$120,000,000 CITY OF SHREVEPORT, STATE OF LOUISIANA Water and Sewer Revenue and Refunding Bonds Series 2015

Transcription

1 Book-Entry Only New Issue OFFICIAL STATEMENT DATED DECEMBER 14, 2015 Ratings: Moody s: A3 (underlying) S&P: BBB+ (underlying) Moody s A2 (insured) S&P AA (insured) (See RATINGS herein) In the opinion of Bond Counsel, under existing law, assuming continuing compliance with certain covenants described herein, interest on the Bonds is excludable from gross income of the owners thereof 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; however, for purposes of computing the federal alternative minimum tax imposed on certain corporations, such interest is taken into account in determining adjusted current earnings, as provided in APPENDIX D hereto. See also "TAX EXEMPTION" herein. Bond Counsel is further of the opinion that, pursuant to the Act and the Refunding Act and other constitutional and statutory authority, the Bonds shall be exempt from all taxation by the State of Louisiana or any political subdivision therein. See the proposed form of opinion of Bond Counsel attached hereto as APPENDIX D. $120,000,000 CITY OF SHREVEPORT, STATE OF LOUISIANA Water and Sewer Revenue and Refunding Bonds Series 2015 Dated: Date of Delivery Due: December 1, as shown on the inside cover The City of Shreveport, State of Louisiana (the City ) is offering $120,000,000 of its Water and Sewer Revenue and Refunding Bonds, Series 2015 (the Bonds ) pursuant to Resolution No. 131 of 1984 adopted by the City Council of the City (the Governing Authority ) on June 12, 1984, as amended and supplemented from time to time (the General Bond Resolution ), particularly by Ordinance No. 108 of 2015 adopted by the Governing Authority on November 24, 2015 (the Thirty-Second Supplemental Ordinance and together with the General Bond Resolution, the Bond Ordinance ). The Bonds are being issued by the City under the authority of Section 1430 (the Revenue Bond Act ) and Chapters 14 and 14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended (La. R.S. 39: ) (the Refunding Act and together with the Revenue Bond Act, the Act ), and other constitutional and statutory authority, for the purpose of (i) refunding certain maturities of the City s Prior Lien Bonds, as more particularly described herein, (ii) obtaining financing for the acquisition and construction of improvements, extensions and replacements (the Project ) to the combined revenue producing water and sewer utility system (the System ) of the City, (iii) funding a reserve fund surety, (iv) funding a municipal bond insurance policy, and (v) paying the costs of issuance of the Bonds. See SOURCES AND USES OF FUNDS and THE SYSTEM herein. Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Bond Ordinance. The Bonds will be initially issued as fully registered bonds in denominations of $5,000 or any integral multiple in excess thereof, 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 for the Bonds. Purchases of the Bonds may be made only in book-entry form in authorized denominations by credit to participating broker-dealers and other institutions on the books of DTC as described herein. Principal of, premium, if any, and interest on the Bonds will be payable by Whitney Bank, a Mississippi Banking Corporation, Baton Rouge, Louisiana, as the Paying Agent, to DTC, which will remit such payments in accordance with its normal procedures, as described herein. Interest will be payable on June 1 and December 1 of each year, commencing June 1, See THE BONDS herein. The Bonds are subject to optional redemption prior to maturity as described herein. See THE BONDS - Redemption Provisions herein. Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. ("AGM") will issue its Municipal Bond Insurance Policy for the Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Bonds maturing on December 1 in the years 2026 through 2035, inclusive (the Insured Bonds ) when due as set forth in the form of the Policy included as an appendix to this Official Statement. See APPENDIX F. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. The Bonds, together with the other Prior Lien Bonds described herein, are payable as to both principal and interest solely from and secured by a pledge of the Revenues (defined herein) to be derived from the operation of the System, subject to the prior payment of the reasonable and necessary expenses of operation and maintenance of the System. The Governing Authority of the City has covenanted and agreed pursuant to the Bond Ordinance to at all times fix and collect rates and charges for all water and sewerage services furnished by the System sufficient to provide for the payment of all reasonable and necessary expenses of operation and maintenance of the System, to provide for the payment of interest on and principal of all of the Bonds and Outstanding Prior Lien Bonds payable therefrom as and when the same shall become due and payable and for the creation of a reserve therefor. See INTRODUCTION The Bonds and the Outstanding Prior Lien Bonds, SECURITY FOR THE BONDS and DEBT SERVICE REQUIREMENTS herein. THE BONDS SHALL BE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE REVENUES OF THE SYSTEM, SUBJECT TO THE PAYMENT OF THE REASONABLE AND NECESSARY EXPENSES OF OPERATING AND MAINTAINING THE SYSTEM. THE BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS OR PLEDGE OF THE GENERAL CREDIT OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OF INDEBTEDNESS. This cover page contains information for convenient and quick reference only. It is not a summary of this issue. Investors must read this entire Official Statement to obtain information essential and material to the making of an informed investment decision. The Bonds are offered when, as and if issued and received by the Underwriters and subject to the approving legal opinion of its Bond Counsel, The Boles Law Firm, APC, Monroe, Louisiana, and Jacqueline Scott & Associates, APLC, Bossier City, Louisiana. Certain legal matters will be passed on for the City by its Disclosure Counsel, the Hardwick Law Firm LLC, Houston, Texas, and Joshua K. Williams Attorney at Law LLC, Shreveport, Louisiana. Certain legal matters will be passed on for the Underwriter by its counsel, Washington and Wells Law Firm, LLC, Shreveport, Louisiana, and West & Associates L.L.P., Houston, Texas. TKG & Associates LLC, Houston, Texas, serves as independent municipal advisor to the City. It is expected that the Bonds will be available for delivery through the facilities of DTC in New York, New York on or about December 17, 2015, against payment therefor. SIEBERT BRANDFORD SHANK & CO., L.L.C. FIRST KENTUCKY SECURITIES The date of this Official Statement is December 11, FIRSTSOUTHWEST

2 AMOUNTS, MATURITIES, INTEREST RATES AND PRICES OR YIELDS $120,000,000 CITY OF SHREVEPORT, STATE OF LOUISIANA Water and Sewer Revenue and Refunding Bonds Series 2015 Base CUSIP (b) : Maturity December 1 Principal Amount Interest Rate Yield% (a) CUSIP (b) Maturity December 1 Principal Amount Interest Rate Yield% CUSIP (b) 2016 $445, % 0.620% TW $1,545, % UF , TX ,145, UG , TY ,540, UH , TZ ,940, UJ , UA ,230, UK , UB ,545, UL , UC ,870, UM , UD ,215, UN , UE ,580, UP ,960, UQ6 $54,525, % Term Bond due on December 1, 2040 (c) ; Yield 3.550% CUSIP: UR4 (a) The initial yields will be established by and are the sole responsibility of the Underwriters and may subsequently be changed. Initial yields are calculated to the earlier of maturity or the first optional redemption date. (b) CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. None of the City, Municipal Advisor or the Underwriters takes any responsibility for the accuracy of the CUSIP numbers, which are included solely for the convenience of the readers of this Official Statement (c) The Bonds maturing on or after December 1, 2026 are subject to redemption prior to maturity, at the option of the City, on December 1, 2025, or any date thereafter.

3 OFFICIALS CITY OF SHREVEPORT, STATE OF LOUISIANA MAYOR Hon. Ollie S. Tyler COUNCIL Hon. Willie Bradford District A Hon. Jeff Everson District B Hon. Oliver Jenkins District C Hon. Michael Corbin District D Hon. James Flurry District E Hon. Stephanie Lynch District F Hon. Jerry Bowman, Jr. District G CLERK OF COUNCIL Arthur G. Thompson CHIEF ADMINISTRATIVE OFFICER Brian Crawford DIRECTOR OF FINANCE Charles J. Madden III CITY ATTORNEY William B. Bradford, Esq. MUNICIPAL ADVISOR TKG & Associates LLC BOND COUNSEL The Boles Law Firm, APC Jacqueline Scott & Associates, APLC

4 REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesperson, or other person has been authorized by the City of Shreveport, State of Louisiana (the City ), Siebert Brandford Shank & Co., L.L.C., First Kentucky Securities and First Southwest Company LLC, as the underwriters (collectively, the Underwriter ), to give information or to make any representations with respect to the Bonds, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the Underwriter or any other entity. The information set forth herein concerning The Depository Trust Company ( DTC ) has been furnished by DTC and the information set forth herein concerning the Bond Insurer (hereinafter defined) has been furnished by the Bond Insurer, and no representation is made by the City or the Underwriter as to the completeness or accuracy of such information. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the Bonds by any persons in any jurisdiction in which it is unlawful to make such offer, solicitation or sale prior to registration or qualification under the securities laws of any such jurisdiction. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information, and it is not to be construed as the promise or guarantee of the Underwriter. Assured Guaranty Municipal Corp. ( AGM or the Bond Insurer ) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM, supplied by AGM and presented under the heading BOND INSURANCE, APPENDIX F and APPENDIX G. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City or that the information contained herein is correct at any time subsequent to the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT A LEVEL ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE BOND ORDINANCE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. This Official Statement contains forward-looking statements, which generally can be identified with words or phrases such as anticipates, believes, could, estimates, foresees, may, plan, predict, should, will, or other words or phrases of similar import. All statements included in this Official Statement that any person expects or anticipates will, should or may occur in the future are forward-looking statements. These statements are based on assumptions and analyses made by the City in light of its experience and perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments conform with expectations and predictions is subject to a number of risks and uncertainties, including without limitation, the information discussed under INVESTMENT CONSIDERATIONS in this Official Statement as well as additional factors beyond the City s control. The important risk factors and assumptions described under that caption and elsewhere herein could cause actual results to differ materially from those expressed in any forward-looking statement. All of the forward-looking statements made in this Official Statement are qualified by these cautionary statements. There can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the City s business or operations. All subsequent forward-looking statements attributable to the City or persons acting on its behalf are expressly qualified in their entirety by the factors and assumptions described above and in any documents containing those i

5 forward-looking statements. No person has any obligation to prepare or release any updates or revisions to any forward-looking statement. THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE CAPTIONS AND HEADINGS IN THIS OFFICIAL STATEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY, AND IN NO WAY DEFINE, LIMIT OR DESCRIBE THE SCOPE OR INTENT, OR AFFECT THE MEANING OR CONSTRUCTION, OF ANY PROVISION OR SECTIONS OF THIS OFFICIAL STATEMENT. THE OFFERING OF THE BONDS IS MADE ONLY BY MEANS OF THIS OFFICIAL STATEMENT. THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM ( ORIGINAL BOUND FORMAT ) OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: THIS OFFICIAL STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR IS PRINTED IN ITS ENTIRETY FROM SUCH WEBSITE. References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, the Rule. ii

6 TABLE OF CONTENTS Page No. INTRODUCTION... 1 Purpose of this Official Statement... 1 The Bonds and the Outstanding Prior Lien Bonds... 1 Security for the Bonds... 2 Book-Entry Only System... 3 Definitions and Summaries... 3 PLAN OF FINANCE... 3 The Project... 3 The Refunding... 3 SOURCES AND USES OF FUNDS... 4 Sources and Uses of Funds... 4 THE BONDS... 4 General Description... 4 Book-Entry Only System... 4 Provisions Applicable if Book-Entry Only System is Terminated... 6 Redemption Provisions... 7 SECURITY FOR THE BONDS... 7 General... 7 Rate Covenant... 8 Debt Service Reserve Fund... 9 Future Parity Indebtedness... 9 Debt Service Coverage Ratio DEQ and DHH Loans Series 2005 LCDA Bonds and LCDA Series 2007 Bonds DEBT SERVICE REQUIREMENTS SWAP AGREEMENTS BOND INSURANCE Bond Insurance Policy Assured Guaranty Municipal Corp THE SYSTEM General Water Supply and Demand Water Treatment Facilities Water Distribution Sewerage Facilities Cooperative Endeavor Agreement with Port Customers of the System Treatment Facilities Capacities Summary iii

7 Largest Industrial Customers Current Rates and Charges for Water and Sewer Services Billing Policy Capital Improvements Trend in Finances of Department of Water and Sewerage Annual Operating Budget Summary Regulatory Requirements Consent Decree PENSION PLANS AND OTHER POST EMPLOYMENT BENEFITS INVESTMENT CONSIDERATIONS General Special Limited Obligations Insufficient Revenues Utilization of Derivatives Markets Water Quality and Environmental Requirements Consent Decree Changes in Law Changes in Federal and State Tax Law Covenant to Maintain Tax-Exempt Status of Interest on the Bonds Secondary Market Failure to Provide Ongoing Disclosure Book-Entry Difficulties in Enforcing Rights and Remedies Bond Insurance Bond Insurer to Control Remedies in Event of Default Financial Condition of the Bond Insurer Weather LITIGATION TAX EXEMPTION Interest on Bonds Louisiana Taxes Minimum Tax Consideration General Qualified Tax-Exempt Obligations (Non-Bank Deductibility) Tax Treatment of Original Issue Premium and Discount Changes in Federal and State Tax Law LEGAL MATTERS ENFORCEABILITY OF REMEDIES CONTINUING DISCLOSURE The Undertaking Compliance with Prior Undertakings iv

8 RATINGS UNDERWRITING FINANCIAL ADVISOR MISCELLANEOUS CERTIFICATION AS TO OFFICIAL STATEMENT SCHEDULE I APPENDIX A APPENDIX B - SCHEDULE OF BONDS TO BE REFUNDED... S-I - FINANCIAL AND STATISTICAL DATA RELATIVE TO THE CITY OF SHREVEPORT, STATE OF LOUISIANA... A-1 - COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, B-1 APPENDIX C - THE BOND ORDINANCE..... C-1 APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL... D-1 APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE... E-1 APPENDIX F - SPECIMEN MUNICIPAL BOND INSURANCE POLICY... F-1 APPENDIX G - SPECIMEN MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY...G-1 The cover page hereof, this Table of Contents and the Schedule and Appendices attached hereto are part of this Official Statement v

9 OFFICIAL STATEMENT $120,000,000 CITY OF SHREVEPORT, STATE OF LOUISIANA Water and Sewer Revenue and Refunding Bonds Series 2015 INTRODUCTION Purpose of this Official Statement The purpose of this Official Statement, including the cover page and the Appendices attached hereto, is to set forth certain information concerning the City of Shreveport, State of Louisiana (the City ) and the $120,000,000 original aggregate principal amount of Water and Sewer Revenue and Refunding Bonds, Series 2015 (the Bonds ) to be issued by the City. The Bonds are being issued by the City pursuant to Resolution No. 131 of 1984 adopted by the City Council of the City (the Governing Authority ), on June 12, 1984, as amended and supplemented from time to time (the General Bond Resolution ), particularly by Ordinance No. 108 of 2015 adopted by the Governing Authority on November 24, 2015 (the Thirty-Second Supplemental Ordinance and together with the General Bond Resolution, the Bond Ordinance ). The Bonds are being issued by the City under the authority of Section 1430 (the Revenue Bond Act ) and Chapters 14 and 14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended (La. R.S. 39: ) (the Refunding Act and together with the Revenue Bond Act, the Act ), and other constitutional and statutory authority, for the purpose of (i) refunding certain maturities of the City s Prior Lien Bonds, as more particularly described herein, (ii) obtaining financing for the acquisition and construction of improvements, extensions and replacements (the Project ) to the combined revenue producing water and sewer utility system (the System ) of the City, (iii) funding a reserve fund surety, if determined to be necessary, (iv) funding a municipal bond insurance policy, and (v) paying the costs of issuance of the Bonds. The Bonds and the Outstanding Prior Lien Bonds The Bonds are being issued pursuant to the Bond Ordinance as Prior Lien Bonds and are secured by the Revenues (hereinafter defined) subject to the payment of the reasonable and necessary expense of operating and maintaining the System (the Net Revenues ) on a parity with the City's currently Outstanding Prior Lien Bonds as follows: (i) $75,000,000 original maximum aggregate principal amount of Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Bonds (Shreveport Utility System Project) Series 2005 (the Series 2005 LCDA Bonds ); (ii) $11,315,000 original maximum aggregate principal amount of the City s Water and Sewer Revenue Bonds, 2006 Refunding Series A (the Series 2006A Bonds ); (iii) $25,685,000 original maximum aggregate principal amount of Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Bonds (Shreveport Utility System Project) Series 2007 (the Series 2007 LCDA Bonds ); (iv) $2,000,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Taxable Water and Sewer Revenue Bonds, Series 2009A (the Series 2009A Bonds ); (v) $9,000,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Water and Sewer Revenue Bonds, Taxable Series 2009B (the Series 2009B Bonds ); (vi) $11,560,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Taxable Utility Revenue Bonds, Series 2010D (the Series 2010D Bonds ); and (vii) $5,000,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Taxable Utility Revenue Bonds (LDEQ Series Project) Series 2013 (the Series 2013 LDEQ Bonds ); (viii) $75,835,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Water and Sewer Revenue Refunding Bonds, Series 2014A (the Series 2014A Bonds ); (ix) $67,045,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Water and Sewer Revenue Bonds, Series 2014B (the Series 2014B Bonds ); and (ix) $7,955,000 original maximum aggregate principal amount of City of Shreveport, State of Louisiana Water and Sewer Revenue Bonds, Series 2014C (the Series 2014C Bonds ). The foregoing Prior Lien Bonds are referred to collectively herein as the Outstanding Prior Lien Bonds. The Series 2006A Bonds will be refunded (the Refunded Bonds) with the expected issuance of the Bonds. The City also has issued pursuant to the General Bond Resolution and Ordinance No. 77 of 2013 its $3,684,000 original aggregate principal amount of Taxable Utility Revenue Bonds, Series 2013 (the Series 2013 Subordinate Bonds ). The Series 2013 Subordinate Bonds are payable from the Net Revenues, however, the Series 2013 Subordinate Bonds are NOT secured on a parity with the Prior Lien Bonds. [remainder of page intentionally left blank] 1

10 The following table has been adjusted to reflect the Refunded Bonds, the expected issuance of the Bonds, the Outstanding Prior Lien Bonds and the Series 2013 Subordinate Bonds as of September 30, Issue Description Prior Lien Bonds Amount Outstanding as of September 30, 2015 Series 2005 LCDA Bonds $48,185,000 Series 2007 LCDA Bonds 3,530,000 Series 2009A Bonds 838,000 Series 2009B Bonds 7,352,302 Series 2010D Bonds 5,129,877 Series 2013 LDEQ Bonds 3,268,243 Series 2014A Bonds 75,835,000 Series 2014B Bonds 67,045,000 Series 2014C Bonds 7,955,000 The Bonds * 120,000,000 Total Outstanding Prior Lien Bonds $339,138,422 Subordinate Bonds Series 2013 Subordinate Bonds $2,947,200 Total Subordinate Bonds $2,947,200 Total Outstanding $342,085,622 * Expected date of issuance on December 17, Source: The City of Shreveport See SECURITY FOR THE BONDS - Future Parity Indebtedness and DEBT SERVICE REQUIREMENTS herein for the debt service requirements for the Bonds, the Series 2013 Subordinate Bonds and the Outstanding Prior Lien Bonds not being refunded by the Bonds. Security for the Bonds The System; Rate Covenant. The Bonds, together with the Outstanding Prior Lien Bonds described herein, are payable as to both principal, premium, if any, and interest solely from and secured by a pledge of all fees, rents, charges and other income derived or to be derived by or for the account of the City from or for the ownership, operation, use or services of the System and any other amounts paid into and credited to the Revenue Fund pursuant to the Bond Ordinance, but shall not include any amount received or receivable from the United States of America or the State (or any agency of either) or from any other source as or on account of a grant, contribution or loan in aid of or for or with respect to the construction, acquisition, improvement, extension, renewal or other development of any part of the System or the financing of any of the foregoing (the Revenues ) subject to the payments of the reasonable and necessary expenses of operating and maintaining the System. The Governing Authority has covenanted and agreed pursuant to the Bond Ordinance to at all times fix and collect rates and charges for all water and sewerage services furnished by the System sufficient to provide for the payment of all reasonable and necessary expenses of operation and maintenance of the System, to provide for the payment of principal of, premium, if any, and interest on all of the Bonds and the Outstanding Prior Lien Bonds, payable therefrom as and when the same shall become due and payable and for the creation of a reserve therefor. See SECURITY FOR THE BONDS and THE SYSTEM herein. Limitation of Liability of the City. THE BONDS SHALL BE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE NET REVENUES OF THE SYSTEM THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR PLEDGE OF THE GENERAL CREDIT OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OF INDEBTEDNESS. Bond Insurance Policy. Concurrently with the issuance of the Bonds, AGM will issue its Municipal Bond Insurance Policy for the Bonds (the Policy ). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due. See BOND INSURANCE herein and SPECIMEN MUNICIPAL BOND INSURANCE POLICY in APPENDIX F hereto. The Bonds will also be secured by a municipal bond debt service reserve insurance policy (the Reserve Policy ) to be issued by the Bond Insurer simultaneously with the delivery of the Bonds. See SECURITY FOR THE BONDS Reserve Fund herein and SPECIMEN MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY in APPENDIX 2

11 G hereto. Book-Entry Only System The Bonds will be initially issued through a book-entry only system maintained by The Depository Trust Company ( DTC ). The Bonds will be initially registered in the name of Cede & Co., as DTC s nominee. See THE BONDS - Book-Entry Only System herein. Definitions and Summaries Definitions of certain words and terms used in this Official Statement are set forth in APPENDIX C attached hereto and within the text herein. Descriptions of the City, the System and the Bonds, and a summary of the Bond Ordinance are included in this Official Statement, including the Appendices attached hereto. Such information, summaries and descriptions do not purport to be comprehensive or definitive. All references in this Official Statement to the specified documents are qualified in their entirety by reference to each such document, and all references to the Bonds are qualified in their entirety by reference to the definitive forms thereof and the information with respect thereto included in the aforesaid documents. Until the issuance and delivery of the Bonds, draft copies of such documents may be obtained from City of Shreveport, 505 Travis Street, Suite 200, Shreveport, Louisiana After the issuance and delivery of the Bonds, copies of such documents will be available for inspection at the corporate trust office of the Paying Agent located at 2600 Citiplace Court 2nd Floor, Baton Rouge, Louisiana The information in this Official Statement concerning the City has been supplied by the City and has not been verified by the Underwriter, and the Underwriter makes no representation or warranty, whether expressed or implied, as to the accuracy or completeness of such information. Financial and Statistical Data Relative to the City are attached hereto as APPENDIX A. The comprehensive annual financial report of the City for the fiscal year ended December 31, 2014, is attached hereto as APPENDIX B. The proposed form of the opinion of Bond Counsel is attached hereto as APPENDIX D. The form of Continuing Disclosure Certificate of the City is attached hereto as APPENDIX E. A specimen of the Policy is attached hereto as APPENDIX F. A specimen of the Reserve Policy is attached hereto as APPENDIX G. The Project PLAN OF FINANCE A portion of the proceeds of the Bonds in the approximate amount of $129,354, from the Bonds will be used to finance the acquisition and construction of improvements, extensions and replacements to the System. The Refunding A portion of the proceeds of the Bonds in the approximate amount of $5,546, is being used to effect a current refunding of the Series 2006A Bonds. Payment of the principal of, premium and interest on the Refunded Bonds will be made on or about the date of delivery of the Bonds. Such payment will be an initial cash deposit made into a special and irrevocable escrow account (the Escrow Fund ) pursuant to the escrow agreement by and between the City and Whitney Bank, acting as escrow trustee (the Escrow Trustee ) and used by the Escrow Trustee to redeem the Refunded Bonds in an amount sufficient to pay the principal of, premium and interest accrued on the Refunded Bonds on January 11, 2016 (the Call Date ). [remainder of page intentionally left blank] 3

12 SOURCES AND USES OF FUNDS Sources and Uses of Funds The following table sets forth the sources and uses of funds relating to the issuance of the Bonds. Sources of Funds Refunding New Money Total Par Amount Premium Total $4,905, $115,095, $120,000, , ,324, ,029, ,610, ,419, ,029, Uses of Funds Refunding New Money Total Deposit to Project Fund $0 $129,354, $129,354, Deposit to Escrow Fund 5,546, ,546, Cost of Issuance (1) 46, ,428, ,475, Underwriter's Discount 17, , , Total Uses of Funds 5,610, ,419, ,029, (1) Includes, among other expenses, legal fees, the Policy premium and the Reserve Policy costs. General Description THE BONDS The following is a summary of certain provisions applicable to the Bonds. Reference is made to the Bond Ordinance and to the summary of certain provisions thereof included in APPENDIX C for a more complete description of the Bonds. The discussion herein is qualified by such reference. The Bonds will be issued as fully registered bonds, without coupons, in denominations of $5,000 or any integral multiple thereof ( Authorized Denominations ) initially in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchasers of Bonds (the Beneficial Owners ) will not receive physical delivery of bond certificates. Ownership interests may be acquired in book-entry form only. See Book-Entry Only System. The Bonds will be dated the date of delivery thereof, will mature (subject to prior redemption) on December 1 in the years and in the principal amounts and will bear interest at the rates per annum (using a year of 360 days comprised of twelve 30- day months) indicated on the inside front cover of this Official Statement payable on June 1 and December 1 of each year, commencing June 1, 2016 (each an Interest Payment Date ). Principal of, premium, if any, and interest on the Bonds will be payable in the manner described below under Book-Entry Only System. Payment of the Bonds will be made in such coin or currency of the United States of America as, at the respective times of payment, is legal tender for the payment of public and private debts. The initial Paying Agent for the Bonds will be Whitney Bank, a Mississippi Banking Corporation, Baton Rouge, Louisiana (the Paying Agent ). So long as DTC acts as a security depository for the Bonds, as described below under Book-Entry Only System, all references to Owner of the Bonds or Bondholder are deemed to be Cede & Co., as nominee for DTC, and not to participants of DTC or Beneficial Owners. Book-Entry Only System The Bonds initially will be issued solely in book-entry form to be held in the book-entry-only system maintained by The Depository Trust Commission ( DTC ), New York, New York. So long as such book-entry system is used, only DTC will receive or have the right to receive physical delivery of the Bonds and, except as otherwise provided herein with respect to Beneficial Owners of Beneficial Ownership Interests, Beneficial Owners will not be or be considered to be, and will not have any rights as, owners or holders of the Bonds under the Bond Ordinance. 4

13 The following information about the book-entry-only system applicable to the Bonds has been supplied by DTC. None of the City or the Underwriter makes any representations, warranties or guarantees with respect to its accuracy or completeness. 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 may be requested by an authorized representative of DTC. One fully-registered Bond for each maturity of the Bonds will be issued in the aggregate principal amount of the Bonds, and will be deposited with DTC. DTC, the world s largest 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, 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 agencies. 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 and, together with the Direct Participants, the Participants ). DTC has Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of the 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 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 interest in the 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 the 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 the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds and principal and interest 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 detailed information from the Issuer or the Paying Agent, on the payable date in 5

14 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 City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of 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 securities depository with respect to the Bonds at any time by giving reasonable notice to the City 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 City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. So long as Cede & Co. is the registered holder of the Bonds as nominee of DTC, references herein to the Holders, holders, or registered owners of the Bonds mean Cede & Co. and not the Beneficial Owners of the Bonds. THE CITY AND THE PAYING AGENT CANNOT AND DO NOT GIVE ANY ASSURANCES THAT THE PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (I) PAYMENTS OF PRINCIPAL OF OR INTEREST AND PREMIUM, IF ANY, ON THE BONDS; (II) CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN BONDS; OR (III) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNERS OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC OR PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. NEITHER THE CITY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO SUCH PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; (3) THE PAYMENT BY ANY PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OF OR INTEREST OR PREMIUM, IF ANY, ON THE BONDS; (4) THE DELIVERY BY ANY PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BOND ORDINANCE TO BE GIVEN TO BONDHOLDERS OF THE BONDS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER OF THE BONDS. Provisions Applicable if Book-Entry Only System is Terminated General. Purchasers of Bonds will receive principal and interest payments, and may transfer and exchange Bonds, pursuant to the following provisions only if the book-entry only system is terminated. Otherwise, payments and transfers will be made only as described above under Book-Entry Only System. Payment of Principal and Interest. The principal (and premium, if any) of the Bonds shall be payable upon maturity or redemption at the principal office or the corporate trust office of the Paying Agent, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, upon presentation and surrender thereof. Interest on any Bonds which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name that the Bonds (or one or more predecessor Bonds) are registered on the close of business on the 15th day of the month next preceding such Interest Payment Date (the Regular Record Date ), whether or not such day is a business day. Any interest on any Bond which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date ( Defaulted Interest ) shall forthwith cease to be payable to the registered holder on the relevant Record Date by virtue of having been such holder; and such Defaulted Interest shall be paid by the City to the persons in whose name the Bonds are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, as further provided in the Bond Ordinance. Exchange of Bonds; Persons Treated as Owners. As long as the Bonds shall be in book-entry only form, the transfer and exchange of the Bonds will be made in accordance with the procedures of DTC as more fully described above under Book- Entry Only System above. 6

15 Upon surrender for registration of transfer of any Bond at the principal corporate trust office of the Paying Agent, the Paying Agent shall authenticate and deliver in the name of the transferee or transferees one or more new fully registered Bonds of authorized denominations of the same maturity and like aggregate principal amount upon surrender at such office. Whenever any Bonds are so surrendered for exchange, the Paying Agent shall authenticate and deliver in exchange therefor the Bond or Bonds which the Bondholder making the exchange shall be entitled to receive. All Bonds presented for transfer or exchange shall (if so required by the City or the Paying Agent) be accompanied by a written instrument or instruments of transfer in form and with a guaranty of signature satisfactory to the City and the Paying Agent, duly executed by the registered owner or by such registered owner s duly authorized attorney. No service charge will be made by the Paying Agent for any exchange or registration or transfer of Bonds. The Paying Agent may require payment by the person requesting an exchange or registration of transfer of Bonds of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The City and the Paying Agent shall not be required (a) to issue, register the transfer of or exchange any Bonds during a period beginning at the opening of business fifteen (15) days next preceding an Interest Payment Date or any date or selection of Bonds to be redeemed and ending at the close of business on the Interest Payment Date or day on which the applicable notice of redemption is given or (b) to register the transfer of or exchange any Bonds so selected for redemption in whole or in part. All Bonds delivered upon any registration of transfer or exchange of Bonds shall be valid obligations of the City, evidencing the same debt and entitled to the same benefits under the Bond Ordinance as the Bonds surrendered. Prior to due presentment for registration of transfer of any Bond, the City and the Paying Agent and any agent of the City or the Paying Agent may treat the person in whose name any Bond is registered as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. Redemption Provisions Optional Redemption. The Bonds maturing on December 1, 2026, and thereafter, shall be callable for redemption at the option of the City in full or in part at any time on or after December 1, 2025, and if less than a full maturity then by lot within such maturity, at the principal amount thereof, plus accrued interest from the most recent Interest Payment Date to which interest has been paid or duly provided for. Mandatory Sinking Fund Redemption. The Bonds maturing December 1, 2040 shall be subject to mandatory redemption prior to maturity in the following principal amounts on the following dates by lot in such manner as shall be determined by the Paying Agent at a redemption price equal to their principal amount plus accrued interest to the redemption date. * Final Maturity Redemption Date Principal Amount (December 1) 2036 $8,355, ,775, ,210, ,675, * 18,510,000 Notice and Effect of Redemption. Notice of any such redemption shall be given by the Paying Agent by mailing a copy of the redemption notice by first class mail (postage prepaid) not less than thirty (30) days prior to the date fixed for redemption to the registered owner of each such Bond to be redeemed in whole or in part at the address shown on the registration books maintained by the Paying Agent. Failure to give such notice by mailing to any Bondholder of the Bonds, or any defect therein, shall not affect the validity of any proceedings for the redemption of Bonds. All notice of redemption shall state (i) the redemption date; (ii) the redemption price; (iii) if less than all of the Bonds are to be redeemed, the identifying number (and in case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (iv) that on the redemption date, the redemption price will become due and payable on each such Bond and interest thereon will cease to accrue thereon from and after said date; and (v) the place where such Bonds are to be surrendered for payment. Upon the giving of notice and the deposit of funds for redemption, interest on the Bonds or portions thereof thus called shall no longer accrue after the date fixed for redemption. General SECURITY FOR THE BONDS The Bonds, together with the other Prior Lien Bonds (including the Outstanding Prior Lien Bonds not being refunded by the Bonds as described herein), are payable as to both principal, premium, if any, and interest solely from and secured by a pari passu pledge of the Revenues. The Governing Authority has covenanted and agreed pursuant to the Bond Ordinance to at all times fix and collect rates and charges for all water and sewerage services furnished by the System sufficient to provide for the payment of all reasonable and necessary expenses of operation and maintenance of the System, to provide for the payment of interest on and 7

16 principal of all of the Bonds and other Prior Lien Bonds payable therefrom (including the Outstanding Prior Lien Bonds not being refunded by the Bonds) as and when the same shall become due and payable and for the creation of a reserve therefor. THE BONDS SHALL BE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE NET REVENUES OF THE SYSTEM. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OR PLEDGE OF THE GENERAL CREDIT OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OF INDEBTEDNESS. The Bonds will be secured by the Net Revenues on a parity with the Outstanding Prior Lien Bonds and any additional Prior Lien Bonds (the Additional Prior Lien Bonds ) that may be issued in the future by the City under and pursuant to the terms of the Bond Ordinance. See INTRODUCTION - The Bonds and the Outstanding Prior Lien Bonds herein, Future Parity Indebtedness, Debt Service Coverage Ratio, DEBT SERVICE REQUIREMENTS and APPENDIX C hereto. The Bonds constitute Prior Lien Bonds of the City under the City's Bond Ordinance and will be secured by an equal lien on and pledge of the Net Revenues. Rate Covenant The City has covenanted under the Bond Ordinance to fix and collect rates and charges for all water and sewerage services supplied by the System which are sufficient in each Bond Year, after making due allowance for delinquencies in collection and provision for the payment of the reasonable and necessary expenses of operating and maintaining the System, to produce net Revenues (a) to pay Debt Service (as described below) on all Outstanding Prior Lien Bonds, all Bonds and any Additional Prior Lien Bonds) and to maintain certain Funds and Accounts created under the Bond Ordinance and (b) which result in each Fiscal Year in the greater of (i) the sum of Debt Service payable on the Prior Lien Bonds in the ensuing Fiscal Year plus any required deposit to the Debt Service Reserve Fund or (ii) a ratio of net Revenues to average annual Debt Service of not less than 1.25 to 1 (the Rate Covenant ). For purposes of computing Debt Service for purposes of the Rate Covenant, with respect to any Series of Prior Lien Bonds which bear interest at a floating, variable or adjustable rate, the interest rate on such Series of Prior Lien Bonds will be calculated as that rate which is equal to the greater of (i) 11% per annum or (ii) the highest variable rate borne by such Prior Lien Bonds (or, if no such Prior Lien Bonds are then Outstanding, by comparable variable rate obligations, the interest on which is calculated according to the same or a similar index as that applicable to the proposed Prior Lien Bonds) over the preceding twentyfour (24) months. In measuring compliance with the Rate Covenant, the City will not be deemed to be incurring a separate obligation to any Person (the Credit Enhancer ) whom the City is obligated to reimburse for advances made for amounts due on any Series of Prior Lien Bonds the principal of and interest on which are secured by the proceeds of an irrevocable letter of credit, surety bond, insurance policy or other credit facility or arrangement with said Credit Enhancer ( Credit Enhanced Indebtedness ) In measuring compliance with the Rate Covenant, Debt Service on Credit Enhanced Indebtedness will be deemed to include any periodic payment payable to the Credit Enhancer as a condition of the Credit Enhancer standing ready to provide moneys necessary for payment to the owners of such Credit Enhanced Indebtedness, and Debt Service on Credit Enhanced Indebtedness will not be based upon terms of any reimbursement obligation to the Credit Enhancer except to the extent payments are required to be made pursuant to such reimbursement obligation due to the Credit Enhancer advancing funds. In determining compliance with respect to Optional Tender Indebtedness (herein defined), the City will not be deemed to be incurring a separate obligation, other than with respect to the Series of Bonds to be issued which constitute Optional Tender Indebtedness, to the Person who has undertaken to provide moneys necessary for payment to the registered owners of such Optional Tender Indebtedness who exercise their option to tender such Bonds for purchase. In measuring compliance with the applicable tests described above for compliance with the Debt Service Coverage Ratio in connection with the rate covenant (i) Debt Service on Optional Tender Indebtedness will not include amounts payable upon exercise by the owner thereof of the option to tender such Bonds for payment to the extent and for so long as a Person (other than the City) is required to provide the moneys necessary for such payment (the "Liquidity Backer"), (ii) Debt Service on Optional Tender Indebtedness will be deemed to include any periodic fees payable to the Liquidity Backer as a condition of the Liquidity Backer standing ready to provide the moneys necessary for such payment, (iii) Debt Service on Optional Tender Indebtedness will not be based upon the terms of any reimbursement obligation to the Liquidity Backer except to the extent payments are required to be made pursuant to such reimbursement obligation due to the Liquidity Backer advancing the funds and (iv) principal will not be deemed to be due on the dates such owner may require that his Bond be purchased but will be due on the stated date thereof. "Optional Tender Indebtedness shall be defined herein as any portion of a Series of Bonds a feature of which is an option on the part of the registered owners of such Series of Bonds to tender for purchase at a stated price prior to its stated date all or a portion of such Series of Bonds to the City or the Paying Agent or other fiduciary owners, or other party whom the City is obligated 8

17 to reimburse. Debt Service Reserve Fund The City maintains a central reserve fund (the Debt Service Reserve Fund ) that secures the Prior Lien Bonds issued pursuant to the General Bond Resolution, but only to the extent such Outstanding Prior Lien Bonds (i) do not have a separate reserve fund, (ii) have a reserve fund surety or (iii) have otherwise waived any rights to the Debt Service Reserve Fund (collectively, Alternative Reserve Rights ). The Debt Service Reserve Fund Requirement is equal to the average annual Debt Service on the Prior Lien Bonds which do not have Alternative Reserve Rights. The Outstanding Prior Lien Bonds which currently have Alternative Reserve Rights consist of the DHH Bonds (defined herein), the DEQ Bonds (defined herein), the Series 2005 LCDA Bonds, the Series 2007 LCDA Bonds, the Series 2014A Bonds, Series 2014B Bonds, the Series 2014C Bonds and the Bonds. The General Bond Resolution provides that any Series of Bonds issued thereunder may be secured by letters of credit, surety bonds or other credit enhancement devices. The Bond Ordinance does not contain any specific standards (e.g., such as minimum rating requirements of providers) relating to such credit enhancement devices, including a debt service reserve fund surety. The Bonds will be secured by the Reserve Policy in an amount equal to the lesser of (a) ten percent (10%) of the stated principal amount of the Bonds (less any original issue discount that exceeds a de minimus amount), (b) one hundred twenty-five percent (125%) of the average annual amount required to pay principal and interest on the Bonds, or (c) one hundred percent (100%) of maximum annual debt service with respect to the Bonds. The Reserve Policy shall be administered as provided by the terms therein between the Bond Insurer and the City relating to the Reserve Policy. The City shall draw on the Reserve Policy in accordance with its terms only to pay the principal of and interest on the Bonds when the moneys in the Debt Service Fund are insufficient therefor. The Bonds will have Alternative Reserve Rights and will NOT be secured by the Debt Service Reserve Fund. See SPECIMEN MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY in APPENDIX G hereto. Future Parity Indebtedness In order to issue Additional Prior Lien Bonds and any other indebtedness on a parity with the Bonds and other Outstanding Prior Lien Bonds, the City must comply with the Additional Prior Lien Bonds test contained in the Bond Ordinance which requires the following conditions to be met: (i) No Event of Default exists and is continuing under the Bond Ordinance; and (ii) the Revenues, after payment of Operating Expenses, for (a) any consecutive twelve calendar months in the eighteen-month period immediately preceding the date of issuance of such proposed Series of Additional Prior Lien Bonds or (b) the Fiscal Year immediately preceding the date of issuance of said proposed Series of Additional Prior Lien Bonds adjusted to reflect any increase in rates which has been adopted and which will take effect during or subsequent to said period, but prior to a date not later than twelve months after the date of issuance of such, proposed Series of Additional Prior Lien Bonds, were not less than 125% of average annual Debt Service (as described below) in any Fiscal Year, on all Outstanding Prior Lien Bonds and the Series of Additional Prior Lien Bonds proposed to be issued. In addition, a Series of Additional Prior Lien Bonds may be issued on a parity with the Bonds and any other Prior Lien Bonds, to Outstanding Prior Lien Bonds, provided that, if only a portion of the Outstanding Prior Lien Bonds is refunded and the refunding bonds require total principal and interest payments during any Fiscal Year in excess of the principal and interest which would have been required in said Fiscal Year to pay the Prior Lien Bonds refunded thereby, then such Prior Lien Bonds may not be refunded without (a) the consent of the owners of the unrefunded portion of said Prior Lien Bonds or (b) meeting the conditions set forth in (i) and (ii) above. For purposes of computing Debt Service with respect to the tests for issuing Additional Prior Lien Bonds as described above, with respect to any Series of Prior Lien Bonds which bear interest at a floating, variable or adjustable rate, the interest rate on such Series of Bonds will be calculated as that rate which is equal to the greater of (A) 11% per annum or (B) the highest variable rate borne by such Prior Lien Bonds (or, if no such Prior Lien Bonds are then Outstanding, by comparable variable rate obligations, the interest on which is calculated according to the same or a similar index as that applicable to the proposed Prior Lien Bonds) over the preceding twenty-four (24) months. In measuring compliance with the tests for issuing Additional Prior Lien Bonds described above, the City also will not be deemed to be incurring a separate obligation to the Credit Enhancer who has undertaken to provide moneys necessary for payment to owners of such Credit Enhanced Indebtedness. 9

18 In measuring compliance with the tests for issuing Additional Prior Lien Bonds described above, Debt Service on Credit Enhanced Indebtedness will be deemed to include any periodic payment payable to the Credit Enhancer as a condition of the Credit Enhancer standing ready to provide moneys necessary for payment to the owners of such Credit Enhanced Indebtedness and Debt Service on Credit Enhanced Indebtedness will not be based upon terms of any reimbursement obligation to the Credit Enhancer except to the extent payments are required to be made pursuant to such reimbursement obligation due to the Credit Enhancer advancing funds. See SUMMARY OF CERTAIN PROVISIONS OF THE BOND ORDINANCE - Additional Prior Lien Bonds in APPENDIX C hereto for treatment of Debt Service on Optional Tender Indebtedness for purposes of meeting the conditions to the issuance of Additional Prior Lien Bonds. In addition, except as provided in the Bond Ordinance, no Additional Prior Lien Bonds will be issued without the consents required in the Bond Ordinance. Debt Service Coverage Ratio The following table sets forth the pro forma Debt Service Coverage Ratio with respect to the Bonds, the Series 2013 Subordinate Bonds and the Outstanding Prior Lien Bonds, calculated in accordance with the requirements of the Bond Ordinance as described above under Future Parity Indebtedness. 12 months ending 12/31/14 (1) System Revenues (2) $74,765,989 Less Operating Expenses (3) $39,898,984 Net Revenues $34,867,005 Average Annual Debt Service (4) $21,639,609 Debt Service Coverage Ratio 1.61 (1) System revenues have not been adjusted to reflect the 2015 rate increases. See Rates and Charges for Water and Sewer Services. The projected total net revenues for fiscal year ending 2015 are $36,758,453, which provides debt service coverage of 1.70 when adjusted to include the 2015 bonds. (2) Includes operating revenues, interest income, changes in fair value of investments and intergovernmental revenues. (3) Before depreciation and amortization expenses and after transfers out. (4) Includes the Bonds, the Series 2013 Subordinate Bonds and the Outstanding Prior Lien Bonds. See DEBT SERVICE REQUIREMENTS herein. Source: City of Shreveport DEQ and DHH Loans The DEQ Loans. The Series 2010D Bonds and Series 2013 LDEQ Bonds (together, the DEQ Bonds ), constitute the two (2) Outstanding Prior Lien Bonds series issued by the City and purchased by the Louisiana Department of Environmental Quality, an agency of the State of Louisiana (the DEQ ), through its Municipal Facilities Revolving Loan Fund. The DEQ Bonds bear an interest rate of.45% plus an administrative fee of.50% per annum and mature no later than twenty-five (25) years from their respective dates of issuance. The Series 2010D Bonds are Build America Bonds and are entitled to a credit equal to 35% of the interest paid on such bonds. The proceeds of the Series 2010D Bonds are received through drawdowns and interest is payable from the date of the drawdown. The Series 2010D Bonds amount outstanding as of September 30, 2015 was $5,129,877. In November 2013, the City entered into a loan and pledge agreement with the DEQ. The DEQ purchased the City s Series 2013 LDEQ Bonds. The bonds were issued for the purpose of financing a portion of the costs of constructing and acquiring improvements, extensions and replacements to the sewerage portion of the System. The proceeds of the Series 2013 LDEQ Bonds are received through drawdowns and interest is payable from the date of the drawdown. The amount outstanding as of September 30, 2015 was $3,268,243. See INTRODUCTION - The Bonds and the Outstanding Prior Lien Bonds. The DHH Loans. The Series 2009A Bonds and Series 2009B Bonds (together, the DHH Bonds ) constitute the two (2) Outstanding Prior Lien Bonds issued by the City and purchased by the Louisiana Department of Health and Hospitals Office of Public Health, an agency of the State of Louisiana (the DHH ), through its Drinking Water Revolving Loan Program. The DHH Bonds were issued for the purpose of upgrading commercial water meters with an automatic reading meter system. The proceeds of the DHH Bonds were received through drawdowns. The DHH Bonds bear an interest rate of 2.95% with an additional administrative fee of.50% per annum. The amount outstanding as of September 30, 2015 for Series 2009A was $838,000 and for 10

19 Series 2009B, 7,352,302. See INTRODUCTION - The Bonds and the Outstanding Prior Lien Bonds. Series 2005 LCDA Bonds, Series 2007 LCDA Bonds and Series 2010C LCDA Bonds In its continuing capital improvement program, (i) on September 29, 2005 the City caused the Louisiana Local Government Environmental Facility and Community Development Authority (the LCDA ) to issue the Series 2005 LCDA Bonds, (ii) on December 19, 2007, the City caused the LCDA to issue the Series 2007 LCDA Bonds, and (iii) on November 15, 2010, the City caused the LCDA to issue the Series 2010C LCDA Bonds, each issued on behalf of the City for the purpose of upgrading and improving the System. The Series 2010C LCDA Bonds were refunded and defeased in The loan obligations of the City with respect to the Series 2005 LCDA Bonds and Series 2007 LCDA Bonds are secured by the Revenues and constitute Prior Lien Bonds under the Bond Ordinance. The Series 2005 LCDA Bonds mature in 2026 and currently bear interest at a variable rate equal to 65.1% of one-month LIBOR (resetting weekly) plus 1.59%. Simultaneously with the issuance of the Series 2005 LCDA Bonds, the LCDA, on behalf of the City, entered into an interest rate swap agreement with JPMorgan Chase Bank, N.A., pursuant to which the City pays a fixed rate of 3.56% and receives 70% of one month LIBOR on a notional amount of $75,000,000 which amortizes with the Series 2005 LCDA Bonds, maturing in The swap agreement was reallocated in part to other (non-water and sewer) variable rate debt of the City in the notional amount of $25,000,000. The swap agreement terminates on October 1, 2026, the final maturity date of the Series 2005 LCDA Bonds. As of October 1, 2015, the current fair value of the swap is (10,106,260). The City receives fair market updates for the swap on a monthly basis and reports the fair value as of its fiscal year end in its annual CAFR (See Note III A. Deposits and Investments, Comprehensive Annual Financial Report, City of Shreveport 2014). In June 2009, the City redeemed $25,000,000 of the $75,000,000 Series 2005 LCDA Bonds with funds remaining in the Project Fund. At the same time, the remaining $50,000,000 of the Series 2005 LCDA Bonds were purchased by Capital One Public Funding, LLC ( COPF ) and held by COPF as purchased bonds. In June 2014 the remaining balance of $48,855,000 was remarketed for a five-year period through June 2019 with COPF. The City entered into a substitute standby bond purchase agreement (the Substitute Standby Bond Purchase Agreement ) with COPF effective June 23, 2014 for a period of five years from June 23, 2014 for the purchased bonds. The commitment was equal to the sum of (a) $48,855,000 constituting the principal face amount of the Series 2005 LCDA Bonds and (b) $546,105 equal to 34 days interest on the Series 2005 LCDA Bonds at 12% percent interest. In October 2014, $670,000 of the Series 2005 LCDA Bonds was redeemed, therefore reducing the commitment to $48,185,000 principal and $538,616 interest. COPF expressly reserves the right to directly sell the purchased bonds on or after the expiration date of the Substitute Standby Bond Purchase Agreement. Upon notice from COPF, the City shall have the right to obtain a substitute standby bond purchase agreement or a standby letter of credit or to obtain a bond purchaser for all of the Purchased Bonds owned by COPF. If the City fails to obtain a substitute bond purchaser and COPF fails to sell or remarket the Series 2005 LCDA Bonds, the outstanding principal will be subject to mandatory redemption over a five-year period with principal payable in equal semi-annual installments, bearing interest at the highest of (1) the Overnight Federal Funds Rate plus 2.00%; (2) the Prime Rate plus 1.50%; or (3) 8.50%. If the balance of the issue was converted to a five-year semi-annual installment loan, the semi-annual payments would be $6,014,939 assuming an 8.50% interest rate. The swap agreement terminates on October 1, 2026, the final maturity date of the Series 2005 LCDA Bonds. The Series 2007 LCDA Bonds mature in 2022 and bear interest at an average rate of 4.0% per annum. See Note III.H-Water and Sewerage Revenue Bonds of the Comprehensive Annual Financial Reports, City of Shreveport [remainder of page intentionally left blank] 11

20 DEBT SERVICE REQUIREMENTS Set forth in the table below for each fiscal year of the City ending December 31, are the annual debt service requirements for the Bonds, the Outstanding Prior Lien Bonds not being refunded by the Bonds, and the Outstanding Subordinate Lien Bonds. Numbers may not add precisely due to rounding. Other Outstanding Outstanding Subordinate The Bonds (Prior Lien) Prior Lien Bonds (1)(2) Lien Bonds Total Annual DS 12/31 Principal Interest Principal Interest Principal Interest Principal Interest Total ,000 5,733,333 11,550,000 9,380, ,400 96,705 12,363,400 15,210,643 27,574, ,000 5,977,750 11,955,000 9,015, ,400 82,890 12,783,400 15,076,289 27,859, ,000 5,954,750 12,435,000 7,773, ,400 69,075 13,288,400 13,797,683 27,086, ,000 5,930,500 12,891,000 7,326, ,400 55,260 13,774,400 13,312,737 27,087, ,000 5,904,750 13,142,000 6,787, ,400 41,445 14,055,400 12,734,189 26,789, ,000 5,877,500 13,736,000 6,219, ,400 27,630 14,674,400 12,124,545 26,798, ,000 5,849,000 14,049,000 5,654, ,400 13,815 15,017,400 11,517,261 26,534, ,000 5,819,000 10,107,000 5,057,076 10,732,000 10,876,076 21,608, ,000 5,787,750 10,252,877 4,657,315 10,912,877 10,445,065 21,357, ,754,750 9,730,000 4,243,172 9,730,000 9,997,922 19,727, ,545,000 5,754,750 8,242,000 3,895,788 9,787,000 9,650,538 19,437, ,145,000 5,677,500 5,006,000 3,604,897 10,151,000 9,282,397 19,433, ,540,000 5,420,250 5,099,243 3,373,672 10,639,243 8,793,922 19,433, ,940,000 5,143,250 5,204,000 3,148,629 11,144,000 8,291,879 19,435, ,230,000 4,846,250 5,443,302 2,913,636 11,673,302 7,759,886 19,433, ,545,000 4,534,750 5,705,000 2,650,900 12,250,000 7,185,650 19,435, ,870,000 4,207,500 5,990,000 2,365,650 12,860,000 6,573,150 19,433, ,215,000 3,864,000 6,290,000 2,066,150 13,505,000 5,930,150 19,435, ,580,000 3,503,250 6,540,000 1,814,550 14,120,000 5,317,800 19,437, ,960,000 3,124,250 6,800,000 1,552,950 14,760,000 4,677,200 19,437, ,355,000 2,726,250 7,075,000 1,280,950 15,430,000 4,007,200 19,437, ,775,000 2,308,500 7,355, ,950 16,130,000 3,306,450 19,436, ,210,000 1,869,750 7,650, ,750 16,860,000 2,573,500 19,433, ,675,000 1,409,250 7,955, ,750 17,630,000 1,807,000 19,437, ,510, , ,510, ,500 19,435,500 Total 120,000, ,904, ,202,422 96,883,729 2,578, , ,781, ,174, ,955,854 (1) Assumes the receipt of the federal subsidy on the Series 2010D Bonds. This table assumes that subsidy payments will be made at 32.62% based on the 35% subsidy rate being reduced by approximately 6.8% in the federal fiscal year beginning October 1, (2) Less the Refunded Bonds. SWAP AGREEMENTS Simultaneously with the issuance of the Series 2005 LCDA Bonds, the LCDA, on behalf of the City, entered into an interest rate swap agreement with JPMorgan Chase Bank, N.A., pursuant to which the City pays a fixed rate of 3.56% and receives 70% of onemonth LIBOR on a notional amount of $75,000,000 which amortizes with the Series 2005 LCDA Bonds. The swap agreement terminates on October 1, 2026, the final maturity date of the Series 2005 LCDA Bonds. The City redeemed the outstanding $25,000,000 of the Series 2005 LCDA Bonds on June 23, 2009, and reallocated this notional amount of the original swap agreement to other (nonwater and sewer) outstanding variable rate debt of the City. See INVESTMENT CONSIDERATIONS Utilization of Derivatives Markets herein. BOND INSURANCE Bond Insurance Policy Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. ("AGM") will issue its Municipal Bond Insurance Policy (the "Policy") for the Bonds maturing on December 1 in the years 2026 through 2035, inclusive (the Insured Bonds ). 12

21 The Policy guarantees the scheduled payment of principal of and interest on the Insured Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Assured Guaranty Municipal Corp. AGM is a New York domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. ( AGL ), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol AGO. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. Neither AGL nor any of its shareholders or affiliates, other than AGM, is obligated to pay any debts of AGM or any claims under any insurance policy issued by AGM. AGM s financial strength is rated AA (stable outlook) by Standard and Poor s Ratings Services, a Standard & Poor s Financial Services LLC business ( S&P ), AA+ (stable outlook) by Kroll Bond Rating Agency, Inc. ( KBRA ) and A2 (stable outlook) by Moody s Investors Service, Inc. ( Moody s ). Each rating of AGM should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM s longterm rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn. Current Financial Strength Ratings On June 29, 2015, S&P issued a credit rating report in which it affirmed AGM s financial strength rating of AA (stable outlook). AGM can give no assurance as to any further ratings action that S&P may take. On November 13, 2014, KBRA assigned an insurance financial strength rating of AA+ (stable outlook) to AGM. AGM can give no assurance as to any further ratings action that KBRA may take. On July 2, 2014, Moody s issued a rating action report stating that it had affirmed AGM s insurance financial strength rating of A2 (stable outlook). On February 18, 2015, Moody s published a credit opinion under its new financial guarantor ratings methodology maintaining its existing rating and outlook on AGM. AGM can give no assurance as to any further ratings action that Moody s may take. For more information regarding AGM s financial strength ratings and the risks relating thereto, see AGL s Annual Report on Form 10-K for the fiscal year ended December 31, Capitalization of AGM At September 30, 2015, AGM s policyholders surplus and contingency reserve were approximately $3,769 million and its net unearned premium reserve was approximately $1,603 million. Such amounts represent the combined surplus, contingency reserve and net unearned premium reserve of AGM, AGM s wholly owned subsidiary Assured Guaranty (Europe) Ltd. and 60.7% of AGM s indirect subsidiary Municipal Assurance Corp.; each amount of surplus, contingency reserve and net unearned premium reserve for each company was determined in accordance with statutory accounting principles. Incorporation of Certain Documents by Reference Portions of the following documents filed by AGL with the Securities and Exchange Commission (the SEC ) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: (i) (ii) (iii) the Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (filed by AGL with the SEC on February 26, 2015); the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (filed by AGL with the SEC on May 8, 2015); the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015 (filed by AGL with the SEC on August 6, 2015); and 13

