 $40,629 $41,356 $39,075 $40,196 $41,828 $43,408 Louisville MSA 31,673 32,923 33,820 35,954 37,095 38,066 36,337 37,400 39,037 40,970 Kentucky 26,347 27,492 28,486 30,034 31,175 32,516 31,754 32,504 33,989 35,463 United States 32,295 33,909 35,452 37,725 39,506 40,947 38,637 39,791 41,560 39,731 Source: Bureau of Economic Analysis website A-6

47 Employment The following table shows the labor force segments of the eight county Louisville Metropolitan Statistical Area for calendar years 2004 through Louisville MSA EMPLOYMENT BY INDUSTRY In Thousands Industry % Change Construction & Mining (24.0) Manufacturing (8.7) Trade, Transportation & Utilities (2.9) Financial Activities Information (5.9) Professional & Business Services Education and Health Services Leisure & Hospitality Other Services (11.7) Government Total Source: Bureau of Labor Statistics website Unemployment Rates The unemployment rate for the metropolitan area was 6.0% as of August The following table sets forth the unemployment percentage rates in Louisville/Jefferson County, the MSA, the State and the United States for the calendar years (1) Jefferson County 5.5% 6.1% 5.9% 5.5% 6.5% 10.1% 10.4% 10.0% 8.6% 8.1% 8.0% Louisville MSA Kentucky United States Source: Labor Market Statistics, Local Area Unemployment Statistics Program. US Department of Labor, Bureau of Labor Statistics. (1) Preliminary, as of August 2014 A-7

48 THE METRO GOVERNMENT OF LOUISVILLE AND JEFFERSON COUNTY MISCELLANEOUS STATISTICS (CONTINUED) Twenty-Five Largest Employers in the Louisville MSA, excluding government agencies Product / Service Number of Employees 1. United Parcel Services Inc.* Global commerce services 20, Humana Inc.* Health insurance 11, Norton Healthcare Inc.* Healthcare 9, KentuckyOne Health Inc. Healthcare 8, Ford Motor Co. Automotive manufacturer 8, GE Appliances & Lighting* Home appliance and lighting products 6, The Kroger Co. Grocery retailer 5, Baptist Healthcare Systems Inc.* Healthcare 4, Catholic Archdiocese of Louisville* Schools/churches/related activities 2, LG&E and KU Energy LLC Utility 2, Kindred Healthcare Inc.* Healthcare 2, Floyd Memorial Hospital & Health Services Healthcare 1, Yum! Brands, Inc.* Quick-service restaurants 1, Publishers Printing Co. LLC Printer 1, Securitas Security Services USA Inc. Security Services 1, Horseshoe Southern Indiana Entertainment 1, Lowe s Cos. Inc. Home improvement retailer 1, Clark Memorial Hospital Healthcare 1, Time Warner Cable Telecommunications 1, Brown-Forman Corp. Manufacturer 1, JP Morgan Chase & Co. Financial Services 1, Papa John s International Inc.* Quick-service restaurants 1, Seven Counties Services, Inc. Healthcare 1, Anthem Blue Cross and Blue Shield Kentucky Health Benefits 1, Samtec Inc. Manufacturer 1,052 * Indicates Corporate, U.S. Division, or Regional Headquarters. Source: Business First of Louisville, December A-8

49 THE METRO GOVERNMENT OF LOUISVILLE AND JEFFERSON COUNTY MISCELLANEOUS STATISTICS (CONTINUED) Major Public Employers in Louisville/Jefferson County Area Product / Service Number of Employees 1. Jefferson County Public Schools K-12 Public education 14, University of Louisville Higher education 6, Louisville-Jefferson County Metro Government Government service 5, Kentucky State Government Government service 4, U.S. Postal Service Postal services 2, U.S. Government Government service 2, Robley Rex VA Medical Center Medical facility 1, New Albany-Floyd County School Corp K-12 Public education 1, Bullitt County Public Schools K-12 Public education 1, Oldham County Board of Education K-12 Public education 1, U.S. Census Bureau Government services 1, Greater Clark County Schools K-12 Public education 1, Shelby County Public Schools K-12 Public education 1, Jefferson County Community College Higher education Transit Authority of River City Public transportation 639 Source: Business First of Louisville, September Education The School System had its beginning in 1975 with the merger of the Louisville and Jefferson County School Systems. The Jefferson County School District is governed by a seven-member Board of Education. Members represent individual election districts, and serve staggered four-year terms. The members elect a chairperson and vice chairperson from the members. The Superintendent is Secretary of the Board and its executive officer. The school system is the largest district in Kentucky and is the 28th largest system in the nation. The following tables summarize certain information regarding the School System s building facilities and enrollment and attendance trends. School System Public Education Facilities Educational Level Number of Buildings School Year Enrollment Elementary 92 36,897 Middle 27 21,310 Senior 27 27,695 Special Education 10 2,432 Total ,604 A-9