22 (iv) the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 (filed by AGL with the SEC on November 6, 2015). All consolidated financial statements of AGM and all other information relating to AGM included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC s website at at AGL s website at or will be provided upon request to Assured Guaranty Municipal Corp.: 31 West 52 nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) ). Except for the information referred to above, no information available on or through AGL s website shall be deemed to be part of or incorporated in this Official Statement. Any information regarding AGM included herein under the caption BOND INSURANCE Assured Guaranty Municipal Corp. or included in a document incorporated by reference herein (collectively, the AGM Information ) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded. Miscellaneous Matters AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading BOND INSURANCE. General THE SYSTEM The City presently provides water and sewer services to an area of approximately 125 square miles, which includes areas outside of the present corporate limits of the City. The City also provides water by contract to Barksdale Air Force Base and to the City of Greenwood, Louisiana, and City of Blanchard, Louisiana as well as other small systems on an emergency basis. The City's existing water and sewer services are provided by the Department of Water and Sewerage (the Department ). The Department is divided into four divisions along with the Office of Administration. The Department has approximately 326 employees under the supervision of the Director of Water and Sewerage, Barbara Featherston. The Office of Administration includes budget management, personnel, and contracts. The four divisions are Customer Service, Field Operations, Wastewater Treatment and Water Purification. Each of the superintendents and assistant superintendents/plant managers overseeing the divisions (except Customer Service) maintain Class IV (utility serving more than 50,000 population) operator's certifications from the State. The Department encourages certification of all of its personnel and supports training programs administered through the local section of the American Water Works Association, Water Environment Federation, DHH and the Louisiana Conference on Water Supply, Sewerage and Industrial Waste. Water Supply and Demand Cross Lake has been the primary water supply for the City since It is supplemented by water from Twelve Mile Bayou. It is estimated that Cross Lake, with supplemental pumping from Twelve Mile Bayou, has an average day yield of 53 million gallons per day MGD ). The average daily requirements were approximately 40 MGD in 1985, approximately 33.1 MGD in 1999 and approximately 34.8 MGD in The existing water supply is considered to be sufficient to meet the City's needs for the foreseeable future. Water Treatment Facilities The City currently operates the Amiss Water Treatment Plant which is rated to produce 78 million gallons of water per day. The Amiss Water Treatment Plant was initially constructed in 1925, with expansions in 1953, 1955, 1968 and The present facility is comprised of two separate water treatment plants which are connected to three common 5.0 MGD finished water clearwells and which have a combined rated capacity of 90 MGD. Both plants provide average daily and peak usage treatment consisting of coagulationflocculation, sedimentation, filtration and disinfection. The Amiss Water Treatment Plant has facilities to feed alum, lime, carbon, fluoride, ammonia, chlorine and is equipped with two-stage ozonation. 14

23 The McNeill Street Plant was initially constructed in 1887, and enlarged in 1947, 1976 and The currently operable portion of the McNeill Street Plant is used as a booster station for water pressure and water flow control purposes. The remaining nonoperating portion of the McNeill Street Plant is now a State Museum comprised of turn-of-the-century equipment and is listed in the National Register of Historical Landmarks. Water Distribution The water distribution system consists of over 1,000 miles of piping, ranging in size from 4 inches to 60 inches in diameter. The distribution system services an area of over 125 square miles with a population of approximately 205,000. In addition to the distribution mains, the distribution facilities include four booster pumping stations with a combined firm capacity of 53 MGD, which is sufficient to meet daily demands, complete with ground storage reservoirs. The McNeill Station has a 3- million-gallon concrete reservoir, the Inner Loop Pump Station has a 5-million-gallon concrete reservoir, 68th and Union Station has a 4-million-gallon concrete reservoir and the 70th and Pine Station has two, 2-million-gallon steel storage tanks. The system also contains three, 2-million-gallon elevated storage tanks. Sewerage Facilities The existing sewerage facilities consist of over 1,000 miles of collection sewers, 132 lift stations and two sewage treatment plants. The present collection system consists of gravity sewer mains, sub-mains, interceptors and force mains, ranging in size from 4 inches to 60 inches in diameter. The collection system serves an area of over 125 square miles with a population of approximately 205,000. Wastewater from the City is currently treated at two wastewater treatment plants. The Lucas Wastewater Treatment Plant was completed in 1976 and expanded in It has a rated capacity of 30 MGD. The plant utilizes the activated sludge wastewater treatment process for liquid treatment and Class A treatment of sludge for final waste disposal. The plant is designed to treat an average daily flow of 25 MGD and a maximum peak daily flow rate of approximately 40 MGD. The plant has an equalization storage capacity of 24 million gallons. The North Regional Wastewater Treatment Plant was constructed in 1988 and expanded in 1991 and underwent major rehabilitation in It was designed to allow for the abandonment of the Old Cooper Road Treatment Plant which failed to meet permit limits. The treatment plant is an oxidation ditch converted to activated sludge with a rated capacity of 7.5 MGD and a maximum peak daily flowrate of 11.8 MGD. The plant has 12-million-gallon off-line excess flow storage capacity. Cooperative Endeavor Agreement with Port The Caddo-Bossier Parishes Port Commission (the Port ) has financed and constructed certain sewer and water facilities owned by the Port and located outside the corporate boundaries of the City. The City and the Port have entered into a Cooperative Endeavor Agreement (the Agreement ) whereby the City sells water to the Port and its users and accepts for treatment wastewater generated by the Port and its users. The City bills the Port and its users on a monthly basis for such water and sewer services. Pursuant to the Agreement, the City remits to the Port on a monthly basis a portion of the moneys collected by the City from the Port and its users, to the extent of any surplus Revenues which are available after the City has made all payments in connection with any outstanding water and sewer bonds of the City. [remainder of page intentionally left blank] 15

24 Customers of the System The number of users of the System is shown in the following table: Year Water Customers Sewer Customers * 2012 * 2013 * 63,050 66,100 66,800 67,500 66,910 70,254 67,461 66,692 66,688 65,714 65,437 64,589 64,590 64,900 65,028 64,700 65,087 65,150 65,075 65,205 65,385 63,295 64,635 65,353 65,634 65,767 66,227 67,051 67,613 68,102 68,435 68,832 66,957 66,695 66,236 61,789 64,778 65,500 66,150 66,183 70,165 66,694 66,085 66,333 64,970 64,867 64,060 63,963 64,200 64,052 62,700 62,700 63,280 63,415 63,195 63,353 61,400 62,454 62,765 62,856 62,909 63,226 63,803 64,162 64,546 64,783 65,074 65, , ,725 64,080 * Note: In 2011, the City installed a new billing software. Differences in customer numbers may be attributable to duplicate counting of meters and dials. Source: City of Shreveport [remainder of page intentionally left blank] 16

25 Treatment Facilities Capacities Summary Treatment Facility Treatment Facility Capacity Average Day/Max Month (MGD) Treatment Facility Average Day Treated Effluent (2014) Treatment Facility Peak Day Treated Effluent (2014) Lucas Wastewater Treatment Facility 30/40 MGD 22 MGD 52 MGD North Regional Wastewater Treatment Facility 7/11.8 MGD 4 MGD 17 MGD T.L. Amiss Waster Treatment Facility Largest Industrial Customers 78 MGD (estimated design capacity) 35 MGD 40 MGD Largest Industrial Customers (1) (For Year Ended December 31, 2014) Customer Annual Water Consumption (million gallons) CALUMET LUBRICANTS COMPANY 691,133,000 PRATT PAPER INDUSTRIES 432,914,000 BASE CIVIL ENG (2) 256,048,000 CHEMTRADE LOGISTICS 93,306,000 LIBBEY GLASS 92,327,000 THE HAVEN PROPERTY OWNERS 90,269,000 CHRISTUS SCHUMPERT 86,682,000 SAM'S TOWN SHREVEPORT 74,268,000 SWEPCO 64,009,000 DR. REDDY'S LABORATORY 57,963,000 TOTALS 1,938,919,000 (1) Account for approximately 8.3% of total revenues. (2) Note: This customer is a water customer only. All other large industrial customers are sewer customers as well. Source: City of Shreveport, Department of Water and Sewerage. [remainder of page intentionally left blank] 17

26 Rates and Charges for Water and Sewer Services Rates and Charges. The following table shows the City's current and approved future rates and charges for water and sewer services of the System. Tier 1 0 to 3 thousand gallons per month Tier 2 4 to 7 thousand gallons per month Tier 3 8 to 14 thousand gallons per month Tier 4 Over 14 thousand gallons per month Sprinkler meter rate begins at Tier 3 Water Customer Class Rate Per 1,000 Rate Per Rate Per 1,000 Rate Per Gallons Inside 1,000 Gallons Gallons Inside 1,000 Gallons City Outside City City Outside City Residential Tier 1 $1.32 $2.64 $1.32 $2.64 Tier 2 $2.63 $5.26 $2.63 $5.26 Tier 3 $3.95 $7.90 $3.95 $7.90 Tier 4 $4.47 $8.94 $4.47 $8.94 Commercial $3.02 $6.04 $3.02 $6.04 Industrial $3.02 $6.04 $3.02 $6.04 Monthly Fee 5/8 inch meter $6.54 $13.08 $7.54 $15.08 Sewer Inside City Outside City Inside City Outside City Rate per 1,000 gallons $6.33 $12.66 $7.22 $14.44 Monthly Fee $6.33 $12.66 $7.22 $14.44 Water Customer Class Rate Per 1,000 Rate Per Rate Per 1,000 Rate Per Gallons Inside 1,000 Gallons Gallons Inside 1,000 Gallons City Outside City City Outside City Residential Tier 1 $1.32 $2.64 $1.32 $2.64 Tier 2 $2.63 $5.26 $2.63 $5.26 Tier 3 $3.95 $7.90 $3.95 $7.90 Tier 4 $4.47 $8.94 $4.47 $8.94 Commercial $3.02 $6.04 $3.02 $6.04 Industrial $3.02 $6.04 $3.02 $6.04 Monthly Fee 5/8 inch meter $7.54 $15.08 $7.54 $15.08 Sewer Inside City Outside City Inside City Outside City Rate per 1,000 gallons $7.87 $15.74 $8.42 $16.84 Monthly Fee $7.87 $15.74 $8.42 $

27 Water Customer Class Rate Per 1,000 Rate Per Rate Per 1,000 Rate Per Gallons Inside 1,000 Gallons Gallons Inside 1,000 Gallons City Outside City City Outside City Residential Tier 1 $1.32 $2.64 $1.33 $2.66 Tier 2 $2.63 $5.26 $2.65 $5.30 Tier 3 $3.95 $7.90 $3.98 $7.96 Tier 4 $4.47 $8.94 $4.51 $9.02 Commercial $3.02 $6.04 $3.18 $6.36 Industrial $3.02 $6.04 $3.18 $6.36 Monthly Fee 5/8 inch meter $7.54 $15.08 $8.54 $17.08 Sewer Inside City Outside City Inside City Outside City Rate per 1,000 gallons $9.01 $18.02 $9.55 $19.10 Monthly Fee $9.01 $18.02 $9.55 $19.10 Water Customer Class Rate Per 1,000 Rate Per Rate Per 1,000 Rate Per Gallons Inside 1,000 Gallons Gallons Inside 1,000 Gallons City Outside City City Outside City Residential Tier 1 $1.33 $2.66 $1.33 $2.66 Tier 2 $2.65 $5.30 $2.66 $5.32 Tier 3 $3.98 $7.96 $3.99 $7.98 Tier 4 $4.51 $9.02 $4.52 $9.04 Commercial $3.18 $6.36 $3.28 $6.56 Industrial $3.18 $6.36 $3.28 $6.56 Monthly Fee 5/8 inch meter $8.54 $17.08 $9.45 $18.90 Sewer Inside City Outside City Inside City Outside City Rate per 1,000 gallons $9.74 $19.48 $9.33 $18.66 Monthly Fee $9.74 $19.48 $9.33 $18.66 Quantity charges for commercial and industrial customers connected to the Sewerage System shall be based on 100 percent of metered water use; provided that the Director of Water and Sewerage shall be authorized to adjust these charges to account for such factors as product use and cooling tower evaporation. The customer shall bear the burden of proof regarding product use or evaporation when requesting an adjustment. 19

28 In addition to the charges listed above, all monitored commercial and industrial customers pay for excessive wastewater strengths, Biochemical Oxygen Demand ( BOD ) and Suspended Solids ( SS ), based upon the following formula: Where: S = Vs x 8.34 x $0.094 (BOD-250) + $0.031 (SS-250) S = Surcharge in dollars. Vs = Sewage volume in millions of gallons = Pound per gallon of water. $0.094 = Unit Charge for BOD in dollars per pound BOD = Strength index in parts per million by weight. $0.31 = Unit charge of suspended solids in dollar per pound. SS = Suspended solids strength index in parts per million by weight. Flat Rate Charges. Flat rate charges for sewer service are $55.13 for residential accounts inside the City and $ for those outside the City. Metered Water Sales. Billing Policy Year Metered Sales 2013 $32,700, $34,400,000 Average of 2013 and 2014 $33,550,000 The City's water and sewage utility accounts are divided into twenty cycles which are read sequentially on a monthly basis. Billings are based on actual water usage, and bills are generated on a daily basis to facilitate a steady cash flow. Accounts are delinquent and subject to discontinuance of service after 35 days. A $50 fee is charged for reconnecting service. The meter is removed 5 days after service is discontinued and the water remains unpaid. An additional fee of $150 is required to restore service. Capital Improvement Program The capital improvement program of the System is expected to grow significantly over the next several years due to the sewer improvements required by the hereinafter defined Consent Decree in addition to funding a significant water program. The current amount dedicated to the System s capital improvement program is approximately $238 million that will be financed through the issuance of bonds and loans. The loans include Clean Water State Revolving Funds for both water and sewer while the bonds include revenue bonds as well as general obligation bonds. The debt service from these loans and bonds (other than general obligation bonds) are and will be paid with revenues generated by the System. This increase in capital improvement projects will be funded by current and future rate increases or general obligation bonds dedicated to such improvements. The City s capital improvement plan incorporates projected improvements identified in the 1999 Water and Wastewater Infrastructure Plan (Master Plan), the 2008 Water System Improvement Plan, and staff identified projects. The Master Plan identifies improvements to the water and wastewater infrastructure necessary over the next twenty-five (25) years to assure adequate water and wastewater service to the Metropolitan Shreveport Area. In the past 10 years, a significant number of these projects have been completed including over $40 million in projects at the Amiss Water Purification facility, $70 million in projects at the two wastewater plants, along with other projects totaling over $75 million. The City is currently undertaking a major sewer evaluation study as a part of the negotiated Consent Decree. This study will be the basis for future sewer capital projects. Trend in Finances of Department of Water and Sewerage The following pages include (i) a summary of revenues, expenses and changes in net assets of the Department of Water and Sewerage Fund of the City for the six years ending December 31, 2014 and (ii) a ten-year history of the revenue bond coverage of the City s Water and Sewer Bonds. 20

29 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE SIX YEARS ENDED DECEMBER 31, (2) Operating Revenues: Charges for Services $61,932,758 $65,543,671 $57,582,004 $61,096,225 $74,519,873 $ 53,625,426 Miscellaneous 1,428,310 1,231,794 1,052, , ,409 2,303,702 Total Operating Revenues 63,361,068 66,775,465 58,634,935 61,742,737 75,259,282 55,929,128 Operating Expenses: Personal Services 14,786,039 14,451,611 14,448,307 14,920,209 15,699,212 10,658,154 Contractual Services and Other Expenses 7,521,132 6,547,313 5,836,383 7,679,616 8,607,605 5,783,883 Utilities 3,816,337 3,442,487 4,944,689 4,409,011 4,562,710 3,363,212 Repairs and Maintenance 838,289 1,094,176 1,366,513 2,363,782 2,222,565 1,515,571 Materials and Supplies 7,435,579 8,509,973 7,856,245 7,693,520 7,371,892 5,936,248 Depreciation 11,558,821 12,358,468 13,301,790 13,217,545 16,069,694 12,052,271 Total Operating Expenses 45,956,197 46,404,028 47,753,927 50,283,683 54,533,678 39,336,339 Operating Income (Loss) 17,404,871 20,371,437 10,881,008 11,459,054 20,725,604 16,592,789 Non-Operating Revenues (Expenses): Investment Earnings (Loss) (2,563,389) (6,166,668) (29,579) 5,797,779 (1,348,250) 30 Interest Expense (6,588,336) (7,275,142) (10,263,675) (9,322,967) (7,028,529) (9,800,440) Intergovernmental 1, , , ,957 0 Bond Issuance Costs (509,348) (411,401) (261,739) (103,105) (1,765,172) 0 Net Increase in Fair Value of Investments 4,183 2, Loss on Disposal of Capital Assets (1,666) (5,976) (67,571) (13,250) (27,528) 0 Net Non-Operating Revenues (Expenses) (9,657,220) (13,357,718) (10,622,564) (3,430,087) (9,314,522) (9,800,410) Income (Loss) Before Contributions and Transfers 7,747,651 7,013, ,444 8,027,967 11,411,082 6,792,379 Capital Contributions 1,412, , , , ,980 0 Transfers In 0 2,543 3,625,811 13,092,780 12,685,064 11,913,603 Transfers Out (1,350,000) (1,142,402) (1,435,000) (1,435,000) (1,435,000) (1,076,250) Change in Net Position (1) 7,810,594 6,743,864 2,914,150 20,118,641 23,290,126 17,629,732 Total Net Assets - Beginning 245,555, ,365, ,109, ,103, ,221, ,512,036 Total Net Position - Ending $253,365,878 $260,109,742 $263,023,892 $282,221, ,512, ,141,768 (1) As restated in 2013 due to the adoption of Governmental Accounting Standard Board Statement No. 65. (2) 2015 Statement of Revenues, Expenses, and Changes in Net Position are based on updated actual financial statements as of September 30, Sources: Annual Financial Statements, City of Shreveport for Fiscal Years ended December 31, December 31, 2014 and Third Quarter Financial Statements provided by the City of Shreveport. [remainder of page intentionally left blank] 21

30 CITY OF SHREVEPORT, LOUISIANA REVENUE BOND COVERAGE WATER AND SEWER BONDS FISCAL YEARS ENDED DECEMBER 31, 2005 THROUGH DECEMBER 31, 2015 Year Gross Revenue (1) Less: Operating Expenses (2)(3) Debt Service Net Available Revenue Principal Interest Total Coverage 2006 $63,131,449 $36,874,335 $26,257,114 $11,782,506 $4,766,703 $16,549, x ,876,054 35,987,039 24,889,015 12,370,601 5,079,611 17,450, x ,944,320 38,219,466 22,724,854 12,755,277 4,759,719 17,514, x ,352,027 35,957,338 20,394,689 11,362,709 4,000,153 15,362, x ,803,198 35,747,376 25,055,822 8,478,772 3,025,458 11,504, x ,110,266 35,187,962 25,922,304 8,390,478 2,823,412 11,213, x ,605,356 35,887,137 22,718,219 8,132,678 2,535,244 10,667, x ,751,942 38,501,138 29,250,804 8,110,966 2,219,129 10,330, x ,765,989 39,898,984 34,867,005 9,898,232 4,318,615 14,216, x 2015 (4) 74,572,211 37,813,757 36,758,453 9,119,625 4,122,003 13,241, x (1) Includes operating revenues, interest income, changes in fair value of investments and intergovernmental revenues. (2) Before depreciation and amortization expenses and after transfers out. (3) The revenue bond coverage computations have been updated to include OPEB costs. (4) City of Shreveport Finance Department-Unaudited Annualized Financials for 2015 based on actual financials for September 30, Source: Comprehensive Annual Financial Reports, City of Shreveport and Unaudited City of Shreveport financial statements as of September 30, [remainder of page intentionally left blank] 22

31 Annual Operating Budget Summary The table below sets forth a summary of the Department s annual operating budget for the fiscal year ended December 31, 2015, and the proposed annual operating budget for fiscal year ending December 31, Summary of Available Funds Amount Summary of Available Funds Amount Fiscal Year Ended December 31, 2014: Fiscal Year Ending December 31, 2015: Fund Balance as of January 1, 2014 $(1,981,600) Fund Balance as of January 1, 2015 $10,147, Estimated Revenues 74,852, Estimated Revenues 77,837, Total Available for Expenditure 72,870, Total Available for Expenditure 87,984, Estimated Expenditures 70,531, Estimated Expenditures 69,560,900 Estimated Fund Balance as of December 31, ,338,700 Estimated Fund Balance as of December 31, ,423, Estimated Revenues 81,655, Estimated Revenues 81,896, Total Available for Expenditures 83,993, Total Available for Expenditures 100,319, Estimated Expenditures 71,534, Estimated Expenditures 80,615,500 Estimated Fund Balance as of December 31, ,459,100 Estimated Fund Balance as of December 31, ,704,100 Source: 2015 Annual Operating Budgets and Proposed 2016 Annual Operating Budgets, City of Shreveport Regulatory Requirements The System is subject to regulatory requirements relating to the Federal Water Pollution Control Act, as amended (the Clean Water Act ) and the Safe Drinking Water Act. The regulatory requirements are administered by the EPA DEQ, and DHH. Regulations of these agencies deal primarily with the quality of effluent which may be discharged from the System s wastewater treatment facilities, the disposal of sludge generated by the wastewater treatment plants, the discharge of pollutants into the groundwater and the nature of waste material (particularly industrial waste) discharged into the collection system. As a condition of having received federal EPA grant funds under the Clean Water Act for planning, design and construction of various wastewater projects, the City is subject to additional regulatory requirements. Among the grant related requirements are guidelines which must be followed concerning planning methodologies, design criteria, construction activities and the operation, maintenance and financing of facilities. On the water side, the regulations deal with the quality of the water as it is treated through the plant processes and as it is ultimately delivered to the consumer. To comply with federally mandated effluent quality and disposal criteria, the City must operate its wastewater treatment facilities according to discharge limitations and reporting requirements set forth National Pollutant Discharge Elimination System ( NPDES ) discharge permits. At the present time, all wastewater treatment plants are successfully meeting the requirements of their individual NPDES permits. To comply with other federal regulations concerning the discharge of waste materials into the sewer system, the City must administer and enforce industrial pretreatment limitation standards upon users of the system. The City has had an industrial waste program in effect since [remainder of page intentionally left blank] 23

32 Consent Decree In 2009, the United States Environmental Protection Agency ( EPA ) reported the City to the United States Department of Justice ( DOJ ) for the hundreds of sanitary sewer overflows ( SSOs ) that occurred in portions of the System in prior years. Immediate action had to be taken to prevent further deterioration of portions of the System and avoid litigation. The City, the EPA and the DOJ entered into a Federal Consent Decree (the Consent Decree ), pursuant to which the City developed a Wastewater Master Plan and Remediation Measures Plan which outline the work that is required as part of the Consent Decree, the objectives of which are to (i) avoid litigation between the City, DEQ, the EPA and the DOJ, (ii) dictate how and when funds are spent on the System and (iii) outline a 12-year compliance schedule and include penalties for each day a deadline is missed. The City is currently meeting all schedules in the Consent Decree. Construction for the first of five phases will start in early The Consent Decree can be reviewed in its entirety at Below is a chart summarizing the 12-year compliance schedule as stipulated by the by the Consent Decree. CD Consent Decree SSA Sanitary Sewer Assessment RMP Remedial Measures Plan CA Capacity Assessment CMOM Capacity, Management, Operations and Maintenance Source: City of Shreveport [remainder of page intentionally left blank] 24

33 PENSION PLANS AND OTHER POST EMPLOYMENT BENEFITS The City administers three defined benefit pension plans: the Firemen s Pension and Relief Fund ( FPRF ), the Policemen s Pension and Relief Fund ( PPRF ) and the Employees Retirement System ( ERS ). These plans do not issue standalone financial reports and are not included in the report of a public employee retirement system or another entity and are therefore included in comprehensive annual financial reports as combining statements under the section entitled Combining and Individual Fund Statements and Schedules. The System makes a contribution to the ERS to cover pension benefits for its employees. The System pension costs totaled $1,139,224 in Fiscal Year 2014; are estimated at $1,570,000 for Fiscal Year 2015; and budgeted at $2,090,400 in Fiscal Year The City also provides medical, dental and life insurance coverage through a cost-sharing multipleemployer defined benefit plan. The City currently covers OPEB expenses on a pay-as-you go basis but continues to evaluate funding options. The System s net OPEB liability as of December 31, 2014 was $16,621,263. See APPENDIX A and Note IV. Other Information of the Comprehensive Annual Financial Report, City of Shreveport General INVESTMENT CONSIDERATIONS The purchase of the Bonds involves special risks, and the Bonds may not be appropriate investments for all types of investors. Each prospective investor is encouraged to read this Official Statement, including the Appendices hereto, in its entirety and to give particular attention to the factors described below, which, among other factors discussed herein, could affect the payment of debt service on the Bonds and could affect the market price of the Bonds to an extent that cannot be determined at this time. The following does not purport to be an exhaustive listing of risks and other considerations that may be relevant to investing in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of such risks. Special Limited Obligations The Bonds shall be special, limited obligations of the City payable solely from the Revenues of the System, subject to the payment of the reasonable and necessary expenses of operating and maintaining the System. The Bonds do not constitute an indebtedness or pledge of the general credit of the City within the meaning of any constitutional or statutory limitation of indebtedness. See SECURITY FOR THE BONDS herein. The ability of the City to meet its payment obligations under the Bond Ordinance will depend upon the ability of the System to generate sufficient Revenues to meet such obligations, the System s operating and maintenance expenses, debt service on the Outstanding Prior Lien Bonds and the Bonds, extraordinary costs or expenses that may occur and other costs and expenses. Accordingly, investors should be aware that future Revenues and expenses of the System will be subject to conditions that may differ materially from current conditions to an extent that cannot be determined at this time. See THE SYSTEM herein. The payment of the Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City, except for the Revenues and other moneys pledged for the payment of the Bonds. Insufficient Net Revenues The Bonds are payable solely from the Net Revenues, and payment of the Bonds is dependent upon the generation of sufficient Revenues from the System. If the System were to become inoperable due to damage, destruction, environmental restriction or any other reason, if the City should lack raw water or lack treatable water due to contamination, lack of adequate water rights to service customers, drought or any other reason, if the City has inadequate storage or transmission facilities, if the City is unable to increase rates and charges for any reason or if the City incurs unanticipated expenses or reduced revenues due to power rate increases, changed water conditions or water regulations or for any other reason, the City may be unable to generate adequate Revenues from the System to pay debt service on the Bonds. See THE SYSTEM herein. Utilization of Derivatives Markets The City occasionally utilizes the derivatives markets (including, from time to time, interest rate swaps) to manage its exposure to interest rate and equity market volatility. The City has entered into an interest rate swap agreement relating to the Series 2005 LCDA Bonds and other non-water and sewer variable rate indebtedness of the City to hedge the variable cash flows associated with such variable rate indebtedness. The interest rate swap is designed to hedge variable rate indebtedness and is structured so that the City pays a fixed rate. In the event of an early termination of the swap agreement, the City may owe a payment to the related swap provider, and such amount, which cannot currently be calculated, may be substantial. The payment obligations of the City under any swap agreement will not alter the obligations of the City to pay or make payments with respect to principal of, redemption price and purchase price of, and interest on any other indebtedness. 25

34 Water Quality and Environmental Requirements The System is subject to numerous federal and State regulatory requirements. Those regulations are subject to change at any time. Public drinking water systems like the System are regulated by the EPA, DHH and DEQ, all of which have the authority to enforce drinking water standards. Water quality standards imposed by the federal government or the State may affect the water available to the City. Further, implementation of those standards or enforcement by EPA, DHH or DEQ could result in increased costs associated with the City s water treatment, storage or distribution operations or require significant capital expenditures. In addition, failure to comply with regulatory changes or the inability to comply with them in a timely manner could cause portions of the System to become unavailable. Any disruption of service or increases in costs would reduce the amount of Revenues available to pay Debt Service on the Bonds (subject to the Rate Covenant described herein under SECURITY FOR THE BONDS - Rate Covenant ). See also THE SYSTEM - Regulatory Requirements herein. Consent Decree In 2009, the EPA reported the City to the DOJ for the hundreds of SSOs that occur in portions of the System each year. Immediate action had to be taken to prevent further deterioration of portions of the System and avoid litigation. The City, the EPA and the DOJ entered into the Consent Decree, pursuant to which the City developed a Wastewater Master Plan and Remediation Measures Plan which outline the work that is required as part of the Consent Decree, the objectives of which are to (i) avoid litigation between the City, DEQ, the EPA and the DOJ, (ii) dictate how and when funds are spend on the System and (iii) outline a 12-year compliance schedule and include penalties for each day a deadline is missed. No assurances can be made that the City will timely comply with the Consent Decree and avoid protracted litigation with the federal government or substantial penalties which may be imposed under the Consent Decree, either of which would reduce the amount of Revenues available to pay Debt Service on the Bonds (subject to the Rate Covenant described herein under SECURITY FOR THE BONDS - Rate Covenant ). See also THE SYSTEM - Regulatory Requirements herein. Changes in Law Various state constitutional provisions, laws and regulations apply to the operation of the System and the operation and finances of the City. Various federal laws and regulations also apply to the operation of the System. There is no assurance that there will not be any change in, interpretation of, or addition to the applicable laws, provisions and regulations which would have a material effect, directly or indirectly, on the affairs of the City or the operation for the System in the future. Changes in Federal and State Tax Law From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein. In addition, such legislation (whether currently proposed, proposed in the future or enacted) could affect the market value or marketability of the Bonds. For example, ongoing or future negotiations between the Executive and Legislative Branches of the United States government to resolve federal budget deficits may result in the enactment of tax legislation that could significantly reduce the benefit of, or otherwise affect, the exclusion of gross income for federal income tax of interest on all state and local obligations, including the Bonds. It cannot be predicted whether or in what form any such proposals might be enacted or whether if enacted such proposals would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds or the market value thereof would be impacted thereby. Prospective purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. Covenant to Maintain Tax-Exempt Status of Interest on the Bonds The tax-exempt status of the interest on the Bonds, as described under the caption TAX EXEMPTION in this Official Statement, is based on the continued compliance by the City with certain covenants contained in the Bond Ordinance and other tax compliance documents, and in reporting of certain information by such entities to the United States Treasury. These covenants relate generally to arbitrage limitations, rebate of certain excess investment earnings to the federal government and requirements regarding the timely and proper use of proceeds of the Bonds and of the System. Failure to comply with any of these covenants may result in the treatment of interest on the Bonds as taxable retroactive to the date of issuance. Secondary Market There is no guarantee that a secondary trading market will develop for the Bonds. Consequently, prospective Bond purchasers should be prepared to hold their Bonds to maturity or prior redemption. Subject to applicable securities laws and prevailing market conditions, the Underwriter intends, but is not obligated, to make a market in the Bonds. 26

35 Failure to Provide Ongoing Disclosure The City will enter into the Undertaking pursuant to the Rule (as such terms are defined herein). Failure to comply with the Undertaking and the Rule may adversely affect the transferability and liquidity of the Bonds and their market price. See CONTINUING DISCLOSURE herein. Book-Entry Persons who purchase Bonds through a DTC Participant become creditors of the DTC Participant with respect to the Bonds. Records of the investors holdings are maintained only by the DTC Participant and the investor. In the event of the insolvency of the DTC Participant, the investor would be required to look to the DTC Participant s estate and to any insurance maintained by the DTC Participant to recoup the investor s loss. Neither the City, the Paying Agent nor the Underwriter is responsible for failures to act by, or insolvencies of, the Securities Depository or any DTC Participant. See THE BONDS - Book- Entry Only System herein. Difficulties in Enforcing Rights and Remedies The remedies available to the owners of the Bonds upon an Event of Default under the Bond Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the federal bankruptcy code), the rights and remedies provided in the Indenture and the rights and remedies of any party seeking to enforce the pledge may not be readily available or may be limited. The State Constitution provides that no judgment against the State, a state agency or a political subdivision will be eligible, payable, or paid except from funds appropriated therefor by the Legislature or by the political subdivision against which judgment is rendered. The City is a political subdivision within the meaning of this constitutional provision. The various legal opinions delivered concurrently with the delivery of the Bonds or to be delivered concurrently with the delivery of the Indenture will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. The exceptions would encompass any exercise of federal, State or local police powers (including the police powers of the State and the City), in a manner consistent with public health and welfare. Bond Insurance The Bond Insurer will issue its Policy guaranteeing the payment of the principal (but not premium) of the Bonds due at their maturity dates or upon mandatory sinking fund redemption, but not as a result of the acceleration or other redemption thereof, and interest on the Bonds due on the Interest Payment Dates therefor. There can be no assurance that the Bond Insurer will be financially able to meet its contractual obligations under the Policy. A form of the Policy is attached hereto as APPENDIX F. Certain information with respect to the Bond Insurer is set forth under the caption BOND INSURANCE herein. Such information was provided by the Bond Insurer and no representation is made as to the adequacy or the accuracy thereof. So long as the Bond Insurer performs its obligations under the Policy, the Bonds cannot be accelerated, including acceleration as a consequence of a default under the Bond Ordinance, without the prior written consent of the Bond Insurer. Furthermore, so long as the Bond Insurer performs its obligations under the Policy, the Bond Insurer may direct any remedies that the City or holders of the Bonds may exercise under the Bond Ordinance. In the event that the Bond Insurer is unable to make payments of principal of and interest on the Bonds, as such payments become due, the Bonds, as applicable, are payable solely from moneys received by the Paying Agent as set forth in the Bond Ordinance. In the event that the Bond Insurer is required to pay principal of or interest on the Bonds, no representation or assurance is given or can be made that such event will not adversely affect the market price for or marketability of the Bonds. Owners of the Bonds should note that, while the Policy will insure payment of the principal amount (but not any premium) paid to any Bondholder in connection with the optional redemption of any Bonds which is recovered from such Bondholder as a voidable preference under applicable bankruptcy law, such amounts will be repaid by the Bond Insurer to such Bondholder only at the times and in the amounts as would have been due absent such redemption. Bond Insurer to Control Remedies in Event of Default Pursuant to the Bond Ordinance, before and after an Event of Default, the Bond Insurer has the complete and exclusive right to direct the Trustee to pursue and enforce any and all rights and remedies established by the Bond Ordinance. The Bond Insurer, if it is not in default with respect to the Policy, also has the exclusive right to waive any Event of Default pursuant to the 27

36 Bond Ordinance. Financial Condition of the Bond Insurer The Bond Insurer will issue the Policy, pursuant to which it will unconditionally guarantee the payment of the regularly scheduled principal of and interest on the Bonds. The ongoing stability and financial condition of the Bond Insurer, and the Bond Insurer s ability to pay the principal of and interest on the Bonds and otherwise perform its obligations under the Policy, will be the basis for the insured ratings assigned expected to be assigned by Moody s and S&P to the Bonds. In the event that the ratings assigned by Moody s and S&P to the Bonds, based upon the ability of the Bond Insurer to perform under the Policy, is revised or withdrawn or that the Bond Insurer is required to pay principal of or interest on the Bonds, no representation or assurance is given or can be made that such event will not adversely affect the market price for or marketability of the Bonds. Upon the occurrence and continuation of an Event of Default under the Bond Ordinance, proceeds of claims under the Policy are the Bondholders primary expected source of payment of principal of and interest on the Bonds. See BOND INSURANCE and RATINGS herein and the SPECIMEN MUNICIPAL BOND INSURANCE POLICY in APPENDIX F hereto. Weather Revenues and expenses of the System can be impacted by the effects of weather. Dry weather generally results in an increase of usage of the System, which can increase both revenues and expenses. Higher than average rainfall amounts generally result in less demand for the usage of the System and therefore revenues. Continued or heavy rain events also contribute to significant inflow and infiltration of stormwater into the sewer collection system, which may impact infrastructure and ultimate treatment of the sewage. The City was affected by major flooding of the Red River in 2015 with some sewer infrastructure, however, protective measures are in place to minimize future damage. As the City implements measures to comply with the Consent Decree, rain events will have considerably less impact on the System. LITIGATION There is no litigation, proceedings or investigations pending or, to the knowledge of the City, threatened against the City questioning the corporate existence of the City or the right of its officials to their respective offices or the right of the City to fix water and sewer rates or seeking to restrain, enjoin or in any way limit the approval or issuance and delivery of the Bonds or the taking of the actions and entering into the agreements referred to herein nor in which an adverse decision could (either singly or in the aggregate) materially adversely affect the financial condition of the City or the System or the City s ability to conduct the business of the System as currently being conducted or as proposed to be conducted herein, except as otherwise described herein under THE SYSTEM Consent Decree and INVESTMENT CONSIDERATIONS Consent Decree. Interest on the Bonds TAX EXEMPTION The delivery of the Bonds is subject to the approving opinion of The Boles Law Firm, APC, Monroe, Louisiana, and Jacqueline Scott & Associates, APLC, Bossier City, Louisiana, to the effect that interest on the Bonds is excluded from gross income for federal income tax purposes under existing law. See APPENDIX D hereto for the proposed form of opinion of Bond Counsel. Louisiana Taxes The opinion of Bond Counsel will state that, under the Act and other constitutional and statutory authority supplemental thereto, the Bonds shall be exempt from all taxation in the State of Louisiana. Minimum Tax Consideration Except as hereinafter described, interest on the Bonds will not be an item of tax preference for purposes of the federal alternative minimum tax on individuals and corporations. The Internal Revenue Code of 1986, as amended (the Code ) imposes a 20% alternative minimum tax on the alternative minimum taxable income of a corporation, if the amount of such alternative minimum tax is greater than the amount of the corporation s regular income tax. Generally, a corporation s alternative minimum taxable income includes 75% of the amount by which a corporation s adjusted current earnings exceeds a corporation s alternative minimum taxable income. Because interest on tax-exempt obligations is included in a corporation s adjusted current earnings, ownership of the Bonds could subject a corporation to alternative minimum tax consequences. 28

37 General The Code imposes a number of requirements that must be satisfied for interest on state and local obligations to be excluded from gross income for federal income tax purposes. These requirements include limitations on the use of bond proceeds and the source of repayment of bonds, limitations on the investment of bond proceeds prior to expenditure, a requirement that excess arbitrage earned on the investment of certain bond proceeds be paid periodically to the United States, except under certain circumstances, and a requirement that information reports be filed with the Internal Revenue Service. The opinion of Bond Counsel will assume continuing compliance with the covenants in the Bond Ordinance pertaining to those sections of the Code which affect the exclusion from gross income of interest on the Bonds for federal income tax purposes and, in addition, will rely on representations by the City with respect to matters solely within the knowledge of the City, which Bond Counsel has not independently verified. If the City should fail to comply with the covenants in the Bond Ordinance or if the foregoing representations should be determined to be inaccurate or incomplete, interest on the Bonds could become included in gross income from the date of original delivery of the Bonds, regardless of the date on which the event causing such inclusion occurs. Owners of the Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to corporations with Subchapter C earnings and profits and passive investment income that exceeds 25% of their gross receipts, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. In addition, certain foreign corporations doing business in the United States may be subject to a branch profits tax on their effectively connected earnings and profits. These categories of owners should consult their own tax advisors as to the applicability of these consequences. Qualified Tax-Exempt Obligations (Non-Bank Deductibility) The Tax Reform Act of 1986 revised Section 265 of the Code so as to generally deny financial institutions 100% of the interest deductions that are allocable to tax-exempt obligations acquired after August 7, However, an exception is permitted under the Tax Reform Act of 1986 for certain qualified tax-exempt obligations which allows financial institutions to continue to treat the interest on such obligations as being subject to the 20% disallowance provision under prior law if the City, together with certain subordinate entities, reasonably expects that it will not issue more than $10,000,000 of governmental purpose bonds in a calendar year and designates such bonds as qualified tax-exempt obligations pursuant to the provisions of Section 265(b)(3)(B) of the Code. The Bonds are NOT designated as qualified tax-exempt obligations pursuant to Section 265(b)(3)(B) of the Code. Tax Treatment of Original Issue Premium and Discount Certain maturities of the Bonds (the Premium Bonds ) may be offered and sold to the public at a price in excess of their stated principal amounts. Such excess is characterized as a bond premium and must be amortized by an investor purchasing a Premium Bond on a constant yield basis over the remaining term of the Premium Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium related to a tax-exempt bond for federal income tax purposes. However, as bond premium is amortized, it reduces the investor's tax basis in the Premium Bond. Investors who purchase a Premium Bond should consult their own tax advisors regarding the amortization of bond premium and its effect on the Premium Bond's tax basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Premium Bond. Certain maturities of the Bonds may be offered and sold at an original issue discount (the OID Bonds ). The difference between the initial public offering price of the OID Bonds (as set forth on the front cover hereon) and their stated principal amount payable at maturity constitutes original issue discount treated as interest that is excluded from gross income for federal income tax purposes and which is exempt from all taxation in the State subject to the caveats and provisions described above. In the case of an owner of an OID Bond, the amount of original issue discount which is treated as having accrued with respect to such OID Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of such OID Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such an OID Bond which are attributable to accrued original issue discount will be treated as interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual OID Bond, on days which are determined by reference to the maturity date of such OID Bond. The amount treated as original discount on such OID Bond for a particular semiannual period is equal to (i) the product of (a) the yield to maturity for such OID Bond and (b) the amount which would have been the tax basis of such OID Bond at the beginning of the particular semiannual period if held by the original purchaser, (ii) less the amount of any payments on such OID Bond during the semiannual period. The tax basis is determined by adding to the initial public offering price on such OID Bond the sum of the amounts which would have been treated as original issue discount for such purposes during all prior periods. If such an OID Bond 29

38 is sold between compounding dates, original issue discount which would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Investors who purchase an OID Bond should consult their own tax advisors with respect to the determination for federal income tax purposes of original issue discount accrued with respect to such OID Bonds as of any date, with respect to the accrual of original issue discount for such OID Bonds purchased on the secondary markets and with respect to the state and local tax consequences of owning such OID Bonds. Changes in Federal and State Tax Law From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein. In addition, such legislation (whether currently proposed, proposed in the future or enacted) could affect the market value or marketability of the Bonds. For example, ongoing and future negotiations between the Executive and Legislative Branches of the United States government to resolve federal budget deficits may result in the enactment of tax legislation that could significantly reduce the benefit of, or otherwise affect, the exclusion of gross income for federal income tax of interest on all state and local obligations, including the Bonds. It cannot be predicted whether or in what form any such proposals might be enacted or whether if enacted such proposals would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds or the market value thereof would be impacted thereby. Prospective purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending or proposed federal or state tax legislation, regulations or litigation. THE FOREGOING DISCUSSION OF CERTAIN FEDERAL AND STATE INCOME TAX CONSEQUENCES IS PROVIDED FOR GENERAL INFORMATION ONLY. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES TO THEM IN LIGHT OF THEIR OWN PARTICULAR INCOME TAX POSITION, OF ACQUIRING, HOLDING OR DISPOSING OF THE BONDS. LEGAL MATTERS Certain legal matters incident to the authorization, issuance, sale and delivery of the Bonds are subject to the approval of The Boles Law Firm, APC, Monroe, Louisiana, and Jacqueline Scott & Associates, APLC, Bossier City, Bond Counsel, whose approving legal opinion in substantially the form of APPENDIX D will be delivered with the Bonds. Certain legal matters will be passed on by Hardwick Law Firm LLC, Houston, Texas, and Joshua K. Williams Attorney at Law LLC, Shreveport, Louisiana, Disclosure Counsel to the City, and by Washington and Wells, LLC, Shreveport, Louisiana, and West & Associates L.L.P., Houston, Texas, Underwriters Counsel. ENFORCEABILITY OF REMEDIES The remedies available to the City or to the owners of the Bonds upon an Event of Default under the Bond Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the United States Bankruptcy Code), the remedies provided in the Bond Ordinance may not be readily available or may be limited. 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 bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. See also INVESTMENT CONSIDERATIONS - Difficulties in Enforcing Rights and Remedies herein. The Undertaking CONTINUING DISCLOSURE The City, as an obligated person within the meaning of Rule 15c2-12 of the Securities and Exchange Commission (17 C.F.R. Part 240, c2-12) (the Rule ), will enter into an undertaking (the Undertaking ) for the benefit of the owners of the Bonds to file, so long as the Bonds are outstanding, certain financial information and operating data annually (the Annual 30

39 Report ) and notice of certain material events with the Municipal Securities Rulemaking Board ( MSRB ), electronically through the MSRB s Electronic Municipal Market Access System ( EMMA ). The specific nature of the information to be contained in the Annual Report or notices of material events is set forth in FORM OF CONTINUING DISCLOSURE CERTIFICATE in APPENDIX E hereto pursuant to the specific requirements of the Rule. A failure by the City to comply with its Undertaking will not constitute an Event of Default under the Bond Ordinance (although Bondholders will have any available remedy at law or in equity). Nevertheless, such a failure must be reported by the City in accordance with the Rule, must be disclosed by the City in connection with future issuances of municipal securities for which the City is an obligated person under the Rule, and must be considered by a broker-dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. The address and telephone number of the City s Dissemination Agent is the Director of Finance, City Hall, 505 Travis Street, Shreveport, Louisiana (telephone (318) ). The City has not undertaken in the Continuing Disclosure Certificate to provide all of the information that investors may desire to have in making decisions to hold, sell or buy the Bonds. Compliance with Prior Undertakings The City has filed all continuing disclosure reports currently required by its prior undertakings under the Rule; however, not all reports were timely filed. Additionally, the City has failed to timely file notice of certain events as required by its prior undertakings. While the City has not made any determination as to materiality, the following summarizes the results of the City s review of the last five years of filings. The City s undertakings in connection with its continuing disclosure obligations all have an annual continuing disclosure compliance date of June 30. For Fiscal Year 2014, the City satisfied the reporting requirement for the Annual Report late on July 8, 2015 (financial information) and July 9, 2015 (operating data). For Fiscal Year 2013, the City satisfied the reporting requirement for the Annual Report late on July 29, For Fiscal Year 2012, the City satisfied the reporting requirement for the Annual Report late on July 30, For Fiscal Year 2011, the City satisfied the reporting requirement for the Annual Report late on July 3, For Fiscal Year 2010, the City satisfied the reporting requirement for the Annual Report on July 12, The City did not make event notice filings when bond insurers were downgraded. The City has made a supplemental filing with EMMA which reflects, to the best of its knowledge, the current rating on its outstanding Bonds which are covered by municipal bond insurance policies. The City is reviewing and revising its continuing disclosure policies and procedures to ensure timely compliance with its continuing disclosure undertakings in the future. The City (i) has enrolled in the EMMA automated reminder system, which alerts issuers and obligated persons to upcoming filing deadlines. Based upon its diligent review and to the best of its knowledge, the City is presently in compliance, in all material respects, with its continuing disclosure undertakings. The foregoing description of instances of noncompliance by the City with continuing disclosure undertakings should not be construed as an acknowledgment that any such instance was material. In order to assist the State and its political subdivisions with compliance of the provisions of the Rule, the Louisiana Legislature enacted Act 463 of the 2014 Regular Session of the Louisiana Legislature ( Act 463 ). Act 463, which is effective August 1, 2014, requires public entities, such as the State, to keep certain records demonstrating compliance with the Rule. Additionally, auditors for public entities in the State are required to review the public entity s compliance with such record-keeping requirements, review a sampling of the EMMA filings, and report on the auditor s findings in the annual audited financial statements of such public entity. Disclosures with Respect to other City Obligations While in the process of evaluating bonds for possible refunding with respect to the City s airport system (the Airport Prior Bonds ), the City learned that the financial information included in its audited financial statements since the issuance of the Airport Prior Bonds incorrectly reflected the revenues necessary to meet the rate covenant set out in the bond documents related to each series of Prior Bonds (the Airport Prior Bond Documents ). 31

40 Because of the incorrect calculations, the City believed that it may have failed to comply with its covenant that requires the City to make adjustments to rents, fees and charges and to revised rents, fees and rentals as such may be necessary to achieve net revenues (as such term is defined in the Airport Prior Bond Documents) equal to 125% of the annual debt service on all outstanding indebtedness payable out of net revenues of the Airport System. The loan agreements relating to each series of Airport Prior Bonds further provided that any failure to adhere to a covenant will become a default under said loan agreement if the City fails to cure same within 30 days of notice being given by the trustee requiring that the same be remedied. On August 30, 2015, the City filed a material event notice disclosing the possible failures to comply with its covenants and possible events of default. The notice is available on EMMA at On November 5, 2015, the City refunded the Airport Prior Bonds rendering moot any question of default under the associated loan agreements. RATINGS Each of Moody s Investors Service, Inc. ( Moody s ) and Standard & Poor s Rating Services, a Standard & Poor s Financial Services LLC business ( S&P ), has assigned the Bonds a rating of A3 (stable outlook) and BBB+ (stable outlook), respectively, in each case based upon the creditworthiness of the City. S&P also has assigned the Insured Bonds a rating of AA (stable outlook)] based upon the delivery of the Policy and the Reserve Policy by the Bond Insurer. Moody s also has assigned the Insured Bonds a rating of A2 (stable outlook) based upon the delivery of the Policy and the Reserve Policy by the Bond Insurer. Such ratings express only the views of such rating agencies and are not a recommendation to buy, sell or hold the Bonds. An explanation of the significance of such ratings may be obtained from the agencies which assigned the ratings at the following addresses: Moody s Investors Service, Inc. 7 World Trade Center at 250 Greenwich Street New York, New York Telephone: (212) Standard & Poor s Ratings Services 55 Water Street New York, New York, Telephone: (212) Generally, such rating agencies base their ratings on such materials and information, as well as their own investigations, studies and assumptions. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies if, in the judgment of the rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Bonds. The City has not requested that any other organization consider assignment of a rating in connection with the Bonds. UNDERWRITING The Underwriter has agreed, subject to certain customary conditions precedent to closing, to purchase the Bonds from the City at a purchase price of $136,375, (representing $120,000,000 principal amount of the Bonds, less $653, of Underwriter s discount, plus $17,029, of original issue premium). In addition to the underwriting discount, the Underwriter will retain certain proceeds of the Bonds in an amount equal to the premiums payable for the Policy and the Reserve Policy, and will pay said amount to the Bond Insurer on the date of issuance of the Bonds. The Bond Purchase Agreement requires the Underwriter to purchase all of the Bonds if any are purchased. The Bonds may be offered and sold to certain dealers (including Underwriter and other dealers depositing such Bonds into investment trusts) at prices lower than the public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various banking and financial services for the System for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the System. 32

41 Siebert Brandford Shank & Co., L.L.C. ( SBS ) has entered into separate agreements with its affiliate, Muriel Siebert & Co., and with Credit Suisse Securities (USA) for the retail distribution of certain securities offerings, at the original issue prices. Pursuant to the distribution agreement, if applicable to the Bonds, Muriel Siebert & Co. and/or Credit Suisse Securities (USA) will purchase Bonds at the original issue price less the selling concession with respect to any Bonds that Muriel Siebert & Co. and/or Credit Suisse Securities (USA) sells. SBS will share a portion of its underwriting compensation with Muriel Siebert & Co. and/or Credit Suisse Securities (USA). MUNICIPAL ADVISOR TKG & Associates LLC (the Municipal Advisor ) serves as independent municipal advisor to the City with respect to the issuance of the Bonds. The Municipal Advisor is a financial advisory firm and consulting organization and is not engaged in the business of underwriting, marketing, or trading municipal securities or any other negotiated instruments. The Municipal Advisor has provided advice as to the plan of financing and the structuring of the Bonds and has reviewed and commented on certain legal documentation, including this Official Statement. The advice on the structuring of the Bonds was based on materials provided by the City and other sources of information believed to be reliable. The Municipal Advisor has not audited, authenticated or otherwise verified the information provided by the City or the information set forth in this Official Statement or any other information available to the City with respect to the appropriateness, accuracy or completeness of disclosure of such information or other information, and no guarantee, warranty or other representation is made by the Municipal Advisor respecting the accuracy and completeness of or any other matter related to such information and this Official Statement. MISCELLANEOUS The references to all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is made to all such documents for full and complete statements of all matters of fact relating to the Bonds, the security for the payment of the Bonds and the rights of the owners thereof. During the period of the offering, copies of drafts of such documents may be examined at the office of the Underwriter; following delivery of the Bonds, copies of such documents may be examined at the principal corporate trust office of the Paying Agent. The information contained in this Official 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. All information regarding the City, the System, the Bonds and the Bond Ordinance have been furnished by the City. All information regarding the Policy and the Bond Insurer has been furnished by the Bond Insurer and the City makes no representations with respect thereto. Any statement made in this Official Statement involving matters of opinion or of estimates, whether or not expressly so stated, are set forth as such and not as representations 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 Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information presented herein since the date hereof. This Official Statement is not to be construed as a contract or agreement among the City, the Paying Agent or the Underwriter and the purchasers or owners of any of the Bonds. CERTIFICATION AS TO OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the City will furnish the purchaser a certificate signed by the Director of Finance of the City to the effect that (i) the descriptions and statements, including financial data, of or pertaining to the City on the date of the Preliminary Official Statement, on the date of the Official Statement, on the date of the sale of the Bonds and on the date of the delivery thereof were and are true in all material respects, and insofar as such matters are concerned, the Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) insofar as the descriptions and statements, including financial data, of or pertaining to governmental and/or nongovernmental entities other than the City and their activities contained in the Official Statement are concerned, such descriptions, statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue or incomplete in any material respect, and (iii) there has been no adverse material change in the affairs of the City between the date of the Official Statement and the date of delivery of the Bonds. 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42 City. The delivery of this Official Statement has been duly authorized and approved by duly authorized representatives of the CITY OF SHREVEPORT, STATE OF LOUISIANA By: Mayor By: Director of Finance 34

43 SCHEDULE I SCHEDULE OF BONDS TO BE REFUNDED Principal Amount Original Interest to be Call Series Maturity Rate Refunded Date Water and Sewer Revenue Bonds, 2006 Refunding Series A 12/1/ % 505,000 1/11/16 12/1/ % 535,000 1/11/16 12/1/ % 560,000 1/11/16 12/1/ % 590,000 1/11/16 12/1/ % 615,000 1/11/16 12/1/ % 640,000 1/11/16 12/1/ % 665,000 1/11/16 12/1/ % 690,000 1/11/16 12/1/ % 720,000 1/11/16

44 SCHEDULE I SCHEDULE OF BONDS TO BE REFUNDED Principal Amount Original Interest to be Call Series Maturity Rate Refunded Date Water and Sewer Revenue Bonds, 2006 Refunding Series A 12/1/ % 505,000 1/11/16 12/1/ % 535,000 1/11/16 12/1/ % 560,000 1/11/16 12/1/ % 590,000 1/11/16 12/1/ % 615,000 1/11/16 12/1/ % 640,000 1/11/16 12/1/ % 665,000 1/11/16 12/1/ % 690,000 1/11/16 12/1/ % 720,000 1/11/16

45 APPENDIX A FINANCIAL AND STATISTICAL DATA RELATIVE TO THE CITY OF SHREVEPORT, STATE OF LOUISIANA

46 FINANCIAL AND STATISTICAL DATA The City The City, incorporated in 1839, is located primarily on the west bank of the Red River in Northwest Louisiana, approximately thirty miles south of Arkansas and fifteen miles east of Texas. The City is approximately 319 miles northwest of New Orleans, Louisiana, approximately 192 miles east of Dallas, Texas, approximately 202 miles southwest of Little Rock, Arkansas and approximately 220 miles west of Jackson, Mississippi. The City is the seat of Caddo Parish and the center of a metropolitan area that includes Bossier, Caddo and Webster Parishes. The City serves as a wholesale and retail center for the region. The current area of the City is approximately 118 square miles. Although located primarily in Caddo Parish, a small portion of the City extends into Bossier Parish. Governance and Organization The City of Shreveport has been organized under a mayor-council form of government since 1978, when the current City charter was adopted by the voters. The charter provides for a seven-member council with each member selected for four-year terms from separate districts of the City. The mayor is elected at large for a fouryear term, is not a member of the council, but has veto power over council action. The mayor and council members may serve no more than two consecutive terms. The City provides a wide range of services including public safety, highways and streets, sanitation, water and sewer services, airports, transportation, recreational activities, general administration functions and others. Organizational Chart LEGISLATIVE BRANCH EXECUTIVE BRANCH JUDICIAL BRANCH Office of the Mayor City Courts City Marshall City Council City Attorney Chief Administrative Officer Police Fire Finance Department Airports Personnel Parks, Recreation & Facilities Metropolitan Planning Community Commission Development Department of Public Works Department of Water & Sewer Engineering & Environmental 2

47 Audit Report Included in Appendix B to this Official Statement is a copy of basic financial statements of the City for the Fiscal Year ended December 31, 2014, audited by BKD LLP, whose independent auditors report, dated as of December 31, 2014, is also included in Appendix B. The audited financial statements of the City included herein have been included in reliance upon said report. General Remarks According to the Shreveport Chamber of Commerce, the City s economy is balanced among agriculture, trade, distribution, processing and manufacturing. The City s major industries are engaged in the production of oil, trucks, lumber and woodworking products, printing and publishing, machinery, food products, stone, clay and glass products, oil well equipment, telephone and related equipment, batteries, defense products, electrical transformers and industrial pumps. The industries are serviced and supported by the Port of Shreveport-Bossier which is attractive to potential companies seeking to locate in the area. It has a strong medical community which services Northwest Louisiana, Southwest Arkansas and East Texas. Sam s Town Casino of Shreveport and El Dorado Casino are relatively new additions to the area s economy which are joined by the new Convention Center, the Convention Center Hilton Hotel and the growing film industry. Employment The Louisiana Department of Labor has issued revised annual average statistics for various employment areas within Louisiana. The annual average figures for the Shreveport- Bossier City Area were reported as follows: Caddo Parish Per Capita Personal Income City Unemployment Rate 2 Year City Population Caddo Parish Population Caddo Parish Personal Income , ,438 7,870,765 31, , ,577 8,501,158 33, , ,609 9,348,950 37, , ,895 9,427,392 37, , ,932 10,337,630 40, , ,969 9,804,879 38, , ,912 9,304,810,990, 10,990,340 42, , ,093 11,351,511 44, , ,887 11,336,821 44, ,327 n/a n/a n/a In thousands City unemployment rate provided by Louisiana Workforce Commission. Sources: City population provided by the U.S. Census Bureau for census years and estimates for other years. Population for Caddo Parish provided by Bureau of Economic Analysis. N/A Statistical information not available. 3

48 Largest Employers The following table shows the largest employers in the City and the approximate number of employees in Rank Employer Industry Employees 1 Barksdale Air Force Base Military 10,284 2 Caddo Parish School Board Public Education 6,815 3 State of Louisiana (regional total) Government 6,549 4 LSU Health Sciences Center Health Care 6,200 5 Willis-Knighton Health Systems Health Care 6,145 6 Bossier Parish School System Education 2,926 7 City of Shreveport Local Government 2,772 8 Walmart/Sam s Stores Retail 2, Harrah s Horseshoe Casino & Hotel/ Gaming Casino/Hotel 1,800 fhharrah s Louisiana Downs 10. Christus Schumpert Health System Health Care 1,800 Source: City of Shreveport, Comprehensive Annual Financial Report Banking Facilities The Shreveport area is served by several banks which are listed below: Source: Office of Financial Institutions Bancorp South Business First Bank Capital One Bank Chase Bank Citizens Bank & Trust Citizens National Bank Community Trust Bank Community Bank of Louisiana Crescent Bank & Trust Iberia Bank Ouachita Independent Bank Progressive Bank Red River Bank Regions Bank Tri-State Bank 4

49 Total Assessed Valuations of the City PROPERTY TAX INFORMATION The following table shows the assessed value of property in the City (in thousands) divided between residential and commercial property, estimated actual taxable value and the percentage of assessed value to actual value. Year Residential Property Commercial Property Estimated Actual Taxable Value Assessed Value as Percentage of Actual Value Assessed Value Total Direct Tax Rate , ,769 9,787, (1) 486, ,164 10,244, , ,729 10,363, * 571, ,434 11,589, , ,434 11,781, , ,099 12,119, , ,556 12,371, * 665, ,002 13,106, , ,590 13,273, , ,584 13,375, * Reappraisal Year (1) Included in the total assessed value of property within the City is $11,242,000 of assessed value, which has been adjudicated to Caddo Parish and Bossier Parish. (NOTE: The figures above differ from the figures below due to adjudicated property, change orders and time of preparation.) Source: City of Shreveport, Comprehensive Annual Financial Report Millage Rates The recent trend in the ad valorem tax rates levied within the boundaries of the City follows: MILLAGE RATES CITY OF SHREVEPORT TAXES Interest and Sinking Fund General Alimony SPAR Recreational Facilities Police: Three Platoon System Police & Fire: Uniforms & Equipment Salary and Wage Schedule Street Improvements Employee Benefits TOTAL DIRECT Source: City of Shreveport, Department of Finance 5

50 Leading Taxpayers The ten largest property taxpayers of the City and their 2014 assessed valuations follow: Taxpayer Assessed Rank Percent Valuation AEP Southwestern Electric $ 46,366, % Power Calumet Lubricants 18,948, % Bell South 13,011, % Walmart 10,830, % Capital One 10,421, % BJ Services Company 9,802, % Regions Bank 9,233, % Centerpoint Energy 8,194, % Sam s Town JP Morgan Chase Bank 7,425,890 7,341, % TOTAL $141,576, % Property Tax Levies and Collections The table below shows total property taxes levied for each of the past ten years, collection percentages in the year due and in subsequent years and total collection rates. Year Ended December 31 Taxes Levied for Year Collected within Levy Year Amount %age of Levy Collections in Subsequent Years Total Collections to Date Amount %age of Levy 2005 $52,173,566 $36,329, $14,812,227 $51,141, ,535,297 41,076, ,235,741 53,312, ,130,275 44,426, ,797,511 54,223, ,421,540 41,480, ,338,615 56,819, ,236,967 41,889, ,875,672 57,765, ,974,524 43,965, ,211,490 59,176, ,875,991 48,969, ,317,501 60,286, ,285,191 46,570, ,379,681 56,950, ,167,413 44,608, ,293,308 57,901, ,673,655 42,808, ,808, Source: City of Shreveport, Comprehensive Annual Financial Report 6

51 Homestead Exemption Homestead exemptions are reductions in the assessed value of property applicable to owner-occupant residences. Under the Constitution the homestead exemption for all homeowners is currently seven thousand five hundred dollars ($7,500) of assessed valuation except that the homestead exemption for 100% disabled veterans and their surviving spouses is $15,000. Default Record According to the Director of Finance of the City, the City has never defaulted in the payment of its outstanding bonds or obligations. Legal Debt Limit Section 562(B) of Title 39 of the Louisiana Revised Statutes of 1950, as amended, provides in pertinent part that the legal debt limit for general obligation bonds of any municipality in Louisiana is ten percent (10%) of its assessed valuation, including both (1) homestead exemption property and (2) non-exempt property for any one authorized purpose; provided, however, a municipality may exceed ten percent (10%) for any one of such purposes so long as the aggregate for all such purposes does not exceed thirty-five percent (35%) of its assessed valuation Taxable Assessed Value $ 1,503,114,000 35% of Assessed Valuation $526,090,000 Total Outstanding General Obligation Bonds of the City (as of December 31, 2014) $ 228,255,000 Effect as a Percentage of 2014 Assessed Valuation 43.30% Remaining Legal Capacity for General Obligation Bonds $ 297,853,000 *Preliminary, subject to change Source: City of Shreveport, Department of Finance. Authorization for Additional General Obligation Bonds The City currently has no voter authorized but unissued general obligation bonds. 7

52 The following table shows the legal debt margin (in thousands) for each of the past 10 years: Total Debt Applicable to Limit Total Debt Applicable to Limit as %age of Limit Legal Debt Year Debt Limit Margin 2005 $391,518 $254,487 $137, % , , , , , , , , , , , , , , , , , , , , , , , , , , , Trend in Sales Tax Collections SALES TAX INFORMATION Sales taxes make up the largest part of local revenues for the City. The following table shows the recent trend in the City s sales tax collections for the past ten years. Collections of sales taxes dropped significantly in 2012 as gas explorations slowed, 2013 showed small increases. Year Collections ,581, ,428,966* ,391, ,343, ,039, ,379, ,199, ,669, ,196, ,733,120 *2006 sales tax total $102,154,326 without one-time receipts Source: Caddo-Shreveport Sales and Use Tax Commission 8

53 The following table shows the direct and overlapping sales tax rates for the City, Caddo Parish School Board, the Caddo Law Enforcement District, Mall St. Vincent Taxing District, and the State: Year City of Shreveport Caddo Parish School Board Caddo Law Enforcement District Mall St. Vincent Taxing District (1) State of Louisiana Total Rate (1) (1) (1) Additional 1% sales tax only levied within Mall St. Vincent Taxing District. Source: Caddo-Shreveport Sales and Use Tax Commission Note: The City s sales tax rate may be changed with voter approval Unaudited see accompanying independent auditor s report The following table shows the tax liability for sales tax revenue payers by industry for the past five years: Industry Type Retail trade $70,424,851 $72,388,451 $73,575,215 $74,537,809 $75,233,688 Services 17,554,911 18,370,738 17,706,280 16,830,868 18,742,751 Wholesale Trade 18,516,602 19,624,037 16,685,163 16,874,399 18,833,822 Transportation, communication, electric and 1,540,652 1,742,285 1,309,172 1,504,851 1,973,396 gas Manufacturing 1,452,756 1,491,183 1,316,033 1,125, ,950 Other 998, ,987 1,150, , ,909 Construction 1,434,632 1,146,763 1,121,224 1,024, ,028 Mining 1,124,557 2,189, ,954 1,317,105 2,165,834 Finance, insurance and real 167, , , , ,475 estate Agricultural 113, ,060 20,505 23,713 24,720 Government 50,712 44,963 40,549 32,498 45,547 TOTAL $113,379,729 $118,199,721 $113,669,818 $114,196,262 $119,733,120 Source: Caddo-Shreveport Sales and Use Tax Commission. Amounts shown are gross collections prior to refunds and collections of amounts due from prior years. The amounts shown in the financial statements are net collections. 9

54 Outstanding Debt by Type The following table shows the City s level of debt by type for the past ten years. (1) Year General Obligation s Certificates of Indebtednes s Loans and Notes Capital Leases Airport Revenue Bonds Airpor t Loans Water and Sewerage Bonds Water and Sewera ge Notes Conventio n Center Hotel Bonds Capita l Leases Total Primary Governmen t %age of Persona l Income City per capita 2005 $263,520 $37,884 $34,394 $9,778 $22,580 - $155,107 $75,000 $42,479 $1,170 $641, % $3, ,913 34,382 33,437 13,410 22,000 $ ,785 75,000 42, , , ,414 30,681 32,430 14,379 21, ,320 75,000 42, , , ,408 26,794 33,580 17,447-38, ,283 75,000 39,591 1, , , ,830 22,722 31,852 12,692-37, ,641 50,000 39,543 1, , , ,481 18,698 30,132 11,201-37, ,000 50,000 39, , , ,372 13,955 28,334 7,191-36, ,259 50,000 39, , , ,986 9,072 27,429 12,313-35, ,924 50,000 38,714 1, , , ,524 7,534 28,170 8,155-34, ,312 48,855 41,350 2, , , ,448 5,718 27,072 5,747-33, ,117 48,185 40,696 2, ,677 n/a 3,028 (1) Statement. Details regarding the City s outstanding debt can be found in the notes to the financial statements. See Appendix B to this Official * Statistical information is not available. 10

55 Trend in Finances A five-year trend in the revenues, expenditures follows: SUMMARY STATEMENT OF GENERAL FUND REVENUES, EXPENDITURES AND FUND BALANCES FOR FIVE FISCAL YEARS ENDED DECEMBER 31, 2014 FISCAL YEAR REVENUES Taxes & Special Assessments $146,711,244 $150,754,108 $147,102,988 $148,734,796 $154,866,369 Licenses & Permits 8,945,467 9,126,196 9,159,315 9,333,071 9,554,623 Intergovernmental Revenues 9,601,561 9,519,179 9,612,815 9,556,535 9,251,265 Charges for Current Services 24,381,786 25,562,367 25,786,275 27,764,494 24,519,238 Fines, Forfeitures & Penalties 3,553,996 3,832,276 3,377,228 3,002,987 3,210,062 Investment earnings 116,512 34, ,992 42,296 Other 4,249,665 3,391,218 2,081,398 1,740,290 1,413,464 Total Revenues $197,560,231 $202,219,404 $197,120,858 $200,150,165 $202,857,317 EXPENDITURES General Government $40,613,428 $33,051,221 $33,053,051 $36,342,264 $35,956,311 Public Safety 99,183, ,041, ,727, ,039, ,385,035 Public Works 40,134,184 43,626,714 40,188,370 38,571,558 39,577,765 Cultural/ Recreation 14,891,474 15,117,286 15,948,768 15,994,387 15,927,6967 Total Expenditures $194,822,841 $196,836,481 $199,918,002 $198,947,404 $198,846,807 Capital Lease $2,337,440 $0 $8,865,007 $0 0 Transfers In 12,850,000 8,253,640 12,128,506 10,253,433 11,355,369 Transfers Out (16,815,808) (17,399,581) (19,948,529) (14,711,920) (12,365,633) Total Other Financing Sources (Uses) ($1,628,368) ($9,145,941) $1,044,984 ($4,458,487) (1,010,264) BEGINNING FUND $20,653,235 $21,762,257 $17,999,239 $16,247,079 $12,991,353 BALANCE ENDING FUND BALANCE $21,762,257 $17,999,239 $16,247,079 $12,991,353 $15,991,599 Source: City of Shreveport, Department of Finance 11

56 Pension Plans and Other Post Employment Benefits The City administers three defined benefit pension plans: the Firemen s Pension and Relief Fund (FPRF), the Policemen s Pension and Relief Fund (PPRF) and the Employees Retirement System (ERS). See IV Other Information in the notes to the Financial Statements attached to this Official Statement as Exhibit B for additional information on the City s pension plans. Membership of each plan consisted of the following at December 31, 2014: FRPF PPRF ERS Retirees and beneficiaries Receiving benefits Active Plan members Vested Nonvested 698 Total ,346 Number of Participating Employers FPRF. The City s annual pension cost and net pension obligation to FPRF for the year ending December 31, 2014, were as follows: Annual required contribution $4,171,194 Interest on net pension obligation 529,555 Adjustment to annual required contribution (2,882,685) Annual pension cost 1,818,064 Contribution made (1,048,879) Increase in net pension obligation 769,185 Net pension obligation beginning of year 7,565,077 Net pension obligation end of year $8,334,262 The annual pension costs for the FPRF for the past three years, the percentage of annual pension costs contributed and the net pension obligations for the FPRF are set forth in the following chart: Year Ended Annual Pension Percentage of Net Pension December 31 Cost APC contributed Obligation 2012 $2,674, % $5,881, ,647, % 7,565, ,818, % 8,334,262 12

57 The funded status of the plan as of December 31, 2014, the most recent actuarial valuation date, is as follows: Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded AAL Funded Ratio Covered Payroll UAAL as %age Of Covered Payroll $16,946,555 $24,008,380 $7,061, % $1,016, % PPRF. The City s annual pension cost and net pension obligation to PPRF for the year ending December 31, 2014, were as follows: Annual required contribution $2,003,793 Interest on net pension obligation 150,348 Adjustment to annual required contribution (818,432) Annual pension cost 1,335,709 Contribution made (1,036,775) Increase in net pension obligation 298,934 Net pension obligation beginning of year 2,147,823 Net pension obligation end of year 2,446,757 The annual pension costs for the PPRF for the past three years, the percentage of annual pension costs contributed and the net pension obligations for the PPRF are set forth in the following chart: Year Ended Annual Pension Percentage of Net Pension December 31 Cost APC contributed Obligation 2012 $2,158, % $ 965, ,137, % 2,147, ,335, % 2,446,757 The funded status of the plan as of December 31, 2014, the most recent actuarial valuation date, is as follows: Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded AAL Funded Ratio Covered Payroll UAAL as %age Of Covered Payroll $17,616,000 $21,215,889 $3,599, % $0 n/a 13

58 ERS. The City s annual pension cost and net pension obligation to ERS for the year ending December 31, 2013, were as follows: Annual required contribution $16,351,357 Interest on net pension obligation 3,158,734 Adjustment to annual required contribution (3,405,851) Annual pension cost 16,104,240 Contribution made (5,944,981) Increase in net pension obligation 10,159,256 Net pension obligation beginning of year 40,757,862 Net pension obligation end of year $50,917,118 The annual pension costs for the FPRF for the past three years, the percentage of annual pension costs contributed and the net pension obligations for the FPRF are set forth in the following chart: Year Ended Annual Pension Percentage of Net Pension December 31 Cost APC contributed Obligation 2012 $16,260, % $30,127, ,582, % 40,757, ,104, % 50,917,118 The funded status of the plan as of December 31, 2014, the most recent actuarial valuation date, is as follows: Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded AAL Funded Ratio Covered Payroll UAAL as %age Of Covered Payroll $196,853,724 $393,085,958 $196,232, % $49,120, % Other Post Employment Benefits The City provides medical, dental and life insurance coverage through a single-employer defined benefit plan that can include non-city employees as described under the Employees Retirement System for any retiree who receives a monthly retirement check from one of the City s retirement plans and their legal dependents. The City contributed 58% and retirees 42% of the required contribution rate as determined annually by the Health Care Board of the self-insured payas-you-go plan. Regulatory Matters A consent decree among the United States Environmental Protection Agency ( EPA ) and the Louisiana Department of Environmental Quality ( DEQ ) and the City relative to wastewater improvements in the City was lodged on May 13, The Consent decree required the City to make various wastewater treatment plan and sanitary sewer infrastructure improvements in order to reduce sanitary sewer overflows in the sewer collection system and meet wastewater discharge permit requirements under wet weather conditions. 14

59 Water and Sewer Rates To fund the sewer improvement program, the City Council approved rate increases. The first of these increases, a 13% increase in water rates and a 55% increase in sewer rates went into effect on October 1, 2013, Additional increases in rates have been approved by the City Council for implementation as follows: Year Water 0% 2% 0% 0% 0% 0% 0% 4% Sewer 14% 14% 9% 7% 7% 6% 2% 2% Authorization for Additional Water and Sewer Revenue Bonds The City currently has no voter authorized but unissued water and sewer revenue bonds. 15

60 APPENDIX B COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

61 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF SHREVEPORT, LOUISIANA For the Year Ended December 31, 2014 Finance Department Charles J. Madden III, Director

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63 CITY OF SHREVEPORT, LOUISIANA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal...1 Certificate of Achievement for Excellence in Financial Reporting...5 Organization Chart...6 Principal Officials...7 Finance Department...8 FINANCIAL SECTION Independent Auditor s Report on Financial Statements and Supplementary Information...9 Management s Discussion and Analysis...13 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position...25 Statement of Activities...26 Fund Financial Statements: Balance Sheet - Governmental Funds...28 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position...29 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds...30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities...31 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund...33 Statement of Net Position - Proprietary Funds...36 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds...38 Statement of Cash Flows - Proprietary Funds...39 Statement of Fiduciary Net Position - Fiduciary Funds...41 Statement of Changes in Fiduciary Net Position - Fiduciary Funds...42 Statement of Net Position - Component Units...43 Statement of Activities - Component Units...44 Notes to the Financial Statements...47 Required Supplementary Information: Schedule of Employer Contributions-Other Post Employment Benefits...97 Schedule of Funding Progress-Other Post Employment Benefits...98 Schedule of Changes in the Net Pension Liability...99 Schedule of the Investment Returns Schedule of Pension Contributions i Page

64 Notes to Required Supplementary Pension Information Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Debt Service Fund 108 Community Development Fund Streets Fund..111 Riverfront Development Fund Police Grants Fund Downtown Entertainment Economic Development Fund Redevelopment Fund Environmental Grants Fund Combining Statement of Net Position - Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses, and Changes in Net Position - Nonmajor Enterprise Funds Combining Statement of Cash Flows - Nonmajor Enterprise Funds 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 - Fiduciary Funds Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds Discretely Presented Component Unit: Metropolitan Planning Commission Balance Sheet Statement of Revenues, Expenditures, and Changes in Fund Balance Required Supplementary Information State of Louisiana Schedule of Composition, Benefits and Other Payments to Agency Head or Chief Executive Officer STATISTICAL SECTION Net Position by Component Changes in Net Position Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Assessed Value and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments Principal Property Taxpayers Property Tax Levies and Collections Taxable Sales by Category Direct and Overlapping Sales Tax Rates Sales Tax Revenue Payers by Industry Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt ii

65 Legal Debt Margin Information Pledged-Revenue Coverage Water and Sewerage Pledged-Revenue Coverage - Municipal and Regional Airports Demographic and Economic Statistics Principal Employers Full-time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function iii

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67 C I T Y O F S H R E V E P O R T P.O. BOX SHREVEPORT, LA TRAVIS STREET SHREVEPORT, LA Website: June 30, 2015 Mayor Ollie S. Tyler Members of the City Council City of Shreveport, Louisiana Mayor and Members of the City Council: In accordance with Section 10.02, paragraph (j), of the City Charter, I am pleased to submit the Comprehensive Annual Financial Report for the year ended December 31, The financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with generally accepted government auditing standards by a firm of licensed certified public accountants. I believe this report presents comprehensive information about the City s financial and operating activities during 2014 that is useful to taxpayers, citizens, and other interested persons. This report was prepared by the Accounting Division of the Finance Department and consists of management s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. In addition to internal controls established by management and those built into the accounting system, the Office of Internal Audit periodically reviews the adequacy of internal controls. The Internal Auditor and her staff are independent of the Finance Department. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. In accordance with Section 4.28 of the City Charter, the City Council is required to provide for an annual independent audit of the accounts and financial transactions of the City by a firm of independent certified public accountants duly licensed to practice in the State of Louisiana. The accounting firm of BKD, LLP was selected by the City to conduct its annual audit. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the year ended December 31, 2014, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis 1

68 for rendering an unmodified opinion that the City s financial statements for the year ended December 31, 2014, are fairly presented in conformity with GAAP. The independent auditor s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated Single Audit designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City s separately issued Single Audit Report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City s MD&A can be found immediately following the report of the independent auditors. Profile of the City of Shreveport The City of Shreveport was incorporated in It is located on the west bank of the Red River in Northwest Louisiana, approximately 30 miles south of Arkansas and 15 miles east of Texas. Shreveport is the seat of Caddo Parish and the center of a metropolitan area that includes Bossier, Caddo, and Webster Parishes. Although located primarily in Caddo Parish, a small portion of the City extends into Bossier Parish. The current area of the City is approximately 123 square miles. The City of Shreveport has been organized under a mayor-council form of government since 1978, when the current City charter was adopted by the voters. The charter provides for a seven member council, with each member selected for four-year terms from separate districts of the City. The mayor is elected at-large for a four-year term, is not a member of the council, but has veto power over council action. The City provides a wide range of services including public safety, highways and streets, sanitation, water and sewer services, airports, transportation, recreational activities, general administration functions and others. These financial statements present the City of Shreveport (the primary government) and its component units. The component units are included in the City s reporting entity because of the significance of their operational or financial relationships with the City. Included as discretely presented component units is the financial data for the Shreveport Home Mortgage Authority, City Courts, City Marshal, Downtown Development Authority and the Metropolitan Planning Commission. They are reported separately within the City s financial statements to emphasize that they are legally separate from the City. Additional information on these legally separate entities can be found in the notes to the financial statements. Budgetary Control The annual budget serves as the foundation for the City s financial planning and control. The City Council is required to adopt the final budgets no later than December 15 each year. Budgets are adopted at the fund, department and object level. The exception is the Community Development Department where 2

69 the budget is at the fund, department, division and object level. Budgetary transfers across department lines or between classes of lump sum appropriations require the approval of the City Council. Local Economy Sales taxes make up the largest part of local revenues. While collections dropped significantly in 2013 as gas exploration slowed they rebounded in They are expected to hold near steady through The five year trend for sales tax has been as follows: 2010 $113,990, ,164, ,068, ,192, ,809,168 While the regional gaming revenues increased slightly in 2014, due to the addition of a new casino in 2013, casino gaming revenues for the city dropped slightly in Casino revenues are expected to remain flat. The five-year history of gaming revenues is as follows: 2010 $12,457, ,326, ,925, ,003, ,241,584 Work continues on the steel mill at the port with production starting in Commercial construction continues to increase with completion of three new apartment complexes, the announcement of a whole food store and a new shopping center in south Shreveport. The Commons, a mixed business and residential area that specializes in the arts, received national recognition for its unique partnership of private and public funds. Another $4.6 million was appropriated from the streets special revenue fund to overlay major arterial streets through the city. The city issued the remaining balance of the General Obligation Bonds approved in This money will be used for additional street work, improvements to recreation facilities and Water and Sewer projects. Long-term Financial Planning A consent decree, with the United States Environmental Protection Agency (EPA) and the Louisiana Department of Environmental Quality (DEQ), relative to wastewater improvements in Shreveport was officially filed in early The consent decree will require the city to make various wastewater treatment plant and sanitary sewer infrastructure improvements in order to reduce sanitary sewer overflows in the sewer collection system and meet wastewater discharge permit requirements under wet weather conditions. To fund the sewer improvement program, the City Council approved rate increases. The first of those increases, a 13% increase in water rates and a 55% increase in sewer rates, went into effect October 1, $75 million of Water & Sewer revenue bonds were sold in 2014 to start meeting the consent decree. 3

70 The City continues to report record low crime and homicide rates through community involvement and proactive policing policies. Relevant Financial Policies Even with the issuance of $91.5 million of General Obligation Bonds, the city will pay off 40% of all outstanding GOB debt in the next 5 years. Increases in Water and Sewer rates will fund the additional debt required to complete the project required by the consent decree. With most revenues flat, continuing services at current levels will be a challenge without additional revenues. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Shreveport for its comprehensive annual financial report for the fiscal year ended December 31, This was the fifth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Sincere appreciation is expressed to the entire staff in the Finance Department and especially to the professional accounting staff whose dedicated and efficient services have made the preparation of this report possible. Thanks to the Mayor and City Council for your support of excellence in financial reporting and fiscal integrity. Sincerely, Charles J. Madden III Director of Finance 4

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72 6 CITY OF SHREVEPORT ORGANIZATION CHART December 31, 2014 LEGISLATIVE BRANCH EXECUTIVE BRANCH OFFICE OF THE MAYOR EXECUTIVE OFFICE OLLIE S. TYLER MAYOR JUDICIAL BRANCH CHIEF ADMINISTRATIVE OFFICE CITY COUNCIL CITY JUDGES CITY MARSHAL DALE L. SIBLEY COUNCIL MEMBERS CITY ATTORNEY TERRI ANDERSON-SCOTT ASSISTANT CAO SHERICKA FIELDS CITY COURTS CHARLIE CALDWELL CITY MARSHAL INTERNAL AUDIT LEANIS STEWARD CITY INTERNAL AUDITOR CLERK OF COUNCIL ARTHUR G. THOMPSON CLERK OF COUNCIL ROBERT SHEMWELL COURTS ADMINISTRATOR POLICE WILLIE L.. SHAW, JR POLICE CHIEF FIRE RONALD JONES INTERIM FIRE CHIEF AIRPORTS WILLIAM COOKSEY INTERIM DIRECTOR HUMAN RESOURCES ANGELITA JACKSON DIRECTOR COMMUNITY DEVELOPMENT BONNIE MOORE DIRECTOR FINANCE CHARLES J.MADDEN DIRECTOR PUBLIC ASSEMBLY AND RECREATION SHELLY RAGLE DIRECTOR PROPERTY STANDARDS DOROTHY FARNELL DIRECTOR PUBLIC WORKS STAN HARRIS DIRECTOR WATER & SEWERAGE BARBARA FEATHERSTON DIRECTOR ENGINEERING AND ENVIRONMENTAL AFFAIRS ROBERT WESTERMAN INTERIM DIRECTOR

73 CITY OF SHREVEPORT, LOUISIANA PRINCIPAL OFFICIALS Ollie S. Tyler Mayor Dale L. Sibley Chief Administrative Officer Members of City Council Willie Bradford Jeff Everson Oliver Jenkins Michael Corbin James Flurry Stephanie Lynch Jerry Bowman District A District B District C District D District E District F District G 7

74 CITY OF SHREVEPORT, LOUISIANA FINANCE DEPARTMENT Department Director Charles J. Madden III Division Managers John Pistorius Angela Duncan Donald Evans Accounting Revenue Collection Purchasing Accounting Staff Rosalyn Atkins Rosemary Clark Barbara Dunn Evelyn Jones Marie LaFontant Tobi Maiden Diane Pharr Linda Smith Shiwanda Brown Dorothy Cole G-Ray Evans, Sr. Doris LaCour Linda Long Abigail Monette Lashonda Samuels Vernell Wiggins 8

75 Independent Auditor s Report Members of the City Council and Honorable Ollie S. Tyler, Mayor City of Shreveport, Louisiana Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, the budgetary comparison information for the general fund, and the aggregate remaining fund information of the City of Shreveport, Louisiana (the City), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City s basic financial statements listed in the table of contents. We have also audited the financial statements of each of the City s nonmajor governmental, nonmajor enterprise, internal service and fiduciary funds presented as supplementary information, as defined by the Governmental Accounting Standards Board, in the accompanying combining and individual fund financial statements as of and for the year ended December 31, 2014, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the City Courts, City Marshall and Downtown Development Authority which represent 52% and 80% of the assets and revenues, respectively, of the aggregate discretely presented component units. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as they relate to the amounts included for the City Courts, Marshal and Downtown Development Authority is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 9

76 Members of the City Council and Honorable Ollie S. Tyler, Mayor City of Shreveport, Louisiana An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, the budgetary comparison information of the general fund and the aggregate remaining fund information of the City as of December 31, 2014, and the respective changes in financial positions and cash flows, where applicable, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental, nonmajor enterprise, internal service, and fiduciary funds of the City as of December 31, 2014, and the respective change in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note I.E to the financial statements, in 2014 the City adopted new accounting guidance in Governmental Accounting Standards Board (GASB) Statement Number 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and pension/other post-employment information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. 10

77 Members of the City Council and Honorable Ollie S. Tyler, Mayor City of Shreveport, Louisiana We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The supplementary information listed in the table of contents as combining and individual fund statements and schedules, discretely presented component unit and schedule of compensation, benefits and other payments, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Information Our audit was conducted for the purpose of forming opinions on the basic financial statements as a whole. The accompanying information in the introductory and statistical sections listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2015, on our consideration of the City s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City s internal control over financial reporting and compliance. Dallas, Texas June 30,

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79 Management s Discussion and Analysis The Management s Discussion and Analysis (MD&A) offers the readers of the City of Shreveport s financial statements this narrative overview and analysis of the financial activities of the City of Shreveport for the year ended December 31, This information presented here should be considered in conjunction with additional information provided in the letter of transmittal which is found on pages 1-4 of this report. Financial Highlights The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at December 31, 2014 by $787.2 million (net position). Unrestricted net position is a deficit of $466.0 million. The City s total net position decreased $18.3 million. Net position of governmental activities decreased $40.2 million and net position of business-type activities increased $21.9 million. As of December 31, 2014, the City s governmental funds reported combined fund balances of $243.6 million, an increase of $95.8 million from the prior year. Of this amount, $4.0 million for the General Fund was unassigned and available for spending. The unassigned fund balances for the General Fund represented 2.0% of total General Fund expenditures. The City s total debt increased $155.1 million. Overview of the Financial Statements The management s discussion and analysis serves as an introduction to the City s basic financial statements which are the government-wide financial statements, fund financial statements, and notes to the financial statements. Also included in the report is required supplementary information. Government-wide financial statements. The government-wide financial statements report information about the overall finances of the City similar to a business enterprise. These statements combine and consolidate short-term, spendable resources with capital assets and long-term obligations. The statement of net position presents information on all of the City s assets, liabilities and deferred inflows/outflows of resources, with the difference reported as net position. The statement is designed to display the financial position of the City. Over time, increases or decreases in net position help determine whether the City s financial position is improving or deteriorating. The statement of activities provides information which shows how the City s net position changed as a result of the year s activities. The statement uses the accrual basis of accounting, which is similar to the accounting used by private-sector businesses. All of the revenues and expenses are reported regardless of the timing of when cash is received or paid. The statement distinguishes functions of the City that are financed primarily by taxes, intergovernmental revenues, and charges for services (governmental activities) from functions where user fees and charges to customers help to cover all or most of the cost of services (business-type activities). The City s governmental activities include general government, public safety, public works, culture and recreation, health and welfare, community development, economic development, and economic opportunity. The business-type activities of the City include airports, water and sewer systems, convention center, hotel, transit, golf, and parking operations. 13

80 Not only do the government-wide financial statements include the City itself which is the primary government, but also its component units, Shreveport Home Mortgage Authority, City Courts, City Marshal, Downtown Development Authority and Metropolitan Planning Commission. Although these component units are legally separate, their operational or financial relationship with the City makes the City financially accountable. The government-wide financial statements can be found on pages of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate fiscal accountability. The City uses governmental, proprietary, and fiduciary fund financial statements to provide more detailed information about the City s most significant funds rather than the City as a whole. Governmental funds. Governmental funds are used to report most of the City s basic services. The funds focus on the inflows and outflows of current financial resources and the balances of spendable resources available at the end of the year. Governmental fund statements provide a near- or short-term view of the City s operations. A reconciliation is prepared of the governmental funds Balance Sheet to the Statement of Net Position and the Statement of Revenues, Expenditures, and Changes in Fund Balances of governmental funds to the Statement of Activities. Fifteen governmental funds are used by the City. There are three major funds which have separately presented information in the governmental fund Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances. The major funds are the General Fund, Debt Service and the 2014 General Obligation Bond Fund. The twelve nonmajor funds are presented in the aggregate in the governmental fund financial statements. The individual fund information is presented in combining statements. The City adopts an annual appropriated budget for its general fund and certain special revenue funds. Budgetary comparison statements have been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found on pages of this report. Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its airports, water and sewer, convention center, hotel, and other operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses internal service funds to account for its health care and retained risk. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Proprietary fund financial statements provide separate information for the airports, water and sewer, convention center and hotel operations which are considered to be major funds of the City. Conversely, internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. 14

81 The basic proprietary fund financial statements can be found on pages of this report. Fiduciary funds. Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for others. Activities from fiduciary funds are not included in the government-wide financial statements because the City cannot use these assets for its operations. The accounting for fiduciary funds is much like that used in proprietary funds. The basic fiduciary aggregated fund financial statements can be found on pages of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City s progress in funding its obligation to provide pension and post employment benefits to its employees. Required supplementary information can be found on pages of this report. The combining statements for nonmajor governmental funds, enterprise funds, internal service funds, and fiduciary funds are presented immediately following the required supplementary information on pensions and post employment benefits. Combining and individual fund statements and schedules can be found on pages for governmental funds, pages for enterprise funds, pages for internal service funds and pages for fiduciary funds. 15

82 Government-wide Financial Analysis Net Position. The following table reflects condensed information on the City s net position: Net Position (in millions) Governmental Business-type Activities Activities Total Current and other assets $284.7 $201.2 $123.2 $38.7 $407.9 $239.9 Capital assets , ,335.1 Total assets , ,575.0 Deferred outflow of resources Long-term liabilities Other liabilities Total liabilities Net position Net investment in capital assets , ,037.7 Restricted Unrestricted (Deficit) (450.5) (346.8) (15.5) (24.0) (466.0) (370.8) Total net position $275.0 $315.2 $512.2 $490.3 $787.2 $805.5 At December 31, 2014, the City as a whole had assets and deferred outflows greater than its liabilities by $787.2 million compared to $805.5 million at December 31, The majority of the City s net position of governmental activities is invested in capital assets (streets, drainage, construction in progress, buildings, equipment, etc.). The capital assets are net of the outstanding principal of the debt associated with their acquisition. These assets are not available for future spending since they will not be sold. Restrictions are imposed upon 82.6% of the governmental activities net position. Therefore, these assets are unavailable for general expenses but must be used for the intended purposes. Unrestricted net position of governmental activities is a deficit of $450.5 million at the end of the year, an increase in the deficit from a $346.8 million deficit in The deficit does not mean that the City has insufficient resources to pay bills for the next year. However, it does show that on a long-term basis, the City has commitments beyond which it has current resources to fund its obligations. The largest of these commitments, besides the general obligation bonds, are certificates of indebtedness which were issued to fund state pension obligations, notes issued for remodeling of the Independence Stadium and the recognition of net pension benefit and other postemployment benefit obligations. The net position of the City s business-type activities is $512.2 million, an increase of $21.9 million from The increase is primarily the result of capital contributions, transfers in and a rate increase in the Water and Sewer Funds. Sewer rates increased 55% and water rates increased 13%. As with the governmental activities, the majority of the net position is invested in capital assets. The City uses these assets to provide services to the citizens. The unrestricted net position of the business-type activities is a deficit of $15.5 million at December 31, 2014 compared to $24.0 million in the prior year. The decrease in the deficit was mainly due to the Water and Sewerage Fund which had a decrease in their unrestricted deficit of $9.6 million. 16

83 Changes in net position. The City s total revenues and expenses for governmental and business-type activities are reflected in the following chart: Changes in Net Position (in millions) Governmental Business-type Activities Activities Total Revenues: Program revenues: Charges for services $ 26.4 $ 29.0 $ $ 89.7 $ $ Operating grants and contributions Capital grants and contributions General revenues: Property taxes Sales taxes Other taxes Grants and contributions not restricted to specific programs Other revenues (1.3) Total revenues Expenses: General government Public safety Public works Culture and recreation Health and welfare Community development Economic development Economic opportunity Interest on long-term debt Municipal and regional airports Water and sewerage Convention Center Convention Center Hotel Shreveport area transit Golf Downtown parking Total expenses Increase (decrease) in net position before transfers (20.3) (26.3) 2.0 (4.0) (18.3) (30.3) Transfers (19.9) (20.7) Increase (decrease) in net position (40.2) (47.0) (18.3) (30.3) Net position-beginning Net position-ending $275.0 $315.2 $512.2 $490.3 $787.2 $

84 Governmental Activities. Revenues for the City s governmental activities for the year ended December 31, 2014 were $263.9 million compared to $262.9 million in Program revenues decreased $4.3 million in 2014 compared to 2013 as a result of a decrease in charges for services, operating grants and contributions and capital grants and contributions. General revenues are, for the most part, comprised of sales and property taxes (81.8%). - Sales taxes represent 54.6% of general revenues at $119.8 million compared to $114.2 million for Collections were up 4.9% for Property tax revenues represent 27.3% at $59.9 million. Revenue was up $0.5 million as a result of new construction. Revenues by Source - Governmental Activities Grants and Contributions Not Restricted to Specific Purposes 1.1% Other Taxes 9.5% Other 4.5% Charges for Services 10.0% Operating Grants and Contributions 6.0% Capital Grants and Contributions 0.8% Property Taxes 22.7% Sales Taxes 45.4% The cost of providing all governmental activities this year was $284.2 million, a decrease of $5.0 million from the prior year. The key factors for the decrease were: General government expenses were $55.5 million compared to $59.2 million in The decrease was primarily due to a decrease in pension and OPEB expense of $3.8 million compared to Public works expenses were $54.4 million compared to $55.1 million in The decrease was mainly due to a change in the estimated closure cost of the landfill from a $0.4 million increase in 2013 to a decrease of $0.6 million in

85 In Millions The City s five largest governmental activities are public safety, public works, general government, interest on long-term debt and cultural and recreation. The graph below shows the expenses and program revenues generated by governmental activities: Expenses and Program Revenues - Governmental Activities 140 Expenses Program Revenue Business-type Activities. Charges for services for the City s business-type activities were $104.8 million for 2014, an increase of $15.1 million from Water and Sewerage revenues increased $13.5 million in 2014 due to rate increases that went into effect in October The Convention Center revenues increased $0.5 million due to increased use of the facilities. Golf revenues increased $0.3 million due to the re-opening of a golf course. All of the enterprise funds had various increases in revenues over

86 In Millions Revenues by Source - Business-type Activities Operating Grants and Contributions 5.2% Capital Grants and Contributions 7.3% Other -1.1% Charges for Services 86.5% The costs of these business-type activities were $116.6 million for 2014, an increase of $4.2 million from Expenses and Program Revenues - Business-type Activities Expenses Program Revenue Water and Sewerage expenses increased $3.7 million over Depreciation increased $2.9 million, personal services increased $0.8 million and contractual services increased $0.9 million. The fund also had a loss of $1.4 due to the change in the fair value of a derivative instrument. Other funds had small increases and decreases. 20

87 Financial Analysis of the City s Funds Governmental funds. The analysis of governmental funds serves the purpose of looking at what resources came into the funds, how they were spent and what is available for future expenditures. Did the government generate enough revenue to pay for current obligations? What is available for spending at the end of the year? The City s governmental funds for the year ended December 31, 2014 reflect combined fund balances of $243.6 million, an increase of $95.8 million compared to the prior year. The increase in fund balances were mostly associated with the sale of the 2014 General Obligation Bonds for $93.5 million plus a premium of $14.4 million. 94.1% or $229.3 million is restricted primarily for debt service and capital projects. Balances assigned to the future years are $10.2 million and $2.5 million is unassigned and available for spending. The General Fund is the City s operating fund which provides most basic services. Its fund balance had a increase of $3.0 million from the prior year. Revenues were up for the year, increasing by $2.7 million. The major revenue sources are property taxes, sales taxes, and charges for services. Sales tax collections increased $5.6 million from Charges for services decreased $3.2 million from The Debt Service Fund has a total fund balance of $56.1 million which is restricted for payment of principal and interest on debt outstanding. The fund balance for 2014 increased by $10.0 million during the year compared to a increase of $5.5 million in The increase is due to increased revenues and reduced debt service payments. Proprietary funds. The proprietary funds had increased net position of $21.9 million. The Municipal and Regional Airports fund increased $4.2 million due to capital contributions. The Water and Sewerage Fund increased $23.3 million due to transfers in, $12.7 million and increased revenues of $13.5 million. The Convention Center net position decreased $2.8 million and Shreveport Area Transit decreased $1.9 million. General Fund Budgetary Highlights During the year, the City Council revised the City s budget several times. After the first quarter, amendments and supplemental appropriations were approved to reflect the actual beginning fund balances estimated during the budget process which must be submitted by October 1 for the next year. Additional changes were made as new information indicated a need. The major differences between the original budget and the final budget were overall revenues increased by $5.8 million while expenditures including transfers out were increased by $0.7 million. During the year, revenues including transfers in were $2.40 million less than the revised budget while expenditures including transfers out were less than the revised budget by $8.0 million. 21

88 Overruns in appropriations at the legal level of budgetary controls were experienced by: Office of the Mayor - Salaries, wages and employee benefits $12,667 - Retirement benefits were not fully budgeted Finance - Contractual services $42,232 - Collection agency fees exceeded the budget Other unclassified - Salaries, wages and employee benefits $618,148 - Group insurance exceeded the budget - Claims 346,865 - Payments exceeded the amount budgeted Engineering - Salaries, wages and employee benefits $67,338 - Budget projections were too low Public works - Contractual services $360,228 - Landfill operating charges exceeded the budget Culture and recreation - Salaries, wages and employee benefits $95,811 - Overtime charges exceeded the budget Capital Assets and Debt Administration Capital assets. The City s investment in capital assets as of December 31, 2014 for its governmental and business-type activities was $1.3 billion net of depreciation as reflected in the following schedule. Capital Assets (net of depreciation in millions) Governmental Business-type Activities Activities Total Land $109.3 $108.2 $46.7 $46.7 $156.0 $154.9 Construction in progress Buildings Improvement other than buildings Equipment Distribution and collection systems Infrastructure Total $592.7 $596.4 $745.1 $738.7 $1,337.8 $1,

89 Major additions to capital assets during the current year included the following (in millions): Taxiway Alpha - Regional Airport funded with Federal Aviation Administration and State Grants $ 4.0 Municipal Auditorium Improvements-ADA 5.8 Police Property and Evidence Storage Facility 3.7 Huntington Park Golf Course Building Renovation 2.9 Querbes Golf Course Clubhouse & Pro Shop Building (New) 1.0 Amis WTP-Raw Water Piping Modifications 3.3 Agurs Lift Station Improvements 1.8 Lucas Lift Station Improvements 5.1 Construction Commitments: Remaining Project Commitment Financing Sources $ 27.6 General Aviation Apron Regional Airport $ 990,814 LADOT State Grants Rehabilitation of Taxiway B, C, D, F Regional Airport 2,206,414 Federal FAA Grants and State Grants Rehabilitation of Airfield Drainage Regional Airport 1,155,223 Federal FAA Grants and State Grants Bus Purchase for the Sportran System Transit 2,241,911 Federal FTA Grants and Supervisory Control & Data Acquisition System 571, A and 2007 W&S Rev Bonds Amiss WTP-Plant 2E Rehabilitation 3,332, GOP-Prop I Broadmoor Lift Station Improvements 2,847, W&S Rev Bonds & 2010D W&S Rev Notes South Highlands Lift Station Improvements 1,175, W&S Rev Bonds & 2011 GOB-Prop 1 Sewer Survey & Wastewater Master Plan 710, W&S Rev Bonds & 2011 GOB-Prop 1 Broadmoor Sewer Outfall 48 Sewer Main Rehabilitation 1,778, GOB-Prop 1 & 2014 GOB-Prop 1 Cedar Grove Trunk Main Repair 581, GOB-Prop 1 & 2014 GOB-Prop 1 Lucas & North Regional WWTP Improvements 1,765, GOB-Prop 1 & 2014 GOB-Prop 1 City Wide Sewer Rehabilitation 12,100, GOB-Prop 1 & 2014 GOB-Prop 1 Port Lift Station Rehabilitation Sharing 2,306, GOB-Prop 1 & State Rev City Wide Lift Station Rehabilitation 3,121, GOB-Prop 1 & 2014 GOB-Prop 1 Total $36,886,198 Detailed information on the City s capital assets can be found in Note III E on pages of the report. 23

90 Long-term debt. At year end, the City had $610.8 million in bonds and other lending agreements, including $2.4 million in Section 108 Housing and Urban Development guaranteed loans as shown in the following table. Outstanding Debt General Obligation and Revenue Bonds and Other Lending Agreements (in millions) Governmental Business-type Activities Activities Total General obligation bonds $251.4 $159.5 $ - $ - $251.4 $159.5 Revenue bonds Other lending agreements Total $292.3 $206.5 $318.5 $249.2 $610.8 $455.7 In the governmental activities, the City issued $93.5 million in General Obligation Bonds, Series In the business-type activities, Water and Sewerage issued $75.8 million in Revenue Refunding Bonds, Series 2014A, $67.0 million in Revenue Bonds, Series 2014B and $8.0 million in Revenue Bonds, Series 2014C. State statutes limit the amount of government obligation debt a municipality may issue at a maximum of 10% of the assessed valuation for any purpose. The maximum may be exceeded if the aggregate issued for all purposes does not exceed 35% of the total assessed valuation. The City s outstanding general obligation debt is below the state limit. Approximately $298 million of additional general obligation bonded debt is available for issuance. Detailed information on the City s long-term debt can be found in Note III H on pages of the report. Economic Factors and Next Year s Budgets and Rates Sales and Use taxes rebounded in 2014 with a 5% increase over They were budgeted to remain flat in 2015 along with most other revenues. In 2014 the City Council at the recommendation of the Employee Retirement Board increased contributions by the city to 16.5% for 2015, 20% for 2016, 25% for 2017, and 29% for These increases will continue to stress the already tight budget. The 2015 budget included a 10% increase in city contributions for Healthcare and a 2% longevity pay increase for civil service employees. Requests for Information This financial report is designed to provide a general overview of the City s finances for all those with an interest in the City s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, City of Shreveport, 505 Travis Street, Suite 670, Shreveport, LA

91 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF NET POSITION DECEMBER 31, 2014 Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Cash and cash equivalents $ 175,423,167 $ 12,928,561 $ 188,351,728 $ 9,468,916 Investments 37,820,184 3,552,783 41,372,967 3,629,190 Receivable, net 40,352,244 9,865,914 50,218, ,521 Due from other governments 15,814,984 3,735,546 19,550,530 - Due from primary government ,814 Internal balances 309,395 (309,395) - - Inventories 1,607,642 3,231,805 4,839,447 - Prepaid items 709, , ,796 25,158 Notes receivable 9,531,032-9,531,032 3,605,000 Other assets 629, ,563 - Restricted assets: Cash and cash equivalents - 81,807,024 81,807,024 - Investments 2,510,298 6,787,115 9,297,413 - Prepaid items - 1,343,241 1,343,241 - Capital assets: Land and construction in progress 136,756,401 91,863, ,619, ,514 Other capital assets, net of depreciation 455,951, ,220,546 1,109,171,992 1,689,261 Total assets 877,415, ,261,712 1,745,677,445 20,043,374 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 3,872,029 6,764,343 10,636,372 89,488 Total deferred outflows of resources 3,872,029 6,764,343 10,636,372 89,488 LIABILITIES Accounts payable 3,392,722 5,240,539 8,633, ,371 Accrued liabilities 223,233 2,778,653 3,001,886 40,463 Accrued interest payable 3,589,762 1,602,254 5,192,016 - Due to other governments 674, ,688 75,280 Due to component unit 16,814-16,814 - Unearned revenue 8,102, ,717 8,357, ,343 Deposits and other 743, ,947 1,589,554 - Non-current liabilities: Due within one year 45,587,766 14,497,507 60,085, ,828 Due in more than one year 543,936, ,640, ,576,422 5,920,671 Total liabilities 606,267, ,859, ,127,167 7,507,956 NET POSITION Net investment in capital assets 498,281, ,710,809 1,021,992,530 2,444,640 Restricted for: Capital projects 158,834, ,834,339 - Debt service 54,128,788 3,960,404 58,089, ,900 Community development 1,139,648-1,139,648 - Streets 8,605,464-8,605,464 - Enrichment 1,169,020-1,169,020 - Downtown entertainment economic development 1,035,385-1,035,385 - Environmental grants 1,258,908-1,258,908 - Other purposes 1,068,065-1,068,065 1,751,467 Unrestricted (deficit) (450,501,025) (15,504,876) (466,005,901) 8,111,899 Total net position $ 275,020,313 $ 512,166,337 $ 787,186,650 $ 12,624,906 The accompanying notes are an integral part of the financial statements. 25

92 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Functions/Programs Primary Government: Governmental Activities: Program Revenues Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions General government $ 55,486,934 $ - $ - $ - Public safety 130,048,046 11,196,830 8,218,449 - Public works 54,417,093 14,925, ,960 1,993,674 Culture and recreation 23,249, ,880 45,748 - Health and welfare 13, Community development 5,495,408-4,532,994 - Economic development 3,657, ,442 - Economic opportunity 2,558,816-2,256,927 - Interest on long-term debt 9,321, Total governmental activities 284,247,926 26,403,871 15,912,520 1,993,674 Business-type activities Municipal and Regional Airports 15,615,759 10,961,308 1,101,777 7,713,625 Water and Sewerage 63,354,907 75,259, , ,980 Convention Center 7,102,290 2,552, Convention Center Hotel 12,149,036 11,283, Shreveport Area Transit System 16,644,288 3,076,104 4,405, ,618 Golf 1,316,897 1,084,133-9,746 Downtown Parking 419, , Total business-type activities 116,602, ,778,730 6,362,042 8,811,969 Total primary government $ 400,850,383 $ 131,182,601 $ 22,274,562 $ 10,805,643 Component units: Shreveport Home Mortgage Authority 298, , City Courts 4,465, , City Marshal 2,108, , Downtown Development Authority 1,552, ,476 50,000 - Metropolitan Planning Commission 1,602, , ,200 - Total component units $ 10,029,024 $ 2,628,653 $ 239,200 $ - General Revenues: Taxes: Property taxes levied for general purposes Property taxes levied for debt service Sales taxes Franchise taxes Occupational licenses Gaming Grants and contributions not restricted to specific programs Investment earnings Payment from City of Shreveport Miscellaneous Transfers Total general revenues and transfers Change in Net Position Net position - beginning - as restated, see Note IV.H. Net position - ending The accompanying notes are an integral part of the financial statements. 26

93 Net (Expenses) Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (55,486,934) $ - $ (55,486,934) $ - (110,632,767) - (110,632,767) - (36,802,298) - (36,802,298) - (22,922,230) - (22,922,230) - (13,602) - (13,602) - (962,414) - (962,414) - (3,494,633) - (3,494,633) - (301,889) - (301,889) - (9,321,094) - (9,321,094) - (239,937,861) - (239,937,861) - - 4,160,951 4,160, ,388,312 13,388, (4,549,506) (4,549,506) - - (866,008) (866,008) - - (8,703,258) (8,703,258) - - (223,018) (223,018) , , ,350,284 3,350,284 - $ (239,937,861) $ 3,350,284 $ (236,587,577) $ (5,414) (3,748,591) (1,426,955) (839,901) (1,140,310) $ - $ - $ - $ (7,161,171) 27,172,731-27,172, ,119 32,669,404-32,669, ,809, ,809,168-7,661,160-7,661,160-7,289,383-7,289,383-10,241,584-10,241,584-2,762,622-2,762, ,727 (1,314,018) (893,291) 53, ,929,511 11,571,074-11,571,074 67,099 (19,872,078) 19,872, ,725,775 18,558, ,283,835 6,858,372 (40,212,086) 21,908,344 (18,303,742) (302,799) 315,232, ,257, ,490,392 12,927,705 $ 275,020,313 $ 512,166,337 $ 787,186,650 $ 12,624,906 27

94 CITY OF SHREVEPORT, LOUISIANA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, General Other Total Debt Obligation Governmental Governmental General Service Bonds Funds Funds ASSETS Cash and cash equivalents $ 7,108 $ 11,040,366 $ 107,041,249 $ 46,284,737 $ 164,373,460 Investments - 12,058,055-16,463,876 28,521,931 Property taxes receivable, net 3,939,397 4,921, ,861,068 Franchise taxes receivable 1,729, ,729,730 Accounts receivable, net 2,439, ,646,980 5,086,576 Due from other governments 13,288, ,951-2,105,444 15,814,984 Due from other funds - 26,767, ,704 27,414,913 Inventories 1,607, ,607,642 Notes receivable, net ,531,032 9,531,032 Assets held for resale , ,563 Restricted assets - 2,510, ,510,298 Total assets $ 23,012,062 $ 57,718,550 $ 107,041,249 $ 78,309,336 $ 266,081,197 LIABILITIES Liabilities: Accounts payable $ 1,950,168 $ - $ - $ 1,081,876 $ 3,032,044 Accrued liabilities 37, , ,233 Due to other governments 674, ,688 Due to other funds 1,817, ,506,466 4,323,906 Due to component unit 16, ,814 Unearned revenue 480, ,622,461 8,102,536 Deposits and other 732, ,491 Notes payable ,400,000 2,400,000 Items held in escrow ,116 11,116 Total liabilities 5,709, ,807,689 19,516,828 DEFERRED INFLOWS OF RESOURCES Unavailable revenue-property taxes 1,311,324 1,638, ,949,447 Total deferred inflows of resources 1,311,324 1,638, ,949,447 FUND BALANCES Nonspendable: Inventories 1,607, ,607,642 Endowments 14, ,719 Restricted for: Debt service - 56,080, ,080,427 Community development ,287,706 1,287,706 Streets ,605,464 8,605,464 Capital projects ,041,249 51,793, ,834,339 Other purposes 122, ,394,255 4,516,659 Assigned to: Purchases on order 7,302, ,302,573 Landfill 2,908, ,908,009 Unassigned 4,036, (1,578,868) 2,457,384 Total fund balance 15,991,599 56,080, ,041,249 64,501, ,614,922 Total liabilities, deferred inflows of resources and fund balances $ 23,012,062 $ 57,718,550 $ 107,041,249 $ 78,309,336 $ 266,081,197 The accompanying notes are an integral part of the financial statements. 28