50 School System Public Schools Enrollment and Attendance School Year Enrollment (1) Average Daily Attendance ,412 83, ,850 84, ,852 84, ,609 85, ,045 85, ,767 86, ,070 87,017 (1) Official enrollment as reported by the Commonwealth of Kentucky in September of each school year; are estimated totals. The Louisville Metropolitan Statistical Area has 24 colleges and universities, including the University of Louisville, Spalding University, Indiana University-Southeast, Bellarmine University and Jefferson Community & Technical College. Total higher education enrollment exceeds 61,000 students annually. Eight of Louisville MSA s institutions of higher education offer graduate programs. Several commercial and vocational schools are located in the Louisville MSA. Manufacturing In 2013, an average of 74,100 persons were employed in the manufacturing industries in the MSA, engaging in a wide range of activities and producing a variety of products, including food, motor vehicle equipment, textiles and furnishings, machinery and electronics, and consumer products. Louisville MSA s largest manufacturing employer is Ford Motor Co., with some 8,300 employees, with two separate manufacturing facilities located in Louisville. The second largest, General Electric Company, with some 6,000 employees, also has its plant located in Louisville. Transportation The Louisville Metro Area is a regional transportation center with major rail and river lines and three interstates running through its boundaries. The metropolitan area is a major air and logistics hub. Louisville is home to the $1.1 billion UPS Worldport hub. Louisville Metro is home to a thriving public transportation network with annual bus ridership on the Transit Authority of River City (TARC) of approximately 15 million people. Three major interstate highways pass directly through Metro Louisville; Interstate 65 and 71 are north-south routes while Interstate 64 is a major east-west route. Interstate 264 (Watterson Expressway), and Interstate 265 (Snyder Freeway) serve as limited-access bypasses around the City. Metro Louisville is served by six railroad companies, which provide freight service to principal markets throughout the United States. Scheduled commercial airline service is available at Louisville International Airport, four miles south of downtown Metro Louisville. Bowman Field, five miles east of downtown, maintains three paved runways for private plane use. The Louisville and Jefferson County Riverport Authority and several privately owned facilities provide public-use port facilities. Metro Louisville also serves as a U.S. Customs Port of Entry. The Ohio River Bridges Project is underway and will increase cross-river mobility by improving safety, alleviating traffic congestion and connecting highways. The project will stimulate the economy of A-10

51 the entire Louisville-Southern Indiana region. According to the Federal Highway Administration s Record of Decision, to meet these needs, two crossings are necessary one in the downtown area and one eight miles upstream in the metro area s growing East End. The Downtown Crossing will connect downtown Louisville and Jeffersonville, Ind., running parallel to the existing Kennedy Bridge. The East End Crossing will be located eight miles upstream and connect Prospect, Ky. and Utica, Ind. The Kentucky Transportation Cabinet (KYTC) has taken the lead on financing, designing and constructing the Downtown Crossing. Walsh Construction Co. of Chicago was awarded the job of completing the design and building the Downtown Crossing. Innovations by the Walsh Design Build Team will result in completion of the project in 2016 exceeding KYTC expectations. Work includes: Building a new I-65 Bridge with six northbound lanes Reconfiguring Spaghetti Junction (I-64, I-65 and I-71) Reconfiguring Indiana roadways and bridge approaches Rehabbing the Kennedy Bridge (I-65) with six southbound lanes The Indiana Department of Transportation (INDOT), in conjunction with the Indiana Finance Authority (IFA), is responsible for overseeing the financing, design and construction of the East End Crossing. WVB East End Partners has been awarded the job of constructing the project along with completing the design and financing. Highlights of the East End Crossing include: Building a new East End bridge eight miles upstream from downtown Louisville Extending the Snyder Freeway (841/265) in Kentucky to the new bridge, including a 1,700-foot tunnel under the Drumanard Estate in Prospect Constructing a four-mile new terrain highway in Indiana which will extend the Lee Hamilton Highway (62/256) to the new bridge Construction Construction in Metro Louisville is illustrated by the following table describing the number and value of building permits issued by the Department of Inspections, Permits & Licenses of the Metro Government. Construction has grown through most of the 1990 s. For the period from January 1, 2003 through August 31, 2014, Metro Louisville has seen a little over $10.1 billion in permit activity. (The Remainder of This Page Intentionally Left Blank) A-11