95 CITY OF SHREVEPORT, LOUISIANA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION DECEMBER 31, 2014 Fund balances - total governmental funds $ 243,614,922 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets 1,008,279,051 Less accumulated depreciation (415,571,204) 592,707,847 Other assets used in governmental activities that are not financial resources and therefore are not reported in the governmental funds Prepaid items 699,029 Less amortization (493,033) 205,996 Some of the City's property taxes will be collected after year-end but are not available soon enough to pay for the current period's expenditures and therefore are deferred inflows in the governmental funds. 2,949,447 Long-term liabilities including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds. Long-term liabilities at year-end consist of: Bonds, notes, loans payable and capital leases (266,656,837) Unamortized certificate of indebtedness discount 21,636 Deferred charge on refunding 3,872,029 Unamortized bond premium (23,349,542) Accrued interest payable (3,589,762) Net pension obligations (61,698,140) Net OPEB obligation (187,170,356) Landfill closure and postclosure care (2,908,009) Compensated absences (2,368,812) (543,847,793) Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are reported with governmental activities. (20,610,106) Net position of governmental activities. $ 275,020,313 The accompanying notes are an integral part of the financial statements. 29

96 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, General Other Total Debt Obligation Governmental Governmental General Service Bonds Funds Funds REVENUES Taxes: Property $ 27,396,041 $ 32,948,365 $ - $ - $ 60,344,406 Sales 119,809, ,809,168 Franchise 7,661, ,661,160 Licenses and permits 9,554, ,554,623 Intergovernmental 9,251,265 1,557,383-7,945,569 18,754,217 Charges for services 24,519, ,519,238 Fines and forfeitures 3,210, ,210,062 Gaming ,241,584 10,241,584 Investment earnings 42, ,926 9, , ,591 Miscellaneous 1,413, ,157,610 11,571,074 Total revenues 202,857,317 34,639,674 9,383 28,510, ,017,123 EXPENDITURES Current: General government 35,956, ,086 36,118,397 Public safety 107,385, ,534, ,919,662 Public works 39,577, ,577,765 Culture and recreation 15,927, ,566 16,135,262 Community development ,844,285 4,844,285 Economic development ,589,063 3,589,063 Economic opportunity ,402,389 2,402,389 Debt service: Principal - 20,068, ,068,059 Interest and other charges - 9,142, ,142,698 Bond issuance cost , ,175 Capital outlay ,550,444 16,550,444 Total expenditures 198,846,807 29,210, ,175 29,290, ,208,199 Excess (deficiency) of revenues over (under) expenditures 4,010,510 5,428,917 (850,792) (779,711) 7,808,924 OTHER FINANCING SOURCES (USES) Transfers in 11,355,369 4,562,348-2,593,424 18,511,141 Transfers out (12,365,633) - - (26,017,586) (38,383,219) Bonds issued ,500,000-93,500,000 Premium on bonds issued ,392,041-14,392,041 Total other financing sources and (uses) (1,010,264) 4,562, ,892,041 (23,424,162) 88,019,963 Net change in fund balances 3,000,246 9,991, ,041,249 (24,203,873) 95,828,887 Fund balances-beginning 12,991,353 46,089,162-88,705, ,786,035 Fund balances-ending $ 15,991,599 $ 56,080,427 $ 107,041,249 $ 64,501,647 $ 243,614,922 The accompanying notes are an integral part of the financial statements. 30

97 CITY OF SHREVEPORT, LOUISIANA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Net change in fund balances - total governmental funds $ 95,828,887 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay 17,546,673 Depreciation expense (23,173,376) (5,626,703) Donations of capital assets increase net position in the Statement of Activities, but do not appear in the governmental funds because they are not financial revenues. 1,904,451 Revenues reported in the Statement of Activities which are not reported in governmental funds because they do not provide current financial resources. This adjustment is to recognize the net change in unavailable revenues. Property taxes (502,271) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. The detail of these differences in the treatment of long-term debt and related items is as follows: Principal payments 20,068,059 Bonds issued (93,500,000) Premium bonds issued (14,392,041) (87,823,982) The changes in other long-term assets and liabilities are reported in the Statement of Activities but do not affect current financial resources of governmental funds. The changes are as follows: Employees' retirement system net obligation (10,159,259) Policemen's pension and relief fund net obligation (769,185) Firemen's pension and relief fund net obligation (298,934) Net OPEB obligation (21,729,546) (32,956,924) (continued) 31

98 (continued) CITY OF SHREVEPORT, LOUISIANA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. These expenses consist of: Amortization of deferred charge on refunding (759,551) Amortization of certificate of indebtedness discount (3,218) Amortization of bond premiums 1,225,356 Increase in accrued interest (640,983) Amortization of prepaid items (59,990) Dcrease in compensated absences 80,720 Decrease in landfill closure and postclosure care 557, ,007 Internal service funds are used by management to charge the costs of certain activities to individual funds. The change in net position of the internal service funds is reported with governmental activities. (11,435,551) Change in net position of governmental activities. $ (40,212,086) The accompanying notes are an integral part of the financial statements. 32

99 CITY OF SHREVEPORT, LOUISIANA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Taxes $ 148,687,200 $ 148,687,200 $ 154,866,369 $ 6,179,169 Licenses and Permits 9,433,200 9,433,200 9,554, ,423 Intergovernmental 2,885,000 2,889,000 2,711,533 (177,467) Charges for services 26,160,300 26,752,300 24,519,238 (2,233,062) Fines and forteitures 4,854,800 4,234,800 3,210,062 (1,024,738) Investment earnings ,296 42,296 Miscellaneous 1,615,500 7,469,915 1,413,464 (6,056,451) Total revenues 193,636, ,466, ,317,585 (3,148,830) EXPENDITURES General government: Office of the Mayor: Salaries, wages and employee benefits 881, , ,480 (12,667) Materials and supplies 23,093 23,092 18,755 4,337 Contractual services 50,807 50,807 50, Other charges Improvements and equipment 2,000 2,000-2,000 Total Office of the Mayor 958, , ,111 (5,899) City Attorney: Salaries, wages and employee benefits 988, , ,337 8,513 Materials and supplies 18,100 18,100 13,122 4,978 Contractual services 111, , ,303 7,263 Other charges 5,300 5,300 2,146 3,154 Improvements and equipment 3,800 3,800 1,530 2,270 Total City Attorney 1,127,616 1,147,616 1,121,438 26,178 Property Standards: Salaries, wages and employee benefits 1,316,837 1,313,836 1,213, ,701 Materials and supplies 143, , ,547 9,845 Contractual services 1,577,069 1,694,068 1,392, ,068 Other charges 771, , , ,003 Improvements and equipment 65,020 56,020 8,617 47,403 Total Property Standards 3,873,398 3,873,396 3,162, ,020 Personnel: Salaries, wages and employee benefits 534, , ,730 12,189 Materials and supplies 6,541 6,541 4,245 2,296 Contractual services 27,435 28,435 25,207 3,228 Other charges 2,150 2, ,162 Improvements and equipment 2,520 2, ,475 Total Personnel 573, , ,215 21,350 (continued) 33

100 CITY OF SHREVEPORT, LOUISIANA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 (continued) Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Information Technology: Salaries, wages and employee benefits 2,059,100 1,970,300 1,890,215 80,085 Materials and supplies 129, ,260 95,735 33,525 Contractual services 1,637,473 1,266, , ,300 Improvements and equipment 321, ,432 73, ,230 Total Information technology 4,147,266 3,887,265 3,030, ,140 City Council: Salaries, wages and employee benefits 1,158,700 1,136,700 1,084,003 52,697 Materials and supplies 14,791 14,790 7,497 7,293 Contractual services 307, , , ,852 Improvements and equipment 22,149 22,149 8,687 13,462 Total City Council 1,503,325 1,480,324 1,252, ,304 Finance: Salaries, wages and employee benefits 2,345,095 2,195,095 2,121,808 73,287 Materials and supplies 123, , ,176 16,273 Contractual services 986,256 1,106,257 1,148,489 (42,232) Improvements and equipment 16,642 66,643 7,026 59,617 Total Finance 3,471,443 3,511,444 3,404, ,945 Other - unclassified Salaries, wages and employee benefits 5,147,273 5,147,272 5,765,420 (618,148) Contractual services 851, , ,467 99,681 Interest and civic appropriations 3,217,392 3,217,390 2,900, ,326 Payments to component units 5,790,718 6,340,339 5,929, ,828 Claims 6,753,200 6,753,200 7,100,065 (346,865) Total other - unclassified 21,759,731 22,309,349 22,446,527 (137,178) Total general government 37,414,557 37,764,171 35,956,311 1,807,860 Public Safety Police: Salaries, wages and employee benefits 50,047,480 50,047,482 49,287, ,797 Materials and supplies 2,890,073 2,791,273 2,367, ,256 Contractual services 1,481,572 1,415,771 1,206, ,098 Other charges 138, , ,009 17,591 Improvements and equipment 302, , , ,082 Total Police 54,860,204 54,675,605 53,107,781 1,567,824 Fire: Salaries, wages and employee benefits 45,638,851 45,638,851 45,102, ,476 Materials and supplies 1,904,899 1,904,901 1,469, ,840 Contractual services 2,085,640 2,976,639 2,597, ,239 Improvements and equipment 320, , ,551 87,936 Total Fire 49,949,877 50,770,878 49,331,387 1,439,491 Total public safety 104,810, ,446, ,439,168 3,007,315 34

101 CITY OF SHREVEPORT, LOUISIANA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 (continued) Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Engineering: Salaries, wages and employee benefits 2,973,039 2,652,639 2,719,977 (67,338) Materials and supplies 185, , ,129 5,830 Contractual services 759, , , ,492 Improvements and equipment 40,000 67,000 44,245 22,755 Total engineering 3,957,350 3,631,349 3,324, ,739 Public Works: Salaries, wages and employee benefits 12,808,321 12,089,320 11,780, ,614 Materials and supplies 5,436,243 4,780,244 3,682,091 1,098,153 Contractual services 18,663,170 19,153,171 19,513,399 (360,228) Improvements and equipment 1,077,533 3,007,532 1,276,959 1,730,573 Total public works 37,985,267 39,030,267 36,253,155 2,777,112 Culture and recreation: Salaries, wages and employee benefits 9,123,672 9,083,672 9,179,483 (95,811) Materials and supplies 974, , ,890 90,721 Contractual services 5,928,251 5,968,251 5,326, ,886 Other charges 269, , ,984 20,977 Improvements and equipment 418, , , ,644 Total culture and recreation 16,715,113 16,738,113 15,927, ,417 Total expenditures 200,882, ,610, ,900,940 8,709,443 Excess (deficiency) of revenues over (under) expenditures (7,246,368) (3,143,968) 2,416,645 5,560,613 OTHER FINANCING SOURCES (USES) Transfers in 15,885,000 10,604,200 11,355, ,169 Transfers out (11,122,100) (10,112,100) (10,771,768) (659,668) Total other financing sources (uses) 4,762, , ,601 91,501 Net change in fund balance (2,483,468) (2,651,868) 3,000,246 5,652,114 Fund balances -beginning 12,991,353 12,991,353 12,991,353 - Fund balances -ending $ 10,507,885 $ 10,339,485 $ 15,991,599 $ 5,652,114 The accompanying notes are an integral part of the financial statements 35

102 36 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2014 ASSETS Current Assets: Business-type Activities Enterprise Funds Governmental Activities Municipal Water Convention Other Internal and Regional and Convention Center Enterprise Service Airports Sewerage Center Hotel Funds Total Funds Cash and cash equivalents $ 2,548,356 $ 8,815,032 $ 742,937 $ - $ 822,236 $ 12,928,561 $ 11,049,707 Investments 2,782, , ,647 3,552,783 9,298,253 Receivables, net 677,100 8,180, , , ,992 9,865,914 3,402,579 Due from other funds , , ,157 Due from other governments 3,351, ,439 3,735,546 - Inventories 83,990 1,956,602 72,222 49,901 1,069,090 3,231,805 - Prepaid items - - 8, , , , ,381 Total current assets 9,443,405 18,952,583 1,292, ,412 3,673,151 33,948,286 25,106,077 Noncurrent Assets: Restricted: Cash and cash equivalents 5,560,504 74,585,214-1,661,306-81,807,024 - Investments 3,848,698 2,938, ,787,115 - Prepaid items 274,550 1,068, ,343,241 - Total restricted assets 9,683,752 78,592,322-1,661,306-89,937,380 - Capital Assets: Land 37,627, ,201 6,147,743-1,940,407 46,712,080 - Construction in progress 4,224,159 40,673,405 39, ,255 45,151,073 - Buildings 72,417,921-88,781,632 44,384,632 11,697, ,281,479 - Improvements other than buildings 105,938,113-3,545, , , ,513,414 - Equipment 7,516,115 19,894,732 8,028,957 5,187,065 19,457,512 60,084,381 - Distribution and collection systems - 680,760, ,760,882 - Less accumulated depreciation (102,949,684) (259,460,854) (23,775,155) (12,139,717) (17,094,200) (415,419,610) - Total capital assets (net of accumulated depreciation) 124,774, ,864,366 82,767,730 37,593,452 17,083, ,083,699 - Total noncurrent assets 134,458, ,456,688 82,767,730 39,254,758 17,083, ,021,079 - Total assets 143,901, ,409,271 84,060,465 39,841,170 20,756, ,969,365 25,106,077 DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refunding 850,757 3,136,753-2,776,833-6,764,343 - Total deferred outflows of resources 850,757 3,136,753-2,776,833-6,764,343 -

103 37 LIABILITIES Current Liabilities: Enterprise Funds Governmental Activities Municipal Water Convention Other Internal and Regional and Convention Center Enterprise Service Airports Sewerage Center Hotel Funds Total Funds Accounts payable 1,160,854 2,736, , , ,179 5,240, ,678 Accrued liabilities 692,070 1,396, , , ,842 2,778,653 - Accrued interest payable 1,012, ,163-34,425-1,602,254 - Due to other funds - 684,324-23, ,653 2,361,478 Unearned revenue 227, , ,717 - Customer deposits 67, , ,806 15, ,947 - Compensated absences 24, , , ,347 1,110 Claims and judgments ,024,408 Leases payable - 612, , ,659 - Revenue bonds and notes payable, net 1,460,000 11,311, ,900-13,482,501 - Total current liabilities 4,644,764 18,055, ,730 1,356,804 1,058,712 25,927,270 20,747,674 Noncurrent Liabilities: Business-type Activities Accrued liabilities - 1,514, ,514,064 - Claims and judgments ,961,276 Compensated absences 139, , , ,315 7,233 Leases payable - 1,658, ,738 1,694,134 - Net OPEB obligation 4,277,772 16,621, ,283,891 22,182,926 - Derivative instrument liability - 10,380, ,380,695 - Revenue bonds and notes payable, net 31,910, ,290,667-39,985, ,185,967 - Total noncurrent liabilities 36,327, ,978,728-39,985,300 1,348, ,640,101 24,968,509 Total liabilities 40,971, ,033, ,730 41,342,104 2,407, ,567,371 45,716,183 NET POSITION (DEFICIT) Net investment in capital assets 97,950, ,844,804 82,767, ,680 17,030, ,710,809 - Restricted for debt service 3,960, ,960,404 - Unrestricted (deficit) 1,869,943 (20,332,768) 481,005 1,158,219 1,318,725 (15,504,876) (20,610,106) Total net position (deficit) $ 103,780,411 $ 305,512,036 $ 83,248,735 $ 1,275,899 $ 18,349,256 $ 512,166,337 $ (20,610,106) The accompanying notes are an integral part of the financial statements.

104 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 OPERATING REVENUES Governmental Activities Municipal Water Convention Other Internal and Regional and Convention Center Enterprise Service Airports Sewerage Center Hotel Funds Total Funds Charges for services $ 10,857,000 $ 74,519,873 $ 2,511,413 $ 11,208,766 $ 4,169,979 $ 103,267,031 $ 40,031,904 Miscellaneous 104, ,409 41,371 74, ,349 1,511,699 4,573,189 Total operating revenues 10,961,308 75,259,282 2,552,784 11,283,028 4,722, ,778,730 44,605,093 OPERATING EXPENSES Business-type Activities Enterprise Funds Personal services 5,300,517 15,699,212 1,681,424-9,792,559 32,473, ,853 Contractual services and other expenses 1,519,572 8,607,605 1,415,303 8,352,502 1,962,616 21,857,598 5,865,497 Utilities 1,062,708 4,562, , , ,723 7,211,438 - Repairs and maintenance 383,075 2,222, , ,624 93,639 3,701,845 - Materials and supplies 294,533 7,371,892 90,422-3,869,041 11,625,888 9,476 Claims ,907,102 Depreciation 4,908,747 16,069,694 2,823,746 1,338,563 2,108,435 27,249,185 - Total operating expenses 13,469,152 54,533,678 7,102,290 10,870,533 18,144, ,119,666 56,119,928 Operating income (loss) (2,507,844) 20,725,604 (4,549,506) 412,495 (13,421,685) 659,064 (11,514,835) NONOPERATING REVENUES (EXPENSES) Investment earnings (loss) 31,536 (1,348,250) 475-2,221 (1,314,018) 79,284 Interest expense (2,145,103) (7,028,529) - (1,278,503) (990) (10,453,125) - Intergovernmental 225, , ,405,308 5,486,159 - Passenger facility charges 875, ,883 - Bond issuance costs - (1,765,172) (1,765,172) - Loss on disposal of capital assets (1,504) (27,528) - - (235,462) (264,494) - Net nonoperating revenues (expenses) (1,013,294) (9,314,522) 475 (1,278,503) 4,171,077 (7,434,767) 79,284 Income (loss) before contributions and transfers (3,521,138) 11,411,082 (4,549,031) (866,008) (9,250,608) (6,775,703) (11,435,551) Capital contributions 7,713, , ,364 8,811,969 - Transfers in - 12,685,064 1,736,600-6,885,416 21,307,080 - Transfers out - (1,435,000) - - (2) (1,435,002) - Change in net position 4,192,487 23,290,126 (2,812,431) (866,008) (1,895,830) 21,908,344 (11,435,551) Total net position-beginning 99,587, ,221,910 86,061,166 2,141,907 20,245, ,257,993 (9,174,555) Total net position-ending $ 103,780,411 $ 305,512,036 $ 83,248,735 $ 1,275,899 $ 18,349,256 $ 512,166,337 $ (20,610,106) The accompanying notes are an integral part of the financial statements. 38

105 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Cash flows from operating activities: Business-type Activities Enterprise Funds Governmental Activities Municipal Water Convention Other Internal and Regional and Convention Center Enterprise Service Airports Sewerage Center Hotel Funds Total Funds Receipts from operations $ 10,797,629 $ 74,903,533 $ 2,511,204 $ 11,085,290 $ 4,163,786 $ 103,461,442 $ 45,157,971 Payments to suppliers (3,006,346) (27,878,696) (2,529,987) (9,518,162) (6,119,157) (49,052,348) (6,415,701) Payments to employees (4,777,091) (13,439,548) (1,670,025) - (9,659,240) (29,545,904) (335,608) Claims (45,795,608) Other receipts 104, ,409 41,371 74, ,413 1,502,763 - Other payments (292,200) (2,760,400) - - (57,000) (3,109,600) - Net cash provided by (used in) operating activities 2,826,300 31,564,298 (1,647,437) 1,641,390 (11,128,198) 23,256,353 (7,388,946) Cash flows from noncapital financing activities: Cash bond - (96) (96) - Transfers out - (1,435,000) (1,435,000) - Intergovernmental 225, , ,398,940 5,479,791 - Transfers in - 12,685,064 1,736,600-6,860,076 21,281,740 - Interest expense on operations (11,610) (990) (12,600) - Net cash provided by (used in) noncapital financing activities 225,894 12,104,925 1,736,600 (11,610) 11,258,026 25,313,835 - Cash flows from capital and related financing activities: Acquisition and construction of capital assets (7,004,480) (24,773,577) (52,280) (431,339) (402,952) (32,664,628) - Principal paid on debt (1,380,000) (14,233,400) - (654,200) (17,308) (16,284,908) - Transfers out (2) (2) - Interest paid on debt (2,077,506) (6,575,608) - (1,196,338) - (9,849,452) - Capitalized lease payment - (603,893) (603,893) - Proceeds from bond issuance - 82,337, ,337,732 - Payment of bond issuance cost - (833,233) (833,233) - Payment used in refunded revenue bonds issued - (947,000) (947,000) - Payment of bonds prepaid insurance - (201,724) (201,724) - Capital grants 6,654, ,473 7,044,366 - Contributed capital by others 46, ,902 53,452 - Passenger facility charges 992, ,437 - Net cash provided by (used in) capital and related financing acitivites (2,768,106) 34,169,297 (52,280) (2,281,877) (23,887) 29,043,147-39

106 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 continued Business-type Activities Enterprise Funds Governmental Activities Municipal Water Convention Other Internal and Regional and Convention Center Enterprise Service Airports Sewerage Center Hotel Funds Total Funds Cash flows from investing activities: Purchase of investments (857,673) - (26,509) - (184,645) (1,068,827) (2,294,784) Proceeds from sale and maturity of investments , ,643 5,032,600 Interest on investments 31,151 10, ,221 44, ,107 Net cash provided by (used in) investing activities (826,134) 11,487 (26,034) 326,660 (182,424) (696,445) 2,857,923 Net increase (decrease) in cash and cash equivalents (542,046) 77,850,007 10,849 (325,437) (76,483) 76,916,890 (4,531,023) Cash and cash equivalents, beginning of year 8,650,906 5,550, ,088 1,986, ,719 17,818,695 15,580,730 Cash and cash equivalents, end of year $ 8,108,860 $ 83,400,246 $ 742,937 $ 1,661,306 $ 822,236 $ 94,735,585 $ 11,049,707 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ (2,507,844) $ 20,725,604 $ (4,549,506) $ 412,495 $ (13,421,685) $ 659,064 $ (11,514,835) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 4,908,747 16,069,694 2,823,746 1,338,563 2,108,435 27,249,185 - (Increase)Decrease in assets: Receivables (35,760) 355,119 (22,288) (129,536) (10,520) 157,015 (655,929) Due from other funds ,515 50,515 1,208,807 Inventories (9,091) (242,197) (1,661) (90) (34,145) (287,184) - Prepaid items - - (7,556) 3, , ,351 7,059 Increase(Decrease) in liabilities: Accounts payable (29,331) (1,206,258) 76,350 (107,103) 42,196 (1,224,146) (369,002) Accrued liabilities (46,349) (925,043) 7, ,930 11,902 (833,645) 4,111,494 Net OPEB obligation 516,888 2,196, ,421 2,836,082 - Due to other funds - (5,471,789) - - (93,571) (5,565,360) (178,785) Unearned revenue 14, (56,182) (41,671) - Customers' deposits 7,991 29,463 22,079 6,060-65,593 - Compensated absences 6,538 32,932 3,484 - (400) 42,554 2,245 Total adjustments 5,334,144 10,838,694 2,902,069 1,228,895 2,293,487 22,597,289 4,125,889 Net cash provided by (used in) operating activities $ 2,826,300 $ 31,564,298 $ (1,647,437) $ 1,641,390 $ (11,128,198) $ 23,256,353 $ (7,388,946) Non-cash investing, capital and financing activities: The Municipal and Regional Airports had a loss on disposal of capital assets of $1,504. The Water and Sewerage Fund had $629,980 in capital contributions, $27,528 in loss on disposal of capital assets, and an investment loss of $1,359,141 due to the change in fair value of the derivative instrument. Refunding bonds in the amount of $75,835,000 with a premium of $9,793,379 were issued with proceeds going directly to paying and escrow agents for defesance of prior bonds. Issuance costs of $920,155, prepaid insurance of $266,251 and deferred charge on refunding $2,823,327 were recorded. The City contributed $947,000 to complete the transactions. The Shreveport Area Transit System had a loss on disposal of capital assets of $235,461. The Golf fund had a loss on disposal of capital assets of $1. The accompanying notes are an integral part of the financial statements. 40

107 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2014 ASSETS Employee Retirement Funds Cash and cash equivalents $ 813,193 Receivables: Interest and dividends receivable 181,968 Accounts receivable 86,372 Prepaid items 475,279 Investments, at fair value: U.S. government obligations 3,794,271 Investment pool 260,259 Mutual funds 231,291,471 Domestic corporate bonds 3,927,836 Domestic equities 4,525,225 International equities 2,214,959 Total investments 246,014,021 Other assets: Cash surrender value of life insurance policies 6,997,953 Total assets 254,568,786 LIABILITIES Due to other funds 21,272,291 Employees' deposits held in escrow 1,922,979 Total liabilities 23,195,270 Net position restricted for pensions $ 231,373,516 The accopmanying notes are an integral part of the financial statements. 41

108 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Employee Retirement Funds ADDITIONS Contributions: Employer $ 8,030,635 Plan members 5,156,403 Total contributions 13,187,038 Investment earnings: Net appreciation in fair value of investments 13,444,834 Interest 292,601 Dividends 416,552 Total investment earnings 14,153,987 Less investment expense 1,283,731 Net investment earnings 12,870,256 Life insurance proceeds 970,000 Miscellaneous 16,628 Total additions 27,043,922 DEDUCTIONS Benefits 25,924,830 Refund of member contribution 1,337,188 Administrative expenses 131,262 Life insurance premiums 819,086 Total deductions 28,212,366 Change in net position (1,168,444) Net position restricted for pensions Beginning of year 232,541,960 End of year $ 231,373,516 42

109 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF NET POSITION COMPONENT UNITS DECEMBER 31, 2014 Shreveport Downtown Metropolitan Home Mortgage City City Development Planning Authority Courts Marshal Authority Commission Total ASSETS Cash and cash equivalents $ 1,380,235 $ 5,307,283 $ 1,803,527 $ 877,220 $ 100,651 $ 9,468,916 Investments 3,629, ,629,190 Receivables, net 8,305 40, , ,521 Due from primary governments ,814 16,814 Prepaid items - 5,542-19,616-25,158 Notes receivable 3,605, ,605,000 Capital assets: Land , , ,514 Other capital assets, net of depreciation - 208, , , ,968 1,689,261 Total assets 8,622,730 5,562,341 2,215,558 2,687, ,947 20,043,374 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding ,488-89,488 Total deferred outflows of resources ,488-89,488 LIABILITIES Accounts payable - 31,440 43,467 4,279 42, ,371 Accrued liabilities 15, ,464-40,463 Due to other governments ,280 75,280 Unearned income , ,343 Noncurrent liabilities: Due within one year 488, , ,828 Due in more than one year 5,125, ,717-5,920,671 Total liabilities 5,630,337 31,440 43,467 1,685, ,465 7,507,956 NET POSITION Net investments in capital assets - 208, , , ,482 2,444,640 Restricted for: Debt service 316, ,900 Other purposes - 1,565, ,794-1,751,467 Unrestricted 2,675,493 3,756,306 1,760,060 (79,960) - 8,111,899 Total net position $ 2,992,393 $ 5,530,901 $ 2,172,091 $ 1,092,039 $ 837,482 $ 12,624,906 The accompanying notes are an integral part of the financial statements. 43

110 CITY OF SHREVEPORT, LOUISIANA STATEMENT OF ACTIVITIES COMPONENT UNITS FOR THE YEAR ENDED DECEMBER 31, 2014 Program Revenues Operating Charges for Grants and Expenses Services Contributions Shreveport Home Mortgage Authority Mortgage Operations $ 298,743 $ 293,329 $ - City Courts Judicial 4,465, ,384 - City Marshal Judicial 2,108, ,023 - Downtown Development Authority Downtown development 750,326-50,000 Streetscape program 340, ,076 - Parking program 365, ,400 - Interest on long-term debt 95, Total Downtown Development Authority 1,552, ,476 50,000 Metropolitan Planning Commission Planning and zoning 1,602, , ,200 $ 10,029,024 $ 2,628,653 $ 239,200 General Revenues: Property taxes levied for general purposes Investment earnings Payment from City of Shreveport Miscellaneous Total general revenues (expense) Change in Net Position Net position - beginning - as restated - see note IV.H. Net position - ending The accompanying notes are an integral part of the financial statements. 44

111 Net(Expenses) Revenues and Changes in Net Position Downtown Metropolitan Shreveport Home City City Development Planning Mortgage Authority Courts Marshal Authority Commission Total $ (5,414) $ (5,414) $ (3,748,591) (3,748,591) $ (1,426,955) (1,426,955) $ (700,326) (700,326) (42,735) (42,735) (1,100) (1,100) (95,740) (95,740) (839,901) (839,901) (1,140,310) (1,140,310) (5,414) (3,748,591) (1,426,955) (839,901) (1,140,310) (7,161,171) , ,119 36,075 9,574 4,873 3,121-53,643-3,247,473 1,555,236-1,126,802 5,929,511-7,851-59,248-67,099 36,075 3,264,898 1,560, ,488 1,126,802 6,858,372 30,661 (483,693) 133,154 30,587 (13,508) (302,799) 2,961,732 6,014,594 2,038,937 1,061, ,990 12,927,705 $ 2,992,393 $ 5,530,901 $ 2,172,091 $ 1,092,039 $ 837,482 $ 12,624,906 45

112 46

113 I. Summary of Significant Accounting Policies CITY OF SHREVEPORT, LOUISIANA NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 The accounting policies of the City of Shreveport conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant accounting policies: A. The Financial Reporting Entity The City of Shreveport (the City ) was incorporated in 1839, under the provisions of Louisiana R.S. 33:1. In May of 1978, the present City Charter was adopted which established a mayor-council form of government. The City provides a full range of municipal services as authorized by the charter. These include police and fire protection, emergency medical services, public works (streets and waste collection), public improvements, water and sewer services, parks and recreation, planning and zoning, public transportation, social, cultural and general administrative services. The basic criterion for determining whether another governmental organization should be included in a primary governmental unit's reporting entity for basic financial statements is financial accountability. Financial accountability includes the appointment of a voting majority of the organization's governing body and the ability of the primary government to impose its will on the organization, or if there is a financial benefit/burden relationship. In addition, an organization which is fiscally dependent on the primary government and there is a financial benefit/burden relationship, should be included in its reporting entity. The financial statements present the City of Shreveport (the primary government) and its component units. The operations of the Shreveport Municipal and Regional Airports and the Shreveport Area Transit System are included as a part of the primary government. The discrete component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. There are no blended component units in the City. Discretely Presented Component Units The component units columns in the government-wide financial statements include the financial data of the City's component units. They are reported in a separate column to emphasize that they are legally separate from the City. City Courts The City Courts have jurisdiction over all violations of City ordinances and state misdemeanor cases. The Courts were created by special legislative act. Their jurisdiction includes the incorporated area of the City of Shreveport plus the fourth ward of Caddo Parish. City judges are elected and cannot be removed by City officials. The City Courts are fiscally dependent on the City of Shreveport and there is a financial benefit/burden relationship. The City has the ability to modify or approve their budget which comes from the General Fund. There are certain funds collected by the City Courts, pursuant to state statute, which are under the control of the courts. The City Courts serve the citizenry of the City of Shreveport plus Ward Four of Caddo Parish. City Marshal The City Marshal is the executive officer of the City Courts. The Marshal has the power of a sheriff in the execution of the courts' orders and mandates in making requests and preserving the peace. The City Marshal is an elected official. The City Marshal is fiscally dependent on the City of Shreveport and there is a financial benefit/burden relationship. The City has the ability to modify or approve the budget which comes from the General Fund. Certain funds are collected such as court costs, pursuant to state statute, which are under the control of the City Marshal. The City Marshal serves the citizenry of the City of Shreveport plus Ward Four of Caddo Parish. 47

114 Downtown Development Authority The Downtown Development Authority was established by an ordinance of the City of Shreveport to provide for the revitalization of downtown Shreveport. Its purpose is to coordinate the efforts of the public and private sectors for the economic and overall development of the Downtown Development District. The Downtown Development District is a special taxing district within the City of Shreveport created by an act of the State legislature. The City Council appoints the seven voting members of the Authority. The Authority must submit to the City Council its proposals, programs and recommendations for the levy of special ad valorem taxes. The City has the ability to modify or approve the budget of the Authority and its plan of work. The Authority's governing body is not substantively the same as the City's. The Authority provides services for a limited area of the City of Shreveport, which consists basically of the downtown area. Metropolitan Planning Commission The Metropolitan Planning Commission is responsible for the orderly, physical development of the City of Shreveport and the surrounding planning area. The Commission makes recommendations to the City Council and the Parish Commission. The Metropolitan Planning Commission consists of nine members with four appointed by both the City of Shreveport and the Caddo Parish Commission and one member elected by joint action of the governing authorities. Although the Commission is legally separate, the City acts as its fiscal agent and has the authority to modify and approve its budget. The Metropolitan Planning Commission is fiscally dependent on the City and there is a financial benefit/burden relationship due to the General Fund subsidy of the majority of their operating budget. The Metropolitan Planning Commission serves the citizenry of the City of Shreveport. Shreveport Home Mortgage Authority The Shreveport Home Mortgage Authority is a public trust, created by state statute, with the City of Shreveport as beneficiary. The Authority is authorized to undertake various programs to assist in the financing of housing for persons of low to moderate income in the City of Shreveport. There are five trustees that are appointed by the City Council for terms of five years. Per the terms of the trust indenture, the City has no power to transact business for the trustees nor to control or direct the actions of the trustees. The City is entitled solely to the benefits of the trust, and at the termination of the trust it shall receive the residual assets of the trust. The City cannot access the organization's funds at will, although there is some ability to access them at the discretion of the Authority. The City is financially accountable since it appoints all of the governing body and there is a potential for Shreveport Home Mortgage Authority to provide specific financial benefits to the City. The Shreveport Home Mortgage Authority serves the citizenry of the City of Shreveport. Shreveport Convention Center Hotel Authority The Shreveport Convention Center Hotel Authority is a public trust, created by state statute, with the City of Shreveport as beneficiary. The Authority is authorized to oversee the development and operation of the Shreveport Convention Center Hotel for the purpose of furthering economic development. There are five appointed trustees. The trustees are the Mayor, Chief Administrative Officer, City Council President, City Council Vice-President, and a citizen chosen at the discretion of the Mayor and approved by the City Council. The term of the Trustees shall be for as long as they hold the office enumerated, and the term of the citizen shall run concurrently with the mayoral term. Per the terms of the trust indenture, the City has no power to transact business for the trustees nor to control or direct the actions of the trustees. The City cannot access the Authority s resources but is the beneficiary of the residual assets on the termination of the trust. The City may provide financial support in the form of interim financing or guarantee of the Authority s debt. The boards are not substantively the same as the City. The Authority serves the citizenry of the City of Shreveport. The trust was created in 2002 but has had no reportable transactions through the year ended December 31,

115 The Metropolitan Planning Commission does not issue separate financial statements. The government-wide financial statements are presented within the basic financial statements. The fund financial statements are included as supplementary information within the section entitled Discretely Presented Component Unit. Complete financial statements of the other individual component units may be obtained from their respective administrative offices. Administrative Offices: City Courts Shreveport Home Mortgage Authority 1244 Texas Avenue 1215 Hawn Avenue Shreveport, Louisiana Shreveport, Louisiana City Marshal Downtown Development Authority 1244 Texas Avenue 400 Edwards Street Shreveport, Louisiana Shreveport, Louisiana Related Organization Shreveport Housing Authority The Authority was created by State statute and it is legally separate from the City. The Mayor appoints the five commissioners; however, the City cannot impose its will on the Authority since it does not have the ability to modify or approve the budget or overrule or modify the decisions of the commissioners. The Authority is fiscally independent and no financial benefit or burden relationship exists with the City. Therefore, it is not included in the City's financial statements. Jointly Governed Organization Caddo-Shreveport Sales and Use Tax Commission The Commission is an independent agency which collects sales taxes. It is legally separate from the City. The Commission is a jointly governed organization. The City does not retain an ongoing financial interest or responsibility in its operations. It is not included in the City's financial statements. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function of governmental activities and different business-type activities are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Program revenues include 1) fees, fines, and charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or program and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 49

116 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For property taxes, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. For revenues other than property taxes, the City considers them to be available if they are collected within 90 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, and interest associated with the current period are all considered to be susceptible to accrual and so have been recognized as revenues of the current period. All other revenue items except landfill fees are considered to be measurable and available only when cash is received by the government. The City reports the following major governmental funds: The General Fund is the City s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. The 2014 General Obligation Bonds Fund accounts for proceeds of bonds issued for the purpose of constructing, acquiring and improving the water and sewer system, parks and recreation, police, fire, finance and streets and drainage. The City reports the following major proprietary funds: The Water and Sewerage Fund accounts for the activities involved in operating the sewerage treatment plant, sewerage pumping stations and collection systems, and the water distribution system. The Municipal and Regional Airports Fund accounts for the activities involved in operating the City s two airports. The Convention Center Fund accounts for the conventions, conferences and rentals of the convention center. The Convention Center Hotel Fund accounts for the activities involved in the operations of the hotel, which is separately operated and adjacent to the convention center. Additionally, the City reports the following fund types: Internal Service Funds account for health care and risk management services provided to other departments on a cost reimbursement basis. The Fiduciary Funds account for the activities of the Firemen s Pension and Relief Fund, the Policemen s Pension and Relief Fund and the Employee s Retirement System, which accumulate resources for pension benefit payments to qualified employees. 50

117 As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government s water and sewerage function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. The City does not use an indirect cost allocation system. However, the General Fund charges certain funds an administrative overhead charge based on a cost allocation plan. This is eliminated like a reimbursement and reduces the revenue and expense in the General Fund. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the enterprise funds and the internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available, it is the City s policy for the governrnent-wide and propriety fund financial statements to use restricted net position first, followed by unrestricted net position. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows, liabilities, deferred inflows, and disclosure of contingent assets and liabilities at the date of the financial statements along with reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from estimates. D. Assets, liabilities, deferred outflows/inflows of resources, and net position/fund balance 1. Cash, Cash Equivalents and Investments The City maintains a pooled cash and investment account that is available for use by all funds, except those restricted by state statutes or other legal requirements. Each fund's positive equity in the pooled cash and investment account is presented as cash and cash equivalents and investments on the balance sheet or statement of net position. Negative equity balances have been reclassified and are reflected as due to/from other funds. Interest income and expense are allocated to the various funds based upon their average daily equity balances. Investments are reported at fair value based on quoted market prices. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Interest is accrued as earned. For purposes of the Statement of Cash Flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. The City has investment policies for the primary government and its fiduciary funds. The fiduciary funds are the Employees Retirement System, the Policemen s Pension and Relief Fund, and the Firemen s Pension and Relief Fund. The primary government s investments are made in accordance with Louisiana Revised Statutes and are further defined in the City s investment policy which has been approved by the Mayor and Chief Administrative Officer and implements Section of the City Code. 51

118 The State authorized investments are as follows: 1. U.S. Treasury obligations 2. U.S. government agencies 3. U.S. government instrumentalities 4. Collateralized repurchase agreements 5. Collateralized certificates of deposit with Louisiana domiciled institutions 6. Collateralized interest bearing bank accounts 7. Mutual or trust funds which are registered with the Securities and Exchange Commission which have underlying investments consisting of and limited to securities of the U.S. government or its agencies 8. Guaranteed investment contracts issued by a bank, financial institution, insurance company or other entity having one of the two highest short-term rating categories of either Standard and Poor s Corporation or Moody s Investors Service 9. Investment grade (A-1/P-1) commercial paper of domestic U.S. corporations 10. Louisiana Asset Management Pool (LAMP) 11. Any other investments allowed by state statute for local governments LAMP, a local government investment pool, is administered by LAMP, Inc., a non-profit corporation organized under the laws of the State of Louisiana, which was formed by an initiative of the State Treasurer in While LAMP is not required to be a registered investment company under the Investment Company Act of 1940, its investment policies are similar to those established by Rule 2a7, which governs registered money market funds. The primary objective of LAMP is to provide a safe environment for the placement of public funds in short-term, high-quality investments. The LAMP portfolio includes only securities and other obligations in which local governments in Louisiana are authorized to invest. Accordingly, LAMP investments are restricted to securities issued, guaranteed, or backed by the U.S. Treasury, the U.S. Government, or one of its agencies, enterprises, or instrumentalities, as well as repurchase agreements collateralized by those securities. The dollar weighted average portfolio maturity of LAMP assets is restricted to not more than 90 days, and consists of no securities with a maturity in excess of 397 days. The fair value of investments is determined on a weekly basis to monitor any variances between amortized cost and fair value. For purposes of determining participants shares, investments are valued at amortized cost. The fair value of the participants position is the same as the value of the pool shares. LAMP is designed to be highly liquid to give its participants immediate access to their account balances. In addition to the above types of securities, the Employees Retirement System is authorized by a separate investment policy in accordance with Article II, Chapter 66 of the City Code or Ordinances to invest in the following with a mix of 60% equities and 40% fixed: 1. Domestic securities registered with the Securities and Exchange Commission and traded on a recognized U.S. stock exchange or over-the-counter market. Equity securities include common stocks, real estate securities and securities convertible into common stock of U.S.-based companies. Individual convertible securities should be rated B or higher at the time of purchase. 2. International securities registered (or filed) with the Securities and Exchange Commission and traded on a recognized national exchange or over-the-counter market. Non-U.S. dollar denominated equity securities traded on recognized exchanges or over-the-counter markets outside the U.S. may also be purchased. 3. Fixed income securities in the form of bonds, notes, securitized mortgages, collateralized mortgage obligations, asset-backed securities, taxable municipal bonds and preferred stock. Fixed income securities shall be rated BBB or higher at the time of purchase except for asset-backed securities, mortgage-backed securities, and collateralized mortgage obligations which shall be rated AAA at the time of purchase. The minimum dollar-weighted average credit quality rating of the fixed income portfolio should be AA. The maximum effective maturity of any single issue should not exceed 30 years. 4. Cash reserves shall be held in the custodians money market funds, short-term maturity treasury securities or high quality money market instruments. 52

119 The Policemen s Pension and Relief Fund is authorized by the Board of Trustees to invest in the same types of investments listed above with a mix of 55% equity 35% fixed and 10% alternative investments. The Firemen s Pension and Relief Fund is authorized by the Board of Trustees to invest in the same types of investments listed above with a mix of 60% equity and 40% fixed. 2. Receivables and Payables All outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmentwide financial statements as internal balances. Within the City s Water and Sewerage Fund, an estimated amount has been recorded for services rendered but not yet billed as of the close of the year. The receivable was computed by taking the cycle billings the City sent to its customers in January and prorating the amount of days applicable to the current year. All trade and property tax receivables are shown net of an allowance for uncollectibles. 3. Inventories and Prepaid Items Inventories are valued at cost using the first in, first out (FIFO) method. Inventory in the General Fund consists of materials and supplies held for consumption. Inventories in the Enterprise Funds consist of pipes, meters, fittings and valves, repair materials, spare parts and items held for sale at the Municipal Golf Courses. Inventories are accounted for using the consumption method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 4. Restricted Assets Certain proceeds of the general obligation bonds and the enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants. The bond construction funds are used to report those proceeds of bond issuances that are restricted for use in construction. The bond and interest sinking funds are used to segregate resources accumulated for debt service payments over the next twelve months. The debt service reserve funds are used to report resources set aside to make up potential future deficiencies in the revenue bond current debt service account. 5. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $2,500 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense incurred by the Water and Sewerage Fund was $7,293,508. Of this amount $264,979 was included as the cost of capital assets in construction in progress. 53

120 Property, plant, and equipment of the primary government are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings Improvements other than buildings Infrastructure Distribution and collection systems Equipment Compensated Absences It is the City s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the City does not have a policy to pay any amounts when employees separate from service with the City. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Vacation earned is based on the number of years of services as follows: Total Employment Days Earned Per Year Less than five years 10 Five to ten years 12 Ten to fifteen years 15 Fifteen to twenty years 18 Twenty or more years 21 For classified employees, a maximum of 240 hours of accrued vacation leave can be vested and carried forward to succeeding calendar years. For non-classified employees, the maximum is 320 hours. All accrued sick leave credited to an employee can be carried forward to succeeding calendar years without limitation. Accumulated sick leave is forfeited at the time an employee terminates employment. However, accumulated sick leave is counted as creditable service at retirement if the employee has accumulated at least 175 hours. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and gains (losses) on refunding are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount or deferred amount on refunding. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, when incurred. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 54

121 8. Deferred Outflows/Inflows of Resources The statement of net position will often report a separate section for deferred outflows and (or) deferred inflows of financial resources. Deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred inflows of resources represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources until that time. All of the City s deferred outflows of resources on the statement of net position are a result of deferrals concerning bonded debt. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. Deferred amount on refunding of debt is reported in the deferred inflows or deferred outflow sections of the statement of net position. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The governmental funds report unavailable revenues from property taxes. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 9. Fund Balance Nonspendable Fund Balance Nonspendable fund balance includes amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact including inventories and endowments. Restricted Fund Balance Restricted fund balance includes amounts that are constrained for specific purposes which are externally imposed by creditors, grantors, contributors or laws or regulations of other governments or by law through constitutional provisions or enabling legislation. Assigned Fund Balance Assigned fund balance includes amounts that are intended to be used for specific purposes that are not considered restricted. Fund balance may be assigned by the Finance Director as provided through the City Charter. Unassigned Fund Balance Unassigned fund balance is the residual classification for the general fund which represents fund balance that has not been restricted or assigned. In other governmental funds, it represents a negative fund balance. It is the City s policy to consider restricted fund balances to be used before using any of the components of unrestricted fund balances. Also, when the components of unrestricted fund balance can be used for the same purpose, assigned fund balance is used first followed by unassigned fund balance. 10. Net Position The government-wide statement of net position reports $231,200,021 of restricted assets, of which $54,128,788 is restricted by enabling legislation. E. Implementation of New Accounting Standard The City implemented the following financial accounting and reporting standards issued by the Governmental Accounting Standards Board (GASB): GASB Statement No. 67 Financial Reporting for Pension Plans The objective of this Statement is to improve financial reporting by state and local governmental pension plans. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. See Note IV.A. 55

122 II. Stewardship, Compliance, and Accountability A. Budgetary Information Prior to October 1, the Mayor files with the Clerk of Council a proposed operating budget for the fiscal year commencing the following January. The operating budget includes proposed expenditures and related financing sources. The City Council conducts public hearings and proposes adoption of the various budget ordinances. Prior to December 15, the City Council adopts the final budgets controlling the financial operations of the City for the ensuing fiscal year. Legal budgetary control for operating budgets is exercised at the department/object class with the exception of the Community Development Department where control is exercised at the division/object class. The ordinances provide lump sum appropriation at the object level. The City Charter allows the Mayor to authorize the transfer of budgeted amounts from one activity to another within the same lump sum appropriation, within the same department with the exception of the Community Development Department where funds must be spent within the same division. Budgetary transfers across department lines or between classes of lump sum appropriations must be approved by the City Council. During the year, the City Council approves several amendments to the budget. The City Charter provides that expenditures may not legally exceed appropriations. Formal budgetary integration and encumbrance accounting are employed as management control devices during the year for the General, Debt Service, Special Revenue Funds (except for the Enrichment Fund), Capital Projects and Proprietary Funds. The capital project funds adopt project length budgets. The budgets for governmental funds are adopted on a basis substantially consistent with generally accepted accounting principles except for state supplemental pay for fire and police which is included but not budgeted in the General Fund. All appropriations which are not expended or encumbered lapse at year end. Encumbrances outstanding at year end will be reappropriated and honored during the subsequent year. Encumbrances outstanding at year end by fund. General fund $ 7,302,573 Debt Service fund General Obligation Bond fund - Nonmajor governmental funds 10,185,919 Total encumbrances $ 17,488,492 Revisions were made to the following major governmental funds original budgets (expenditures including transfers out) as follows: Original Budget Final Including Revised Carry Forwards Revisions Budget General Fund $ 212,004,468 $ 718,015 $ 212,722,483 Adjustments necessary to convert the revenues and expenditures of the General Fund at the end of the year on the budgetary basis to the GAAP basis are as follows: Revenues General Fund Actual on the budgetary basis $ 196,317,585 Adjustment for state supplemental pay 6,539,732 GAAP basis $ 202,857,317 56

123 Expenditures (Including transfers out) Actual on the budgetary basis $ 204,672,708 Adjustment for state supplemental pay 6,539,732 GAAP basis $ 211,212,440 B. Excess of Expenditures over Appropriations During 2014, based on the legally adopted level of control for budgetary purposes, the General Fund had excess expenditures over appropriations as follows: General government Office of the Mayor Salaries, wages and employee benefits $ 12,667 Retirement benefits were not fully budgeted Finance Contractual services 42,232 Collection agency fees exceeded the budget Other unclassified Salaries, wages and employee benefits 618,148 Group insurance exceeded the budget Claims 346,865 Payments exceeded the amount budgeted Engineering Salaries, wages and employee benefits 67,338 Budget projections were too low Public works Contractual services 360,228 Landfill operating charges exceeded the budget Culture and recreations Salaries, wages and employee benefits 95,811 Overtime charges exceeded the budget C. Deficit Net Position The Golf Fund, a nonmajor enterprise fund, had a deficit net position balance of $929,772. The deficit was due to the accrual of Other Postemployment Benefits (OPEB) as described in Note IV.A. The Retained Risk Fund, an internal service fund, had a deficit net position balance of $19,388,189 which will be recovered through future charges to other funds. The Employee Health Care Fund, an internal service fund, had a deficit net position balance of $1,221,917 which will be recovered through future charges to other funds. D. Deficit Fund Balance The Riverfront Development Fund, a nonmajor governmental fund, had a deficit fund balance of $1,578,868. The deficit was due to less than anticipated revenues and will be funded through 2015 budget amendments within the fund. 57

124 III. Detailed Notes on All Funds A. Deposits and Investments 1. Investments Primary Government excluding Fiduciary Funds Investment Type Fair Value U.S. Treasuries $ 10,690,882 U.S. Instrumentalities 39,386,929 Money Market 217,515,044 LAMP 5,106,711 Capital One Investment Account 23,635,651 Certificates of Deposit 592,569 Total $ 296,927,786 The fair value of $50,670,380 for U.S. Treasuries and Instrumentalities and Certificates of Deposit, is classified on the Statement of Net Position as Investments. The money market amounts of $217,515,044, LAMP $5,106,711, and Capital One Investment Account $23,635,651 are classified as Cash and cash equivalents. Investment Maturities (in years) Less Investment Type Fair Value Than U.S. Treasuries $ 10,690,882 $ 9,372,501 $ 1,318,381 U.S. Instrumentalities 39,386,929 1,001,836 38,385,093 Certificates of Deposit 592, ,569 Money Market 217,515, ,515,044 - LAMP 5,106,711 5,106,711 - Capital One Investment Account 23,635,651 23,635,651 - Total $ 296,927,786 $ 256,631,743 $ 40,296,043 Interest rate risk. The City investment policy limits its exposure to declines in fair value by limiting investment maturities to 3 years from the date of settlement unless matched to a specific cash flow requirement. The City is exposed to interest rate risk on its pay fixed, receive variable rate swap. The City pays 3.56% and receives 70% of USD-LIBOR-BBA. A decrease in the variable rate increases the City s interest expense. The swap had a negative fair value of $10,380,695 at December 31, 2014 and is classified under noncurrent liabilities within the Water and Sewerage Fund as derivative instrument liability. The increase in the negative fair value for 2014 was $1,359,141 and is classified as investment loss. The swap has a notional amount of $72,850,000 and matures on October 1, Credit risk. The standard of prudence to be used for managing the City s assets is the prudent investor rule which states, Investments shall be made with judgment and care under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation but for investment considering the probable safety of their capital as well as the probable income to be derived. The City s investment policy limits investments to those discussed previously. The investments in U.S. treasuries and instrumentalities were rated AA+ and Aaa, the Investment Agreements and Money Market investments were unrated and the LAMP investment was rated AAAm. Concentration of credit risk. The City has no investments in one issuer greater than 5 percent except those backed by the full faith and credit of the U.S. Government. Custodial credit risk deposits. In the case of deposits; this is the risk that in the event of a bank failure, the City s deposits may not be returned to it. The City s policy is that banks holding deposits are required to pledge securities to fully collateralize these transactions. The pledged securities are held by another bank or through book entry in a 58

125 custodial account in the Federal Reserve System. The City must authorize in writing the release or substitution of the pledged securities. Custodial credit risk investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City s policy is that all investments purchased by the City, except certificates of deposit, local government investment pools, and money market funds, will be delivered by book entry and will be held in third-party safekeeping by a City-approved custodian bank. 2. Investments Fiduciary Funds Investment Type Fair Value U.S. Treasuries $ 1,637,025 U.S. Instrumentalities 374,761 Asset-backed Securities 1,782,485 Corporate Bonds 3,927,836 Mutual Funds 57,889,214 Mutual Bond Funds 173,402,257 Investment Pool 260,259 Domestic Equities 4,525,225 International Equities 2,214,959 Money Market 510,416 Total $246,524,437 The fair value of $246,014,021 is classified on the Statement of Fiduciary Net Position as Investments. The money market amounts of $510,416 are classified as Cash and Cash Equivalents. Investment Maturities (in years) Less Investment Type Fair Value Than >10 U.S. Treasuries $ 1,637,025 $ 88,584 $ 694,355 $ 421,643 $ 432,443 U.S. Instrumentalities 374, , Asset-backed Securities 1,782,485-34, ,493 1,468,186 Corporate Bonds 3,927, ,155 1,861, , ,427 Money Market 510, , Total $8,232,523 $1,593,155 $2,965,057 $1,225,255 $2,449,056 S&P/Moody s Rating Fair Value Government $ 1,637,025 AAA 2,003,055 AA 694,290 A 1,582,001 BBB 1,561,067 Unrated 244,669 Money Market 510,416 Total $8,232,523 59

126 Interest rate risk. The Fiduciary Funds do not have a policy to limit investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates. The funding obligations of the plan are long-term in nature; consequently, the investment of the Plan s assets shall have a long-term focus, but shall not exceed 30 years. Credit risk. Fixed income securities shall be rated BBB or higher at the time of purchases except for asset-backed securities, mortgage-backed securities and collateralized mortgage obligations which shall be rated AAA. Convertible securities shall be rated B or higher at the time of purchase. The minimum dollar-weighted average credit quality rating of the fixed income portfolio should be AA. Concentration of credit risk. Holdings of any single issue shall not exceed more than 5% of the market value of the issuer. Currency risk. The international equities are held through American Depository Receipts which are traded in U.S. dollars on the American Stock Exchanges. There were no investments in international fixed-income securities. 3. Discretely Presented Component Units Deposits Shreveport Home Mortgage Authority The Authority has no deposits since all funds are maintained at trust departments at financial institutions. City Courts The City Court does not have a policy for custodial credit risk. As of December 31, 2014, $4,804,998 of the City Courts bank balance of $5,304,998 was exposed to custodial credit risk due to being uninsured and collateral held by the pledging bank s trust department not in the City Courts name. City Marshal The City Marshall does not have a policy for custodial credit risk. As of December 31, 2014, $1,157,505 of the City Marshal s bank balance of $2,160,692 was exposed to custodial credit risks due to being uninsured and collateral held by the pledging banks trust department not in the City Marshal s name. Downtown Development Authority The Authority does not have a policy for custodial credit risk. As of December 31, 2014, $565,947 of the Authority s bank balance of $815,947 was uninsured but collateralized with pledged securities held by the custodial bank s trust department in the Authority s name. Louisiana Revised Statue 39:1229 imposes statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the component unit that the fiscal agent has failed to pay deposited funds upon demand. Investments Shreveport Home Mortgage Authority The $3,629,190 consists of $670,000 in certificates of deposit and $2,959,190 in guaranteed mortgage-backed securities. 60

127 B. Property Taxes The City levies taxes on real and business personal property located within its boundaries. Property taxes are levied by the City on property values assessed by the Bossier Parish and Caddo Parish Tax Assessors and approved by the State of Louisiana Tax Commission. Assessment date January 1, 2014 Levy date Not later than June 1, 2014 Tax bills mailed On or about November 15, 2014 Total taxes are due December 31, 2014 Penalties and interest are added January 1, 2015 Lien date January 1, 2015 Tax sale delinquent property July 1, 2015 Property taxes levied for the current year are recognized as revenues, even though a portion is collectible in the period subsequent to the levy. The City's property tax collection records show that 94.2% of the property taxes due were collected within 60 days after the due date. Assessed values are established by the Bossier Parish and Caddo Parish Tax Assessors each year on a uniform basis at the following ratios to fair market value. 10% Land 15% Machinery 10% Residential Improvements 15% Commercial Improvements 15% Industrial Improvements 25% Public Service properties, excluding land A re-evaluation of all property is required to be completed no less than every 4 years. A re-evaluation was completed for the tax roll of January 1,

128 62 C. Receivables Receivables (excluding due from other funds and component units) as of year end for the City's individual major funds and nonmajor, internal service, and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts, are outlined below. Municipal Nonmajor Debt Water and and Regional Convention Convention and Other General Service Sewerage Airports Center Center Hotel Funds Total Receivables: Interest $ - $ - $ - $ - $ - $ - $ 181,968 $ 181,968 Taxes 6,214,276 5,644, ,858,632 Accounts 6,675,681-12,038, , , ,242 6,475,923 26,535,569 Intergovernmental 13,288, ,951-3,351, ,489,883 19,550,530 Notes receivable ,881,156 14,881,156 Gross receivables 26,178,546 6,065,307 12,038,299 4,028, , ,242 24,028,930 73,007,855 Less: Allowance for uncollectibles 4,781, ,685 3,857, ,350,124 14,712,086 Net total receivables $ 21,397,312 $ 5,342,622 $ 8,180,949 $ 4,028,207 $ 233,631 $ 434,242 $ 18,678,806 $ 58,295,769 The total of notes receivable is not expected to be collected within one year. Approximately $472,732 will be collected in the next year and the balance in future years in accordance with the payment schedules.

129 D. Federal and State Financial Assistance Federal and State governmental units represent an important source of supplementary funding to finance housing, employment and construction programs, and other activities beneficial to the community. These funds, primarily in the form of grants, are recorded in the General, Special Revenue, Capital Projects and Enterprise Funds. A grant receivable is recorded when the City has a right to reimbursement under the related grant. The grants normally specify the purpose for which the funds may be used and are audited annually under the Single Audit Act as mandated by OMB Circular A-133. The following amounts under various grants and entitlements are recorded as revenues, passenger facility charges, subsidies or contributions in the accompanying financial statements: General Fund $ 9,251,265 Debt Service Fund 1,557,383 Special Revenue Funds: Community Development 6,839,302 Police Grants 867,780 Environmental Grants 149,264 Capital Projects Funds 89,223 Enterprise Funds: Municipal and Regional Airports 8,845,402 Water and Sewerage 854,957 Shreveport Area Transit System 4,864,926 Totals $33,319,502 Supplementary salary payments are made by the State to certain groups of employees. The City is not legally responsible for these salaries. Therefore, the basis for recognizing the revenue and expenditure payments is the actual contribution from the State. The State paid supplemental salaries to the following groups of employees: Fire Department $3,219,839 Police Department $3,128,705 and City Marshal (a component unit) $191,188. These amounts were paid directly to the employees. There were no payments made for fringe benefits. The amounts for fire and police employees have been recorded in the General Fund financial statements as revenue and expenditures. 63

130 E. Capital Assets Capital asset activity for the year ended December 31, 2014 was as follows: Primary Government Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 108,165,997 $ 1,107,690 $ - $ 109,273,687 Construction in progress 26,853,397 16,550,444 (15,921,127) 27,482,714 Total capital assets not being depreciated 135,019,394 17,658,134 (15,921,127) 136,756,401 Capital assets, being depreciated: Buildings 173,430,407 13,228, ,659,390 Improvements other than buildings 70,140, ,864-70,462,307 Equipment 82,662,609 2,138,387 (1,808,316) 82,992,680 Infrastructure 529,383,390 2,024, ,408,273 Total capital assets being depreciated 855,616,849 17,714,117 (1,808,316) 871,522,650 Less accumulated depreciation for: Buildings (62,999,051) (3,471,024) - (66,470,075) Improvements other than buildings (36,134,436) (2,007,745) - (38,142,181) Equipment (58,178,132) (5,661,714) 1,808,316 (62,031,530) Infrastructure (236,894,525) (12,032,893) - (248,927,418) Total accumulated depreciation (394,206,144) (23,173,376) 1,808,316 (415,571,204) Total capital assets, being depreciated, net 461,410,705 (5,459,259) - 455,951,446 Governmental activities capital assets, net $ 596,430,099 $ 12,198,875 $ (15,921,127) $ 592,707,847 64

131 Beginning Ending Balance Increases Decreases Balance Business-type activities: Municipal and Regional Airports Capital assets, not being depreciated: Land $ 37,627,795 $ - $ (66) $ 37,627,729 Construction in progress 710,610 8,006,959 (4,493,410) 4,224,159 Total capital assets not being depreciated 38,338,405 8,006,959 (4,493,476) 41,851,888 Capital assets, being depreciated: Buildings 72,179, ,861-72,417,921 Improvements other than buildings 101,733,395 4,204, ,938,113 Equipment 7,395, ,336 (53,983) 7,516,115 Total capital assets being depreciated 181,308,217 4,617,915 (53,983) 185,872,149 Less accumulated depreciation for: Buildings (35,319,618) (1,490,791) - (36,810,409) Improvements other than buildings (57,325,530) (3,165,415) - (60,490,945) Equipment (5,448,268) (252,541) 52,479 (5,648,330) Total accumulated depreciation (98,093,416) (4,908,747) 52,479 (102,949,684) Total capital assets, being depreciated, net 83,214,801 (290,832) (1,504) 82,922,465 Municipal and Regional Airports capital assets, net $ 121,553,206 $ 7,716,127 $ (4,494,980) $ 124,774,353 Beginning Ending Balance Increases Decreases Balance Water and Sewerage: Capital assets, not being depreciated: Land $ 996,201 $ - $ - $ 996,201 Construction in progress 61,062,919 18,658,206 (39,047,720) 40,673,405 Total capital assets not being depreciated 62,059,120 18,658,206 (39,047,720) 41,669,606 Capital assets, being depreciated: Equipment 18,749,800 2,095,732 (950,800) 19,894,732 Distribution and collection systems 637,634,789 43,126, ,760,882 Total capital assets being depreciated 656,384,589 45,221,825 (950,800) 700,655,614 Less accumulated depreciation for: Equipment (3,295,627) (638,604) 923,272 (3,010,959) Distribution and collection systems (241,018,805) (15,431,090) - (256,449,895) Total accumulated depreciation (244,314,432) (16,069,694) 923,272 (259,460,854) Total capital assets, being depreciated, net 412,070,157 29,152,131 (27,528) 441,194,760 Water and Sewerage capital assets, net $ 474,129,277 $ 47,810,337 $ (39,075,248) $ 482,864,366 65

132 Beginning Ending Balance Increases Decreases Balance Convention Center: Capital assets, not being depreciated: Land $ 6,147,743 $ - $ - $ 6,147,743 Construction in progress - 95,550 (56,296) 39,254 Total capital assets not being depreciated 6,147,743 95,550 (56,296) 6,186,997 Capital assets, being depreciated: Buildings 88,781, ,781,632 Improvements other than buildings 3,545, ,545,299 Equipment 8,011,443 17,514-8,028,957 Total capital assets being depreciated 100,338,374 17, ,355,888 Less accumulated depreciation for: Buildings (13,761,388) (1,859,828) - (15,621,216) Improvements other than buildings (1,055,515) (145,628) - (1,201,143) Equipment (6,134,506) (818,290) - (6,952,796) Total accumulated depreciation (20,951,409) (2,823,746) - (23,775,155) Total capital assets, being depreciated, net 79,386,965 (2,806,232) - 76,580,733 Convention Center capital assets, net $ 85,534,708 $ (2,710,682) $ (56,296) $ 82,767,730 Convention Center Hotel: Capital assets, being depreciated: Buildings 44,166,054 Beginning Ending Balance Increases Decreases Balance $ $ 218,578 $ - $ 44,384,632 Improvements other than buildings 153,048 8, ,471 Equipment 4,982, ,338-5,187,066 Total capital assets being depreciated 49,301, ,339-49,733,169 Less accumulated depreciation for: Buildings (7,003,075) (972,632) - (7,975,707) Improvements other than buildings (62,112) (6,702) - (68,814) Equipment (3,735,967) (359,229) - (4,095,196) Total accumulated depreciation (10,801,154) (1,338,563) - (12,139,717) Total capital assets, being depreciated, net 38,500,676 (907,224) - 37,593,452 Convention Center Hotel capital assets, net $ 38,500,676 $ (907,224) $ - $ 37,593,452 66

133 Beginning Ending Balance Increases Decreases Balance Other business-type activity programs: Capital assets, not being depreciated: Land $ 1,940,407 $ - $ - $ 1,940,407 Construction in progress 163 4,370,336 (4,156,244) 214,255 Total capital assets not being depreciated 1,940,570 4,370,336 (4,156,244) 2,154,662 Capital assets, being depreciated: Buildings 11,737,382 7,741 (47,829) 11,697,294 Improvements other than buildings 868, ,530 Equipment 21,461, ,418 (2,273,556) 19,457,512 Total capital assets being depreciated 34,067, ,159 (2,321,385) 32,023,336 Less accumulated depreciation for: Buildings (4,633,500) (343,217) 35,827 (4,940,890) Improvements other than buildings (478,221) (27,337) - (505,558) Equipment (11,959,968) (1,737,881) 2,050,097 (11,647,752) Total accumulated depreciation (17,071,689) (2,108,435) 2,085,924 (17,094,200) Total capital assets, being depreciated, net 16,995,873 (1,831,276) (235,461) 14,929,136 Other enterprise funds capital assets, net $ 18,936,443 $ 2,539,060 $ (4,391,705) $ 17,083,798 Business-type activities capital assets, net $ 738,654,310 $ 54,447,618 $ (48,018,229) $ 745,083,699 In some cases, the reduction in construction in progress is greater than the increase in capital assets due to items not meeting the capitalization criteria. Also, in the other business-type activities, the Shreveport Area Transit System s operating and capital grants are tracked through the City s capital project system. Operating expenses are expensed out of construction in progress. Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 366,348 Public safety 3,325,278 Public works, including depreciation of general infrastructure assets 13,968,051 Community development 521,554 Culture and recreation 4,992,145 Total depreciation expense-governmental activities $ 23,173,376 Business-type activities: Municipal and Regional Airports $ 4,908,747 Convention Center Hilton Hotel 1,338,563 Convention Center 2,823,746 Water and Sewerage 16,069,694 Shreveport Area Transit System 2,047,475 Golf 60,960 Total depreciation expense-business-type activities $ 27,249,185 67

134 Construction commitments The government has active major construction projects as of December 31, The projects include public works projects, Airport additions, and improvements to Water and Sewerage facilities. At year end, the government s commitments with contractors are as follows: Remaining Project Commitment Financing Sources General Aviation Apron Regional Airport $ 990,814 LADOT State Grants Rehabilitation of Taxiway B, C, D, F Regional Airport 2,206,414 Federal FAA Grants and State Grants Rehabilitation of Airfield Drainage Regional Airport 1,155,223 Federal FAA Grants and State Grants Bus Purchase for the Sportran System Transit 2,241,911 Federal FTA Grants and Local Funds Supervisory Control & Data Acquisition System 571, A and 2007 W&S Rev Bonds Amiss WTP-Plant 2E Rehabilitation 3,332, GOP-Prop I Broadmoor Lift Station Improvements 2,847, W&S Rev Bonds & 2010D W&S Rev Notes South Highlands Lift Station Improvements 1,175, W&S Rev Bonds & 2011 GOB-Prop 1 Sewer Survey & Wastewater Master Plan 710, W&S Rev Bonds & 2011 GOB-Prop 1 Broadmoor Sewer Outfall 48 Sewer Main Rehabilitation 1,778, GOB-Prop 1 & 2014 GOB-Prop 1 Cedar Grove Trunk Main Repair 581, GOB-Prop 1 & 2014 GOB-Prop 1 Lucas & North Regional WWTP Improvements 1,765, GOB-Prop 1 & 2014 GOB-Prop 1 City Wide Sewer Rehabilitation 12,100, GOB-Prop 1 & 2014 GOB-Prop 1 Port Lift Station Rehabilitation 2,306, GOB-Prop 1 & State Rev Sharing City Wide Lift Station Rehabilitation 3,121, GOB-Prop 1 & 2014 GOB-Prop 1 Total $36,886,198 Discretely presented component unit Activity for the Metropolitan Planning Commission (MPC) for the year ended December 31, 2014 was as follows: Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 704,514 $ - $ - $ 704,514 Capital assets, being depreciated: Improvements other than buildings 999, ,234 Equipment 109,292 - (13,188) 96,104 Total capital assets being depreciated 1,108,526 - (13,188) 1,095,338 Less accumulated depreciation for: Improvements other than buildings (901,964) (5,150) - (907,114) Equipment (60,086) (8,358) 13,188 (55,256) Total accumulated depreciation (962,050) (13,508) 13,188 (962,370) Total capital assets, being depreciated, net 146,476 (13,508) - 132,968 MPC capital assets, net $ 850,990 $ (13,508) $ - $ 837,482 All depreciation was charged to planning and zoning. 68

135 Activity for the Downtown Development Authority for the year ended December 31, 2014 was of follows: Beginning Ending Balance Increases Decreases Balance Capital assets, not being depreciated: Land $ 80,000 $ - $ - $ 80,000 Total capital assets, not being depreciated 80, ,000 Capital assets, being depreciated: Leasehold improvements 52, ,369 Buildings 1,166,728 - (26,900) 1,139,828 Equipment 327,618 37,399 (43,130) 321,887 Total capital assets being depreciated 1,546,715 37,399 (70,030) 1,514,084 Less accumulated depreciation for: Leasehold improvements (26,333) (1,746) - (28,079) Buildings (264,558) (51,051) 9,704 (305,905) Equipment (245,203) (26,457) 26,900 (244,760) Total accumulated depreciation (536,094) (79,254) 36,604 (578,744) Total capital assets, being depreciated, net 1,010,621 (41,855) (33,426) 935,340 Downtown Development Authority capital assets, net $ 1,090,621 $ (41,855) $ (33,426) $ 1,015,340 Depreciation expense was charged to functions/programs as follows: Downtown development $54,651 Streetscape program 9,626 Parking program 14,977 Total $79,254 F. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of December 31, 2014 is as follows: Due to/from other funds: Receivable Fund Payable Fund Amount Nonmajor governmental funds Nonmajor governmental funds $ 624,375 Convention Center Hotel 23,329 Nonmajor enterprise funds General Fund 398,258 Internal service funds General Fund 167,833 Water and Sewerage Fund 684,324 Debt service fund Fiduciary Funds 21,272,291 Nonmajor governmental funds 1,882,091 Internal Service Fund 2,361,478 General Fund 1,251,349 Total $ 28,665,328 69

136 These balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Interfund transfers: Transfer in: Transfer out: Nonmajor Nonmajor General Governmental Water and Enterprise Fund Fund Sewer Funds Total General Fund $ - $ 9,920,369 $ 1,435,000 $ - $ 11,355,369 Debt Service 4,562, ,562,348 Nonmajor governmental 917,869 1,675, ,593,424 Water & Sewerage - 12,685, ,685,064 Convention Center - 1,736, ,736,600 Nonmajor enterprise 6,885, ,885,416 Total transfers $ 12,365,633 $ 26,017,586 $ 1,435,000 $ 2 $ 39,818,221 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. G. Capital Leases In previous years, the City entered into lease agreements totaling $47,281,040. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The payment schedule below includes all of the current leases in effect at year end. The assets acquired through the capital leases follow: Governmental Activities Business-type Activities Equipment $ 42,219,301 $ 5,061,739 Less: accumulated depreciation (24,031,618) (1,821,185) Total $ 18,187,683 $ 3,240,554 70

137 The future minimum lease obligations and the net present value of these minimum lease payments as of December 31, 2014 were as follows: Governmental Business-type Ending December 31, Activities Activities ,532, , ,842, , ,506, , ,274 Total minimum lease payments 5,880,996 2,390,994 Less: amount representing interest (134,160) (67,201) Present value of minimum lease payments $ 5,746,836 $2,323,793 H. Long-term Liabilities Long-term liability activity for the year ended December 31, 2014 was as follows: (in thousands of dollars) Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental activities: General obligation bonds $ 149,560 $ 93,500 $ (14,805) $ 228,255 $ 19,255 Plus unamortized premium 9,964 14,392 (1,163) 23,193 1,768 Total bonds payable 159, ,892 (15,968) 251,448 21,023 Certificate of indebtedness 7,395 - (1,760) 5,635 1,815 Less unamortized discount (25) - 3 (22) (3) Plus unamortized premium (59) Total certificates of indebtedness 7,534 - (1,816) 5,718 1,870 Capital lease 8,155 - (2,408) 5,747 2,451 Notes 28,115 - (1,095) 27,020 1,150 Plus unamortized premium 55 - (3) 52 3 Total notes 28,170 - (1,098) 27,072 1,153 Net pension obligation 50,471 11,227-61,698 - Net OPEB obligation 165,441 21, ,170 - Landfill postclosure care 3,466 - (558) 2,908 - Claims and judgments 38,874 49,907 (45,795) 42,986 18,024 Compensated absences 2, (367) 2, Governmental activities (Excluding: Community Development notes 464, ,044 (68,010) 587,124 44,871 Community Development notes 3,105 - (705) 2, Total long-term liabilities $ 467,195 $ 191,044 $ (68,715) $ 589,524 $ 45,588 71

138 Beginning Ending Due Within Balance Additions Reductions Balance One Year Business-type activity Municipal and Regional Airports: Revenue bonds and notes $ 34,750 $ - $ (1,380) $ 33,370 $ 1,460 Net OPEB obligation 3, ,278 - Compensated absences (21) Total 38, (1,401) 37,812 1,484 Water and Sewerage: Revenue bonds and notes 167, ,833 (96,351) 228,090 9,789 Plus unamortized premium ,167 (514) 12,212 1,223 Total bonds payable 168, ,000 (96,865) 240,302 11,012 Capital lease 2,874 - (603) 2, Net OPEB obligation 14,424 2,197-16,621 - Compensated absences (99) Accrued liability 2, (300) 1, Derivative instrument liability 9,022 1,359-10,381 - Total 197, ,788 (97,867) 272,008 12,029 Convention Center Hotel Notes 1,725 - (114) 1, Revenue bonds 39,625 - (540) 39, Total 41,350 - (654) 40, Other business-type activities: Net OPEB obligation 1, ,284 - Capital lease 71 - (18) Compensated absences (270) Total 1, (288) 1, Business-type activity long-term activities $ 278,623 $ 173,725 $ (100,210) $ 352,138 $ 14,498 Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above totals for governmental activities. The claims and judgments liability will be liquidated through the City s Employees Health Care Fund and the Retained Risk Fund. These funds will finance the payment of these claims by charging other funds based on the origination of the claims. The General Fund normally bears approximately 90% of these costs. At year end, $8,343 of internal service funds compensated absences are included in the above amounts. For the governmental activities, the balance of compensated absences is generally liquidated by the General Fund. Net pension obligation, Net OPEB obligation and landfill post-closure care will also be liquidated by the General Fund. There are a number of limitations and restrictions contained in the various bond indentures. The City is in substantial compliance with all significant limitations and restrictions. State law allows a maximum of 10% of the assessed valuation for general obligation bonded debt for any one purpose. However, the 10% maximum can be exceeded if the aggregate issued for all purposes does not exceed 35% of the total assessed valuation. A total of approximately $297,834,860 of additional general obligation bonded debt is available for issuance on a total assessed valuation of $1,503,113,886 pursuant to the 35% limitation. Included in the total assessed valuation of property within the City is $10,786,000 of assessed valuation which has been adjudicated to Caddo and Bossier Parish. The table below shows the computation of the City s legal debt margin calculated at 10% of assessed valuation as of December 31,

139 Debt limit - 10% of Deduct - Amount assessed value for of debt applicable Legal any one purpose to debt limit Debt margin Street Improvements $150,311,389 $50,707,820 $ 99,603,569 Police and Fire 150,311,389 4,126, ,185,300 Water and Sewer Improvements 150,311,389 89,268,650 61,042,739 Parks and Recreation 150,311,389 34,155, ,155,861 Public Buildings 150,311,389 37,517, ,794,389 Drainage 150,311,389 10,876, ,434,655 Sanitation and Incinerator 150,311, ,311,389 Industrial Bond 150,311, ,331,389 Airports 150,311, ,331,389 Sportran 150,311, , ,108,655 Riverfront Park 150,311,389 1,400, ,910,943 73

140 The annual requirements to amortize all debt outstanding as of December 31, 2014, including interest requirements are as follows: Maturities (thousands of dollars) PRINCIPAL REQUIREMENTS: GENERAL OBLIGATION DEBT: Total B Refunding Issue % 2,420 1,175 1, Plus: Unamortized Premium ,477 1,221 1, A Refunding Issue % 5,755 1,830 1,920 2,005 - Plus: Unamortized Premium ,797 1,847 1,937 2, A Refunding Issue % 31,720 5,725 6,035 6,345 6,650 Plus: Unamortized Premium 1, ,341 6,099 6,409 6,719 7, B Refunding Issue % 13,400 2,405 2,535 2,670 2,820 Plus: Unamortized Premium ,146 2,584 2,714 2,848 2, Refunding Issue % 7,360 1,705 1,790 1,885 1,980 Plus: Unamortized Premium ,512 1,751 1,837 1,932 1, Issue % 74,100 2,745 2,895 3,055 3,225 Plus: Unamortized Premium 6, ,404 3,125 3,275 3,435 3, Issue % 93,500 3,670 3,170 3,235 3,365 Plus: Unamortized Premium 14, ,771 4,396 3,896 3,961 4,091 Total General Obligation Bonds 251,448 21,023 21,324 20,908 19,710 74

141 Maturities (thousands of dollars) , , , , ,400 20,020 26,170 12, ,900 1, ,780 21,920 28,070 13,194-3,465 19,655 25,025 31, ,630 3,630 3,381-4,191 23,285 28,655 35,296-18,063 45,205 56,725 48,490-75

142 Maturities (thousands of dollars) Total General Obligation Notes 2000A LCDA Convention Center Hotel - Variable 1, Certificate of Indebtedness % 2, Less: Unamortized Discount (22) (3) (3) (3) (3) 2, LCDA Independence Stadium % 27,020 1,150 1,205 1,265 1,330 Plus: Unamortized Premium ,072 1,153 1,208 1,268 1, A Refunding LCDA Convention Center Hotel - Variable 39, A Refunding Certificate of Indebtedness % 2,785 1,355 1, Plus: Unamortized Premium ,890 1,413 1, B Refunding Certificate of Indebtedness % Community Bank Lease/Purchase % Suntrust Lease Purchase % Chase Lease Purchase % 1, A Chase Lease Purchase % 3,434 1,130 1,145 1, A Chase Lease Purchase - Golf % A Capital Lease - Water & Sewer % Capital Lease - Water & Sewer % 1, ,071 3,081 2,443 2, Total General Obligation Debt 333,005 27,838 27,846 25,675 22,782 Municipal and Regional Airports 2008A LCDA Refunding Issue - ( %) 9, B LCDA Refunding Issue - ( %) 12, ,040 1,090 1, C LCDA Issue - ( %) 9, D LCDA Issue - (7.000%) 2, Total Municipal and Regional Airports - NOTES 33,370 1,460 1,540 1,620 1,720 Water and Sewerage 2009A Revenue Bonds RLF % B Revenue Bonds RLF % 7, D Revenue Bonds RLF -.95% 5, Revenue Bonds RLF -.95% 3,

143 Maturities (thousands of dollars) (3) (7) ,395 8,030 10,260 2, ,398 8,045 10,275 2,392-1,025 7,125 10,650 13,935 3, ,020 62,093 77,684 64,817 3,250-2,775 6, ,210 7, ,545 4,145 1, ,225 12,465 10,530 1, ,258 2, , ,

144 Maturities (thousands of dollars) Total LCDA Note - Variable 48,185 1,514 3,666 3,834 3, A Refunding Issue % 6, Plus: Unamortized Reoffer Call Premium , LCDA Revenue Bonds % 3,530 1,130 1,175 1,225-3,530 1,130 1,175 1, Revenue Bonds 2, A Refunding Revenue Bonds 75,835 5,090 5,490 5,660 7,185 Plus: Unamortized Reoffer Call Premium 9,792 1,096 1,024 1,257 1,148 85,627 6,186 6,514 6,917 8, B Revenue Bonds 67, Plus: Unamortized Reoffer Call Premium 1, , C Revenue Bonds 7, Plus: Unamortized Reoffer Call Premium , Total Revenue Bonds - Water and Sewerage 240,302 11,012 13,569 14,236 14,632 Total Principal 606,677 40,310 42,955 41,531 39,134 INTEREST REQUIREMENTS: General Obligation Debt 112,320 11,682 11,146 10,462 9,235 Revenue Bonds and Notes Convention Center Hotel 5, Water and Sewerage 90,980 8,365 7,785 7,213 6,102 Municipal and Regional Airports 17,893 2,009 1,923 1,832 1,736 Total Interest Requirements 226,518 22,794 21,225 19,869 17,425 Total Future Debt Requirements $ 833,195 $ 63,104 $ 64,180 $ 61,400 $ 56,559 78

145 Maturities (thousands of dollars) ,130 21,110 9, , , , ,490 34,100 10, ,262 3, ,752 37,621 11, ,805 29,360 28, ,231 29,650 28, , ,093 15,231 69,833 34,331 30,398 37,060 38, , ,545 97,025 40,310 19,041 30,021 17,324 3, ,511 1, ,574 22,886 16,967 11,381 4,707 1,619 6,327 2, ,577 60,745 37,607 15,540 4,736 $ 65,053 $ 205,136 $ 160,152 $ 112,565 $ 45,046 79

146 General Obligation Bonds General obligation bonds are direct general obligations of the City. Principal and interest are payable from ad valorem taxes levied on all taxable property within the City. In October 2014, the City issued $93,500,000 in General Obligation Bonds, Series Included in the proceeds was a reoffering premium of $14,392,041. The Bonds are being issued for the purpose of paying the cost of (Proposition No.1) constructing, acquiring and/or improving the water system and the sewer system and appurtenances thereto and acquiring the necessary land or rights therein, equipment and furnishings therefor, and paying the costs of issuance of the Bonds thereof ($55,064,671), (Proposition No.2) constructing, acquiring and improving public facilities and equipment for parks and recreation, public building, the police department, fire department and finance department and acquiring the necessary land or rights therein, equipment and furnishings therefor, and paying the costs of issuance of the Bonds thereof ($12,933,337), and (Proposition No.3) constructing, acquiring, and/or improving the streets, highways, bridges, and drainage systems and appurtenances thereto and acquiring the necessary land or rights therein, equipment and furnishing therefor, and paying the costs of issuance of the Bonds thereof ($25,501,992). The Bonds are the final series of a total amount of $175,000,000 in bonds for all three Propositions that were authorized at a special election held on April 2, The bonds have maturity dates from 2015 through 2034 with principal payments from $3,670,000 to $7,020,000 and interest rates of 2.00% to 5.00%. Community Development Notes The City has four HUD loans received in prior years. The loans are secured by a note receivable from the developer with a first lien mortgage and a pledge of the City s current and future CDBG funds. The note receivable and loan payable are recorded in the Community Development Fund due to the flow of funds between the developer, the City, and HUD. The developer makes payments to the City and the City services the loan to HUD. An allowance for doubtful accounts has been provided for one note originally made for $2,200,000 and still outstanding for the full amount. Another note originally made for $5,000,000 is not collectible. An amount of $359,000 has been recorded as due from HUD at December 31, 2014 in relation to this note. The debt service requirements to maturity for these loans are as follows: Year Ending December 31, Principal Interest 2015 $ 717,000 $ 79, ,000 67, ,000 58, ,000 49, ,000 39, ,000 76,047 Total $2,400,000 $370,130 Municipal and Regional Airports Revenue Bonds The resolutions applicable to the Municipal and Regional Airports Revenue Bonds require the establishment of various bond principal and interest sinking funds and the establishment of a debt service reserve fund. For financial statement reporting, these funds have been consolidated within the Municipal and Regional Airport fund. Net position of the Municipal and Regional Airport fund has been restricted in accordance with the provisions of the respective bond indentures in the amount of $3,960,404 at December 31, 2014, which represents the restricted assets included in the debt service funds at that date with no current liabilities payable from these restricted assets. The City has covenanted in the General Bond Resolution that it will at all times fix, prescribe and collect rents, fees and other charges for the services and facilities furnished by the Airport System sufficient to yield net revenues during each fiscal year equal to at least 125% of debt service for such fiscal year and to yield revenues during each fiscal year equal to at least 100% of the aggregate amounts required to be deposited during the first year in each account created by the General Bond Resolution. 80

147 Restricted assets of the Municipal and Regional Airport fund primarily represent amounts which are required to be maintained pursuant to ordinances relating to bonded indebtedness. A summary of restricted assets at December 31, 2014 follows: Fund Debt Service Reserve Funds $3,848,698 Other Miscellaneous Restricted Funds 2,976,132 Bond and Interest Sinking Funds 2,584,372 Total restricted assets $9,409,202 Water and Sewerage Revenue Bonds In November 2014, the City issued $75,835,000 in Water and Sewer Revenue Refunding Bonds, Series 2014 A. The bonds were issued to currently refund the outstanding 2001A, 2001B, 2001C, 2002A, 2002B, 2003A, 2003B, 2004A and 2010C bonds in the amount of $65,981,906 and to advance refund $16,135,000 of the 2007 bonds. The net proceeds of $85,387,973 (including a premium of $9,792,379, a contribution from the City of $947,000 and issuance costs and insurance premiums of $1,186,406) were used for the current refunding $66,832,837 and $18,555,136 was placed in an irrevocable trust with an escrow agent to provide funds for the advance refunded 2007 bonds. As a result, all of the bonds are considered defeased and the liabilities have been removed from the statement of net position. The 2007 bonds will be called on December 1, 2017 and the amount outstanding in December 31, 2014 is $16,135,000. The refunding bonds bear interest rates of 3% to 5% and have maturities from 2015 to The reacquisitions price exceeded the carrying amount of the old debt by $2,823,327. This amount is being netted against the new debt and amortized over 10 years which is the average life of the old debt which is shorter than the new debt. The refunding was undertaken to reduce future debt service payments by $5,414,929 and resulted in an economic gain of $4,344,086. In November 2014, the City issued $67,045,000 in Water and Sewer Revenue Bonds, Series 2014B. Included in the proceeds was a reoffering premium of $1,676,592. The bonds were issued for the purpose of financing construction of and extensions and improvements to the City s combined waterworks plant and system and sewer system, funding a deposit to the Debt Service Fund or the premiums for debt service fund sureties and paying the costs of issuance including the premiums for bond insurance policies. The bonds have maturity dates from 2027 through 2038 with interest rates of 4.00% to 5.00%. In December 2014, the City issued $7,955,000 in Water and Sewer Revenue Bonds, Series 2014C. Included in the proceeds was a reoffering premium of $698,051. The bonds were issued for the purpose of financing construction of and extensions and improvements to the City s combined waterworks plant and system and sewer system, funding a deposit to the Debt Service Fund or the premiums for debt service fund sureties and paying the costs of issuance including the premiums for bond insurance policies. The bonds have a maturity date of 2039 and an interest rate of 5.00% In November 2013, the City entered into a Loan and Pledge Agreement with the Louisiana Department of Environmental Quality. The Department purchased the City s $5,000,000 Taxable Utility Revenue Bonds (LDEQ Series Project) Series The bonds were issued for the purpose of financing a portion of the costs of constructing and acquiring improvements, extensions and replacements to the sewerage portion of the combined water and sewer system of the city. The bonds bear an interest rate of.45% plus an administrative fee of.50%. The proceeds of the bonds are received through drawdowns and interest is payable from the date of the drawdown. The estimated debt maturity schedule is for principal payments of $228,000 to $273,000 for the year 2015 through The amount drawdown in 2014 was $3,212,630 for a total of $3,268,243. In June 2010, the City issued $11,560,000 of Taxable Water and Sewer Revenue Bonds (DEQ Sewer Project). Series 2010D. The bonds were sold by the City to the Louisiana Department of Environmental Quality, Municipal Facilities Revolving Loan Fund. The bonds are Build America Bonds and are entitled to a credit equal to 35% of the interest paid on the bonds. The bonds bear an interest rate of.45% plus an administrative fee of.50%. The proceeds 81

148 of the bonds are received through drawdowns and interest is payable from the date of the drawdown. The amount drawn down in 2014 was $2,232,274 for a total of $6,749,877. In October 2010, the City entered into a Loan Agreement with the Louisiana Local Government Environmental Facilities and Community Development Authority. The Authority issued $15,000,000 of Utility Revenue Bonds (Shreveport Water Improvement Project), Series 2010C for the purpose of financing the costs of the acquisition and construction of improvements, extensions and replacements to the drinking water portion of the City s combined revenue producing water and sewer utility systems, and pay the costs of issuance. In November 2010, the bonds were purchased by Capital One Public Funding, LLC. The bonds bear an initial rate of 4.59% for five years. At the end of the first five years, the bond purchaser has the right to remarket the bonds or hold them for four additional five year periods subject to a mutually agreeable interest rate and such other terms upon which all parties agree and also the right to remarket the bonds at each five year interval. In November 2009, the City entered into a Loan and Pledge Agreement for $11,000,000 with the Louisiana Department of Health and Hospitals. The Department purchased the City s $2,000,000 Water and Sewer Revenue Bonds, Series 2009A and the City s $9,000,000 Water and Sewer Revenue Bonds, Series 2009B. The proceeds of the bonds are received through drawdowns. The $2,000,000 of 2009A bonds were drawn down in prior years and $1,000,000 has been forgiven through the American Recovery and Investment Act of There were no drawdowns in The total to date is $8,692,302 for the 2009B bonds. In prior years, the City has issued Water and Sewer Revenue Bonds for system upgrades through a series of Loan and Pledge Agreements with the Louisiana Department of Environmental Quality (DEQ). The DEQ, as the initial purchaser of the bonds, purchases the bonds in increments as project costs are incurred, and interest is payable only on the amount purchased from the date of purchase. At December 31, 2014, the bonds authorized and the amount purchased to date are the 2002B $13,000,000, 2003B $6,000,000, 2004A $16,000,000. The amounts drawn down and issued in 2014 were 2002B $89,595, 2003B $438,335 and 2004A $25,212. In September 2005, the City entered into a Loan Agreement for $75,000,000 with the Louisiana Local Governmental Environmental Facilities and Community Development Authority. The Authority issued $75,000,000 of its Revenue Bonds (Shreveport Utility System Project) Series In June 2009, the City redeemed $25,000,000 of the $75,000,000 Revenue Bonds Series 2005 with funds remaining in the Project Fund. At the same time, the remaining $50,000,000 of the Revenue Bonds Series 2005 were purchased by Capital One Public Funding, LLC ( COPF ) and held by COPF as purchased bonds. In June 2014 the remaining balance of $48,855,000 was remarketed for a five year period through June 2019 with COPF. The Bonds carry a fluctuating interest rate per annum equal to sixty-five (65%) percent of LIBOR for a one month interest period (resetting weekly) plus 1.59%. The City entered into a Substitute Standby Bond Purchase Agreement with COPF effective June 23, 2014 for a period of five years from June 23, 2014 for the purchased bonds. The commitment was equal to the sum of (a) $48,855,000 constituting the principal face amount of the Bonds and (b) $546,105 equal to 34 days interest on the Bonds at 12% percent interest. In October 2014, $670,000 of the bonds was redeemed, therefore reducing the commitment to $48,185,000 principal and $538,616 interest. COPF expressly reserves the right to directly sell the purchased bonds on or after the expiration date of the Substitute Standby Bond Purchase Agreement. Upon notice from COPF, the City shall have the right to obtain a substitute standby bond purchase agreement or a standby letter of credit or to obtain a bond purchaser for all of the Purchased Bonds owned by COPF. If the City fails to obtain a substitute bond purchaser and COPF fails to sell or remarket the Bonds, the outstanding principal will be subject to mandatory redemption over a five year period with principal payable in equal semi-annual installments, bearing interest at the highest of (1) the Overnight Federal Funds Rate plus 2.00%; (2) the Prime Rate plus 1.50%; or (3) 8.50%. If the balance of the issue was converted to a five-year semi-annual installment loan, the semi-annual payments would be $6,014,939 assuming a 8.50% interest rate. The resolutions applicable to the Water and Sewerage Revenue Bonds require the establishment of various bond principal and interest sinking funds and the establishment of a debt service reserve fund. For financial statement reporting, these funds have been consolidated within the Department of Water and Sewerage. 82

149 The City has debt covenants with respect to the various Water and Sewer bond issues to fix and collect rates and charges for all water and sewerage services supplied by the System which will be sufficient in each fiscal year, after making due allowance for delinquencies in collection and after providing for the payment of the reasonable and necessary expenses of operating and maintaining the System, to produce net revenues (i) sufficient to pay debt service on all outstanding City bonds and to maintain the funds and accounts as provided in the bond resolution and (ii) which result in each fiscal year in the greater of (a) the sum of debt service payable on the city bonds in the ensuing fiscal year plus any required deposit to the Debt Service Reserve Fund, or (b) a ratio of net revenues to average annual debt service of not less than 1.25 to 1, the required debt service coverage ratio. Restricted assets in the Water and Sewerage Fund primarily represent amounts which are required to be maintained pursuant to ordinances relating to bonded indebtedness (construction, debt service, and bond principal and interest sinking funds). A summary of restricted assets at December 31, 2013 follows: Fund 1990A and B Bonds Construction Funds $ 501 Debt Service Reserve Funds 2,054,626 Bond and Interest Sinking Funds 33, A Bond Construction Fund 517, B Bond Construction Fund 245, C Bond Construction Fund 35, LCDA Revenue Bonds 491, B Bond Project Fund 61,721, C Bond Project Fund 8,525,742 Miscellaneous Bond Construction Fund 3,897,884 Total restricted assets $ 77,523,631 Convention Center Hotel In May 2014, the City remarketed the $39,085,000 remaining principal balance of the $40,980,000 Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Refunding Bonds (Shreveport Convention Center Hotel Project) Series The bonds were placed with Regions Capital Advantage, Inc. for a period of five years through May 30, 2019 and shall bear interest at a variable rate of 65.1% of one-month LIBOR plus 0.92%. The bonds were remarketed without credit enhancement or rating. In the event the bonds are not remarketed at the end of the holding period, the interest rate will increase to 12%. Restricted assets of the Convention Center Hotel Fund primarily represent amounts required to be maintained in accordance with the trust indenture and loan agreement. A summary of restricted assets at December 31, 2014 follows: Fund Bond Interest Sinking Fund $ 478,020 Miscellaneous Restricted Funds 1,183,286 Total restricted assets $ 1,661,306 Shreveport Home Mortgage Authority Bonds On February 1, 2004, the Authority issued $4,360,000 in bonds, the 2004 Multi-Family Housing Revenue Refunding Bonds, to advance refund the $4,360, Multi-Family Issue. Bond costs of $130,569 were paid by the Authority. At December 31, 2014, the principal outstanding on the 2004 bonds was $3,640,000. There are a number of limitations and restrictions contained in the various bond indentures. The Authority is in compliance with all significant limitations and restrictions. 83

150 The annual requirements to amortize all debt outstanding as of December 31, 2014 including interest requirements are as follows: Year Ending December 31, Total to be paid Principal Interest 2015 $ 822,861 $ 488,384 $ 334, , , , , , , , , , , , , ,744,875 3,090, ,875 Total $ 7,669,201 $ 5,614,338 $ 2,054,863 IV. Other Information A. Retirement Commitments - Defined Benefit Pension Plans and Other Postemployment Benefits The City of Shreveport administers three defined benefit pension plans: the Firemen s Pension and Relief Fund (FPRF), the Policemen s Pension and Relief Fund (PPRF) and the Employees Retirement System (ERS). These plans do not issue stand-alone financial reports and are not included in the report of a public employee retirement system or another entity and are therefore included in this report as combining statements under the section entitled Combining and Individual Fund Statements and Schedules. The City also provides medical, dental and life insurance coverage through a cost-sharing multiple-employer defined benefit plan. Summary of Significant Accounting Policies Basis of Accounting - The three City administered pension plans financial statements are prepared using the accrual basis of accounting. Plan members contributions are recognized in the period in which the contributions are due. The City s contributions are recognized when due and a formal commitment to provide the contributions has been made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Method Used to Value Investments Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market are reported at estimated fair value. The cash surrender value of life insurance policies is recorded as other assets for the FPRF and PPRF. The policies are valued at their cash value as of the date of the financial statements. The policies provide assets to fund benefits of the plan. The pension investment policies are described in Note I.D.1. Cash, Cash Equivalents and Investments. Concentration of Investments The FPRF, PPRF and ERS had no investments in any one organization representing 5% or more of the fiduciary net position except for obligations of the federal government. There are no investments in loans to or leases with parties related to the pension plans. 84

151 Plan Descriptions and Contribution Information Membership of each plan consisted of the following at December 31, 2014: FPRF PPRF ERS Retirees and beneficiaries receiving benefits Active plan members: Vested Nonvested Total ,346 Number of participating employers Administrative costs of the ERS are financed through contributions from the employers, members and investment income. Administrative costs of the FPRF and PPRF are financed through contributions from the employer and investment income. The FPRF, PPRF and ERS do not have any legally required reserves. Firemen s Pension and Relief Fund Plan Description - The FPRF is a single-employer defined benefit pension plan that temporarily covers firefighters who retire after January 1, 1983 and meet the eligibility requirements of the local retirement plans but not the State plan. The pension plan is closed to new members. Until January 1, 1983, the Firemen s Pension and Relief Fund provided the primary retirement benefits for two groups of employees. Firefighters hired before July 12, 1977 were covered under an Old Plan. Firefighters hired on or after July 12, 1977 were covered by a New Plan. Under the Old Plan, a firefighter was eligible to retire at any age with 20 years of service. Benefits are payable monthly for life equal to 50% of the fireman s monthly salary, plus 3 1/3% for each year of service between 20 and 25 years, plus 1 2/3% for each year of service between 25 and 30 years. Under the New Plan, a firefighter is eligible to retire at age 50 with 20 years of service or age 55 with 12 years of service. Benefits are 2 1/2% of three-year average pay times years of service up to 10, plus 3% of each year of service over 10. The benefit cannot exceed 85% of final salary. The City guarantees that it will pay the benefits under the Old and New Plans until the member is eligible for a benefit from the Statewide Firefighters Retirement System. It also guarantees to pay the excess benefit of these plans over the Statewide Firefighters Retirement System. Disability benefits are payable under the Old Plan on the basis of: (1) temporary total disability in the line of duty, (2) total disability in the line of duty, (3) occupational disability in the line of duty, or (4) total disability not in the line of duty. Disability benefits payable are (1) 66 2/3% of the monthly salary, payable for no more than one year; (2) 66 2/3% of the salary of active members holding the position corresponding to that held by the disabled member at the time he became disabled is payable for the duration of the disability or until the member reaches eligibility for retirement on service basis, except the benefit will end as of the time when the member would have completed 30 years of service; (3) 50% of salary of active members holding the position corresponding to that held by the disabled, not to exceed 66 2/3% of first class hoseman s salary, payable for duration if disability or until eligible for service retirement: and (4) 25% of salary of active members holding the position corresponding to that held by the disabled member at the time he became disabled, plus an additional 2% of such salary for each year of service over 5 years, but not to exceed 50% of a first class hoseman s salary payable for the duration of the disability. Under the New Plan, the disability benefit is (1) 60% of the fireman s monthly salary or (2) 75% of the accrued benefit. The City guarantees it will pay any excess of the benefits of this plan over the Statewide Firefighters Retirement System. Under the Old Plan, death benefits equal to 50% of a beginning fireman s salary are payable to a surviving spouse. The City guarantees that it will pay this benefit for each fireman holding a guarantee of benefits contract. Under the New Plan, there is not an automatic benefit provided. Death benefits are based on the option chosen by the member at retirement. 85

152 There was not a vesting provision under the Old Plan. Members were eligible for benefits only after serving the time requirement for normal retirement. Under the New Plan, members vest after twelve years service and may receive a benefit at age 50 with twenty years service or at age 55 with a minimum of twelve years service. Benefits are established and may be amended by State statutes, R.S.11:3713 and 3714 The guaranteed benefits are paid to a closed group of firefighters. A significant part of the guaranteed benefits are the temporary benefits payable until age 50. The value of these temporary benefits can fluctuate widely, since it directly depends upon how many people retire before age 50. Funding Policy - Only the employer makes contributions on a pay-as-you-go basis. The employer contribution obligations are established and may be amended by State statutes. Contributions are made from the General Fund. The City s contribution rate of annual covered payroll is %. Management of the FPRF is vested in the board which consists of nine members five elected employees or retirees eligible for the plan, the Mayor, the Chief Administrative Officer, the Finance Director and the Fire Chief. For the year ended December 31, 2014, the annual money-weighted rate of returns on pensions plan investments, net of pensions plan investment expense, was 3.72%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Annual Pension Cost and Net Pension Obligation - The City s annual pension cost and net pension obligation to FPRF for the current year were as follows: Annual required contribution $ 4,171,194 Interest on net pension obligation 529,555 Adjustment to annual required contribution (2,882,685) Annual pension cost 1,818,064 Contributions made (1,048,879) Increase in net pension obligation 769,185 Net pension obligation beginning of year 7,565,077 Net pension obligation end of year $ 8,334,262 The net pension obligation is $8,334,262 at December 31, 2014, and it is recorded in the governmental activities of the government-wide statement of net position. Three-Year Trend Information Annual Percentage Net Year Pension of APC Pension Ended Cost Contributed Obligation 12/31/12 $2,674, % $ 5,881,720 12/31/13 2,647, ,565,077 12/31/14 1,818, ,334,262 Net Pension Liability Total pension liability $24,008,380 Plan fiduciary net position (16,946,555) Net pension liability $7,061,825 Plan fiduciary net position as a percentage of the total pension liability 70.59% 86

153 The total pension liability was determined by an actuarial valuation as of January 1, 2015, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation 3.5% Salary increases 5.0% Investment rate of return 7.0% Mortality rates. Non-annuitants: RP-2000 Employees table projected to 2030 using Scale AA; Annuitants: RP Healthy Annuitants projected to 2022 using Scale AA. The actuarial assumptions used in the January 1, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2014 December 31, The long-term expected rate of return on pension plan investments was determined by using extended cash flow projection of the investment earnings less investment expenses. Discount rate. The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that contributions from the employer will be made at the required rates. Based on those assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-term expected real rate of returns: Fixed income 2.20% Domestic equity 6.12 International equity 6.29 Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability calculated using the discount rate of 7%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Current 1% Decrease Discount 1% Increase (6%) Rate (7%) (8%) Net pension liability $10,076,549 $7,061,825 $4,575,512 Policemen s Pension and Relief Fund Plan Description - The PPRF is a single-employer defined benefit pension plan that temporarily covers policemen who retire after January 1, 1983 and meet the eligibility requirements of the local retirement plans but not the state plan. The pension plan is closed to new members. Until July 12, 1977, all police officers hired became participants in the plan as a condition of employment. After July 12, 1977, all new policemen were placed directly into the State s Municipal Police Employees Retirement System (MPERS). Currently only policemen who retire after January 1, 1983, and who meet the eligibility requirements for a retirement benefit from the local plan but not the state plan, are being paid from this fund. Under this plan, a policeman hired before 1969 can retire at any age with 20 years of service; policemen hired after 1968 can retire at any age with 25 years of service. Benefits are payable monthly at 66 2/3% of monthly salary, plus an additional 0.833% for each year of service over 20 served after July 12, An additional 1.66% is paid for each year of service over 25 if the employee was hired after The benefit cannot exceed 75% of the policeman s monthly salary. The City guarantees that it will pay the benefit under this plan until the member is eligible for the Municipal Police Employee s Retirement System. It guarantees to pay the excess benefits, if any, of this plan over the Municipal Police Employee s Retirement System for the life of the member. 87

154 Disability benefits are payable on the basis of: (1) temporary total disability in the line of duty; (2) total and permanent disability in the line of duty; and (3) occupational disability that is total and permanent and received in the line of duty which renders the member unable to function in his police duties. Benefits payable are: (1) 66 2/3% of monthly salary of active member holding a position corresponding to that which had been held by a disabled member at the time he became disabled. Payments will be made for no more than one year or benefits will continue until member becomes eligible for service retirement; or (2) 50% of monthly salary of active member holding a position corresponding to that which had been held by a disabled member at the time he became disabled. Benefits will continue until member becomes eligible for service retirement. The City guarantees that it will pay any excess of the benefits of this plan over the MPERS. A death benefit is payable to a surviving spouse equal to 50% of a beginning policeman s salary. The City guarantees that it will pay this benefit for each policeman holding a guarantee-of-benefits only after serving the time requirement for normal retirement. Benefits are established and may be amended by State statutes, R.S.11:3433, 3434, 3436 and The guaranteed benefits are paid to a closed group of policemen. A significant part of the guaranteed benefits are the temporary benefits payable until age 50. Funding Policy - Only the employer makes contributions. The employer contribution obligations are established and may be amended by State statutes. The funding approach is to amortize all benefits over 25 years. However, the contribution cannot be less than the expected benefit payments for the year. Contributions are made from the General Fund. The City s contribution rate of covered payroll is not applicable. There are no active employees. Management of the PPRF is vested in the board which consists of nine members five elected employees or retirees eligible for the plan, the Mayor, the Chief Administrative Officer, the Finance Director and the Police Chief. For the year ended December 31, 2014, the annual money-weighted rate of returns on pension plan investments, net of pensions plan investment expense, was 4.35%. The money weighted rate of return expenses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Annual Pension Cost and Net Pension Obligation - The City s annual pension cost and net pension obligation to PPRF for the current year were as follows: Annual required contribution $ 2,003,793 Interest on net pension obligation 150,348 Adjustment to annual required contribution (818,432) Annual pension cost 1,335,709 Contributions made (1,036,775) Increase in net pension obligation 298,934 Net pension obligation beginning of year 2,147,823 Net pension obligation end of year $ 2,446,757 The net pension obligation is $2,446,757 at December 31, 2014, and it is recorded in the governmental activities of the government-wide statement of net position. Three-Year Trend Information Annual Percentage Net Year Pension of APC Pension Ended Cost Contributed Obligation 12/31/12 $2,158, % $ 965,096 12/31/13 2,137, ,147,823 12/31/14 1,335, ,446,757 88

155 Net Pension Liability Total pension liability $21,215,878 Plan fiduciary net position (17,573,238) Net pension liability $ 3,642,640 Plan fiduciary net position as a percentage of the total pension liability 82.83% The total pension liability was determined by an actuarial valuation as of January 1, 2015, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation 3.5% Salary increases Not applicable no current employees Investment rate of return 7.0% Mortality rates. Non-annuitants: RP-2000 Employees table projected to 2030 using Scale AA; Annuitants: RP Healthy Annuitants projected to 2022 using Scale AA. The actuarial assumptions used in the January 1, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2014 December 31, The long-term expected rate of return on pension plan investments was determined by using extended cash flow projection of the investment earnings less investment expenses. Discount rate. The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine the discount rate assumed that contributions from the employer will be made at the required rates. Based on those assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-term expected real rate of returns: Fixed income 2.20% Domestic equity 6.12 International equity 6.29 Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability calculated using the discount rate of 7%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Current 1% Decrease Discount 1% Increase (6%) Rate (7%) (8%) Net pension liability $6,095,707 $3,642,640 $1,571,148 Employees Retirement System (ERS) Plan Description - The ERS is a cost-sharing multiple-employer defined benefit pension plan that covers all fulltime classified employees of the City other than policemen and firemen and is administered by the City. Non-City employees employed by the following organizations may become members in the system: Caddo Parish Library, Caddo-Shreveport Sales and Use Tax Commission and other non-city employees recommended by the Board of Trustees and approved by the City Council. Appointed officials of the City and the Mayor have the option to join by filing an application within 90 days after taking office. However, by joining the retirement system, they may not participate in the deferred compensation program for appointed employees. 89

156 Prior to October 1, 1999, to be eligible for regular retirement benefits, members must have 30 years of service regardless of age or be age 65 with 10 years of service, and if hired before January 1, 1979 be 55 years of age with 20 years of service. If hired on or after January 1, 1979, members must be 55 years of age with 25 years of service or age 60 with 20 years of service. As of October 1, 1999, eligibility for regular retirement has been extended to any member who has 20 years of service at age 55. The difference before and after a hire of January 1, 1979 has been eliminated. Members become vested in the system after 10 years of creditable service. Benefit provisions are established and may be amended by City ordinance #2 of 1954, #163 of 1990 and #112 of Benefits available to members hired before January 1, 1996, consist of an annuity, which is the actuarial equivalent of the employee s accumulated contributions; plus an annual pension, which together with the annuity, provides a total retirement allowance equal to 3% of average compensation times years of creditable service. Beginning January 1, 1996, the retirement allowance was increased to 3 1/3% of average compensation times years of creditable service for 1996 and future years of service. An early retirement provision has been implemented for any member who has at least 10 years of service and is within 10 years of a member s normal retirement age. The benefit is reduced by 3% per year for each year within five years of the normal retirement date, by 5% for the next earlier year, and by 8% for each additional earlier year. The plan allows members who have met eligibility requirements to defer receipt of benefits for a period of two years with one percent interest. At December 31, 2014, there is $1,922,979 being held for members in the Deferred Retirement Option Plan. Funding Policy - Prior to January 1, 2007, plan members were required by City ordinance to contribute 7% of compensation to the Plan. The City or other employers were required by the same ordinance to contribute 11.15% of compensation. Contribution amounts from plan members, the City and other employers may be amended by City ordinance. Effective January 1, 2007, the employees contributions to the plan were increased to 9% from 7% and the employers contributions were increased to 13.15% from 11.15%. Contributions are made from the fund that the employee is paid from or from the organizations noted above. The contribution rate is currently 12.10% of annual covered payroll. In February 2004, an ordinance was passed which changed the method of computation for cost-of-living increases. The new computation states that effective January 1 of each year, there will be a cost-of-living increase based on the Consumer Price Index (CPI) if certain conditions exist: 1) the CPI has increased a minimum of one percent 2) the funded percentage for the retirement system for the prior year is not under 90 percent 3) the retirement systems overall rate of return on investments for the prior year was equal to or exceeded the actuarial interest rate for funding. The maximum increase is limited to five percent. Management of the ERS is vested in the board which consists of seven members two elected employees who are members of the plan, one elected retiree and one retiree alternate, the Mayor, the Chief Administrative Officer, the Finance Director and one Council Member. For the year ended December 31, 2014, the annual money-weighted rate of returns on pension plan investments, net of pensions plan investment expense, was 6.09%. The money weighted rate of return expenses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Annual Pension Cost and Net Pension Obligation - The City s annual pension cost and net pension obligation to ERS for the current year were as follows: Annual required contribution $ 16,351,357 Interest on net pension obligation 3,158,734 Adjustment to annual required contribution (3,405,851) Annual pension cost 16,104,240 Contributions made (5,944,981) Increase in net pension obligation 10,159,256 Net pension obligation beginning of year 40,757,862 Net pension obligation end of year $ 50,917,118 The net pension obligation is $50,917,121 at December 31, 2014, and is recorded in the governmental activities of the government-wide statement of net position. 90