52 THE METRO GOVERNMENT OF LOUISVILLE AND JEFFERSON COUNTY CONSTRUCTION AND BUILDING PERMIT ACTIVITY Ten-Year Summary CALENDAR YEAR RESIDENTIAL CONSTRUCTION NUMBER OF PERMITS VALUE NON-RESIDENTIAL CONSTRUCTION NUMBER OF PERMITS VALUE REPAIRS, ALTERATIONS, & INSTALLATIONS NUMBER OF PERMITS VALUE OTHER NUMBER OF PERMITS VALUE TOTAL PERMIT VALUE ,658 $578,453,464 1,378 $229,474, $252,851, $42,500,699 $1,103,279, , ,602,387 1, ,971,472 1,498 61,433,974 1,844 29,723, ,731, , ,483,122 1, ,457,258 1,539 80,018,876 1,628 27,281,042 1,551,240, , ,330, ,964,521 1, ,683,720 1, ,423, ,402, , ,932, ,194,948 1, ,907,779 2, ,947,540 1,289,983, , ,901, ,789,107 1, ,756, ,138, ,835, ,622, ,108,476 2, ,567, ,674, ,972, ,998, ,653,882 2, ,105, ,750, ,507, ,168, ,838,858 2, ,422, ,057, ,488, , ,839, ,793,899 3, ,080, ,681, ,395, , ,863, ,014,653 2, ,045, ,061, ,525,039 1/1/14-8/31/ ,131, ,140,345 1, ,416, ,744, ,432,659 Source: Metro Louisville/Jefferson County Department of Inspections, Permits, and Licenses. Tourism Recreation and convention travelers spend about $1.4 billion a year in Louisville. The Kentucky Fair & Exposition Center features 1.3 million square feet of ground level exhibit space, making it the fifth largest center in the country. Downtown, the Kentucky International Convention Center (KICC) also serves as a center for business and convention travel. The metro area is home to more than 130 hotels containing over 18,000 hotel rooms. Medical Facilities Louisville s strong downtown medical complex includes Norton Hospital, a 859 bed facility; Jewish Hospital, a 462 bed facility; Kosair Children s Hospital, a 271 bed facility; and, University of Louisville Hospital, a 404 bed facility. Norton includes a cancer center and spine institute, as well as two additional locations: Norton Audubon, a 480 bed facility and Norton Suburban Hospital, a 373 bed facility. Jewish Hospital is home to a hand-surgery institute, which was the first in the United States to perform a successful hand transplant; its heart surgery program was the first in the nation to implant an AbioMed artificial heart. University Hospital specializes in trauma care and houses a burn unit that serves the western half of the state. The community has a number of regional hospitals and outpatient care centers as well. The Department of Veterans Affairs is in the master planning and design phase to construct a new state-of-the-art medical center in Louisville, Kentucky which will begin in 2016 and is anticipated to be completed in The new $900 million Robley Rex VA Medical Center will have clinics specializing in primary care, surgery, and mental health, in addition to 110 inpatient beds. The new facility will also have a geriatric and extended care program, a home-based primary care program, and a substance abuse residential rehabilitation treatment program. Recreation and Cultural Churchill Downs, home to the Kentucky Derby, offers two seasons of thoroughbred horse racing. Louisville is also home to the Louisville Bats, a Triple-A affiliate of the Cincinnati Reds baseball team. Metro Parks operates 123 parks on about 14,000 acres, including the 6,057-acre Jefferson Memorial Forest, the nation s largest municipally owned woods. Louisville has a professional orchestra, opera, ballet, and children s theater. Actors Theatre of Louisville is nationally known for its annual Humana Festival of New A-12