157 Three-Year Trend Information Annual Percentage Net Year Pension of APC Pension Ended Cost Contributed Obligation 12/31/12 $ 16,260, % $ 30,127,716 12/31/13 16,582, ,757,862 12/31/14 16,104, ,917,118 Net Pension Liability Total pension liability $393,085,958 Plan fiduciary net position (196,853,723) Net pension liability $196,232,235 Plan fiduciary net position as a percentage of the total pension liability 50.08% The total pension liability was determined by an actuarial valuation as of December 31,2014, using the following actuarial assumptions, applied to all prior periods included in the measurement: Inflation 3.0% Salary increases Based on classification Investment rate of return 7.00% Mortality rates. Non-annuitants: RP-2000 Employees table projected to 2030 using Scale AA; Annuitants: RP Healthy Annuitants projected to 2022 using Scale AA. The actuarial assumptions based on the valuation dated January 1, 2014 and rolled forward to December 31, 2014 were based on the results of an actuarial experience study for the period January 1, 2014 December 31, The long-term expected rate of return on pension plan investments was determined by using extended cash flow projection of the investment earnings less investment expenses. Discount rate. The discount rate used to measure the total pension liability was 7% for The rate in effect for 2013 was 7.75 percent. The projection of cash flows used to determine the discount rate assumed that contributions from employees and employers will be made at contractually required rates. Based on those assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Long-term expected real rate of returns: Fixed income 2.20% Domestic equity 6.12 International equity 6.29 Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability calculated using the discount rate of 7.00%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: Current 1% Decrease Discount 1% Increase (6.00%) Rate (7.00%) (8.00%) Net pension liability $245,834,169 $196,232,235 $155,135,016 91

158 Other Postemployment Benefits (OPEB) Plan Description - In addition to providing pension benefits, the City provides medical, dental and life insurance coverage through a cost-sharing multiple-employer defined benefit plan that can include non-city employees as described under the Employees Retirement System for any retiree who receives a monthly retirement check from one of the City s retirement plans and their legal dependents. The benefits, employee contributions, and employer contributions are governed by the Health Care Board and can be amended annually. The plan is not accounted for as a trust fund. The plan does not issue a separate report. The activity of the plan is reported in the City s Employees Health Care Fund, an internal service fund. Funding Policy - The City contributes 58% and retirees 42% of the required contribution rate as determined annually by the Health Care Board of the self-insured pay-as-you go plan. Membership at December 31, 2014 consisted of: Retirees and beneficiaries currently receiving benefits 1,121 Terminated employees entitled to but not yet receiving benefits 746 Active employees 1,878 Total 3,745 Number of participating employers 3 Annual OPEB costs and Net OPEB Obligation - The City s annual OPEB cost, the percentage of annual OPEB cost contributed and the net OPEB obligation for 2014 and the prior year are as follows: Annual Percentage of Year OPEB Employer Annual OPEB cost Net Ended Cost Contributions Contributed Obligation 12/31/12 $ 36,373,972 $9,076, % $158,803,146 12/31/13 35,818,338 9,833, ,787,654 12/31/14 35,461,115 10,895, ,353,282 The net OPEB obligation as of December 31, 2014, was calculated as follows: Annual required contribution $ 38,001,484 Interest on net OPEB obligation 8,315,444 Adjustment to annual required contribution (10,855,813) Annual OPEB cost 35,461,115 Contributions made (10,895,487) Increase in net OPEB obligation 24,565,628 Net OPEB obligation beginning of year 184,787,654 Net OPEB obligation end of year $ 209,353,282 The funded status of the plan as of December 31, 2014, the most recent actuarial valuation date is as follows: (1) (2) (3) (4) (5) (6) Actuarial Unfunded UAAL as a Actuarial Accrued AAL Funded Percentage of Value of Liability (UAAL) Ratio Covered Covered Payroll Assets (AAL) (2-1) (1/2) Payroll 3/5 - $401,053,357 $401,053, % $122,318, % The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. 92

159 Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions - Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2014, actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included 4.5% investment rate of return (net of administrative expenses) and an annual healthcare cost trend rate of 8.0% for 2014 declining gradually to 4.0% by An inflation rate of 2.7% was used. The actuarial value of assets was not determined as the City has not advance funded its obligation. The plan s unfunded actuarial accrued liability is being amortized as a level dollar open amortization. The remaining amortization period at December 31, 2014, was 30 years. Statewide Firefighters Retirement System (SFRS) Plan Description - The City of Shreveport contributes to the Statewide Firefighters Retirement System Pension Plan, a cost-sharing multiple-employer defined benefit pension plan administered by the Firefighters Retirement System. SFRS covers firefighters employed by any municipality, parish, or fire protection district of the State of Louisiana under the provisions of Louisiana Revised Statutes 11:2251 through 2269 effective January 1, Benefits are established and may be amended by State statutes. The SFRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the Board of Trustees, Firefighters Retirement System, 2051 Silverside Drive, Suite 210, Baton Rouge, Louisiana or by calling Funding Policy - Plan members are required to contribute 10% of their annual compensation and the City is currently required to contribute 29.25% of annual compensation, excluding overtime but including State supplemental pay. The contribution requirements of plan members and the City are established and may be amended by the SFRS Board of Trustees. The City s contributions to SFRS for the years ending December 31, 2014, 2013, and 2012, were $8,606,711, $7,779,279 and $6,900,719, respectively, equal to the required contributions for each year. Municipal Police Employees Retirement System (MPERS) Plan Description - The City of Shreveport contributes to the Municipal Police Employees Retirement System Pension Plan, a cost-sharing multiple-employer defined benefit pension plan administered by the Municipal Police Employees Retirement System. MPERS covers any full-time police officer, empowered to make arrests, employed by a municipality of the State and engaged in law enforcement, earning at least $375 per month excluding state supplemental pay, or an elected Chief of Police whose salary is at least $100 per month, and any employee of this system may participate in the MPERS. Benefits are established and may be amended by State statutes. The MPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to the Board of Trustees of the Municipal Police Employees Retirement System, 8401 United Plaza Blvd., Room 305, Baton Rouge, Louisiana or by calling Funding Policy - Plan members are required to contribute 10.0% of their annual compensation and the City is currently required to contribute 31.5% of annual compensation, excluding overtime but including State supplemental pay. The contribution requirements of plan members and the City are established and may be amended by State statute. The City s contributions to MPERS for the years ended December 31, 2014, 2013 and 2012, were $8,887,193, $8,718,749 and $8,153,229, respectively, equal to the required contributions for each year. 93

160 B. Transit System The Shreveport Area Transit System (Transit System) is managed and operated for the City by a management company pursuant to an agreement which expires September 30, Based on terms of the agreement, management fees included in operating expenses were $297,212. The City is required to reimburse the management company for the excess of expenses over revenues derived from the operation of the Transit System. Pursuant to an agreement between the City of Shreveport and the City of Bossier City, Bossier City will pay the Transit System for the excess of expenses incurred over revenues derived from operations of transit services in Bossier City. The City reimbursed the Transit System $7,304,601. Bossier City reimbursed the Transit System $858,957. C. Contingencies Litigation The City is a defendant in various lawsuits in addition to those accrued in the Retained Risk Fund. These lawsuits have not been accrued because the amount of the loss cannot be reasonably estimated at this time. It is the City s opinion that resolution of these matters will not have a material adverse effect on the financial condition of the City. Grant Disallowances The City participates in a number of federally assisted grant programs, principal of which are the Workforce Investment Act, Community Development Block Grant, and various construction grants. These programs are subject to program compliance audits under the Single Audit Act. Such audits could lead to requests for reimbursement by the grantor agency for expenditures disallowed under terms of the grants. City management believes that the amount of disallowances, if any, which may arise from future audits will not be material. D. Landfill and Sludge Facility Closure and Post-Closure Care Cost State and federal laws and regulations require the City to place a final cover on its Woolworth Road landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. The City has entered into a sanitary landfill services contract with a contractor. The contractor is responsible for the operation and closure of that portion of the landfill on which it conducted operations. The City is responsible for the maintenance and construction of all monitoring facilities and the conduct of all monitoring programs. If the contractor defaults on the contract, the City would be liable for all costs. We have reviewed the financial capability and stability of the contractor to ensure that the contractor will be able to meet the closure obligations when they are due. We believe that the contractor will be able to meet the obligations. A liability of $2,908,009 has been reported at December 31, 2014 for closure and post-closure care cost and represents the cumulative costs reported based on 48.62% of the capacity of the landfill having been used to date. The landfill has an estimated remaining life in excess of 12 years. This amount has been accrued in the government-wide financial statements within the governmental activities and has been reported as an assigned fund balance in the General Fund. The estimated total current cost of closure and post-closure care remaining to be recognized is $3,073,087. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. The estimated closure of the sludge facility is $12,566. This amount has been accrued in the business-type activities as a liability in the Water and Sewerage Fund. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. The City is the permit holder for the landfill and the sludge facility, and Louisiana Solid Waste Rules and Regulations require all permit holders to demonstrate financial responsibility by one of a group of financial tests contained within the regulations. The City has demonstrated its financial responsibility by the fact that the tangible net worth of the City is at least $10 million, the net worth is at least six times the estimate of the closure and postclosure costs, at least 90% of the assets are located in the United States and the City has a bond rating which exempted it from certain required financial ratios. 94

161 E. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natural disasters. All self-insurance programs are accounted for within internal service funds. The City has included incurred but not reported claims in determining its claims liability in both self-insurance programs. The Retained Risk Fund is used to account for self-insurance activities involving property damage, workers compensation, and general and auto liability. The City is afforded a $1,000,000 self-insurance retention for general liability and law enforcement liability, a $1,000,000 self-insurance retention for workers compensation for police and fire, $1,000,000 for other employees and a $500,000 self-insurance retention for auto liability, except for exposures related to Fire Department vehicles which have a $1,000 deductible for collision and comprehensive. General liability aviation is insured with limits of $200,000,000. The City s property coverage has a limit of $809,488,789 subject to a $50,000 deductible. There were no reductions in insurance coverage from coverage in the prior year. No property damage claim has exceeded the City s insurance coverage during the past three years. Payments to the Retained Risk Fund are accounted for as revenues by the receiving fund and expenditures/expenses by the paying funds. Payments into the fund are available to pay claims and administrative costs of the program. Payments in excess of actual expenses are recorded as transfers. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay-outs and other economic and social factors, including the effects of specific, incremental claim adjustment expenses, salvage and subrogation. No other allocated or unallocated claim adjustment expenses are included. The claims liability of $36,331,936 reported in the fund at December 31, 2014 is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Actual results could vary materially in the future. Changes in the fund s claims liability amount in 2013 and 2014 were: Retained Risk Fund Beginning of Current Year Claims Year and Changes Claim Balance at Liability in Estimates Payments Year End 2013 $ 28,672,152 $ 14,968,904 $10,664,602 $32,976, ,976,454 13,758,575 10,403,093 36,331,936 The City also maintains a self-insurance program to cover medical and dental care claims of City employees, retirees, and dependents. This program is accounted for in the Employees Health Care Fund, an Internal Service Fund. Changes in the fund s claims liability amount in fiscal years 2013 and 2014 were: Employees Health Care Fund Beginning of Current Year Claims Year and Changes Claim Balance at Liability in Estimates Payments Year End 2013 $ 5,084,696 $ 32,115,836 $ 31,302,796 $5,897, ,897,736 36,148,527 35,392,515 6,653,748 95

162 F. Compensation Paid to Council Members Council Member Compensation Willie Bradford, District A $15,225 Jeff Everson, District B 17,625 Oliver Jenkins, District C 15,225 Michael Corbin, District D 15,225 James Flurry, District E 15,225 Stephanie Lynch, District F 15,225 Jerry Bowman, District G 15,225 G. Subsequent Events $ 108,975 In February 2015, the City issued $24,205,000 in General Obligation Refunding Bonds, Series Included in the refunding was a reoffering premium of $2,521,090. The bonds were issued to refund a portion of the City s General Obligation Refunding Bonds, Series 2005A issued in the original amount of $56,675,000. The amount refunded was $25, H. Restatement of Net Position The Downtown Development Authority, a component unit restated their beginning net position as follows: Net Position December 31, 2013 $1,884,086 Correction of property tax revenue (822,634) Net Position December 31, 2013 as restated $1,061,452 96

163 97 CITY OF SHREVEPORT, LOUISIANA SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS - OTHER POST EMPLOYMENT BENEFITS (UNAUDITED) Annual Year Ended Required Percentage December 31, Contribution Contribution 2009 $ 35,115, % ,409, ,181, ,181, ,001, ,001,

164 98 CITY OF SHREVEPORT, LOUISIANA SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS (UNAUDITED) (1) (2) (3) (4) (5) (6) UAAL as a Actuarial Actuarial Actuarial Accrued Unfunded AAL Funded Percentage of Valuation Value of Liability (UAAL) Ratio Covered Covered Payroll Date Assets (AAL) (2-1) (1/2) Payroll (3/5) 12/31/09 - $ 360,308,412 $ 360,308, $ 117,498, % 12/31/10-343,176, ,176, ,034, /31/11-383,067, ,067, ,078, /31/12-383,067, ,067, ,078, /31/13-401,053, ,053, ,318, /31/14-401,053, ,053, ,318,

165 99 CITY OF SHREVEPORT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY LAST 10 FISCAL YEARS (1) (UNAUDITED) FPRF PPRF ERS Total pension liability Service cost $ 4,653 $ - $ 5,494,260 Interest 1,602,967 1,426,956 26,529,382 Changes of benefit terms - - (8,183,785) Differences between expected and actual experience (3,791,005) (1,271,703) (1,782,300) Changes of assumptions ,311,060 Benefit payments, including refunds of member contributions (1,366,507) (1,172,492) (24,723,019) Net change in total pension liability (3,549,892) (1,017,239) 25,645,598 Total pension liability - beginning 27,558,272 22,233, ,440,360 Total pension liability - ending (a) $ 24,008,380 $ 21,215,878 $ 393,085,958 Plan fiduciary net position Contributions - employer $ 1,048,879 $ 1,036,775 $ 5,944,981 Contributions - member - - 5,156,403 Net investment income 631, ,582 11,665,092 Benefit payments, including refunds of member contributions (1,366,507) (1,172,492) (24,723,019) Administrative expense (25,160) (25,158) (80,944) Other (18,006) - - Net change in plan fidicuary net position 270, ,707 (2,037,487) Plan fiduciary net position - beginning 16,676,219 16,974, ,891,210 Plan fiduciary net position - ending (b) $ 16,946,555 $ 17,573,238 $ 196,853,723 Net pension liability - ending (a) - (b) $ 7,061,825 $ 3,642,640 $ 196,232,235 Plan fiduciary net position as a percentage of the total pension liability 70.59% 82.83% 50.08% Covered-employee payroll 1,016,908 N/A 49,120,412 Net pension liability as a percentage of covered-employee payroll % N/A % (1) 2014 is the first year available

166 100 CITY OF SHREVEPORT SCHEDULE OF INVESTMENT RETURNS Last 10 Fiscal Years(1) FPRF PPRF ERS Annual money-weighted rate of return 3.72% 4.35% 6.09% net of investment expense (1) 2014 is the first year available

167 101 SCHEDULE OF PENSION CONTRIBUTIONS Last 10 Fiscal Years (UNADITED) FFRF Actuarially determined contribution $ 2,091,576 $ 2,046,177 $ 2,132,120 $ 2,044,285 $ 2,719,001 $ 2,847,389 $ 2,310,932 $ 3,726,529 $ 4,477,402 $ 4,171,194 Contributions in relation to the actuarially determined contribution 1,227,755 1,407,770 1,408,553 1,406,904 1,406,904 1,407,204 1,462,207 1,465, ,526 1,048,879 Contribution deficiency (excess) 863, , , ,381 1,312,097 1,440, ,725 2,261,326 3,512,876 3,122,315 Covered-employee payroll 3,978,077 4,125,853 3,604,757 2,974,729 2,034,266 2,135,980 1,197,330 1,140, ,951 1,016,908 Contributions as a percentage of covered-employee payroll 30.86% 34.12% 39.07% 47.30% 69.16% 65.88% % % % % PPRF Actuarially determined contribution $ 1,443,763 $ 1,398,435 $ 1,506,135 $ 1,353,760 $ 1,835,113 $ 1,616,818 $ 1,373,266 $ 2,215,304 $ 2,437,506 $ 2,003,793 Contributions in relation to the actuarially determined contribution 1,235,861 1,398,435 1,408,194 1,353,760 1,407,096 1,407,296 1,373,266 1,445, ,585 1,036,775 Contribution deficiency (excess) 207,902-97, , , ,390 1,482, ,018 Covered-employee payroll 256, , , ,070 n/a n/a n/a n/a n/a n/a Contributions as a percentage of covered-employee payroll % % % % n/a n/a n/a n/a n/a n/a ERS Actuarially determined contribution $ 5,912,729 $ 7,375,855 $ 4,806,416 $ 4,898,103 $ 12,040,692 $ 11,238,882 $ 12,202,624 $ 16,380,807 $ 16,764,758 $ 16,351,357 Contributions in relation to the actuarially determined contribution 3,778,234 4,263,244 6,099,342 6,685,911 6,634,421 6,261,604 6,003,545 5,970,988 5,951,946 5,944,981 Contribution deficiency (excess) 2,134,495 3,112,611 (1,292,926) (1,787,808) 5,406,271 4,977,278 6,199,079 10,409,819 10,812,812 10,406,376 Covered-employee payroll 38,817,000 44,403,000 46,875,000 51,761,000 49,021,000 45,226,000 45,538,000 45,247,171 44,749,039 49,120,412 Contributions as a percentage of covered-employee payroll 9.73% 9.60% 13.01% 12.92% 13.53% 13.85% 13.18% 13.20% 13.30% 12.10%

168 102 CITY OF SHREVEPORT Notes to Required Supplementary Pension Information For the Year Ended December 31, 2014 Methods and assumptions used in calculations of actuarially determined contributions. The actuarially determined contribution rates in the schedule of pension contributions were calculated as of December 31, The following actuarial methods and assumptions were used to determine contribution rates reported in that schedule: FPRF PPRF ERS Acturial cost method Entry age normal Entry age normal Entry age normal Amortization method Level dollar, closed Level dollar, closed Level dollar, closed Remaining amortization period 3 years 3 years 30 years Asset valuation period N/A N/A N/A Inflation 3.50% 3.50% 3.00% Salary increases 5.00% N/A Based on classification Investment rate of return 7.00% 7.00% 7.00% Cost of Living adjustment 3.50% 3.50% None Retirement Age Plan specific Plan specific Plan specific Turnover Plan specific Plan specific Plan specific Mortality Non-annuitants: RP-2000 "Employee" table projected to Non-annuitants: RP-2000 "Employee" table projected to Non-annuitants: RP-2000 "Employee" table projected to 2030 using Scale AA; Annuitants: RP-2000 "Healthy 2030 using Scale AA; Annuitants: RP-2000 "Healthy 2030 using Scale AA; Annuitants: RP-2000 "Healthy Annuitants" projected to 2022 using Scale AAA Annuitants" projected to 2022 using Scale AAA Annuitants" projected to 2022 using Scale AAA Disability Plan specific Plan specific Plan specific

169 Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are used for specific revenues that are legally restricted to expenditures for particular purposes. Community Development Fund This fund accounts for programs to increase opportunities, assist in the creation of employment and develop business expansion. Streets Fund This fund is used for construction and repair of streets, including sidewalk and drainage structures. Enrichment Fund - This fund is used to account for donations held for the purpose of enrichment and improvement of City facilities and services. Riverfront Development Fund - This fund accounts for the collection and disbursement of funds from the riverfront gaming activities. Police Grants Fund - This fund accounts for the collection and disbursement of various state and federal grants to the City of Shreveport Police Department. Downtown Entertainment Economic Development Fund - This fund is used to account for incremental sales tax revenues collected from the development area to promote development of the area and associated projects. Redevelopment Fund - This fund is used to acquire and land bank vacant adjudicated property for future redevelopment projects and to acquire other property for current redevelopment projects in redevelopment areas. Environmental Grants Fund - This fund accounts for grants received for Brownfields assessment, cleanup loan fund, job training, and economic development. Capital Projects Funds Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds. Miscellaneous General Obligation Bond Funds - These funds are used to account for bonds issued for the purpose of constructing public buildings and/or improving streets, public safety, drainage systems, waste disposal, parks, an industrial park, and a Sportran maintenance facility. Miscellaneous Capital Projects Fund - This fund is used to account for various projects funded by miscellaneous sources other than general obligation bonds. 2003A General Obligation Bond Fund - This fund is used to account for bonds issued for the purpose of constructing, acquiring, and improving works of neighborhood public improvement, recreation facilities, and police and fire facilities General Obligation Bonds This fund is used to account for bonds issued for the purpose of improving the water and sewer system, various public facilities and streets and drainage systems. 103

170 CITY OF SHREVEPORT, LOUISIANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2014 Special Revenue Funds Downtown Entertainment Community Riverfront Police Economic Development Streets Enrichment Development Grants Development Redevelopment ASSETS Cash and cash equivalents $ 200 $ 3,374,246 $ 566,389 $ - $ 179,604 $ 504,471 $ 1,910 Investments - 3,685, , , ,972 2,087 Accounts receivable, net 87,241 1,545,938-1,011, Due from other governments 1,525, , Due from other funds Notes receivable, net 9,231, Assets held for resale 433, ,066 Total assets $ 11,277,800 $ 8,605,464 $ 1,184,987 $ 1,011,118 $ 730,879 $ 1,055,443 $ 200,063 LIABILITIES AND FUND BALANCES (DEFICIT) Liabilities: Accounts payable $ 175,584 $ - $ 15,967 $ - $ - $ 20,058 $ - Accrued liabilities , Due to other funds 80, ,404, Unearned revenue 7,322, Items held in escrow 11, Notes payable 2,400, Total liabilities $ 9,990,094 $ - $ 15,967 $ 2,589,986 $ - $ 20,058 $ - Fund balance (deficit): Restricted 1,287,706 8,605,464 1,169, ,879 1,035, ,063 Unassigned (1,578,868) Total fund balance (deficit) 1,287,706 8,605,464 1,169,020 (1,578,868) 730,879 1,035, ,063 Total liabilities and fund balance (deficit) $ 11,277,800 $ 8,605,464 $ 1,184,987 $ 1,011,118 $ 730,879 $ 1,055,443 $ 200,

171 Capital Project Funds Miscellaneous Miscellaneous 2003A 2011 Total General Capital General General Nonmajor Environmental Obligation Projects Obligation Obligation Governmental Grants Total Bond Funds Fund Bond Fund Bond Fund Total Funds $ 775,269 $ 5,402,089 $ 4,100,225 $ 4,012,244 $ 1,906,198 $ 30,863,981 $ 40,882,648 $ 46,284, ,603 5,521,700 4,478,179 4,382,088 2,081,909-10,942,176 16,463,876-2,644,297-2, ,683 2,646,980 55,852 1,936, ,507 3, ,870 2,105, , , , , ,777 9,531, ,531, , ,563 $ 1,599,501 $ 25,665,255 $ 8,788,780 $ 9,003,213 $ 3,988,107 $ 30,863,981 $ 52,644,081 $ 78,309,336 $ 40,816 $ 252,425 $ 94,658 $ 259,474 $ 450 $ 474,869 $ 829,451 $ 1,081, , ,770-2,484, ,540 21,540 2,506, ,777 7,622, ,622,461-11, ,116-2,400, ,400,000 $ 340,593 $ 12,956,698 $ 94,658 $ 259,474 $ 450 $ 496,409 $ 850,991 $ 13,807,689 1,258,908 14,287,425 8,694,122 8,743,739 3,987,657 30,367,572 51,793,090 66,080,515 - (1,578,868) (1,578,868) 1,258,908 12,708,557 8,694,122 8,743,739 3,987,657 30,367,572 51,793,090 64,501,647 $ 1,599,501 $ 25,665,255 $ 8,788,780 $ 9,003,213 $ 3,988,107 $ 30,863,981 $ 52,644,081 $ 78,309,

172 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Special Revenue Funds Downtown Entertainment Community Riverfront Police Economic Development Streets Enrichment Development Grants Development Redevelopment REVENUES Intergovernmental $ 6,839,302 $ - $ - $ - $ 867,780 $ - $ - Gaming ,241, Investment earnings 5,665 57,403 5,003 1, , Miscellaneous 1,257,148 6,824, , , , ,683 - Total revenues 8,102,115 6,881, ,220 11,119,992 1,115, , EXPENDITURES Current: General government Public safety ,049-1,291, Culture and recreation 45, , Community development 4,844, Economic opportunity 2,402, Economic development 1,991, ,372, ,468 - Capital outlay Total expenditures 9,283, ,867 1,372,226 1,291, ,468 - Excess (deficiency) of revenues over (under) expenditures (1,181,676) 6,881,719 32,353 9,747,766 (175,589) (100,832) 17 OTHER FINANCING SOURCES (USES) Transfers in 1,200, , ,000 - Transfers out - (1,935,000) - (10,439,100) Total other financing sources and uses 1,200,000 (1,935,000) - (10,408,367) - 175,000 - Net change in fund balances 18,324 4,946,719 32,353 (660,601) (175,589) 74, Fund balances (deficit)-beginning 1,269,382 3,658,745 1,136,667 (918,267) 906, , ,046 Fund balances (deficit)-ending $ 1,287,706 $ 8,605,464 $ 1,169,020 $ (1,578,868) $ 730,879 $ 1,035,385 $ 200,

173 Capital Project Funds Miscellaneous Miscellaneous 2003A 2011 Total General Capital General General Nonmajor Environmental Obligation Projects Obligation Obligation Governmental Grants Total Bond Funds Fund Bond Fund Bond Fund Total Funds $ 149,264 $ 7,856,346 $ - $ 89,223 $ - $ - $ 89,223 $ 7,945,569-10,241, ,241,584 3,880 78,510 35,562-18,993 32,921 87, , ,604 9,892, , , ,614 10,157, ,748 28,069,436 35, ,837 18, , ,313 28,510, , , ,086-1,534, ,534, , ,566-4,844, ,844,285-2,402, ,402,389-3,589, ,589, ,740 4,632,288 1,174 10,918,242 16,550,444 16,550, ,086 12,740, ,740 4,632,288 1,174 10,918,242 16,550,444 29,290, ,662 15,329,420 (963,178) (4,440,451) 17,819 (10,723,321) (16,109,131) (779,711) - 1,405, , ,168 1,174-1,187,691 2,593,424 - (12,374,100) (6,905) (236,102) (650,072) (12,750,407) (13,643,486) (26,017,586) - (10,968,367) 496, ,066 (648,898) (12,750,407) (12,455,795) (23,424,162) 125,662 4,361,053 (466,734) (3,993,385) (631,079) (23,473,728) (28,564,926) (24,203,873) 1,133,246 8,347,504 9,160,856 12,737,124 4,618,736 53,841,300 80,358,016 88,705,520 $ 1,258,908 $ 12,708,557 $ 8,694,122 $ 8,743,739 $ 3,987,657 $ 30,367,572 $ 51,793,090 $ 64,501,

174 CITY OF SHREVEPORT, LOUISIANA DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Property taxes $ 30,911,500 $ 30,911,500 $ 32,948,365 $ 2,036,865 Investment earnings 370, , ,926 (236,074) Intergovernmental 2,880,000 2,880,000 1,557,383 (1,322,617) Total revenues 34,161,500 34,161,500 34,639, ,174 EXPENDITURES Principal 20,100,000 20,100,000 20,068,059 31,941 Interest and other charges 8,900,000 8,900,000 9,142,698 (242,698) Total expenditures 29,000,000 29,000,000 29,210,757 (210,757) Excess (deficiency)of revenues 5,161,500 5,161,500 5,428, ,417 over (under) expenditures OTHER FINANCING SOURCES Transfers in 4,600,000 4,600,000 4,562,348 (37,652) Total other financing sources 4,600,000 4,600,000 4,562,348 (37,652) Net change in fund balances 9,761,500 9,761,500 9,991, ,765 Fund balances - beginning 46,089,162 46,089,162 46,089,162 - Fund balances - ending $ 55,850,662 $ 55,850,662 $ 56,080,427 $ 229,765 The accompanying notes are an integral part of the financial statements. 108

175 CITY OF SHREVEPORT, LOUISIANA COMMUNITY DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 6,192,200 $ 8,333,600 $ 6,839,302 $ (1,494,298) Investment earnings - - 5,665 5,665 Miscellaneous 1,038,000 1,100,800 1,257, ,348 Total revenues 7,230,200 9,434,400 8,102,115 (1,332,285) EXPENDITURES Administration: Salaries, wages and employee benefits 691, , ,830 (15,130) Materials and supplies 15,452 17,552 16, Contractual services 258, , ,530 30,207 Other charges 224, ,500 28, ,000 Improvements and equipment 894 3,294 2, Total administration 1,191,283 1,195, , ,697 Community development projects: Grants 846,519 1,590, , ,237 Total community development projects 846,519 1,590, , ,237 Materials and supplies 7,700 7,700 7,700 - Contractual services 16,800 16,800 16,800 - Other charges 7,768,694 9,414,494 4,080,681 5,333,813 Improvements and equipment ,233 (12,233) Total housing and business development 7,793,194 9,438,994 4,117,414 5,321,580 Housing and business development administration: Salaries, wages and employee benefits 528, , ,928 (9,043) Materials and supplies 21,663 55,663 19,476 36,187 Contractual services 199, , ,236 82,333 Improvements and equipment 36,221 41,021 15,412 25,609 Total housing and business development administration 785, , , ,

176 CITY OF SHREVEPORT, LOUISIANA COMMUNITY DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 (continued) Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Workforce development: Salaries, wages and employee benefits 1,369,800 1,361,300 1,210, ,311 Materials and supplies 26,907 70,107 51,976 18,131 Contractual services 1,976,213 1,690,313 1,097, ,904 Other charges ,835 (30,135) Improvements and equipment 6,500 23,800 11,180 12,620 Total workforce development 3,380,120 3,146,220 2,402, ,831 Workforce development administration: Salaries, wages and employee benefits 227, , ,286 (5,486) Materials and supplies 5,901 5,901 3,956 1,945 Contractual services 170, , ,840 4,287 Improvements and equipment - 8,500 8, Total workforce development administration 404, , , Total Expenditures 14,400,782 16,604,982 9,283,791 7,321,191 Excess (Deficiency) of revenues (7,170,582) (7,170,582) (1,181,676) 5,988,906 over (under) expenditures OTHER FINANCING SOURCES Transfers in 1,200,000 1,200,000 1,200,000 - Total other financing sources 1,200,000 1,200,000 1,200,000 - Net change in fund balances (5,970,582) (5,970,582) 18,324 5,988,906 Fund balances - beginning 1,269,382 1,269,382 1,269,382 - Fund balances - ending $ (4,701,200) $ (4,701,200) $ 1,287,706 $ 5,988,906 The accompanying notes are an integral part of the financial statements. 110

177 CITY OF SHREVEPORT, LOUISIANA STREETS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Investment earnings $ - $ - $ 57,403 $ 57,403 Miscellaneous 6,000,000 6,000,000 6,824, ,316 Total revenues 6,000,000 6,000,000 6,881, ,719 OTHER FINANCING SOURCES (USES) Transfers out (1,500,000) (6,945,000) (1,935,000) 5,010,000 Total other financing sources (uses) (1,500,000) (6,945,000) (1,935,000) 5,010,000 Net change in fund balances 4,500,000 (945,000) 4,946,719 5,891,719 Fund balances - beginning 3,658,745 3,658,745 3,658,745 - Fund balances - ending $ 8,158,745 $ 2,713,745 $ 8,605,464 $ 5,891,719 The accompanying notes are an integral part of the financial statements. 111

178 CITY OF SHREVEPORT, LOUISIANA RIVERFRONT DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Gaming $ 11,253,000 $ 11,253,000 $ 10,241,584 $ (1,011,416) Investment earnings 6,000 6,000 1,986 (4,014) Miscellaneous 912, , ,422 (36,478) Total revenues 12,171,900 12,171,900 11,119,992 (1,051,908) EXPENDITURES Current: Economic development: Salaries, wages and employee benefits 141, , ,025 6,275 Materials and supplies 1,400 1, Contractual services 43,600 43,600 44,781 (1,181) Other charges 1,347,200 1,347,200 1,191, ,477 Total expenditures 1,533,500 1,533,500 1,372, ,274 Excess (deficiency) of revenues over under expenditures 10,638,400 10,638,400 9,747,766 (890,634) OTHER FINANCING SOURCES Transfers in ,733 30,733 Transfers out (10,439,100) (10,439,100) (10,439,100) - Total other financing uses (10,439,100) (10,439,100) (10,408,367) 30,733 Net change in fund balances 199, ,300 (660,601) (859,901) Fund deficit - beginning (918,267) (918,267) (918,267) - Fund deficit - ending $ (718,967) $ (718,967) $ (1,578,868) $ (859,901) The accompanying notes are an integral part of the financial statements. 112

179 CITY OF SHREVEPORT, LOUISIANA POLICE GRANTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 1,885,131 $ 1,897,631 $ 867,780 $ (1,029,851) Investment earnings 2,500 2, (1,797) Miscellaneous 111, , , ,106 Total revenues 1,999,131 2,011,531 1,115,989 (895,542) EXPENDITURES Current: Public Safety: Salaries, wages and employee benefits 1,734,223 1,674, , ,537 Materials and supplies 181, ,473 77, ,198 Contractual services 135, ,373 70,960 64,413 Other charges 127, , ,278 2,230 Improvements and equipments 244, , ,379 75,447 Total expenditures 2,423,903 2,376,403 1,291,578 1,084,825 Excess (deficiency) of revenues over (under) expenditures (424,772) (364,872) (175,589) 189,283 Net change in fund balance (424,772) (364,872) (175,589) 189,283 Fund balance - beginning 906, , ,468 - Fund balance - ending $ 481,696 $ 541,596 $ 730,879 $ 189,283 The accompanying notes are an integral part of the financial statements. 113

180 CITY OF SHREVEPORT, LOUISIANA DOWNTOWN ENTERTAINMENT ECONOMIC DEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Investment earnings $ 8,000 $ 8,000 $ 3,953 $ (4,047) Land rent 220, ,900 - (220,900) Miscellaneous 209, , ,683 (88,317) Total revenues 437, , ,636 (313,264) EXPENDITURES Current: Economic development: Salaries, wages and employee benefits 38,400 38,400 20,226 18,174 Materials and supplies 10,000 10,000 1,731 8,269 Contractual services 200, , ,886 36,114 Other charges 1,291,400 1,291,400 39,625 1,251,775 Total expenditures 1,539,800 1,539, ,468 1,314,332 Excess (deficiency) of revenues over (under) expenditures (1,101,900) (1,101,900) (100,832) 1,001,068 OTHER FINANCING SOURCES Transfers in , ,000 Total other financing sources , ,000 Net change in fund balances (1,101,900) (1,101,900) 74,168 1,176,068 Fund balances - beginning 961, , ,217 - Fund balances - ending $ (140,683) $ (140,683) $ 1,035,385 $ 1,176,068 The accompanying notes are an integral part of the financial statements. 114

181 CITY OF SHREVEPORT, LOUISIANA REDEVELOPMENT FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Investment earnings $ - $ - $ 17 $ 17 Total revenues EXPENDITURES Current: Economic development: Other charges 4,100 4,100-4,100 Total expenditures 4,100 4,100-4,100 Excess (defciency) of revenues over (under) expenditures (4,100) (4,100) 17 4,117 Net change in fund balances (4,100) (4,100) 17 4,117 Fund balances - beginning 200, , ,046 - Fund balances - ending $ 195,946 $ 195,946 $ 200,063 $ 4,117 The accompanying notes are an integral part of the financial statements. 115

182 CITY OF SHREVEPORT, LOUISIANA ENVIRONMENTAL GRANTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2014 Variance With Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 200,000 $ 200,000 $ 149,264 $ (50,736) Investment earnings - - 3,880 3,880 Miscellaneous 134, , ,604 4 Total revenues 334, , ,748 (46,852) EXPENDITURES Current: General government: Contractual services 200, , ,086 37,914 Other charges 134, , ,600 Total expenditures 334, , , ,514 Excess of revenues over expenditures , ,662 Net change in fund balances , ,662 Fund balances - beginning 1,133,246 1,133,246 1,133,246 - Fund balances - ending $ 1,133,246 $ 1,133,246 $ 1,258,908 $ 125,662 The accompanying notes are an integral part of the financial statements. 116

183 Nonmajor Enterprise Funds Enterprise funds are used to account for the acquisition, operation, and maintenance of facilities and services which are entirely or predominantly self-supported by user charges. The operations of enterprise funds are accounted for in such a manner as to show a profit or loss similar to comparable private enterprises. Shreveport Area Transit System - This fund accounts for the activities necessary to provide bus service for the residents of the City. Golf - This fund is used to account for the operations of the City s three golf courses. The fund s operations are financed by greens fees, golf equipment rentals, merchandise sales, memberships, and concession sales to the public. Downtown Parking Fund - This fund is used to account for parking revenues to promote improved parking facilities in the downtown area. 117

184 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Total Shreveport Nonmajor Area Transit Downtown Enterprise System Golf Parking Funds ASSETS Current Assets: Cash and cash equivalents $ 553,340 $ 6,353 $ 262,543 $ 822,236 Investments 247, , ,647 Receivables, net 296, , ,992 Due from other funds 398, ,258 Due from other governments 384, ,439 Inventories 1,052,980 16,110-1,069,090 Prepaid items 124, ,489 Total current assets 3,057,928 22, ,724 3,673,151 Noncurrent Assets: Capital Assets: Land 1,940, ,940,407 Buildings 11,433, ,373-11,697,294 Improvements other than buildings - 868, ,530 Equipment 18,885, ,601-19,457,512 Construction in progress 214, ,255 Less accumulated depreciation (15,876,613) (1,217,587) - (17,094,200) Total noncurrent assets 16,597, ,917-17,083,798 Total assets 19,655, , ,724 20,756,949 LIABILITIES Current Liabilities: Accounts payable 529, ,179 Accrued liabilities 222,525 6, ,842 Unearned revenue - 27,200-27,200 Compensated absences 217,801 38, ,962 Leases payable - 17,529-17,529 Total current liabilities 969,505 89,207-1,058,712 Noncurrent Liabilities: Compensated absences - 29,352-29,352 Leases payable - 35,738-35,738 Net OPEB obligation - 1,283,891-1,283,891 Total noncurrent liabilities - 1,348,981-1,348,981 Total liabilities 969,505 1,438,188-2,407,693 NET POSITION (DEFICIT) Net investment in capital assets 16,597, ,650-17,030,531 Unrestricted (deficit) 2,088,423 (1,362,422) 592,724 1,318,725 Total Net Position (deficit) $ 18,686,304 $ (929,772) $ 592,724 $ 18,349,256 The accompanying notes are an integral part of the financial statements. 118

185 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Total Shreveport Nonmajor Area Transit Downtown Enterprise System Golf Parking Funds OPERATING REVENUES Charges for services $ 2,532,691 $ 1,075,197 $ 562,091 $ 4,169,979 Miscellaneous 543,413 8, ,349 Total operating revenues 3,076,104 1,084, ,091 4,722,328 OPERATING EXPENSES Personal services 9,032, ,157-9,792,559 Contractual services and other expenses 1,278, , ,280 1,962,616 Utilities 238,494 79, ,723 Repairs and maintenance 90,613 3,026-93,639 Materials and supplies 3,721, ,417-3,869,041 Depreciation 2,047,475 60,960-2,108,435 Total operating expenses 16,408,827 1,315, ,280 18,144,013 Operating income (loss) (13,332,723) (231,773) 142,811 (13,421,685) NONOPERATING REVENUES (EXPENSES) Investment earnings ,191 2,221 Interest expense - (990) - (990) Intergovernmental 4,405, ,405,308 Loss on disposal of capital assets (235,461) (1) - (235,462) Net nonoperating revenues (expenses) 4,169,847 (961) 2,191 4,171,077 Income (loss) before contributions and transfers (9,162,876) (232,734) 145,002 (9,250,608) Capital contributions 459,618 9, ,364 Transfers in 6,798,216 87,200-6,885,416 Transfers out (2) - - (2) Change in net position (1,905,044) (135,788) 145,002 (1,895,830) Total net position (deficit)-beginning 20,591,348 (793,984) 447,722 20,245,086 Total net position (deficit)-ending $ 18,686,304 $ (929,772) $ 592,724 $ 18,349,

186 120 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Total Shreveport Nonmajor Area Transit Downtown Enterprise System Golf Parking Funds Cash flows from operating activities: Receipts from operations $ 2,562,430 $ 1,070,590 $ 530,766 $ 4,163,786 Payments to suppliers (5,142,854) (557,023) (419,280) (6,119,157) Payments to employees (9,050,609) (608,631) - (9,659,240) Other receipts 543, ,413 Other payments - (57,000) - (57,000) Net cash provided by (used in) operating activities (11,087,620) (152,064) 111,486 (11,128,198) Cash flows from noncapital financing activities: Intergovernmental 4,398, ,398,940 Transfers in 6,772,876 87,200-6,860,076 Interest expense on operations - (990) - (990) Net cash provided by (used in) noncapital financing activities 11,171,816 86,210-11,258,026 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (402,952) - - (402,952) Principal paid on debt - (17,308) - (17,308) Transfers out (2) - - (2) Capital contributed by others 6, ,902 Capital grants 389, ,473 Net cash provided by (used in) capital and related financing activities (6,579) (17,308) - (23,887) Cash flows from investing activities: Purchase of investments (65,913) - (118,732) (184,645) Interest on investments ,191 2,221 Net cash provided by (used in) investing activities (65,913) 30 (116,541) (182,424) Net increase (decrease) in cash and cash equivalents 11,704 (83,132) (5,055) (76,483) Cash and cash equivalents - beginning of year 541,636 89, , ,719 Cash and cash equivalents - end of year $ 553,340 $ 6,353 $ 262,543 $ 822,236

187 121 Total Shreveport Nonmajor Area Transit Downtown Enterprise System Golf Parking Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ (13,332,723) $ (231,773) $ 142,811 $ (13,421,685) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 2,047,475 60,960-2,108,435 (Increase)Decrease in assets: Receivables 20,806 (1) (31,325) (10,520) Due from other funds 50, ,515 Inventories (22,979) (11,166) - (34,145) Prepaid items 152, ,836 Increase(Decrease) in liabilities: Accounts payable 56,239 (14,043) - 42,196 Accrued liabilities 10,751 1,151-11,902 Due to other funds - (93,571) - (93,571) Unearned revenue (41,582) (14,600) - (56,182) Compensated absences (28,958) 28,558 - (400) Net OPEB obligation - 122, ,421 Total adjustments 2,245,103 79,709 (31,325) 2,293,487 Net cash provided by (used in) operating activities $ (11,087,620) $ (152,064) $ 111,486 $ (11,128,198) Non-cash investing, capital and financing activities: The Shreveport Area Transit System had a loss on disposal of capital assets of $235,461. The Golf fund had a loss on disposal of capital assets of $1. The accompanying notes are an integral part of the financial statements.

188 122

189 Internal Service Funds Internal service funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies of the City, and to other governments, on a cost reimbursement basis. Employees Health Care Fund - This fund is used to account for self-insurance activities involving medical and dental care claims by the City s employees, retirees, and dependents. Retained Risk Fund - This fund is used to account for self-insurance activities involving property damage, worker s compensation and general liability claims. 123

190 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS DECEMBER 31, 2014 Total Employees Retained Internal Service Health Care Risk Funds ASSETS Current Assets: Cash and cash equivalents $ 3,422,621 $ 7,627,086 $ 11,049,707 Investments 968,109 8,330,144 9,298,253 Due from other funds - 852, ,157 Receivables, net 3,402,579-3,402,579 Prepaid items - 503, ,381 Total current assets 7,793,309 17,312,768 25,106,077 LIABILITIES Current Liabilities: Accounts payable - 360, ,678 Due to other funds 2,361,478-2,361,478 Compensated absences - 1,110 1,110 Claims and judgments 6,653,748 11,370,660 18,024,408 Total current liabilities 9,015,226 11,732,448 20,747,674 Noncurrent Liabilities: Compensated absences - 7,233 7,233 Claims and judgments - 24,961,276 24,961,276 Total noncurrent liabilities - 24,968,509 24,968,509 Total liabilities 9,015,226 36,700,957 45,716,183 NET POSITION (DEFICIT) Unrestricted (deficit) (1,221,917) (19,388,189) (20,610,106) Total net position (deficit) $ (1,221,917) $ (19,388,189) $ (20,610,106) The accompanying notes are an integral part of the financial statements. 124

191 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Total Employees Retained Internal Service Health Care Risk Funds OPERATING REVENUES Charges for services $ 30,993,080 $ 9,038,824 $ 40,031,904 Miscellaneous 3,184,411 1,388,778 4,573,189 Total operating revenues 34,177,491 10,427,602 44,605,093 OPERATING EXPENSES Personal services 97, , ,853 Contractual services and other expenses 2,793,112 3,072,385 5,865,497 Materials and supplies 5,636 3,840 9,476 Claims 36,148,527 13,758,575 49,907,102 Total operating expenses 39,044,387 17,075,541 56,119,928 Operating loss (4,866,896) (6,647,939) (11,514,835) NONOPERATING REVENUES Investment earnings (loss) 16,551 62,733 79,284 Net nonoperating revenues (loss) 16,551 62,733 79,284 Change in net position (4,850,345) (6,585,206) (11,435,551) Total net position (deficit)-beginning 3,628,428 (12,802,983) (9,174,555) Total net position (deficit)-ending $ (1,221,917) (19,388,189) $ (20,610,106) The accompanying notes are an integral part of the financial statements. 125

192 126 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 Total Employees Retained Internal Service Health Care Risk Funds Cash flows from operating activities: Receipts from operations $ 33,521,562 $ 11,636,409 $ 45,157,971 Payments to suppliers (3,080,492) (3,335,209) (6,415,701) Payments to employees (97,112) (238,496) (335,608) Claims (35,392,515) (10,403,093) (45,795,608) Net cash provided by (used in) operating activities (5,048,557) (2,340,389) (7,388,946) Cash flows from investing activities: Purchase of investments (997,716) (1,297,068) (2,294,784) Proceeds from sale and maturity of investments 5,032,600-5,032,600 Interest on investments 57,374 62, ,107 Net cash provided by (used in) investing activities 4,092,258 (1,234,335) 2,857,923 Net increase (decrease) in cash and cash equivalents (956,299) (3,574,724) (4,531,023) Cash and cash equivalents - beginning of year 4,378,920 11,201,810 15,580,730 Cash and cash equivalents - end of year $ 3,422,621 $ 7,627,086 $ 11,049,707

193 127 Total Employees Retained Internal Service Health Care Risk Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) $ (4,866,896) $ (6,647,939) $ (11,514,835) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: (Increase)Decrease in assets: Receivables (655,929) - (655,929) Due from other funds - 1,208,807 1,208,807 Prepaid items - 7,059 7,059 Increase(Decrease) in liabilities: Accounts payable (102,959) (266,043) (369,002) Accrued liabilities 756,012 3,355,482 4,111,494 Due to other funds (178,785) - (178,785) Compensated absences - 2,245 2,245 Total adjustments (181,661) 4,307,550 4,125,889 Net cash provided by (used in) operating activities $ (5,048,557) $ (2,340,389) $ (7,388,946) The accompanying notes are an integral part of the financial statements.

194 128

195 Fiduciary Funds Pension Trust Funds Firemen s Pension and Relief Fund - This fund is used to account for a single-employer defined benefit pension plan that temporarily covers firefighters who retire after January 1, 1983 and meet the eligibility requirements of the local retirement plans but not the State plan. Policemen s Pension and Relief Fund - This fund is used to account for a single-employer defined benefit pension plan that temporarily covers policemen who retire after January 1, 1983 and meet the eligibility requirements of the local retirement plans but not the State plan. Employees Retirement System - This fund is used to account for a cost-sharing defined benefit pension plan that covers all full-time classified employees of the City and other board recommended organizations other than policemen and firemen. Appointed officials also have the option to join the plan. 129

196 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS DECEMBER 31, 2014 Total Firemen's Policemen's Employees' Employee Pension and Pension and Retirement Retirement Relief Relief System Funds ASSETS Cash and cash equivalents $ 235,030 $ 578,163 $ - $ 813,193 Receivables: Interest and dividends receivable 78, , ,968 Accounts receivable - 4,808 81,564 86,372 Prepaid items 263, , ,279 Investments, at fair value: U.S. government obligations 2,105,205 1,689,066-3,794,271 Investment pool , ,259 Mutual funds 5,750,005 6,137, ,404, ,291,471 Domestic corporate bonds 1,659,457 2,268,379-3,927,836 Domestic equities 2,267,586 2,257,639-4,525,225 International equities 1,073,085 1,141,874-2,214,959 Total investments 12,855,338 13,494, ,664, ,014,021 Other assets: Cash surrender value of life insurance policies 3,816,581 3,181,372-6,997,953 Total assets 17,249,645 17,573, ,745, ,568,786 LIABILITIES Due to other funds 303,090-20,969,201 21,272,291 Employees' deposits held in escrow - - 1,922,979 1,922,979 Total liabilities 303,090-22,892,180 23,195,270 NET POSITION Net position restricted for pensions $ 16,946,555 $ 17,573,238 $ 196,853,723 $ 231,373,516 The accompanying notes are an integral part of the financial statements. 130

197 CITY OF SHREVEPORT, LOUISIANA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014 ADDITIONS Contributions: Total Firemen's Policemen's Employees' Employee Pension and Pension and Retirement Retirement Relief Relief System Funds Employer $ 1,048,879 $ 1,036,775 $ 5,944,981 $ 8,030,635 Plan members - - 5,156,403 5,156,403 Total contributions 1,048,879 1,036,775 11,101,384 13,187,038 Investment earnings: Net appreciation in fair value of investments 322, ,577 12,867,105 13,444,834 Interest 123, ,197 20, ,601 Dividends 205, , ,552 Total investment earnings 650, ,187 12,888,028 14,153,987 Less investment expense 24,223 24,525 1,234,983 1,283,731 Net investment earnings 626, ,662 11,653,045 12,870,256 Life insurance proceeds 530, , ,000 Miscellaneous 4,581-12,047 16,628 Total additions 2,210,009 2,067,437 22,766,476 27,043,922 DEDUCTIONS Benefits 1,366,507 1,172,492 23,385,831 25,924,830 Refund of member contribution - - 1,337,188 1,337,188 Administrative expenses 25,160 25,158 80, ,262 Life insurance premiums 548, , ,086 Total deductions 1,939,673 1,468,730 24,803,963 28,212,366 Change in net position 270, ,707 (2,037,487) (1,168,444) Net position restricted for pensions Beginning of year 16,676,219 16,974, ,891, ,541,960 End of year $ 16,946,555 $ 17,573,238 $ 196,853,723 $ 231,373,516 The accompanying notes are an integral part of the financial statements. 131

198 132

199 Discretely Presented Component Unit Metropolitan Planning Commission - This special revenue fund accounts for receipts and disbursements which occur in conjunction with coordinating City planning, preparing and enforcing zoning laws, and keeping City annexation policies current. 133

200 CITY OF SHREVEPORT, LOUISIANA METROPOLITAN PLANNING COMMISSION BALANCE SHEET DECEMBER 31, 2014 ASSETS Cash and cash equivalents $ 100,651 Due from primary government 16,814 Total assets 117,465 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable 42,185 Due to other governments 75,280 Total liabilities 117,465 Fund balance - Amounts reported for the Metropolitan Planning Commission in the Statement of Net Position for component units are different because: Capital assets reported in governmental activities are not financial assets and, therefore, are not reported in governmental funds. 837,482 Net position $ 837,482 The accompanying notes are an integral part of the financial statements. 134

201 CITY OF SHREVEPORT, LOUISIANA METROPOLITAN PLANNING COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED DECEMBER 31, 2014 REVENUES Intergovernmental $ 189,200 Miscellaneous 273,441 Total revenues 462,641 EXPENDITURES General government 1,589,443 Total expenditures 1,589,443 Deficiency of revenues under expenditures (1,126,802) OTHER FINANCING SOURCES Payment from City of Shreveport 1,126,802 Net change in fund balance - Fund balance - beginning - Fund balance - ending - Amounts reported for the Metropolitan Planning Commission in the Statement of Activities for component units are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Depreciation expense (13,508) Change in net position $ (13,508) The accompanying notes are an integral part of the financial statements. 135

202 136

203 City of Shreveport Schedule of Compensation, Benefits and Other Payments to Agency Head or Chief Executive Officer For the Year Ended December 31, 2014 Mayor Cedric B. Glover January 1, 2014 through December 26, 2014 Salary $ 95, Benefits-insurance 10, Deferred compensation 7, Cell phone Travel 37, Total $ 151, Mayor Ollie S. Tyler December 27, 2014 through December 31, 2014 Salary $ 1, Benefits-insurance Deferred compensation Cell phone Total $ 1,

204 138

205 Statistical Section This part of the City of Shreveport s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City s overall financial health. Contents Page Financial Trends 133 These schedules contain trend information to help the reader understand how the City s financial performance and well-being have changed over time. Revenue Capacity 141 These schedules contain information to help the reader assess the factors affecting the City s ability to generate its property and sales taxes. Debt Capacity 148 These schedules present information to help the reader assess the affordability of the City s current levels of outstanding debt and the City s ability to issue additional debt in the future. Demographic and Economic Information 154 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City s financial activities take place. Operating Information 156 These schedules contain service and infrastructure data to help the reader understand how the information in the City s financial report relates to the services the City provides and the activities it performs. 139

206 140 CITY OF SHREVEPORT, LOUISIANA NET POSITION BY COMPONENT, LAST TEN YEARS (accrual basis of accounting) Governmental activities Invested in capital assets, net of related debt $ 483,359,022 $ 495,015,044 $ 506,744,193 $ 507,132,856 $ 518,394,035 $ 540,238,387 $ 507,856,245 $ 525,050,532 $ 527,404,356 $ 498,281,721 Restricted 43,179,343 48,021,783 52,517,433 61,409,857 66,374,435 52,008,888 66,131, ,571, ,588, ,239,617 Unrestricted(Deficit) (10,485,180) (5,981,760) (28,935,041) (46,402,145) (66,220,992) (87,144,658) (174,840,905) (312,357,344) (346,760,306) (450,501,025) Total governmental activities net position $ 516,053,185 $ 537,055,067 $ 530,326,585 $ 522,140,568 $ 518,547,478 $ 505,102,617 $ 399,146,694 $ 364,264,940 $ 315,232,399 $ 275,020,313 Business-type activities Invested in capital assets, net of related debt $ 313,801,300 $ 332,708,732 $ 351,253,030 $ 361,928,742 $ 368,705,299 $ 372,834,742 $ 485,342,461 $ 492,313,051 $ 510,326,673 $ 523,710,809 Restricted 5,257,124 3,930,459 3,166,944 3,751,501 2,769,016 3,958,325 3,958,848 4,041,954 3,959,892 3,960,404 Unrestricted(Deficit) 5,385,880 5,666,173 51,301 (8,587,822) (3,750,025) (5,874,101) (16,495,186) (20,035,941) (24,028,572) (15,504,876) Total business-type activities net position $ 324,444,304 $ 342,305,364 $ 354,471,275 $ 357,092,421 $ 367,724,290 $ 370,918,966 $ 472,806,123 $ 476,319,064 $ 490,257,993 $ 512,166,337 Primary government Invested in capital assets, net of related debt $ 797,160,322 $ 827,723,776 $ 857,997,223 $ 869,061,598 $ 887,099,334 $ 913,073,129 $ 993,198,706 $ 1,017,363,583 $ 1,037,731,029 $ 1,021,992,530 Restricted 48,436,467 51,952,242 55,684,377 65,161,358 69,143,451 55,967,213 70,090, ,613, ,548, ,200,021 Unrestricted(Deficit) (5,099,300) (315,587) (28,883,740) (54,989,967) (69,971,017) (93,018,759) (191,336,091) (332,393,285) (370,788,878) (466,005,901) Total primary government net position $ 840,497,489 $ 879,360,431 $ 884,797,860 $ 879,232,989 $ 886,271,768 $ 876,021,583 $ 871,952,817 $ 840,584,004 $ 805,490,392 $ 787,186,650 Unaudited - see accompanying independent auditor's report.

207 141 CITY OF SHREVEPORT, LOUISIANA CHANGES IN NET POSITION, LAST TEN YEARS (accrual basis of accounting) Expenses Governmental activities: General government $ 31,642,982 $ 41,202,664 $ 35,773,877 $ 32,327,417 $ 36,368,232 $ 45,631,827 $ 50,522,532 $ 52,871,070 $ 59,180,755 $ 55,486,934 Public safety 83,788,205 86,563, ,967, ,101, ,755, ,370, ,009, ,296, ,986, ,048,046 Public works 41,698,053 47,526,978 50,734,669 54,436,508 49,697,351 54,493,585 55,707,874 54,861,069 55,054,294 54,417,093 Culture and recreation 15,773,260 22,528,381 23,458,242 24,552,571 24,444,194 24,340,798 22,601,155 22,298,863 23,634,459 23,249,858 Health and welfare 389, , , , , , ,526 25,854 14,760 13,602 Community development 3,669,884 4,094,946 6,380,100 4,945,019 4,409,060 5,136,142 5,866,418 4,517,472 4,663,450 5,495,408 Economic development 6,151,081 6,823,742 7,098,377 7,752,605 6,585,469 5,763,806 3,441,846 4,462,780 4,576,357 3,657,075 Economic opportunity 5,075,413 3,613,591 3,049,514 3,501,904 6,850,646 3,689,216 2,714,400 2,609,908 2,558,968 2,558,816 Interest on long-term debt 15,152,212 15,539,408 14,476,239 12,803,169 13,421,295 10,923,435 9,910,030 11,331,384 9,509,948 9,321,094 Total governmental activities expenses 203,340, ,325, ,524, ,773, ,756, ,713, ,108, ,275, ,179, ,247,926 Business-type activities Municipal and Regional Airports 10,698,537 11,755,786 12,342,488 13,838,731 15,011,292 15,175,747 15,922,093 15,414,301 15,490,057 15,615,759 Water and Sewerage 44,707,461 54,485,362 54,903,981 56,098,592 54,476,538 53,055,547 54,096,547 58,346,912 59,722,975 63,354,907 Convention Center ,694,097 (1) 6,969,925 6,811,134 7,102,290 Convention Center Hotel 485,540 1,967,861 7,781,837 13,085,201 12,931,427 13,535,949 13,424,358 12,867,218 12,510,097 12,149,036 Shreveport Area Transit System 10,581,217 11,293,961 12,562,076 14,155,118 13,993,824 13,843,465 15,240,703 15,804,741 16,439,796 16,644,288 Golf 1,572,192 1,699,369 1,934,772 1,885,373 1,727,208 1,489,766 1,373,739 1,310,004 1,029,810 1,316,897 Downtown Parking 417, , , , , , , , , ,280 Total business-type activities expenses 68,462,747 81,628,005 89,961,354 99,514,015 98,606,289 97,519, ,169, ,136, ,423, ,602,457 Total primary government expenses $ 271,803,339 $ 309,953,314 $ 338,485,705 $ 352,287,480 $ 355,362,495 $ 368,233,329 $ 386,277,715 $ 396,411,881 $ 401,602,912 $ 400,850,383 (1) The Convention Center became a separate fund in (continued)

208 142 CITY OF SHREVEPORT, LOUISIANA CHANGES IN NET POSITION, LAST TEN YEARS (accrual basis of accounting) (continued) Program Revenues Governmental Activities Charges for services: Public safety $ 8,434,247 $ 9,203,269 $ 9,026,836 $ 8,473,486 $ 9,220,566 $ 10,053,128 $ 10,026,553 $ 10,115,288 $ 12,868,050 $ 11,196,830 Public works 12,738,976 11,585,956 11,861,491 11,371,166 13,832,164 15,737,329 17,439,141 16,940,167 15,817,405 14,925,161 Other activities 952,331 1,149, , , , , , , , ,880 Operating grants and contributions 15,862,194 15,634,442 17,268,873 19,503,074 23,733,763 19,440,207 20,941,429 18,342,548 17,205,002 15,912,520 Capital grants and contributions 27,165,717 12,399,644 9,200,892 4,403,430 3,022,403 2,079,020 6,727,297 3,591,188 2,392,234 1,993,674 Total governmental activities program revenues 65,153,465 49,973,193 48,153,532 44,428,180 50,118,834 47,790,355 55,442,970 49,428,182 48,587,732 44,310,065 Business-type activities Charges for services: Municipal and Regional Airports 7,555,898 7,967,886 9,091,820 9,833,275 8,564,049 9,533,588 10,117,819 10,159,922 10,658,288 10,961,308 Water and Sewerage 56,108,108 58,589,864 56,502,400 58,517,927 58,177,800 63,361,068 66,775,465 58,634,935 61,742,737 75,259,282 Convention Center ,262,319 (2) 2,437,396 2,013,793 2,552,784 Convention Center Hotel - - 4,674,048 (1) 11,018,851 11,141,947 11,934,328 11,631,259 11,012,614 11,109,856 11,283,028 Shreveport Area Transit System 2,050,464 2,179,884 2,380,408 2,545,666 2,583,705 2,601,316 2,695,670 2,723,380 2,842,739 3,076,104 Golf 1,383,371 1,446,980 1,372,161 1,374,572 1,196,859 1,148,443 1,010, , ,516 1,084,133 Downtown Parking 551, , , , , , , , , ,091 Operating grants and contributions 2,750,760 4,288,852 3,489,645 5,068,237 5,490,761 6,077,306 5,169,564 5,898,980 6,174,220 6,362,042 Capital grants and contributions 9,044,417 14,997,350 13,301,924 8,477,153 13,796,684 9,771,827 14,080,038 8,558,562 6,644,821 8,811,969 Total business-type activities program revenues 79,444,875 90,048,436 91,408,832 97,466, ,575, ,041, ,356, ,037, ,553, ,952,741 Total primary government program revenues $ 144,598,340 $ 140,021,629 $ 139,562,364 $ 141,894,509 $ 151,694,627 $ 152,832,107 $ 169,799,253 $ 150,465,723 $ 151,140,856 $ 164,262,806 Net(Expense) Revenue Governmental activities $ (138,187,127) $ (178,352,116) $ (200,370,819) $ (208,345,285) $ (206,637,372) $ (222,923,220) $ (223,665,399) $ (235,847,165) $ (240,592,031) $ (239,937,861) Business-type activities 10,982,128 8,420,431 1,447,478 (2,533,242) 2,969,504 7,521,998 7,186,937 (10,098,993) (9,870,025) 3,350,284 Total primary government net expense $ (127,204,999) $ (169,931,685) $ (198,923,341) $ (210,878,527) $ (203,667,868) $ (215,401,222) $ (216,478,462) $ (245,946,158) $ (250,462,056) $ (236,587,577) (1) Opened in 2007 (2) The Convention Center became a separate fund in 2011.

209 143 CITY OF SHREVEPORT, LOUISIANA CHANGES IN NET POSITION, LAST TEN YEARS (accrual basis of accounting) (continued) General Revenues and Other Changes in Net Position Governmental activities: Taxes: Property taxes $ 51,498,165 $ 54,196,554 $ 54,192,772 $ 57,452,405 $ 58,542,857 $ 60,397,983 $ 61,892,794 $ 58,031,369 $ 59,428,155 $ 59,842,135 Sales taxes 93,713, ,163, ,404, ,226, ,947, ,990, ,161, ,068, ,192, ,809,168 Franchise taxes 7,648,385 7,635,287 7,749,311 7,914,581 7,290,551 7,780,000 7,822,649 7,512,211 7,750,603 7,661,160 Occupational licenses 6,233,140 6,276,736 6,597,061 6,549,432 6,659,033 6,760,523 7,005,960 7,175,204 7,306,835 7,289,383 Gaming 11,617,496 12,273,760 12,366,888 12,931,726 12,931,910 12,457,759 12,326,597 11,925,489 11,003,579 10,241,584 Unrestricted grants and contributions 3,246,134 3,878,809 3,677,032 3,368,399 3,961,292 3,641,977 3,510,589 3,398,492 1,886,334 2,762,622 Investment earnings 4,289,082 5,124,099 5,568,888 4,115,495 1,163, , , , , ,727 Miscellaneous 4,495,820 4,133,123 3,554,655 3,653,651 10,833,738 7,578,232 8,252,475 12,558,552 12,232,148 11,571,074 Transfers (3,906,539) (3,328,336) (5,469,109) (5,052,569) (4,285,799) (3,563,881) (100,815,874) (1) (13,566,000) (20,703,921) (19,872,078) Total governmental activities 178,835, ,353, ,642, ,159, ,044, ,478, ,706, ,965, ,630, ,725,775 Business-type activities: - Investment earnings (loss) 2,764,454 6,112,293 5,249, ,819 2,580,624 (2,528,522) (6,115,654) 45,934 5,846,715 (1,314,018) Miscellaneous ,942 2, Transfers 3,906,539 3,328,336 5,469,109 5,052,569 4,285,799 3,563, ,815,874 (1) 13,566,000 20,703,921 19,872,078 Total business-type activities 6,670,993 9,440,629 10,718,433 5,154,388 7,662,365 1,037,529 94,700,220 13,611,934 26,550,636 18,558,060 Total primary government $ 185,506,387 $ 208,794,627 $ 204,360,770 $ 205,313,656 $ 210,706,647 $ 210,515,888 $ 212,406,696 $ 214,577,345 $ 220,181,089 $ 218,283,835 Change in Net Position Governmental activities $ 40,648,267 $ 21,001,882 $ (6,728,482) $ (8,186,017) $ (3,593,090) $ (13,444,861) $ (105,955,923) $ (34,881,754) $ (46,961,578) $ (40,212,086) Business-type activities 17,653,121 17,861,060 12,165,911 2,621,146 10,631,869 8,559, ,887,157 3,512,941 16,680,611 21,908,344 Total primary government $ 58,301,388 $ 38,862,942 $ 5,437,429 $ (5,564,871) $ 7,038,779 $ (4,885,334) $ (4,068,766) $ (31,368,813) $ (30,280,967) $ (18,303,742) (1) Included in the transfers was $93,061,016 for the Convention Center to a separate enterprise fund. Unaudited - see accompanying independent auditor's report.

210 144 CITY OF SHREVEPORT, LOUISIANA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN YEARS (modified accrual basis of accounting) General Fund Nonspendable $ 971,248 $ 1,095,980 $ 1,268,611 $ 1,267,226 $ 1,529,818 $ 1,302,722 $ 1,521,316 $ 1,582,251 $ 1,457,442 $ 1,622,361 Restricted , ,404 Assigned 4,995,935 8,406,811 6,341,925 6,242,982 5,192,490 9,001,311 6,672,603 8,235,732 7,353,477 10,210,582 Unassigned 11,509,416 10,327,081 5,224,682 3,009,981 13,930,927 11,458,224 9,805,320 6,429,096 4,137,247 4,036,252 Total General Fund $ 17,476,599 $ 19,829,872 $ 12,835,218 $ 10,520,189 $ 20,653,235 $ 21,762,257 $ 17,999,239 $ 16,247,079 $ 12,991,353 $ 15,991,599 All Other Governmental Funds Restricted $ 117,017,731 $ 106,847,013 $ 101,381,672 $ 99,830,365 $ 97,498,999 $ 76,580,843 $ 177,217,086 $ 154,952,867 $ 135,712,949 $ 229,202,191 Unassigned (460,762) (1,729,116) (918,267) (1,578,868) Total all other governmental funds $ 117,017,731 $ 106,847,013 $ 101,381,672 $ 99,830,365 $ 97,498,999 $ 76,580,843 $ 176,756,324 $ 153,223,751 $ 134,794,682 $ 227,623,323 Unaudited - see accompanying independent auditos's report.

211 145

212 146 CITY OF CITY OF SHREVEPORT, LOUISIANA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Revenues Taxes $ 153,389,462 $ 170,919,781 $ 168,009,381 $ 173,109,183 $ 171,405,070 $ 182,891,465 $ 187,282,626 $ 179,323,323 $ 180,915,510 $ 187,814,734 Licenses and permits 8,211,268 8,144,443 8,755,409 8,379,559 8,591,789 8,945,467 9,126,196 9,159,315 9,333,071 9,554,623 Intergovernmental 26,272,456 22,112,233 21,710,733 24,240,070 27,747,701 24,073,617 25,510,000 23,012,567 19,327,161 18,754,217 Charges for services 20,635,745 20,184,618 19,251,533 18,681,539 21,992,151 24,381,786 25,562,367 25,786,275 27,764,494 24,519,238 Fines and forfeitures 3,231,362 3,555,633 3,462,609 3,319,902 3,460,862 3,553,996 3,832,276 3,377,228 3,002,987 3,210,062 Gaming 11,617,496 12,273,760 12,366,888 12,931,726 12,931,910 12,457,759 12,326,597 11,925,489 11,003,579 10,241,584 Investment earnings 3,938,911 4,423,360 4,780,092 3,257, , , , , , ,591 Miscellaneous 4,495,820 4,133,123 3,554,655 3,653,651 10,833,738 7,578,232 8,252,475 12,558,552 12,232,148 11,571,074 Total revenues 231,792, ,746, ,891, ,572, ,912, ,207, ,288, ,807, ,023, ,017,123 Expenditures General government 32,393,215 38,900,339 37,204,737 34,638,892 30,099,483 40,898,671 33,670,983 33,754,118 36,770,691 36,118,397 Public safety 84,754,554 90,574,313 91,446,018 96,639,536 94,952, ,102, ,360, ,152, ,841, ,919,662 Public works 30,502,540 34,062,025 36,218,897 37,036,813 35,257,799 40,134,184 43,626,714 40,188,370 38,571,558 39,577,765 Culture and recreation 12,417,996 12,998,481 14,158,892 15,840,773 14,609,505 15,214,547 15,576,293 16,419,548 16,433,993 16,135,262 Health and welfare 389, , , , , , ,316 11, Community development 3,444,802 3,477,313 4,766,654 4,138,744 3,881,994 4,593,147 5,375,401 3,957,114 4,043,129 4,844,285 Economic development 6,151,081 6,823,742 7,030,767 7,670,569 6,504,277 5,678,318 3,358,194 4,385,707 4,502,555 3,589,063 Economic opportunity 5,075,413 3,613,591 2,834,390 3,281,038 6,592,309 3,439,875 2,448,233 2,364,677 2,367,082 2,402,389 Capital outlay 57,465,679 24,414,447 17,058,735 14,117,197 7,210,328 6,645,730 7,188,534 7,609,546 17,563,135 16,550,444 Debt service Principal 29,908,186 26,517,782 28,128,374 28,764,098 32,309,943 50,311,347 26,645,341 51,542,365 23,738,712 20,068,059 Interest 14,013,453 14,648,081 13,975,345 12,187,938 13,765,069 11,421,559 8,848,980 12,004,912 10,059,930 9,142,698 Bond issuance cost 2,584,664-52, , , , ,175 Total expenditures 279,101, ,461, ,449, ,488, ,392, ,148, ,120, ,391, ,892, ,208,199 Excess(deficiency) of revenues over (under) expenditures (47,308,565) (10,714,919) (11,558,076) (7,915,785) 12,520,017 (18,941,375) 15,167,740 (20,583,740) (869,063) 7,808,924

213 147 (continued) CITY OF SHREVEPORT, LOUISIANA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN YEARS (modified accrual basis of accounting) Other Financing Sources(Uses) Bonds issued ,500, ,500,000 Refunding bonds issued 80,515, ,850, Premium on debt issued 7,702, , ,132 7,603, ,392,041 Certificate of indebtedness issued ,995, Discount on certificate of indebtedness issued Loan proceeds Capital leases 1,973,508 6,185,810 4,292,190 6,187,239-2,337,440-8,865, Payments to refunded bond escrow agent (86,423,980) - - (49,170,198) - (15,015,450) Swap termination payment (1,300,000) Transfers in 31,898,342 32,148,537 31,249,879 31,923,157 27,020,204 28,100,857 27,056,191 28,141,986 28,891,695 18,511,141 Transfers out (35,326,885) (35,436,873) (36,443,988) (36,975,726) (31,738,541) (31,664,738) (34,914,529) (41,707,986) (49,707,427) (38,383,219) Total other financing sources(uses) 338,338 2,897,474 (901,919) 4,049,449 (4,718,337) (867,759) 81,244,723 (4,700,993) (20,815,732) 88,019,963 Net change in fund balances $ 46,970,227 $ (7,817,445) $ (12,459,995) $ (3,866,336) $ 7,801,680 $ (19,809,134) $ 96,412,463 $ (25,284,733) $ (21,684,795) $ 95,828,887 Debt service as a percentage of noncapital expenditures 21.0% 17.7% 17.8% 17.3% 19.3% 22.5% 14.6% 23.4% 13.9% 12.1% Unaudited - see accompanying independent auditor's report.

214 148 CITY OF SHREVEPORT, LOUISIANA ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN YEARS (dollars in thousands) Total Estimated Assessed Year Total Taxable Direct Actual Value as a Ended Residential Commercial Assessed Tax Taxable Percentage of December 31 Property Property Value Rate Value Actual Value , ,769 1,109, ,787, % , ,164 1,160, ,244, , ,729 1,173, ,363, , ,434 1,301, ,589, , ,357 1,318, ,781, , ,099 1,354, ,119, , ,556 1,389, ,371, , ,002 1,468, ,106, , ,590 1,490, ,273, , ,584 1,503,114 (1) ,375, Note: Assessed values are established by the Caddo Parish Tax Assessor on January 1 of each year at approximately 10-25% of assumed market value. A revaluation of all property is required to be completed no less than every four years. The last revaluation was completed for the tax roll of January 1, The next revaluation will be completed as of January 1, 2016 for the 2016 tax roll. Tax rates are per $1,000 of assessed value. (1) Included in the total assessed value of property within the City is $10,786 of assessed value that has been adjudicated to Caddo and Bossier parish. Unaudited - see accompanying independent auditor's report.

215 149 CITY OF SHREVEPORT, LOUISIANA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (rate per $1,000 of assessed value) LAST TEN YEARS City Direct Rates Overlapping Rates Year Police Police and Fire Uniforms Parks and Total Ended Debt General Three-Platoon and Equipment Salary & Wage Street Employee Recreational Direct School December 31, Service (1) Alimony (2) System (2) Equipment (3) Schedule (3) Improvements (3) Benefits (3) Facilities (3) Debt Board Parish Total (1) Political subdivisions in Louisiana are required to levy taxes without limitation at such rates as may be necessary to service general obligation bonds. (2) City Council is authorized by Louisiana Constitution to levy, after public hearing by a two-thirds affirmative vote, - a millage rate of up to, but not in excess of: (a) mills for General Alimony (b) 1.50 mills for Police Three-Platoon System (3) Special millage approved by referendum and must be reapproved by referendum every five years. (Last submitted and approved on April 6, 2013). Unaudited - see accompanying independent auditor's report.

216 150 CITY OF SHREVEPORT, LOUISIANA Principal Property Taxpayers Current Year and Nine Years Ago Taxpayer Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Value Rank Value Value Rank Value AEP Southwestern Electric Power Company $ 46,366, % $ 41,639, % Calumet Lubricants 18,948, ,991, Bell South 13,011, ,388, Wal-Mart 10,830, ,161, Capital One 10,421, ,775, BJ Services Company 9,802, Regions Bank 9,233, ,097, Centerpoint Energy 8,194, ,752, Sam's Town 7,425, ,446, JP Morgan Chase Bank 7,341, ,100, Cingular Wireless ,741, $ 141,576, % $ 143,096, % Unaudited - see accompanying independent auditor's report.

217 151 CITY OF SHREVEPORT, LOUISIANA Property Tax Levies and Collections Last Ten Years Collected within the Year Taxes Levied Year of the Levy Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage December 31, Year Amount of Levy Years Amount of Levy 2005 $ 52,172,566 $ 36,329, % $ 14,812,227 $ 51,141, % ,535,297 41,076, ,235,741 53,312, ,130,275 44,426, ,797,511 54,223, ,421,540 41,480, ,338,615 56,819, ,236,967 41,889, ,875,672 57,765, ,974,524 43,965, ,211,490 59,176, ,875,991 48,969, ,317,501 60,286, ,285,191 46,570, ,438,058 57,008, ,167,413 44,608, ,293,308 57,901, ,673,655 42,808, ,808, Unaudited - see accompanying independent auditor's report.

218 152 CITY OF SHREVEPORT, LOUISIANA TAXABLE SALES BY CATEGORY LAST TEN YEARS (dollars in thousands) Motor vehicle dealers $ 339,595 $ 355,024 $ 355,111 $ 352,186 $ 296,797 $ 338,048 $ 355,903 $ 383,516 $ 399,335 $ 416,102 Restaurant, food services and drinking places 291, , , , , , , , , ,097 Discount stores 275, , , , , , , , , ,209 Grocery stores 263, , , , , , , , , ,222 Department stores 120, , , , , , , , , ,540 Miscellaneous general merchandise stores 115, , , , , , , , , ,202 Drug stores 112, , , , , , , , , ,297 Lumber and other building materials dealers 107, , , , , , , , , ,160 Wholesale - machinery, equipment and supplies 99, , , , , , , , , ,945 Wholesale - professional and commercial equipment 89,856 96, , , , , , , , ,374 All others 1,564,908 1,906,431 1,791,539 1,793,876 1,830,375 1,938,100 2,062,456 1,870,476 1,872,615 2,012,783 Total $ 3,380,101 $ 3,904,053 $ 3,824,504 $ 3,920,213 $ 3,892,355 $ 4,122,900 $ 4,298,171 $ 4,133,445 $ 4,152,591 $ 4,353,931 City sales tax rate 2.75% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75% Source: Caddo-Shreveport Sales and Use Tax Commission Unaudited - see accompanying independent auditor's report.

219 153 CITY OF SHREVEPORT, LOUISIANA DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN YEARS Caddo Law City of Caddo Parish Enforcement State of Total Year Shreveport School Board District Louisiana Rate % 1.50% 0.35% 4.00% 8.60% Source: Caddo-Shreveport Sales and Use Tax Commission Note: The City's sales tax rate may be changed with voter approval. Unaudited - see accompanying independent auditor's report.

220 154 CITY OF SHREVEPORT, LOUISIANA SALES TAX REVENUE PAYERS BY INDUSTRY LAST NINE YEARS Tax Tax Tax Tax Tax Tax Tax Tax Tax Liability Liability Liability Liability Liability Liability Liability Liability Liability Retail trade $ 66,506,787 $ 66,868,050 $ 69,134,367 $ 67,052,000 $ 70,424,851 $ 72,388,451 $ 73,575,215 $ 74,537,809 $ 75,233,688 Services 20,304,523 15,769,308 16,295,689 16,273,181 17,554,911 18,370,738 17,706,280 16,830,868 18,742,751 Wholesale Trade 15,349,862 16,838,019 17,444,320 16,311,724 18,516,602 19,624,037 16,685,163 16,874,399 18,833,822 Transportation, communications, electric, and gas 1,888,073 1,324,469 1,435,385 1,412,211 1,540,652 1,742,285 1,309,172 1,504,851 1,973,396 Manufacturing 1,882,685 3,091,773 1,705,805 1,548,868 1,452,756 1,491,183 1,316,033 1,125, ,950 Other 1,167, ,510 1,015,865 2,438, , ,987 1,150, , ,909 Construction 784, ,171 1,064,320 1,111,438 1,434,632 1,146,763 1,121,224 1,024, ,028 Mining 210, , , ,957 1,124,557 2,189, ,954 1,317,105 2,165,834 Finance, insurance, and real estate 205, , , , , , , , ,475 Agricultural 83,760 93, , , , ,060 20,505 23,713 24,720 Government 45,990 50,178 50,545 50,907 50,712 44,963 40,549 32,498 45,547 Total $ 108,428,966 $ 106,391,168 $ 109,343,652 $ 107,039,761 $ 113,379,729 $ 118,199,721 $ 113,669,818 $ 114,196,262 $ 119,733,120 Source: Caddo-Shreveport Sales and Use Tax Commission Note: Due to confidentiality issues, the names of the 10 largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue. The amounts shown are gross collections prior to refunds and collections of amounts due from prior years. The amounts reported in the financial statements are net collections. Years 2005 through 2013 are the most recent years for which data are available. Unaudited - see accompanying independent auditor's report.

221 155 CITY OF SHREVEPORT, LOUISIANA Ratios of Outstanding Debt by Type Last Ten Years (dollars in thousands, except per capita) Governmental Activities Business-type Activities Municipal Municipal Water Water Convention General Certificates Loans and and and and Center Total Percentage City Obligation of and Capital Regional Airports Regional Airports Sewerage Sewerage Hotel Capital Primary of Personal Per Year Bonds Indebtedness Notes Leases Revenue Bonds Loan Revenue Bonds Loan Loan Leases Government Income Capita 2005 $ 263,520 $ 37,884 $ 34,394 $ 9,778 $ 22,580 $ - $ 155,107 $ 75,000 $ 42,479 $ 1,170 $ 641, % $ 3, ,913 34,382 33,437 13,410 22, ,785 75,000 42, , , ,414 30,681 32,430 14,379 21, ,320 75,000 42, , , ,408 26,794 33,580 17,447-38, ,283 75,000 39,591 1, , , ,830 22,722 31,852 12,692-37, ,641 50,000 39,543 1, , , ,481 18,698 30,132 11,201-37, ,000 50,000 39, , , ,372 13,955 28,334 7,191-36, ,259 50,000 39, , , ,986 9,072 27,429 12,313-35, ,924 50,000 38,714 1, , , ,524 7,534 28,170 8,155-34, ,312 48,855 41,350 2, , , ,448 5,718 27,072 5,747-33, ,117 48,185 40,696 2, ,677 N/A 3,028 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See the Schedule of Demographic and Economic Statistics for personal income and population data. N/A Statistical information is not available. Unaudited - see accompanying independent auditor's report.

222 156 CITY OF SHREVEPORT, LOUISIANA Ratios of General Bonded Debt Outstanding Last Ten Years (dollars in thousands, except per capita) Percentage of General Less: Amounts Estimated City Obligation Available in Debt Actual Taxable Per Year Bonds Service Fund Total Value of Property Capita 2005 $ 263,520 $ 40,239 $ 223, $ 1, ,913 44, , ,414 48, , ,408 55, , ,830 58, , ,481 46,292 97, ,372 60, , ,896 40, , ,524 46, , ,448 56, , Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See the Schedule of Assessed and Actual Value of Taxable Property for property value data. See the Schedule of Demographics and Economic Statistics for population data. Unaudited - see accompanying independent auditor's report.

223 157 CITY OF SHREVEPORT, LOUISIANA Direct and Overlapping Governmental Activities Debt As of December 31, 2014 (dollars in thousands) Estimated Estimated Share of Direct and Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt Debt repaid with property taxes Caddo Parish Commission $ 25, % $ 18,164 Caddo Parish School Board 91, ,320 Subtotal, Overlapping Debt 83,484 City direct debt 289,985 Total direct and overlapping debt $ 373,469 Sources: Assessed value data used to estimate applicable percentages provided by the Caddo Parish Tax Assessor. Debt outstanding data provided by each governmental unit. Notes: Overlapping governments are those that coincide, at least in part, with the geopraphic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident-- and therefore responsible for repaying the debt--of each overlapping government. The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Commission and School Board's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value. Unaudited - see accompanying independent auditor's report.

224 158 CITY OF SHREVEPORT, LOUISIANA LEGAL DEBT MARGIN INFORMATION LAST TEN YEARS (dollars in thousands) Fiscal Year Debt limit $ 391,518 $ 409,249 $ 413,713 $ 459,083 $ 465,514 $ 479,144 $ 486,228 $ 513,849 $ 521,627 $ 526,090 Total debt applicable to limit 254, , , , , , , , , ,255 Legal debt margin $ 137,031 $ 171,647 $ 192,997 $ 256,936 $ 282,404 $ 336,334 $ 277,913 $ 347,449 $ 372,067 $ 297,835 Total debt applicable to the limit as a percentage of debt limit 65.00% 58.06% 53.35% 44.03% 39.34% 29.81% 42.84% 32.38% 28.67% 43.39% Legal Debt Margin Calculation for Fiscal Year 2011 Assessed value $ 1,503,114 Debt limit (35% of total assessed value) 526,090 Debt applicable to limit: General obligation bonds 228,255 Legal debt margin $ 297,835 State law allows a maximum of 10% of the assessed valuation for bonded debt for any purpose. However, the 10% maximum can be exceeded if the aggregate issued for all purposes does not exceed 35% of the total assessed valulations. Unaudited - see accompanying independent auditor's report.

225 159 CITY OF SHREVEPORT, LOUISIANA WATER AND SEWERAGE PLEDGED REVENUE COVERAGE LAST TEN YEARS Less: Net Gross Operating Available Debt Service Year Revenues(1) Expenses(2)(3) Revenue Principal Interest Total Coverage ,713,962 30,578,978 27,134,984 10,982,563 4,438,531 15,421, % ,131,449 36,874,335 26,257,114 11,782,506 4,766,703 16,549, ,876,054 34,081,657 26,794,397 12,370,601 5,079,611 17,450, ,944,320 36,200,116 24,744,204 12,755,277 4,759,719 17,514, ,352,027 33,617,542 22,734,485 11,362,709 4,000,153 15,362, ,803,198 33,688,533 27,114,665 8,478,772 3,025,458 11,504, ,110,266 33,172,696 27,937,570 8,390,478 2,823,412 11,213, ,605,356 33,897,265 24,708,091 8,132,678 2,535,244 10,667, ,751,942 36,405,157 31,346,785 8,110,966 2,219,129 10,330, ,765,989 37,702,211 37,063,778 7,822,370 2,027,947 9,850, (1) Includes operating revenues, interest income, changes in fair value of investments and intergovernmental revenues. (2) Before depreciation and amortization expenses and after transfers out. (3) Beginning in 2011, Other Post Employment Benefits (OPEB) costs were excluded in the calculation of the Rate Covenant Requirements for the debt service coverage computation. Years prior to 2011 were recalculated to reflect this change to exclude OPEB costs. Unaudited - see accompanying independent auditor's report.

226 160 CITY OF SHREVEPORT, LOUISIANA MUNICIPAL AND REGIONAL AIRPORTS PLEDGED REVENUE COVERAGE LAST TEN YEARS Less: Net Unrestricted Net Resourses Gross Operating Available Operating Available For Debt Service (3 & 4) Year Revenues(1) Expenses(2)(7) Revenue Reserve (6) Debt Service Principal Interest Total Coverage 2005 $ 8,053,251 $ 6,822,081 $ 1,231,170 $ 138,400 $ 1,369,570 $ - $ 478,020 $ 478, % ,017,059 7,353,327 1,663,732 1,508,800 3,172, , , ,781,072 7,599,917 2,181,155 1,277,800 3,458, , , ,180,016 (5) 7,730,899 2,449,117 2,329,500 4,778,617 10, , , ,970,640 7,577,770 1,392,870 3,315,900 4,708, ,000 2,310,257 2,645, ,766,437 7,692,162 2,074, ,800 2,557,075-1,451,250 1,451, ,349,559 8,193,481 2,156,078 1,872,300 4,028, ,000 2,050,319 2,405, ,411,803 7,727,100 2,684,703 4,010,200 6,694, ,000 2,003,708 2,388, ,854,430 7,949,169 2,905,261 5,113,545 8,018, ,000 1,973,174 2,378, ,218,738 8,043,517 3,175,221 6,945,100 10,129, ,117 2,145,103 2,649, (1) Includes operating revenues, interest income, intergovernmental revenues, net fair value adjustment of investments, transfers in and excludes gain on disposal of capital assets, passenger facility charges and associated PFC debt up to the amount of the charges. (2) Before depreciation and amortization expenses but including transfers out. (3) Excludes passenger facility charges and associated PFC debt up to the amount of the charges. (4) Reflects current year debt service expenses. (5) Excludes swap termination payment of $3,563,000 and excludes Swaption receipt of $809,321. These amounts are not normal operating revenue and expense items. (6) Beginning in 2009, the Unrestricted Operating Reserve was used in the calculation of the Rate Covenant Requirement for the debt service coverage computation. Years prior to 2009 were recalculated to reflect this change to include current year's net revenues as well as the Unrestricted Operating Reserve at Year-Ending. Beginning in 2012, Restricted appropriation for Debt Service Coverage Operating Reserve was also used in the computation. Year 2011 has been restated to reflect this change in computation. (7) Beginning in 2011, Other Post employment Benefits costs (OPEB) were excluded in the calculation of the Rate Covenant Requirement for the debt service coverage computation. Years prior to 2011 were recalculated to reflect this change to exclude OPEB costs. Unaudited - see accompanying independent auditor's report.

227 161 CITY OF SHREVEPORT, LOUISIANA Demographic and Economic Statistics Last Ten Years Caddo Parish Caddo Parish Per Personal Capita City City Caddo Parish Income Personal Unemployment Year Population Population (in thousands) Income Rate , ,438 $ 7,870,765 31, % , ,577 8,501,158 33, , ,609 9,348,950 37, , ,895 9,427,392 37, , ,932 10,337,630 40, , ,969 9,804,879 38, , ,912 10,990,340 42, , ,093 11,351,511 44, , ,887 11,336,821 44, ,327 N/A N/A N/A 7.1 Sources: City population provided by the U.S. Census Bureau for census years and estimates for other years. Population and personal income for Caddo Parish (which the City resides in) provided by the Bureau of Economic Analysis. City unemployment rate provided by Louisiana Workforce Commission. N/A Statistical information is not available. Unaudited - see accompanying independent auditor's report.

228 162 CITY OF SHREVEPORT, LOUISIANA PRINCIPAL EMPLOYERS SHREVEPORT-BOSSIER CITY, METROPOLITAN AREA CURRENT YEAR AND NINE YEARS AGO Employer Percentage Percentage of Area of Area Employees Rank Employment Employees Rank Employment Barksdale Air Force Base 10, % 9, % Caddo Parish School Board 6, , State of Louisiana 6, , LSU Health Sciences Center 6, , Willis Knighton Health System 6, , Bossier Parish School System 2, , City of Shreveport 2, , Wal-Mart/Sam's Stores 2, Harrah's/Horseshoe 1, , Christus Schumpert Health System 1, , General Motors - - 3, Total 47, % 48, % Source: Louisiana Tech University, College of Business Unaudited - see accompanying independent auditor's report.

229 163 CITY OF SHREVEPORT, LOUISIANA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN YEARS Full-time Equivalent City Government Employees by Function as of December 31 Function/Program General government Public safety 1,305 1,320 1,316 1,348 1,356 1,378 1,398 1,404 1,377 1,385 Public works Culture and recreation Health and welfare Community development Economic development Economic opportunity Municipal and Regional Airports Water and Sewerage Convention Center (1) Convention Center Hotel (1) Shreveport Area Transit System (1) Golf Downtown Parking (1) Total 2,731 2,751 2,758 2,790 2,758 2,717 2,732 2,752 2,729 2,772 (1) Managed through contracts operated by non-city employees. Unaudited - see accompanying independent auditor's report.

230 164 CITY OF SHREVEPORT, LOUISIANA OPERATING INDICATORS BY FUNCTION LAST TEN YEARS Year Function/Program General government Property standards inspections made 46,000 46,000 30,600 30,800 28,172 30,810 30,000 32,000 50,000 50,000 Lots cut 10,000 10,000 6,739 9,700 9,223 9,220 8,019 10,000 15,000 14,500 Public safety Prisoners booked in City jail 11,000 12,400 12,721 13,500 13,628 13,160 16,461 16,856 15,000 13,419 Offense reports processed 47,300 29,678 30,000 30,000 32,189 29,340 29,340 30,310 35,500 27,822 Traffic citations issued 43,000 43,000 40,000 40,000 42,692 50,286 55,912 58,934 59,044 50,926 Fires reported 1,575 1,730 1,431 1,473 1,403 1,337 1,538 1,330 1,050 1,200 Fire responses 33,800 33,800 36,000 35,500 36,701 36,802 37,822 38,000 37,000 38,500 Fire inspections 15,000 14,484 10,174 9,700 17,000 9,811 9,237 9,960 18,398 16,054 EMS responses 24,300 25,000 25,573 25,506 26,308 29,167 30,117 30,250 30,300 30,300 Public works Refuse collected (tons) 135, , , , , , , , ,450 (1) 92,000 Building permits issued 4,274 4,400 3,400 3,200 2,682 1,777 1,161 2,764 1,950 2,796 Asphalt repairs 2,000 1,564 2,000 1,564 2,000 2,000 3,000 2,453 2,300 2,400 Street resurfacing (miles) Culture and recreation Events at all facilities Acres of City parks maintained 21,171 21,171 23,450 23,450 22,315 22,315 22,315 23,450 23,450 23,450 Participants in team sports 9,500 10,000 9,000 8,935 8,935 8,935 9,830 9,400 9,400 9,400 Senior program participants 37,840 38,000 38,000 37,900 37,900 37,900 37,900 40,250 40,500 40,500 Community development Programs funded Economic development Housing units assisted Small business loans Economic opportunity Participants served 2,130 4,854 11,943 12,098 14,180 19,987 29,035 32,000 28,778 28,600 Municipal and Regional Airports Capital projects managed Contracts/leases monitored Water and Sewerage Water treated and pumped per day (MGD) Wastewater treated per day (MGD) Water mains (miles) 1,096 1,089 1,100 1,144 1,104 1,104 1,135 1,144 1,150 1,152 Sewer mains (miles) 1,067 1,144 1,150 1,196 1,077 1,077 1,088 1,093 1,105 1,106 Fire hydrants 7,107 7,310 7,350 7,400 7,310 7,064 7,074 7,084 7,084 7,100 Shreveport Area Transit System Passenger trips (thousands) 2,932 3,145 3,383 3,400 3,400 3,400 3,400 3,400 3,400 3,100 Golf Golf rounds played 90,000 76,200 70,059 62,343 51,466 51,466 38,310 36,109 28,811 47,170 (2) Downtown Parking Citations issued 42,000 42,000 42,000 42,000 43,000 25,000 20,338 22,000 26,600 20,000 Source: City of Shreveport Annual Budget Book (1) The city's collection contract with Bossier City ended during (2) Huntington Course reopend in Note - No indicators are available for Health and Welfare or the Convention Center Hotel. Unaudited - see accompanying independent auditor's report.

231 165 CITY OF SHREVEPORT, LOUISIANA CAPITAL ASSETS STATISTICS BY FUNCTION LAST TEN YEARS Year Functions: Public Safety Police: Station Patrol Units N/A Fire Stations Police and fire academy facility City courts facility Public Works: Collection Trucks Streets (miles) 1,624 1,998 2,200 2,500 2,700 2,959 3,326 3,326 3,326 3,326 Street lights 29,990 30,085 30,085 30,085 30,100 30,100 30,100 30,100 30,100 30,100 Traffic signals N/A Culture and recreation Parks acreage 1,783 1,783 1,783 1,783 1,783 1,783 1,808 1,773 1,773 1,773 Number of playgrounds Number of picnic areas Swimming pools Tennis courts Community centers Baseball park Multipurpose stadium Auditorium Theater Coliseum Convention center Softball and soccer complex Stage works movie facility Planetariums Hotel Municipal and Regional Airports: Number of airports Water and Sewerage: Number of water accounts 66,500 67,050 67,465 68,000 68,435 68,989 69,300 69,500 69,500 69,500 Water mains (miles) 1,080 1,089 1,097 1,144 1,104 1,104 1,135 1,144 1,150 1,150 Fire Hydrants 7,270 7,310 7,350 7,400 7,310 7,350 7,074 7,084 7,084 7,100 Maximum daily capacity 80,000 80,000 80,000 90,000 (2) 90,000 90,000 90,000 90,000 90,000 90,000 (thousands of gallons) Number of water storage tanks (1) Capacity of water storage tanks 35,500,000 35,000,000 35,000,000 35,500,000 35,500,000 35,500,000 35,500,000 35,500,000 35,500,000 35,500,000 Number of sewerage accounts 63,500 63,701 63,987 64,000 64,300 64,854 65,165 65,365 65,786 66,000 Sanitary sewers (miles) 1,053 1,063 1,072 1,196 1,077 1,077 1,088 1,092 1,105 1,103 Storm sewers (miles) Maximum daily treatment capacity 80, , , , , , , , , ,000 (thousands of gallons) Golf: Number of municipal golf courses Shreveport Area Transit System: Number of transit buses Number of transit liftline vehicles Sources: Various City departments. Note - No capital asset indicators are available for general government, health and welfare, community development, economic development, economic opportunity, convention center hotel and downtown parking. (1) Three tanks retired from Capital Asset Records (2) Amiss Water Treatment Plant improvements N/A - Statistical information is not available. Unaudited - see accompanying independent auditor's report.

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233 APPENDIX C THE BOND ORDINANCE The attached Bond Ordinance is comprised of Resolution No. 131 of 1984 adopted by the City Council of the City (the Governing Authority ) on June 12, 1984, as amended and supplemented from time to time (the General Bond Resolution ), particularly by Ordinance No. 108 of 2015 adopted by the Governing Authority on November 24, 2015 (the Thirty-Second Supplemental Ordinance and together with the General Bond Resolution, the Bond Ordinance ).

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250 l It I 11(a \. 1' '1 \. eq. I I " I \ '»_ 0.1 s.. \ s- I _. D0, n _ \ 4. _. A It 11.., ". RESOLUTION No. gt crust By Councilman 500l0O : ' A RESOLUTION authorizing the issuance tram time to time oi Wotcr and Sewer Revenue Bonds oi the City of Shreveport, State oi Louisiana, prescribing tho form, fixing the details and providing ior the payment oi principal of and interest on-such bonds and for the rights of the holders tereot.. WHEREAS, the City of Shreveport, State oi Louisiana (the lssuet') owns and operates a revenue-producing public utility comprised oi a combined waterworks plant and system end sewer plant and system (the "Sysu:m"); and WHEREAS, the issuer has heretoiore determined that it is in the public interest to refund its outstanding water and sewer revenue bonds in order to (ei consolidate its outstanding debt payable from water and sowor revenues, ib) reorganize its outstanding debt structure, and (c) eliminate certain existing covenants restricting the issuance oi additional indebted:-ms secured by water and sewer revenues, which covenants are otherwise inconsistent with the issuer : prqjeeted financing requirements necessary iqr the extension and improvement oi the System; and ' WHEREAS, the issuance by tho issuer ot revenue rotunding bonds at an amount not exceeding Thirty-Two Million Dollars ($32,000,000), to mature over a period not exceeding twenty-live (Z5) years irom date thereoi, with interest at a rate not exceeding iourteen per ccnturn (10%) per annum, for the purpose of relunding, extending and unitying -the issuer's outstanding (ii Water and Sewer Revenue Bonds, i978 Reloading Series A, dated May l, I978, and (ii) Vlatcr and Sewer Revenue Bonds, I978 Series B, dated September i, 197! (the Prior Bonds ). said revenue relunding bonds to be payable as to principal and interest solely from the income and revenues to he derived irom the operation oi the System, was authorized at a puhiic hearing held on June i2, ink; and WHEREAS, in order to meet the present and continuing needs oi the issuer tor water and sewerage services, it is and will he necessary to issue, trom time to time, water and sewer revenue bonds tor the purpose oi acquiring and constructing improvements ond extensions to the System; and. WHEREAS, the issuer is authorized to borrow money and issue revenue bonds, payable solely Irom the income and revenues to be derived b'y the issuer irom the operation 01 the System, to refund the Prior Bonds, ursuant to the provisions of Port Xiii, Chapter iv, Title J9 oi the Louisiana llevrsed Statutes oi I530, as amended ( tl0ii ) (tho "Act"), and other eonstltutionai and statutory authority supplemental thereto; and, WHEREAS, under the Act and under other constitutional and statutory authority, the issuer is authorized to borrow money and issue revenue bonds, payable solely lrom the income and revenue: derived by the issuer irorn the operation oi the Synorn. tor the purpose oi acquiring lnd.constructing improvements and extensions to the System; and. WHEREAS, the Issuer proposes to authorize the Lsswmce oi rcvemx: bonds hereunder to relund the Prior Bonds and to acquire Ind conttrlict, lrom time to time, improvements and extensions to the Systcrn or to retund bonds; 5 t NOW, THEREFORE, BE IT RESOLVED by the Council oi the City oi Shreveport, State oi Louisiana, acting as the governing authority of said City, that:

251 I 4 5 I I 1 i l i i s i 2- -.'.j, _, 1- I, J4-a - 4,. " -3,.-ti-' = ' :, t ARTICLE I DEFINITICNS AND INTERPRETATION.SECTlON 101. Delinittons. in this Resolution.the following terms shali have the!oilowin_g meanings unless the context otherwise requlvress "Act" shall mean Part Xlll, Chapter '4, Title 39 o1 the Louisiana Revised Statutes at i950, as amended (R-5. 39:l0Il-39tl02'l). 4 "Authorized Newspaper" shall mean The Daily Bond Buyer"'and a newspaper which is customarily published (except in the case or legal holidays) at least once :1 day ior at least five days in each calendar week, primed in the English language, end o! general circulation either in the City of New Orleans, Louisiana or the City of Shreveport, Louisiana. ' _ ' "Authorized OHicer"_sha1l mean the Mayor and the Director of Finance ul the issuer or any person succeeding to the powers and duties oi such offlcers and, when used with reference to any act or certificate or other document, also means any person duly authorized to perform such act or sign such document. "Bank" shall mean Commercial Notional Bank in Shreveport, in the City oi Shreveport, Louisiana, its successors and assigns. ' _ "Bond" shall mean any bond authorized and Issued pursuant to this Resolution. - _ "8ond Counsel" shall mean the tirm at Foley Iludeii Beck Bewley Martin 4: i-licks, ol New Orleans and Baton Rouge, Louisiana, or any other attorney or firm cl attorneys whose experience in matters relating to the issuance of obligations by states and th_eir political smadivlsions is nationally recognized. y I "Bond Obligation" shall mean the aggregate-amount as oi interest Payment Date immediately pilor to the date of calculation (unless the date of calculation is an interest Payment Date in which case as oi such interest Payment Date), except where another date oi calculation ls specified herein, ol (ll' all interest accrued and unpaid on the outstanding Bonds and (ii) the principal of the outstanding Bonds. ' - _ - ' - {Bond Registrar" shall mean the Trustee. I - - "Bondhoider",' "holder" or "'owner", or words oi sim.la_r'lmpbrt, shall mean, when used with relerence to a Bond, any person who~sh_aii be th'e registered owner ot any Bond. ', '- t ' "Capital Costs! shall mean and Include all costs at acquisition, construction or completion oi any part at the System, including Costs ol Issuance oi any Bands issued to provide funds to pay the cost therool, the casts at any demolition: or relocation: necessary in connection therewith and any extensions, renewals, replacements, equipment, alterations, improvements, - additions, machinery and equipment, hetterments, paving, grading, excavation. or removals and at all or any property, rights, easements and iranchises deemed by the Council to be necusary or useful or convenient therefor. " Compound interest Bonds" shall mean those Bonds which pay interest only at maturity or redemption. ' '. "Compound lnterst Serial Bonds" shall mean Compound interest Bond: so designated and maturing on dates as set forth In a Supplemental Resolution., "Compound interest Term Bonds" shall mean Compound interest Bends so desifinated and maturing un'a' particular date'as s_et iorth in a Supplemental Rerolut on. _ - - "Compounded Amount" shall mean, with respect to Compound interest Bonds, the total amount oi principal thercot and interest accrued thereon as oi the dates (specified in a Supplemental Resolution relating to such Compound interest Bonds) determined solely by reference to the Table of Compounded Amounts set lorth In the lorm oi Compound interest Bonds.. ' _ 1 '. _2_ 1, ' '1'., I ~i 1 '\ J i I Ị I r I

252 I \i I i I _....>-._.._...._,,. > _ o- ' I I I I I I. ' ' 1' rr.~ '. l 1 \-. '4 j. -,1; "Consulting Engineer" shall mean a reputable and experienced engineer or iirm oi engineers selected by the Council.. ' - - oi mice" shall mean all items or cxpénsc, directly or indirectly payable or reimbursable and related to the authorization, sale and issuance oi Bonds, including but not limited to printing costs, costs oi preparation and reproduction oi documents, filing and recording Sees, initial fees and charges oi any Fiduciary, legal lees and Charges, tees and disbursements oi consultants and protessionois, casts of credit ratings, tees and charges tor preparation, execution, transportation and salekecping oi Bonds, costs and expenses oi relunding, premiums tor the insurance oi the payment of the Bonds and any other cost, charge or lee in connection with the original issuance of Bonds. ' ' _ - "Council" shall mean the Council oi the City of Shreveport, State oi Louisiana, and any entity succeeding to its powers, duties or-tunctions with respect to this Resolution or the Bonds. '. ~ "Current interest Bonds shall mean those Bonds which pay interest semiannuully on the dates specified in a Supplemental Resolution relating to such Current interest Bonds. ~ ' _ "Current interest Serial Bonds" shall mean Current interest Bonds so designated and maturing on dates as set forth ina Supplemental Resolution. "Current intertst Term Bonds" shall mean Current interest Bonds so designated and maturing o_n a particular date as set lorth in o Supplemental Resolution. - "Dds: Service" tor any period shall mean; as of the date oi calculation and with respect to any Series, an amount equal to the suln of ii). interest payahie during such period on Bonds oi such Series, iii) the principal amount oi Bonds oi such Series which mature on any iuture date in such period, and (iii) payments, if any, required to be made into an invested Sinking Fund Account, iess,payrnents, it any, to be made into the Debt Service Fund trom the invested Sinking Fund Account. ' Y _» - - "Debt Service Reserve Fund Requirement (Prior Lien Bonds)" shall mean, as oi any date ol calculation, the averageannual Debt Service on ail Prior Lien Bonds outstanding.. L Debt Service Rserve Fund Requiremu-it (Series 1931: Refunding Bonds)" shall mean, as oi any date oi calculation, the average annual Debt Service on all Series l28' Retundlng Bonds outstanding. " "Depositary" shall mean any bank or tnist company selected by the issuer as a depositary oi moneys to be held under the provisions at this Resolution, and may include the Trustee. _. _. '_ Escrow Agreement" shall mead the Escrow Deposit Agreement between the issuer and Commercial National Bunk in Shreveport, as Escrow Trustee, substantially in the iorrn attached hereto as Fxhihlt A. _ "Event at Delault" shall mean any event specltied in_se_ct'ion l0dl hereof. _ :_ ' ', _ ' "Fiduciary" "shall mean the Trustee or any Paylnghgent or D_t;_positary. "Fiscal Year" shall mean a twelve rnonth period commencing on the first day of January or any other twelve month'perlod prescribed by law tor the issuer. ', _. ' - "Fun s'and Accounts" shall mean the iunds, and the accounts therein established, created pursuarit to this Resolution._ -- _ ' ' General Bond Resolution" or 'fresolutlon" shall mean this Resolution. "interest Payment i3ate shall mean, in the-case ot Current interest _ Bonds, January i and July i ot each year (unless otherwise specified in a Supplemental Resolution), commencing on the date setjorth in the applicable \ t ' 0 I 1 i. -3-

253 :1 -I._ I 9 _ ct. u I - 0, D-. I- \ It " ~ t - Supplemental Resolution, and in the case oi Compound interest Bonds", the date on which such Bond matures or is redeemed. _ -.,. ~.- -" ~.;- *.. - "invested Sinking Fmd Payment" shall mean the ayments established for the Series 198': Refunding onds pursuant to Section _203(Ar(ht'). "investment Secttritles" shall mean ahd incdude any of the following securities, it and to the extent the some are of the time legal investments {or the ssuer: ~ (a) direct obligations ol the United State oi America; ~ lb) time certificates of deposit oi hanks organized under the laws oi - the State and national banks having their principal olfice in the State, secured by obligations described in clause (n) oi this definitlomand - ' (c) obligations lruured or guaranteed by the United States oi America, it then permitted by law. _. ' i ~ "Issues" shall mean the City ot Shreveport, State of Louisiana, and any lnstrurnentality hereatter succeeding to its powers, duties'or Iunctlons with respect to this Resolution or the Bonds. _ ' Mandatory Retirement Payment" shall mean the payment established tor a Series at Bonds pursuant to Section 20JlI\)(~/iii). - "Maturity Amount" shall mean the amount of principal and interest payable upon the maturity at any Compound interest Bond. Operating Etpema" st ai_i mean ail reasonable and necessary current expenses of operating and maintaining the System, including the costs oi repairing and managing the same, _but not including any charge tor depreciation. - "Outstanding", when used with relerence to Bonds, shall moon, as oi any date, ail Bonds theretoiore or thereupon being issued under this Resolution except: ' (oi any Bond tor the payment or redemption oi Which there shall be set aside and held in trust hereunder either: (bl (i) moneys in an amount suliiclent to pay when due the _ principal or applicable Redemption Price thereof, together with all accrued interest; ' _ ' (Iii investment Securities, as described in Section 1201, or obligations secured by such investment _S urlt.ies, in such principal amounu, of such maturities, bearing sudt interest and otherwise having such terms and quelillcations, as are necessary to provide" moneys (whether as principal or interest) in an amount stifllchsnt tn pay when due the principal or applicable Redemption Price thereol, together with all accrued interest, '. t ' and, I! such Bond s to be redeemed, tor which notice oi redemption has been given as provided in Article Vi and ' any Bond in Lieu oi or in substitution tor which other Bonds have been issued. '. ' ' "Paying Agent" shall mean any paying agent tor the Bonds oi my Series, and its successor or successors, and any other person which may at any timehe substituted in its place pursuant to this Resolution. - "Prior Bonds" shall. mean the presently outstanding weter'and_ sewer revenue bonds oi the is_suer_described in the preamble hereto. ' _ Prior Lien Bo)1ds"ahltll mcan:aii Bonds authorized ond issued pursuant to this Resolution other than the Series 1980 Rdunding Bonds to he initially issued under this Resolution ior the purpose oi retunding the Prior Bonds. _ s I z -_ _. -0-

254 _ s I 0 e 4 u.. t. _.."_ r." L t r,,..1 v 1 "Purchase Agreement" shall mean the agreement by and among the issuer, the Tmsteo and the Bank, which Bonk-may be the Trustee, nbllgsting the Bank to seli and the Trustee, on behall oi the issuer, to purchase the Treasury Bonds described therein which are to be deposited in the Debt Service Fund to the credit ol _the invested Sinking Fund Account established therein tor the payment of the principalo! the Bonds oi the initial Series.. "Redemption Price" shall mean, when used with respect to a Bond, the principal amount thereot plus the applicable premium, it any, payable upon redemption thereot pursuant to this Resolution. _. 4. "Regular Record Date" shall mean, with respect to an interest Payment Date, the close of business on June l5 or December 15.(uniess otherwise specified in a Supplemental Resolution), as the case may be, next-sprecedlng, such interest Payment Date, whether or not such June i3 or December i_ is a business day._ "Revenus" shallmoan all tees, rents,'charge.t and other income derived or to be derived by or ior the account of the Issuer -tram or tor the ownership, operation, use or services 0! the System and any other amounts paid into and creidted to the Revenue Fund pursuant to this Resolution, but shaii_not include any amount received or receivable-from the United States or the State (_or any agency of either thereol) or irorn any other source as or on account oi,a grant, contribution or loan in aid oi or tor or with respect to (a) the construction, acquisition, lm rovernont, extension, renewal or other develoment oi any part oi the System or (Z) the financing oi any ol the ioregoing. ' _ "Series" shall mean all of the Bonds issued in a simultaneous. transaction pursuant to a Supplemental Resolution. 4 _. ' "Saris 1980 Refunding Bonds" shall mean the Bonds to ho initially lsued under this Resolution ior the purpose or ralunding the Prior Bonds.. " "Special Record Date" Ior the payment pt Delaulted interest (as gggined in Section 306) rnco_ns the date ibted by the Trustee pursuant to Section i 'fst_ate" shall mean the State oi Louisiana. - ' - "Supplementnl'Resoiution"shaii mean any roésoiution supplemental to or omlendatory oi this Resolution adopted by the Council in accordance with Article Vil hereof. ' _ "System" shall mean the revenue-producing public utility owned and operated by the issuer conslstlngof the combined waterworks plant and system and sewer plant and system as said plants and systems new exist and as they may be hereaiter improved, extended or supplemented while any ol the Bonds issued under this Resolution remain Outstanding, including specifically nil properties oi every nature owned, leased or operated by the issuer andused or uselul in the operation oi said combined waterworks plant and system and sewer plant and system, and including real estate, personal and intangible properties, cohtracts, lranchises, leases and choses in action, whether lying within or wlthoutthe boundaries oi the City oi Shreveport, Louisiana. ' - "Term Bonds shall mean the Bonds oi any Series maturing on one principal maturity date, the principal of which is payable from fixed amounts provided to be deposited in each your in the Principal Account or any invested Sinking Fund Account in the D'ebt Service Fund ior the ptiyment oi such principal on or prior tofttaturlty. ' ~ ', "trustee" shall meen the Commercial National Bank in $_hrev_eport, in the City ol Shreveport, Louisiana, and its succusor or successors, and any other porsonflwhich may at any time be substituted in its plop: purusant to this Resoiu on.... ' SECTION 102. interpretation. in this Resolution, unless the context otherwise requires, la) words importing persons include lirmspassociations and corporations, (b) words importing the singularlinclude the plural and vice verso, (cl -5-