53 American Plays. Louisville s Zoo attracted 881,776 children and adults during fiscal year 2014; its Gorilla Forest won the 2003 exhibit award from the American Zoo and Aquarium Association. The city s Waterfront Park serves about 1.5 million visitors annually. Louisville museums include The Speed Art Museum, the Louisville Slugger Museum, the Kentucky Science Center and the Kentucky Museum of Art and Craft. The Frazier International History Museum opened in 2004 and is the only location outside Great Britain to see the collection of its Royal Armories. The Muhammad Ali Center and 21C, a modern art museum, opened in The KFC Yum! Center is the first sports and entertainment arena built in Louisville, Kentucky in 54 years. With a project cost of $238 million, the 721,762 square foot arena opened on October 10, KFC Yum! Center is home to the University of Louisville men's and women's basketball teams with a seating capacity of 22,090. The Center is a significant downtown anchor, located on the Ohio River, with connections to existing centers of activity, including Slugger Field to the east, Museum Row to the west, and northward to Waterfront Park on the Ohio River. MISCELLANEOUS The information contained in this Information Statement has been compiled from official and other sources deemed to be reliable, and while not guaranteed as to completeness or accuracy, is believed to be correct as of this date. Any statements made in this Information Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representation of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Information Statement nor any sale of securities made using this Information Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Metro Government since the date hereof. A-13

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55 APPENDIX B Comprehensive Annual Financial Report of Louisville/Jefferson County Metro Government to include Audited Financial Statements for the Period Ended June 30, 2013

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58 COMPREHENSIVE ANNUAL FINANCIAL REPORT LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT LOUISVILLE, KENTUCKY Fiscal Year Ended June 30, 2013 GREG FISCHER Mayor Prepared by: Office of Management & Budget

59 LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2013 TABLE OF CONTENTS INTRODUCTORY SECTION Letters of Transmittal... i Government Finance Officers Association Certificates of Achievement... vi Organization Chart... vii Mayor, Metro Council, and Office of Management and Budget Officials... viii FINANCIAL SECTION Independent Auditors Report...1 Management s Discussion and Analysis...5 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position...17 Statement of Activities...18 Fund Financial Statements: Balance Sheet - Governmental Funds...20 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds...22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities...24 Proprietary Funds: Statement of Fund Net Position...25 Statement of Revenues, Expenses, and Changes in Fund Net Position...26 Statement of Cash Flows...27 Fiduciary Funds: Statement of Fiduciary Net Position...28 Statement of Changes in Fiduciary Net Position...29 Component Units: Combining Statement of Net Position...30 Combining Statement of Activities...32 Notes to the Financial Statements...35 Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund...95 Pensions Schedules of Funding Progress, Schedules of Employer Contributions, and Actuarial Assumptions...96 Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet Nonmajor Governmental Funds...98 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds...99

60 LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2013 TABLE OF CONTENTS FINANCIAL SECTION (continued) Combining Statement of Net Position Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds Combining Statement of Cash Flows Internal Service Funds Combining Statement of Fiduciary Net Position Agency Funds Statement of Changes Fiduciary Net Position Agency Funds STATISTICAL SECTION Summary of Net Position and Changes in Net Position Fund Balance, Governmental Funds Changes in Fund Balance, Governmental Funds General Government Revenues by Source General Fund Tax Revenue by Source Employment, Income and Occupational Tax Revenues Principal Withholding Taxpayers Assessed and Estimated Actual Value of Taxable Property Metro Government Assessed and Estimated Actual Value of Taxable Property Urban Services District Property Tax Rates Direct and Overlapping Governments Principal Property Tax Payers Property Tax Levies and Collections Legal Debt Margin Direct and Overlapping Governmental Activities Debt Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Pledged Revenue Coverage Demographic & Economic Indicators Principal Employers Number of Government Employees by Function/Program Miscellaneous Operating Indicators and Capital Asset Information...126

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67 Louisville Metro Government Mayor Office of Internal Audit Louisville Metro Council Chief of Staff Deputy Chief of Staff/Chief of Strategic Initiatives Human Resources Metro Technology Services Louisville Metro Police Department Department of Corrections Youth Detention Services Criminal Justice Commission Other Elected Officials Chief of Public Services Chief of Community Building Chief of Economic Growth & Innovation Chief Financial Officer Chief of Performance Improvement Jefferson County Attorney Louisville Fire Emergency Medical Services Human Relations Commission Metro Animal Services Economic Growth & Innovation Office of Management & Budget Office of Performance Improvement Jefferson County Clerk Commonwealth Attorney Emergency Management Agency/MetroSafe Public Works & Assets Codes & Regulations Community Services & Revitalization Public Health & Wellness Parks & Recreation Related Agencies Waterfront Development Corporation Kentucky Science Center Jefferson County Coroner Property Valuation Administrator Other Statutory Obligations Louisville Free Public Library Parking Authority of River City (PARC) Louisville Zoo Transit Authority of River City (TARC)