255 4 " Il\'._ _. l ' \1 5 ;,\. -" ".. tr-' --s. ',. D t ~ words oi the masculine gender shall be deemed and construed to include correlative. wordsof the teminlne and neuter genders and id) the tit_ie oi the issuer oitiees osed in this Resolution shall be deemed to include any other title by 'v/hleh sud : oitice shall be known under any subs_equentiy odoptedlssuer charter. I 1 l 0 ARTICLE]! AUTHORIZATION AND ISSUANCE OF BONDS. SECTION 201. Authorization of Bonds. (A) This Resolution ueates a series oi issues of Bonds oi the borer to be'des_ignatod "Water and Sewer Revenue Bonds" and creates it continuing lien to secure the full and fl.nai_ pay.inen_t of the principal or Redemption Price oi and interest on nil the Bonds. The Bonds shall he special obligations oi the issuer payable solely irom end secured by o pledge o! the Revenues as do-scribed herein, subject to the prior payment of the reasonable and necessary expenses oi operating and mhintalnlng the System, and, with respect to the Series NBA Refunding Bonds, to the pledge oi the Revenues tor the payment oi Prior Lien Bonds. The aggregate principal amount ot the Bonds which may be executed, authenticated and delivered under this Resolution i_s not limited, except as provided in this Resolution or as limited by law. _. ' ' ' (B) It is hereby determined that the Series'_i98_'r -Reiundlng Bonds initially issued under this Resolution shall be -issued for the purpose oi reiundlng the i rlor Bonds through th_e escrow oi the proceeds ot such initial Series oi Bonds, in accordance with the terms oi the Escrow hgreement. in order to provide tor the payment oi the principal oi, premium, it any, and interest on tho Prior Bonds as they mature or upon earlier redemption, according to their terms. -Upon issuance oi tho Series I980 Re1undlng' Bonds, no Bonds s_i1oii be issued hereunder other than Prior Lien Bonds as provided herein. b _ ' (C) Provision having been made tor the orderly payment until moturlty or earlier redemption ot all the Prior Bonds, inmccorlionce with their terms, it is hereby recognized and acknowledged that as oi the date oi delivery oi the Series '0! Bonds initially issued under this Resolution, provision will have been mado tor the peiiormance of all covenants and'ogreon\en,ts'oi the issuer incident to the Prior Bonds, and that accordingly, and imcornpiionee with all that is herein provided, the issuer is expected to have no Xuture obligation with reterenceto -the aioresaid Prior Bonds, except to assure that the Prior Bonds are paid trorn the lunds s'o escrowed in accordance with the provisions oi the Escrow Agreement

256 : t I 0 1. :l I, ' s, In I: ' I,' I ~ I \ ml; _ - ', 4 ta t _ '. (D) Provislon havlng beenfnade as oioresald tor the orderly payment untll maturlty or earller jeder_hit_tion ol all the Prior Bohds, lt ls hereby determined that the Issuer shall cause the amounts on deposit in the Eunds ahd Accounts established and maintained under the resolutions of the Issuer authorizing the Prlor Bonds to be withdrawn therefrom and applied in aceordmtce with the provlslons 0! the Supplemental Resolution authorizing the Series l9.80 Reiundlng Bonds issued hereunder. ' _ l - -, (E) The Mayor and/er th_e Dlrector at Finance. 0! the lstuer ls authorized to execute the Escrow Agreement and lt ls_expressly provided and covenanted that all oi the provlsloits tor the payment ol the prlnclpal ot and lnterest on the, Prior Bonds from the special trust lund created under the Escrow Agreement shall be strlctly observed and tollowed ln all respects. SECTION 202. Resolution to Oonstitute Contract. ln eanshlcrotlon oi the purchase end acceptance oi the Eonds by those who shall 4hold.the some lrom tlme to tlrnc, the provisluns of this Resolutlon shall be a parto! the contract oi the lssuer with tht: holders at Bonds and shall be deemed to he andishall constltute a contract between the lssuer, the Trustee and the holderslfrom tlme to time o1 the Bands. The pledge hereorand the provlslens, covenants andagreements hereln net torth to he performed by or on beltali ol the Issuer shall betor the equal benefit, protectlon and security o! the holders 0! arty and all o! such Bands, each oi which, regardless of the tlnte or tlmes oflts lssue or maturity, shall be ol equal rank wlthout preference, prlorlty or dlstinctlon over any other thereot. mtcep! utpressly provided in this Resolution. ' ~ SECTION 203. Obligation of Bonds. This Resolution creates a serh-.s 01 issues of Bonds oi the Issuer and creates a contlnulngv pledge and lien to secure the lull and final payment of the Bands. Tlie Bonds shall hespeclal obligations o! the Issuer and are payable solely from the Revenues ot-the System, subject to the prlor payment ot the reasonable and necessary expenses at operating and malntalrv lng the System, and, wlth respect ta the Se_rles mm lletundln; fiends, further subject to the pledge rli the Revenues tor the payment ot Prlor Llen Bonds. Bonds shall not constitute an indebtedndss or pledge of dte'general credlt o! the Issuer wltltln the meanlng ot any constltutlonal or statutory lltnltatlon o1 indebted-l ness and shall contaln a reeltul to thateiiect.. ' _... _. SECTION 200. Authorlzatlon ot Bends in Series. ln order to provlde tutilclent iunds (or the Capltel Costs ol the System or for the purpose of reiundlng _ as The.7-

257 l '4 I u, I, v_ 1- \: -t at b _. _,.-\ ' h I any Bonds or Prior Bonds, revenue bonds oi the issuer are hereby authorized to be issued irom time to time without limitation as to amount except as herein provided or as may be limited by law and such Bonds shall-be issued subject to the torrns, conditions and limitations established by the Act, and other constitutional and statutory provisions, and in this Resolution and in one or more Series as hereinafter provided. -. SECTION 205. Provisions tor issuance 01 Bonds. (A) The issuance oi each Series o! Bonds shall be authorized by a Sup ilernerrta_l Resolution adopted by the Council. The Bonds of each Series shall, in addition to the title "Water and Sewer Revenue Bonds", contain an appropriate Series designation. ' ' Each Supplemental Resolution authorizing the issuance of a Series ot Bonds shall also specify:. '. (I) the authorized principal amount and Series designation oi such Bonds; _ (ll) (iii) (iv) the pu_r-pme tor which such Series is being issued, which shall be one or more oi the toilowlngz (i) the making ot deposits into the Construction Fund, U any, established by such Supplemental Resolution, to pay the cost oi the acquisition and construction oi improvements and extensions to the System or (ii) the rehmding of any Outstanding Bonds or, in the case oi the initial Series of Bonds to be issued under the Resolution, the Prior Bonds; the date, and the maturity date o;- dates, of the Bonds oi such Series;'. the interest rate or rates oi the Bonds oi such Series, or the manner oi determining sud: rate or rats, and the interut payment dates thereior; V _ ' (V) the denominations ot, and the manner of dating, number- ing and lettering, the Bonds of such Series, but such Bonds shall be in the denomination of $5,000 each in the case oi Current interest Bonds or $5,000 Maturity Amount in the case of Compound interest Bonds, or in denominations of such multiple or multiples thereof. as may be authorized by such Supplemental Resolution; - ' (vi) (vii) ' (viii) (ix) the Paying Agent and the place or places -of payment ot the Bonds oi such Series or the manner.oi appointing and _ designating the same; the amount and due date oi each Mandatory Retirement Payment, it any, tor Bonds oi like maturity o! such Series, provided that the due date.0! any Mandatory Retirement Payment shall be an interest payment date; the amount and due date oi each invested Sinking Fund Payment to be deposited in the invested Sinking Fund Account, it any, pertaining to -the Series 19% Refunding Bonds and established by such Supplemental Resolution (provided that the due date oi any invested Sinking Fund t t I the Redemption Prices, it any, and, subject to the provisions oi this Resolution, the redemption terms tor the Bonds of such Seriess ".. 1, -8- t

258 1 ft! J J I 0 I l i! is 9 i i s ii. I "' I,, ". J :,_4,:_ 4 ' r l,_. (B) (X) '1.r ' H ' i" l : Payment shall be an interest Payment Date) and the manner of valuing the investments held therein; it so determined by the issuer, provisions for the sale of the Bonds o1 such Series;, (xi) the lorrn ot the Bonds at such Series; and. (xii) any other provisions deer:-zed advisable by the issuer as ' shall not conflict with the provlslonshereof; _. Upon the original issuance oi Bonds of any Series, thejssuer shall deliver to the Trustee: ' ' (ll a certified copy of the Supplemental Resolution authorizing such Series;... (ii). opinion of Bond Counsel to the issuer to the effect that. (a) this Resolution and the applicable Supplemental Resolution have been duly and lawfully adopted by thelssuer, are in itdl force and eflect, and insular as they create obligations of the issuer in favor ol Bondhoidersare valid and binding upon the issuer and are enforceable against the issuer except as limited by bankruptcy, insolvency or other laws aiieetlng creditors rights generally; (b) this Resolution and the applicable Supplemental Resolution create ii valid pledge which they purport to create; (cl the Bonds oi such Series are valid and binding special obligations oi the issuer; and (d) upon the execution, issuance, sale and delivery thereof, the Bonds,0! such Series will have been duly and validly authorized and issued in _ accordance with the Constitution and statutes of the - State, including the Act, as amended to the date of such opinion, and in'accordance with this Resolution and the applicable Supplemental Resolution; ' (ill) except in the case of a Series of Bonds to refund any - Outstanding Bonds issued hereunder or the Prior Bonds, a certificate oi an Authorized Officer, dated as oi the date. ' oi such delivery, stating that the 1ssuer_is not in deiauit in the periormance oi any of the oovenants, conditions, ' agreements or provisions contained in this Resolution or in any Supplemental Resolution; and, (iv) except ln the case oi a Series oi Bonds issued to relund _any Outstanding Bonds or the Prior Bonds, a certificate of the Consulting Engineer, dated as oi the date ot such delivery, stating that the issuer has met the requirements oi'section 709 hereol. 4 ' ' _ ' I ti l 1 I iu=.1_' cz.e m, _ g '. GENERALTERMS AND PROVISIONS OF BONDS _ SECTION 30l.' Principal and interest'payrnent'dates'. The dates upon. which any principal payment with respect to a Series of Bonds is payable shall be the first day oi any January and the first day of any July [unless otherwise specified in e Supplemental Resolution). lnter'est'o'n each Current interest Bond shall be payable on the first day of any January and July not more than twelve months after its date and sen-ilannually thereafter (unless otherwise spe:ci_iicd l'n a Supplemental Resolution). ' ' '.9.. an

259 I 1 r. 1 1': 1 F I - ~- _., -..,- s - ' - -t.. 1 I - 4 I.. " :1"; I I r. SECTION 302; 595. The Bonds ofeach Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsis tent with the provisions oi this Resolution as may be necessarypr desirable to comply with custom or otherwise as may be determined by the Council prior to delivery thereof. ' SECTION 303. Place and Medium of Payment The principal. (and premium, it any) o1 each Bond and the Compounded Amount _\vith respect to the Compound interest hands shall be payable upon maturity or redemption at the principal oiiice or the corporate trust oitice o! any Paying Agent appointed or provided tor such Bond in any coin or currency ot the United States of America which at the time oi payment is legal tender tor the payment oi public and private debts, upon presentation and surrender thereoi. Interest on the Current interest Bonds shall be payable by check oi any Paying Agent mailed on the business day next preceding each interest Payment Date by the Paying Agent to the registered owner (determined as oi the Regular Record Date) at the address as shown on the books of the Paying Agent. ' ' _ l I SECTION 30. Form and Denomination. The Bonds oi each Series shall be issued in iully registered torm l_n denominations oi $5,000 (in the c'ose'o_1 Current interest Bonds) and $5,000 Maturity Amount (in the case oi Compound interest Bonds), or any integral multiple thereoi within a single maturity. Supplemental Resolution may pl'ovldb> tor other'denomina_tions andlor maturity amounts, or coupon bearer bonds it then permitted by applicable law. ' ' _ SECTION _ Eat change oi Bonds-', Persons Treated 'a'. Dtvners-. The issuer shall cause boo_k_s tor the registration and tor the registration oi transfer oi the Bonds as provided in this Resolution to be kept by the Trustee at its principal oiiice, and the Trustee is hereby constituted and appointed the Registrar (or the Bonds. At reasonable times and under reasonable regulations established by the Trustee, said list may_ be inspected and copied by the issuer,,or by4the owners (or a designated representative then-'eo1)ot i596 or more ot tnebonil Obligation.- Any Upon surrender tor registration oi transtenoi any Bond-at such oiiice, the Trustee shall authenticate and deliver in the name of tho-transferee or translerees one or more new iully registered Bonds 01 authorized denomination oi the same maturity and like ggregatcprincipal _amount. At the option of the Bondholder, Bonds may be exchanged Idr other Bonds oi authorized denominations of the same maturity and like aggregate principal amount upon surrender at such 1 ii I v a i l I ~ -m_ t

260 V »--..~..-_..._...i_..i, _i, 0r r t l s u 1. 'I I I '."' ' - '-',> 1f 1 :-. :. _ otiice. Whenever any Bonds are so surrendered tor exchange, the Trustee shall authenticate and deliver ln,elrchange thereior the Bender hands which the Bondholder making the exchange shall be entitled to receive. - t All Bonds presented iur registration 0! transfer or exchange shall (ii so required by the issuer or the Trustee), be accompanied by a written lnstrurnlentior instruments oi rransier in iorm and with a guaranty oi signature satlslactory to the Issuer and the Trustee, duly executed by the registered owner or by such owner's duly authorized attorney. -.. ' No service charge will be made by a Trustee'1or any exchange or registration oi transier or Bonds. The Trustee may require payment by the person requesting an exchange,or registration at transfer 0-{bends of a sum sultjcient to cover any tax or other governmental charge that may be imposed in relation thereto.. I. - _ w _ The Issuer and the Trustee shall not be required (a) to issue, register the transier oi or exchange any Bonds during a period beginning at at-5 opening Io! business ii days next preceding an interest Payment Date or any date oi selection oi Bonds to brredeemed and ending at the close oi business on the Interest Payment Da'te or day on which the applicable norice oi redemption is given or (b) to register the transter oi or exchange any Bonds so selected tor. redemption in whole or In pert. ' ' - All Bonds delivered upon -any registration 01 transfer or exchange 0! Bonds shall be valid obligations of the Lssuer,-evidencing the same debt and entitled to the same beneilts under this Resolution as the Bonds surrendered. - Prior to due presentment lor registration oi transfer oi any Bond, the issuer and the Trustee, and any agent oi the Issuer or the Trustee may treat the person ln whose name any Bond is registered as the absolute bvvner thereei (or all purposes (subject to Section 306), whether or not such Bond shallgbe overdue, and shall not be bound by any notice to the contrary. ~ ~ SECTION 306. flyment oi interest; interest Rights Preserved. Interest on any Bond which is payable, and ls punctually paid or duly provided for, on any interest Payment Date shall be paid to the person in whose name that Bondior one or more predecessor Bonds) ls registered on thdlleguier Record Date for such Interest Payment Date. - _, ' _ Any interest on any Bond which is payable, but ls not punctually paid or duly provided tor, on any interest Payment Date (herein called "Defaulted I I -1]-

261 } \ 4 I - I H, ~, E 1, n I ~ I I.* I I - ' l A. - '. \\ ll I - interest ) shall forthwith cease to be payable the registered holder on the relevant Record Date by virtue oi having been such holder; and such Detauited interest shall he paid by the issuer to the persons in whose names the -Bonds (or their respective predecessor Bonds) are registered at the close oi business on a Special Record Date tor the payment oi such Detauited interest, which shall be fixed in the loilotvlng manner: The Issuer shall notiiy the Trustee in writing oi the amount of Defaulted interest proposed to be paid on each Bond and the date of the proposed payment, and at the same time the issuer shall deposit with the Trustee an amount oi monoyequal to the aggregate amount proposed to be paid in respect ol such Delaulted interest or shall maize arrangements satisiactory to the Trustee tor such deposit prior to the date oi the proposed payment, such tnoney' when deposited to be held in trust for the benefit ol the persons entitled to Such Defaulted interest. Ihereupon the Trustee shall fix a Special Record Date for the payment oi such Deiaulted interest which shall be not _more than l5 nor less than ll) days prior to the date o! the proposed payment and not less than iii days after the receipt by the Trustee oi the rto.tl_co oi the proposed payment. _ l'he Trustee shall promptly notlly the Issuer ot such Special Record Date and shall cause notice oi the proposed payment oi such Defaulted interest and the Special Record Date thereior to be mailed, first dass, postage prepaid, to each Bondholder at his address as it appears in the Bond Register not less than Ill day_s prior to such Special Record Date. Notice o! the proposed payment oi such Detaulted lnteyest and the Special Record Date therelor having been mailed as aforesaid, such Deiaulted interest shall be paid to the persons in whose names the Bonds (or their respective predecessor Bonds) are registered on such Special iecord Date. " Subject to the toregoing provisions oi this Section, each Bond delivered under this Resolution upon transler oi or in. exchangeior or in lieu oi any other Bond shall carry the rights to interest accrued and unpaid, and toacorue, which were carried by such other Bond. ' V. - _ SECTION 307. Bonds Mutilated, Destroyitl, Stolen or Lost. in case nny Bonds shall become mutilated or be improperly cancelled, or be destroyed, stolen or lost, the bwncfl may' in its discretion adopt a resolution and thereby authorize the issuance and delivery of a new Bond in exchange tor and substitiutlon ior such mutilated oflmproperly cencelledlond; or in lieu oi and substitution tor the Bond destroyed, stolen or lost, upon the holder turnfshlng the issuer prool oi his ownership thereof and pi'o01 oi such mutilation, improper cahcellatlon, destruction, -12-

262 i I I -, H I,-. ' '1-t= """._. t,,3»,. I 0. their or loss satisfactory to the Council, upon his giving to thé issuer an indemnity bond in such amount as the C_oilncli may require, upon his.con-ipllaneo with<s_uch other reasonable regulations and conditions as the Issuer may prescribe and upon i his paying such expenses as the issuer may incur. All Bonds so surrendered shall be cancelled by the Director oi Finance oi the issuer and held ior the account oi the issuer. ii anypflond shall have matured or be about to rnature, instead oi issuing a i substitute Bond, the issuer may pay the same upon being indemnified as aforesaid, and it such Bond be lost, stolen or destroyed, without surrender thereot. ' _ Any such duplicate Bond issued_ pursuant to this Section shall constitute original, additional, contractual obligations on the part oi the issuer, whether or 1 t I o not_ the lost, stolen or destroyed Bond be at any time lound by anyone. Such duplicate Bond shall be' in all respects identical with thoseweplaced except that they shall bear on their taco the loiiowing additional clause: "This bond is issued to replace a lost, anceiled or destroyed - bond under the authority oi ii :97i through 39:97 :-'-' ' i II i Such duplicate Bonds shall be signed by the same oificers who signed the original Bonds, provided, however, that in the event the oflicers who executed the original Bonds are no longer-in ottlce, then the new Bonds shall be signed by the ofllcers then in ofllee. Such duplicate Bonds shell be entitled-to equal and proportionate benefits and rights as to lien and source and security tor payment ffoi l'l'1h6'_iflcflil1g and revenues 0! the System as provided herein with respect to all other Bonds hereunder. the obligations at the issuer upon the new -Bonds belngidentitii to its obligations upon the original Bonds and the rights oi the holder at the new Bonds being the some as those c'_onierred by the original Bonds. ' V 5ECTiON 308. Preparation oi i)eiin'itive Bonds,V i'emporary Bonds. Until the deiinitive Bonds oi any Series are prepared, the_lssuer may execute, in the same manner as is provided in Section 3l0, and deliver, in lieu of deiinitive Bonds, but subject to the same provisions, limitations and conditions as the oetinltive _Bonds except as to the denominations, one or more temporary Bonds substantially 0! the tenor of the definitive Bonds'ln lieu oi which such temporary Bond or Bonds are issued, in such denominations as may benuthoriied by the issuer, and with such omissions, insertions and variations as rnay be: appropriate to temporary Bonds. ' ' ~ - SECTION sos. Cancellation and Destruction at Bonds nu Bonds paid or redeemed either ot or before maturity shall be delivered.to_ the issuer when such i i _ -i3-.

263 1..,,--at in g ' ~,-_, I.. - ' if '.t- I. '," 1 I I payment or redemption is made, and such Bonds, together with all Bands purchased by the Issuer, shall thereupon bé promptly cancelledbby the Director ol Finance oi the issuer.».. SECTION SID. Execution. The Bonds shall be executed in the name and on behall oi the Issuer by the manual or iacsimile signature oi the Mayor and eountcrsigncd by the manual or iacslmilc signature cl the Dlrer:,tor.ol Finance 0! the Issuer, and the corporate seal oi the issuer (or a lacsimllc thereof] shall be thereunto affixed, imprinted, engraved or othel \vi_s'c repi-oduced_thcreon, and attested by the manual or iacsirnile signature oi the élerk oi: Council 01 the Issuer. in case any one or more_oi the olficers who shall have signed or scaled any olthe Bonds shall cease to be such officer before the'bnnds so signed and scaled shall have been actually delivered, such Bonds may, nevertheless, be delivered as herein provided, and may be issued as ll the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond ot a Series may be signed and sealed on behislt oi the Issuer by such persons as at the actual time 01 the execution oi such Bond shall be duly authorized or hold the proper olfice in the issuer, although at the date oi the Bonds of such Series such person may not have been so authorized to have held such ottice. Said oflicers shall, by the execution oi the Bonds, adopt as and lor their own proper signatures their respective facsimile signatures appearing on any legal opinion certificate, and the issuer mayladopt and use for that purpose the facsimile signature,ol any person or persons who shall have been such oiiieer at any time. on qr after the date oi such_bond, notwithstanding that at the date oi such Bond such person maynot have hoid"such,o'!1ice or that at the time when such Bond shall be dcilvcrcd such person may have ceased to hold sucli oitice. '. - ' SECTION Authentication. No Bond shall be valid or obligatory lor any purpose or ntltiedto any security or benefit under this Resolution unless and until a certificate oi authentication on such Bondsubstantiaily in the torrn set iorth in the Supplemental Resolution shall have been duly executed by the Trustee, and such executed certiiicate oi the Trustee upon. any such Bond shall he conclusive evidence that such Bond has been executed, authenticated and delivered under this Rsolution. ~ l -14-

264 1 F t I i i 0 u.- t._ I - \ ' " \_,.'r','t 1., ~ t _ ARTICLE lv Arl=t.l'cAjr1oN or PROCEEDS ' (A) SECTION #01. Qppilcotion of hand Procee-dsjfld Accrued interest- The proceeds oi the Series i984 Reiunding Bonds issued hereunderlexciuslve oi accrued interest) shall be deposited in the special trust lund established pursuant to the Escrow Agreement and applied and invested. es therein provided. The proceeds so deposited, together with the interest earned trom the investment thereof, shall he sulficient to pay the principal oi and interest on the Prior Bonds as the some mature and become due. ' = (B) The proceeds o_i sale of the Bon:d_s of each, Series subsequent to the initial Series at Bonds shall be applied as provided ln the Sltppiemental Resolution Ior each such Series. - ' ~. ' (C) Upon the delivery oi any Series o! Bonds, the amount, if ony, received as accrued interest shall be deposited in the appropriate interest Account in the Debt Service Fund. ' '_ nanctev FUNDSANDACCOUNTS '. ' SECTIQN 50i. The Pledge Eflected by'"this're'solutlon. There are hereby pledged the Revenues for the payment oi the Bonds, in accordance with their terms and the provisions of this Resolution, subject only-to the payment oi the reasonable and necessary expenses oi operating and maintaining the System, and, with respect to the Series i984 ReIunding' Bonds, subiect lurther to thepledge oi the Revenues lor the payment of Prior Lien Bonds, and to the provisions oi this Resolution perltiitting the application thereof tor or to the purposesend on the terms and conditions herein set Iorth. it is the intention o _ the _lssuer,tha't, to the fullest extent permitted by law, this pledge shall be valid and binding from the time when it is mode, that the Revenues, moneys, securities and other funds so pledged and then or thereafter received by the issuer shall imrnedietely be-subject to the lien of such pledge» without any physical delivery or further act, a_nd that the lien of such pledge and the obligation to perlorm the contractual provisions herein contained shell have priority over any or all other obliga_ti0n! one lieblllties oi the issuer, with the exceptiorronly of the payment oi the reasonable and necessary expenses of operating and maintaining the System, and that this pledge shell be. velid and binding as against all parties having claims of any kind in tort, contract _ 3 l -15- '

265 l 1. -'\, ' ; "-"".-. '.»',-» I. I I. " u-t or otherwise against the Issuer, irrespective oi whether such parties have notice thereoi SECTION $02. Establishment oi Funds and Accounts. (A) The issuer hereby establishes and creates the loilowing special trust tunds to be held as toliows: ' ' '.. (B) (I) Revenue Fund, to be held by the lssuer;' - - (2) Debt Service Fund, to be held by th_e Issuer; and ' (3) Debt Service Reserve Fund, to Be held by the Trust_ee._ The moneys in the Iunds held by the issuer hereunder may be deposited with one or more Depository as required by low. All moneys or securities deposited with the Trustee or any Depositary pursuant to this Resolutiorfshall be held in trust and applledoniy in accordance with the provisions hereo! and shall be considered trust lunds for the purposes of this Resolution., ' secrnon 503. Revenue Fund. So long as mil Bonds lssiled tinder mu" i-_ I I. Resolution remain Outstanding, the issuer shall cause all Revenues to be deposited.. ' I as promptly as possible alter receipt thereoi In the Revenue Fund and disbursed by the issuer in the manner provided In this Article V. _ ' SECTION 504. Deposit and Disgition oi Revenues. From the Revenue Fund, the iollowlng payments shall be made at -the times, in the amounts and in the order as follows: - ' ' First: Second: ' _ To the issuer the monthly amount (Which need not be the some in every month) sulflcient to provide tor tho psyrnent ol the reasonable and necessary current expenses 01 operating and maintaining the Systcm. ' To_ the issuer for deposlt_ln the Debt Service Fund and the Debt Service Reserve Fund as loliowsi (1) On the twenty-!i!th day oi, each month there shall be deposited in the Debt Service Fund to the credirof the Prior Lien interest Account hereby created therein (the "Prior Lien Interest Account") an amount computed by (I) deducting the amount oi moneys" then in the Prior Lien Interest Account from the interest next due on the Iollowing Interest Payment Date on all Outstanding Prior.Llen Bonds and (ii) rnutlplylng the dll-lerence by a traction -the numerator oi vlhldt is one a1td'the denominator oi which is the number oi months, lrom and including the 'month of computation, to and including the month prior to the month in which such interest lsydue. The issuer shall transler lrom the Prior Lien Interest Account to the Trustee, at least twp (2) business days prior to any interest Payment Date, immediately available tunds sulficlent to pay promptly tho Interest so failing due on such date on all Outstanding'Prior Lien Bonds. Moneys so trensierred shall be applied by the Trustee solely lor the payment, when due, ot the interest on all Outsmnding Prior Lien Bonds. - - i -16-

266 i e.. ',..., H 3_ 1.-e. t, 11. D,,'.! i (2) On the twenty-filth day oi each month there shall be deposited in the Debt Service» Fund to the credit of the Prior Lien Principal Account hereby created therein (the Prior Lien Principal Account") an amount computed by (ll deducting the amount oi moneys then in the Prior Lien Principal Account from the amount of the principal payment due on all Outstanding Prior Lien Bonds on the next succeeding interest Payment Date on which-principal fails due whether at maturity or by virtue oi mandatory redemption requirements and (ii) mutiplying, the dilierenee by a fraction the numerator oi which is one and the denominator of which is the-number oi months, including the month oj computation, to and including the month prior to said interest Payment Date. The -issuer shaii transfer Irom the Prior Lien Principal Account to the Trustee, at least two (2) business days prior to any interest Payment Date, immediately available funds sufficient to pay promptly the interest so falling due on such date on all Outstanding Prior Lien Bonds. Moneys so transferred shall be applied by the Trustee solely for the payment, when due, oi the principal on all Outstanding Prior Lien Bonds. - (3) On the twenty-lifth day ot_ea_ch month there shall be deposited with the Trustee in the Debt Service Reserve Fund to the credit o! the Prior Lien Reserve Account hereby created therein (the "Prior Lien Reserve Account") an -amount at least equal to 2096 ot the total of the amounts payable on such date into the Prior Lien interest Account and Prior Lien Principal Account, which amounts shall be paid for so long and resumed as ol_ten and to the extent only as may be necessary to create and thereafter maintain a balance in the Prior Lien Reserve Account at least equal to the Debt Service Reserve Fund Requirement (Prior Lien Bonds). - ' "' if on any interest Payment Date the amount in the Prior Lien lntenst Account or Prior Lien Principal Account shall_ be less than the amount required to be on deposit therein, the Trustee shall apply the moneys in the Prior Lion Reserve Account to the extent necessary to make up such deficiency (or the_entir'e amount in the Prior Lien Reserve Account it less than sutliclentl. in the event any iunds are so withdrawn lrom the Prior Lien Reserve Account to correct any such dellciency, such withdrawn.ainount shall be replenished irom Revenues alter melting the deposits required by (i) and (2) above. Whenever the amount in the Prior Lien Reserve Account exceeds the Debt Service Reserve Fund Requirement (Prior Lien Bonds), the Trustee shall withdraw lrom"the Prior Lien Reserve Account the amount oi any excess therein as 0! the date oi such withdrawal and deposit the moneys so withdrawn into the Revenue Fund. _ (it) On the twenty-titth day oi coda month there shall be deposited in the Debt Service Fund to the credit oi the i9iil4 Refunding interest Account hereby created therein (the "1981! Retunding interest Account") an amount computed by (i) deducting the amount oi moneys then in the Relunding interest Account irom the interest next due on the loilowing interest Payment Date on all Outstanding Series l93li Refunding Bonds and (ll) multiplying the ditterence by a traction the numerator oi which ls one and the denominator oi which is the number oi months, from and including the month 0! computation, to and including th_e month prior to the month in which such interest is due. issuer shall transfer.lron_t_ the I984 Reiunding interest Account to the _Trustee, at leis! two (2) business days prior to any interest Payment Date, immediately available funds suflicient to pay promptly i \ i I 4 l \-_i i -...._i..-_,._. _

267 I 1 I l i 4 t 1 ta \_ v , l, '11,." _,' ',,'. ' ' \ the interest so tailing due on such date on all Outstanding Series 1980 Refunding Bonds. Moneys so transterred shall be applied by the Trustee solely tor the payment, when due, oi the interest on all Outstanding Series 1980 Roiunding Bonds. (5) On the twenty-iiith day ot each month there shall be deposited in the Debt Service Fund for credit to the 19$ : Refunding Principal Account hereb created therein (the "1981: Retunding Principal Account"i onamount Computed by (ll deducting the amount of moneys then ln the I980 Retundlng Principal Account irom the amount oi the principal payment due on all Outstanding Series 198'; Refunding Bonds on the next succeeding Int_o :est Payment Data on which principal iolls due whether at maturity or by virtue of mandatory redemption requirements, and (ll) multiplying the diflerence by a traction the numerator oi which is one and the denominator o! which is the number of months, including the month oi computation, to and including the month prior to said interest Payment Date. issuer shall transier from the 198'; Retunding Principal Accouhtto the Trustee, at least two (2) business days prior to any lnterut Payment Date, immediately ovailnble tunds_su.tticlent to pay promptly the principal so tailing due on such date on the Series l9lib Rélunding Bonds. Moneys so tranterred shall be applied by the Trustee solely tor the payment, when due, oi the principal on all Outstanding Series 1981! Reiunding Bonds. (6) On the twenty-tltth day oi each month there shall be deposited in the Debt Service F_und tor credit to any- ' invested Sinking Fund Account created therein pursuant to a Supplemental Resolution with respect to the Series i989 Retunding Bonds (the "invested Sinking Fund Account") an amount computed by (I) deducting the amount oi moneys, ii any,'theretolor'e depdsited in such Invested Sinking Fund Account in the same Fiscal Year, irom the amount ofthe Invested, Sinking Fund Payment next due with respect to the Series 198!» Relunding Bonds and (ll) multiplying the difletence by a traction the numerator oi which is one and_ the denominator of "which is the number pt months; including tho month o1 computation, to and including the month prior to sold. next required invested Sinking Fund Payment., ' - ' Moneys in each lnvested'sinking Fund Account shall be accumulated by the Issuer tor the purpose oi providing tor the payment, at maturity, of the principal of the Series Belunding Bonds designated in the applicable Supplemental Resolution to be' so paid irdm the Invested Sinking Fund Account therein created and shall, pending such application, lie invested by the lssuer as provided in such Supplemental Resolution. Any sudt investments are to be held by the Issuer for the credit o_1 such invested Sinking Fund Account. Any income realized irom the investment oi such moneys shall be applied as provided in, the applicable Supplemental Resolutiom. - It shall be the duty of the Trustee to make such credit arrangements with each Paying Agent as will, to the extent of the moneys in the Debt Service Fund, assuqe the gompt payment when due oi all Bonds and the interest ereon. - (7) On the twenty-filth day of each month there shall be deposited with the Trustee in the Debt Servioe_Reserve Fund to the credit oi the 1980 Retunding Reserve Account hereby created therein (the "1984 Refunding Reserve Account") an amount at least equal to 2093 ot the totoi oi the amounts poyable'on such dote lnto the tsao -13- ii I \ l l l

268 \ v~ v 1.-:> - 0 ' I 0 ) _ :6 \- -oz! 1. - I be in accordance with subscriptions submitted to the Federal Reserve Bank on behalf of the issuer by the Escrow Trustee. All documents evldcnclng' the book entries oi the Government Obligatiom shall be held by the Escrow Trustee and appropriate evidence thereoi shall be iurnished by the Escrow Trustee to the issuer. The Government Obligations shall mature in principal amounts and pay interest in such amounts and at such times so that sulticlent moneys will be available from such Government Obligations to pay, as the some mature and become due, the principal oi and interest on the Prior Bonds. The issuer has heretofore found and determined that the investments described in said Schedule A and Schedule B are advantageous in yield and maturity date in order to provide the necessary moneys to accomplish the reiundlng oi the Prior Bonds and to meet the applicable requirements oi the regulations oi the United States Department oi the Treasury adopted pursuant to Section l03(c) oi the internal Revenue Code oi 1950, as amended. 3. There is also hereby created and established with the Trustee a special trust account designated the Expense Fund" (the "Etpense Fund") to be held in the custody oi the Escrow Trustee separate and apart from any other iunds oi the issuer or the Escrow Trustee to which.$ " oi the proceeds derived from the issuance and sale oi the Relundlng Bonds are Erewith deposited. The Escrow Trustee hereby acknowledges receipt of such deposit. Tho amounts on deposit in the Expense Fund shall be used tor and applied to the payment oi the expenses oi the issuer in connection with the issuance, sale and eiivery oi the reiunding Bonds and the utablishment oi the tunds hereunder, including, but not limited to, printing costs, cost of preparation and reproduction oi documents, tiling and recording lees, initial lees and charges oi any fiduciary, legal lees and charges, foes and disbursements oi consultants and professionals, cost oi credit ratings and ices and charges tor preparation, eagecu-tion, transportation and safekeeping of the Bonds. Payment oi the aforesaid expenses shall be made by tho Escrow Trustee irom the moneys on deposit in such Expense Fund upon receipt by the Escrow Trustee of a written request oi the issuer signed by the Director of Finance thereoi, which request shall state, with respect to each payment to be mode, the person, firm or corporation to whom payment is to be made, the amount to be paid and the purpose ior which the obligation to be paid was incurred. Each such written request shall be sufficient evidence to the Escrow Trustee that the payment requested to be made irorn the moneys on deposit in such Expense Fund is a proper payment to the person named therein in the amount and tor the purposes stated therein and, upon receipt oi such written request, the Escrow Trustee snail pa'y the amount set forth therein as directed by the terms thereof. Upon receipt oi a certificate signed by the Director oi Finance oi the issuer that all expenses contemplated to be paid Irom sud: Expense Fund have been paid, such iund shall be closed and any balance remaining therein shall be withdrawn by the Trustee and deposited in the Principal Account oi the Debt Service Fund, as defined in the Resolution. > ll. The deposit of the moneys in the Escrow Fund shall constitute an irrevocable deposit oi said moneys exclusively tor the benefit oi the holders oi the Prior Bonds and suds moneys and Government Obligations, together with any income or interest earned thereon, shall be held in escrow _and shall be applied solely to the payment of the principal oi and interest on the Prior Bonds as the same mature and become due. Subject to the requirements set iorth herein for tho use oi the Escrow Fund and the moneys and investments therein, the issuer covenants and agrees that the Escrow Trustee shall have full and complete control and authority over and with respect to the Escrow Fund and moneys anti investments therein and that the issuer shall not exercise any control or authority over and with respect to the Escrow Fund and the moneys and investments therein. 5. The Escrow Trustee hereby establishes the Escrow Fund and accepts the money caused to be deposited therein by the issuer. The Escrow Trustee shall purchase those Government Obligations listed in Schedule A solely from the moneys representing proceeds oi the Refunding Bonds deposited in.the Escrow Fund. The Escrow Trustee shall apply the moneys deposited in the Escrow Fund and the Government Obligations, together with any income or interest earned thereon, in accordance with the provisions hereof. The Escrow Trustee shall have no power or duty to invest any moneys held hereunder or to _m_ake substitutions oi the Government Obligations held hereunder or to sell, transter or otherwise dispose of the Government Obligations acquired hereunder. The liability oi the Escrow Trustee tor tho payment at the principal or, interest and redemption prernlurns on the Prior Bonds pursuant to this Section ll shall be limited to the principal oi and interest on the Government Obligations and cash available for such purposes ln tho oi.,r- u < '. \. 9.. a.-..~_..-i-_ _ i~ -i. i i n

269 hi]\ u _ Escrow Fund. The issuer and the Trustee hereby covenant that no part of the moneys or funds at any time in the Escrow_ Fund or Expense Fund shall be used directly or indirectly to acquire any securities or obligations the acquisition of which would cause any Refunding Bonds to be an "arbitrage bond" as dellnad in subsection (c)(2) oi Section I03 of the internal Revenue Code of 1950 (Title 26 of the United States Code) as then in effect and to be subject to treatment under $1-Ibwiiliflll icllll oi said Section 103 as an obligation not described in subsection (a)(i) oi said Section l03._ 6. The Escrow Trustee shall recolve the matured principal oi and the interest on the Government Obligations as the same are payable. On or before each interest payment date on the Prior Bonds, the Escrow Trustee shall transmit to the paying agents for the Prior Bonds, in immediately available funds, sufficient amounts tor the payment of the interest on the Prior Bonds due on said date and any principal oi and redemption premiums on the Prior Bonds due on said date, whether by reason of the maturity of Prior"Bonds or the earlier redemption thereoi, in accordance with Schedule C attached hereto. in the event any of those Government Obligations listed in Schedule B hereto are called for redemption prior to their stated maturity, the proceeds derived from such redemption shall be applied to the payment or redemption of Prior Bonds in accordance with the terms of the resolutions authorizing the issuance of the Prior Bonds. 7. Upon the retirement of the Prior Bonds, any amounts remaining in the Escrow Fund shall be paid to the issuer as its property free and clear oi the trust created by the Resolution and this Agreement and deposited in the general fund of the issuer. ' 8. The escrow" created hereby shall be irrevocable and the holders of the Prior Bonds shall have a beneficial interest and a first, prior and permanent claim on all moneys and Government Obligations in the Escrow Fund until paid out, used and applied in accordance with this Agreement. 9. in consideration of the services rendered by the Escrow Trustee under this Agreement, the issuer has paid to the Escrow Trustee its reasonable fees and expenses, and the Escrow Trustee hereby acknowledges (I) receipt of such payment and (ii) that it shall have no lien whatsoever upon any moneys in the Escrow Fund. in no event shall the issuer be liable to any person by reason oi the transactions contemplated hereby other than to the Escrow Trustee as set forth in this Section 9. - The Escrow Trustee and its respective successors, assigns, age:-its and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the establishment oi the Escrow Fund, the acceptance of the moneys and securities deposited therein, the purchase of those Government Obligations listed in Schedule A, the retention o! the Government Obligations or the proceeds thereof or any payment, transfer or other application ot moneys or securities by the Escrow Trustee in accordance with the provisions of this Agreement or by reason of any acta omission or error oi the Escrow Trustee made in good faith in the conduct of its utles. ' l0. The issuer and tho holders of the Prior Bonds shall have the right to take all actions available under law or equity to enforce this Agreement or the rerms hereol. _ ll. All covenants, promises and agreements in this Agreement shall bind and inure to the benelit of the respective successors and assigns of the issuer and the Escrow Trustee, whether so expressed or not. i2. This agreement shall be governedby the applicable law oi the State of Louisiana. l3. This Agreement shall terminate, when the Prior Bonds have been paid as aforesaid and any remaining moneys have been paid to the issuer.. 1'4. it any one or more ot the covenants or agreements provided in this Agreement on the part oi the Issuer or the Escrow Trustee to be performed should be determined by a court or competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severablo from ~. \.7 4 i l I t F, f I u-' '. - _.r Iv.., ' ' '1., -.-"r\"~:h " ".- -3-

270 l -,... _. "J.\.-. J \ ' it..'r, Q \ -.~-». 1- e, ,_, I/._ --.: v\'3' I-- 9 a. D. ':-_.- fla -. the remaining covenants and agreements herein contained and shall in no way aflact the validlty of the remaining provisions of this Agreement. I5. This Agreement may be executed ln several counterparts, all or any of which shall be regarded for all purposes as one original and shall conttltute and be one and the same instrument. IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized offlcers and their corporate seals to be hereunto alflxed and attested as oi the date first above written. ' ' crrv or SHREVEPORT, s1-me or LOUISIANA By: ATTEST: ' Title: _.,..-..._i._ _..._..._. By: ' (SEAL) Tiiltt ' WITNESSES: i - COMMERCIAL NATIONAL BANK IN ' SHREVEPORT, as Escrow Trustee By: i i i ATTEST: Title: 2 e - Tltle (SEAL) WITNESSES: -- -_i.._ii. _t ~ l

271 e 1 -~_. _. - I..- fa v'p,, ' I ' - _ U) ' naps ,0 <1 vi" Ifl.» - ~ I _..? m TAR! EflEfli _m 5.91llI8._i i mn;x:_n._:mm flllllllfl TM: raaelutznn will udoptzon. net the tern: and enndltlono at future Hater and Sever Revenue bond ual m nu revolution in e result of the upcoming Hater end Sever Revenue Band Advnlwo Betuadleg. This new reeoluttea update: end ellwe the future Lmunnee el revenue bond: under the meet feveruhin condition: feasible. Ilminhla Introduction: Buy 22 Ptnnl 1='m=.15e= June EMMM COST MID COM of total pr\ejeet Si fin], REFUGE COS? 0 PRNECTIOHS RELIED Cantu DICRBASI- D EXPECTED ennuu operating ieii ii i_.$. :.$.i.$...j._i. mzmumn Altnnnnliua 1. Reject and deny the advance refunding 2. Approve. Cengluglgn Rueaumnd adaption. YACT SHEET PIIBPMED ll I Robert H Snflhrd

272 l I I I i. u. 1,,., r.' _ Relunding interest Account, the i98'i Reiunding Principal Account and any invested Sinking Fund Account, which amounts shall b'e paid lar so long and resumed as often and to the extent only as may be necessary to create and thereaiter maintain a balance in the 1980 Refunding Reserve Account at least equal to.the Debt Service Reserve Fund Requirement (Series Refunding Bonds). I. i! I i _ if on any lnterst Payment Date the amount in the 198 ; Relunding interest Account, the 1980 Refunding Principal Accounror the invested Sinking Fund Account-shall be less than the amount required to be on deposit.thereln, the Trustee shall apply the moneys in the 1984 Relunding Reserve Account to the extent necessary to make up such deficiency (or the entire amount in the 198': Relunding Reserve Account ll-less than suitlelenti. in the event any iunds are so withdrawn from the 1980 Reserve Account to correct any such deficiency, such withdrawn amount shall be replenished from Revenues after making the deposits required by (1), (2), (3), (ll). (5) and (6) above. Whenever the amount in the i981! Relunding Reserve Account exceeds the Debt Service Reserve Fund Requirement (Series l98 l Refunding Bonds), the Trustee shall withdraw from the Reiundlng Reserve Account the amount oi any excess therein as oi the date of such withdrawal and deposit the moneys so withdrawn into the Revenue Fund. Third: All moneys remaining on the twenty-iifth day oi each month ln the Revenue Fund, alter making the deposits required in paragraphs First through Third above, shall be regarded as surplus and may be used by the issuer for any lawlul purpose. SECTION $05. investment oi Certain Funds and Accounts.~ (A) Moneys held in the Funds and Accounts shell be invested and reinvested by the I v issuer and the Trustee, as the case may be, to the luilut extent practicable, in investmem Securities which mature not iater_than suchtlmes as shall be _ -necessary to provide moneys!or payments to be made from such Funds and Accounts, as required herein; provided, however, that the Trustee shall make any (such. investment ln accordance with any instructions received irom the issuer. - (B) _in computing the amount in any Fund or Account established under the provisions of this Resolution, obligations purchased as an investment oi moneys therein shall be valued at par it purchased at par or at amortized value if purchased at other than'par. Amortized value, when used with respect to an obligation purchased at a premium above or discount below par, means thetvaiue as oi any given time obtained by dividing the total premium or discount at which such obligation was purchased by the number of interest payments remaining on such obligation auer such pun-hose and deducting the amount thus caiculatedtor each interest payment date after such purchase irom the purchase price in the case oi an obligation purchased at e premium and adding the amount thus calculated tor -19- I

273 - -, Q I I., - - " I, I. ' i. ' I "1", r v -, _ -. each interest payment date alter such purchase to the purchase price in the case on an obligation purchased ot a discount. _ - ' (C) Except as otherwise provided herein, the Trustee shall sell at the best price obtainable, using reasonable diligence to determine such best price, or present tor redemption, any obligation so purchased as an investment whenever it shall be so requested in writing by the Issuer or whenever It shall be ne :essary in t I order to provide moneys to meet any paylmentor transfer from any Fund held by lt. (D) -investments purchased as investment at moneys in any Fund or Account shell be deemed at all times to be o part of such Fund or Account, and any losses suflered due to the investment thereol shall be charged to such Fund or I I Account.. (E) income and any proilts realized due to the investment oi moneys in any Fund or Account, except any invested Sinking Fund Account, shall be. deposited in and credited to the Revenue Fund. SECTION 506. Depositaries, Security for Degits. (A) All Revenues received by the issuer and all investment Securities purchased as an Investment oi moneys in any oi the Funds and Accounts shall, es provided in'this Resolution, be deposited with the Trustee or one or more Depositary, as the case may be. All such moneys and investment Securities shall be held in trust tor the benellt oi the Bondholders and applied only in accordance with the provisions qt this Resolution, I and shall not be subject to lien or attachment by any other creditor oi the issuer. (5) All moneys held by a Depositary mu be secured to _n== Iuilest extent required or permitted by the laws oi the State pertaining to the securing oi I 0 public deposits. ' ' ' ARIICLE v1 REDEMPTION or nouns ~ SECTION 601. Priv_liegt_:_of Redemption and Redemption Price. Bonds subject to redemption prior to maturity pursuant to a Supplemental Resolution shall be redeemable, upon published notice. as provided in this Article, at such times, at such Redemption Prices upon such terms (in addition to and i 0 consistent with the terms contained in this Article) as may he specified In the Supplemental Resoiut.ion i. i ~ SECTION 602. Notice to Trustee. in the ease of any redemption o1 o Bonds otherwise than as provided in Qcction 60.3, the Issuer shall give written -2o_,

274 \ l i ' 1 ' ' ' ' I I. ' _ -, I I-. y,s, ' ' -,..., notice to the Trustee oi the election so to redeem, oi the redemption date, oi the Series, and oi the principal amounts of the Bonds oi each maturity oi such Series to be redeemed (which Series, maturities and principal amounts thereol to be redeemed shall he determined by the issuer in its solo discretion, subleet to any limitations with respect thereto contained in any Supplemental Resolution authorizing a Series oi Bonds). the redemption date. Such notice shall be' given at least thirty days prior to in the event notice oi redemption shall have been given as provided in Section 6'05, the Trustee shall, at least one day prior to the redemption date, or such earlier date as the issuer may direct, pay out of moneys available theretor to the appropriate Paying Agent or Paying Agents an amount in cash which, in addition to other amounts, ii any, available therefor held by such Paying Agent or Paying Agents, will be sutllcientto redeem on the redemption date at the Redemption Price thereof together with accrued interest to the redemption date, all of the Bonds to be redeemed. '. SECTION soa. Redemption Otherwise than at Issuer : Election. Whenever by the terms oi this Resolution or a Supplemental Resolution, Bonds are required to be redeemed otherwise than at the election oi the issuer, the Trustee shall select the Bonds to be redeemed, give the notice of redemption and pay out oi moneys available theretor the Redemption ifrice, together with accrued interest to the redemption date, to the appropriate Paying Agents in accordance with the terms oi this Article. ~ _ ' _ ' _ SECTION sou. Selection oi Bonds to he liedeemed by Lot. in the» event of redemption oi less than all th_e Outstanding Bonds oi like Series and maturity, such Bonds shall he redeemed-by lot or in such other manner as shall be' deemed fair and equitable by the Trustee for random selection.. ' _ SECTION 605. Notice 0! Redemption. Notice oi any such redemption shall he given by the Trustee by mailing a copy oi the redemption notice by first class mail (postage prepaid) not less than 10 days prior -to the date Iixed for redemption to the registered owner of each Bond to be redeemed in whole or in part at the address shown an the registration books maintained by the Trustee. Failure to give such notice by mailing to any Bondhnider, or any defect therein, shall not atieet the validity o!_any proceedings tor" the redemption oi Bonds. notices oi redemption shall state (i) the redemption date ; (ii) the redemption price; (iii) it less than all the Bonds are to he redeemed, the identltying number (and in the case oi partial redemption, the respective principal pmounts) 0'! the Bonds to All I I -2]-

275 2 H ' ' It ' r. ' I ' "" ', I - be redeemed; (iv) that on the redemption date the redernption price will become. due and payable on each such Bond and interest thereon will cease to accrue thereon from and alter said date; and iv) the place where such Bonds are to be surrended tor payment. Any notice mailed as provided _ln this Section shall be conclusively presumed to have been duly given, whether or not the owner oi such Bonds receives the notice. On or betore any redemption date the Trustee shall segregate and hold in trust iunds in the Debt Service Fund tor the payment oi the Bonds or portions thereol called, together with accrued interest thereon to the redemption date. the case oi Compound interest Bonds, the accrued interest to any redemption date is the excess of the Compounded Amount with respect to such Bond on_such date ever the original principal amount called tor redemption. Upon the giving pi hotice and the deposit oi funds for redemption, interest on the Bonds ~_or porfions thereof thus called shall no longer accrue alter the date fixed tor redemption. in No payment shall be made by the Trustee upon any Bond or portion thereof called for redemption until such Bond or portion thereof shall have been delivered ior payment or cancellation or the Trustee shall have received the items required by Section 307 with respect to any mutilated, lost, stolen or destroyed Bond. Upon surrender ol any Bond for redemption in part only, the Trustee shall authenticate and deliver to the holder thereol a new Bond o_r Bonds oi authorized denominations in an aggregate principal amount equal to the' unredeemed portion or the Bond surrendered. 4 - ~ SECTION 606. Payment oi Redeemed Bonds. Notice having been given by publication in the manner provided in Section 605, the Bonds so called for redemption shall become due and payable on the redemption date so designated at the Redemption Price, plus interest accrued and unpaid to the redemption date, and, upon presentation and surrender thereoi at the otflce specified in such notice, such Bonds shall be paid at the Redemption Price plus interest accrued and unpaid to the redemption date. 11, on the redemption date, moneys lor the redemption of all the Bonds oi any like Series and maturity to be redeemed, together with interest to the redemption date, shall he held hy the Trustee orthe Paying Agents so as to be available therefor on {aid dale and i! notice oi redemption shall have been published as atoresaid, then, from and alter the redemption date interest on the Bonds oi such Series and maturity so called tor redemptiorrshall cease to accrue and become payable. if sold moneysshail not he so available on the JI - a S l -22-

276 _ -_._-....._.._-...._..._.-.. 1i- _. _,.. -_r. ll I I s ' e. \. ' ' ' " ' v ' D _ ' _.. redemption date, such Bonds shall continue to bear interest until paid at the some rate as they would have borne hid they not been called tor redemption: SECTION V 607. Purchase oi Bonds. The Trustee" shall endeavor to apply moneys in the Debt Service Fund available for thelreiicmption oi Bonds (but not committed to the redemption oi Bonds as to which notice oi redemption has been given) to the purchase oi appropriate Outstanding Bonds. in accordance with Section 309, any Bonds so purchased shall he cancelled. The price paid by the Trustee (excluding accrued interest, but including any. brokerage or other charges) tor any Bond purchased pursuant to this Section shall not exceed the principal amount thereolg the Trustee shall_also pay (from the Debt. Service Fund) accrued interest on any such Bond. Subject to the above limitations, the Trustee, at the direction oi the issuer, shall purchase Bonds at such times; ior such prices, in such amounts and in such manner (whether after advertisement!or tenders or otherwise) with monies available in the Debt Service Fund lor such purpose, provided, however, that the Trustee shall not expend amounts tor the purchase oi Bonds ol a particular maturity in excess oi the amount that would otherwise be expended for the redemption oi Bonds oi such maturity, and, provided iurther, that the issuer may, in its discretion, direct the Trustee to advertise lor tenders for the purchase oi Bonds sixty (60) days prior to any date tor redemption oi Bonds. ' ARTICLE vu _ PARTICULAR covémwrs - y " ' The issuer covenants and agrees with the holders lrorn time to time oi the Bonds that as long as any oi the Bonds remain Outstanding and unpaid: '. SECTION 701. Payment of Bonds. The issuer shall duly and punctually pay or cause to be paid (but solely from the sources herein provided) the principal or Redemption Price, ll any, of every Bond and the interest thereon, at the dates and places and in the manner stated ln the Bonds according to the true intent and meaning thereof.. " SECTION 702. Power to issue Bonds and Pledge Revenues and Funds, The issuer is duly authorized under all applicable laws to authorize and issue the Bonds and to adopt this Resolution and to pledge the ilevenues purported to be pledged hereby in the manner and to the extent herein provided. The Revenues so pledged are and will be iree and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created -23- _

277 I I l, q ~' t ' ',.1 D, - -.' -... '.~\_ - *- s 1 hereby, and all action on the part of the issuer to that end has been and will be duly and validly taken. The Bonds and the provisions oi this Resolution are and will be the valid and legally enforceable obligations oi the Issuer in accordance with their terms and the terms oi this Resolution, subject to bankruptcy, insolvency or other laws attesting creditors rights generally. The issuer shall at all times, to the extent permitted by law, d_eiend, preserve and protect the pledge 01 the Revenues, including rights therein pledged under this Resolution and all the rights of the bondholders under this Resolution against all claims n_nd_demands oi all persons whomsoever.. i ~ _ SECTION 703. Tax Covenants. (A) The issuer shall not permit _at any time or times any oi the proceeds of the Bonds or any other funds oi the issuer to he used directly or indirectly to acquire any securities or obligations the~acqulsition oi. which would cause any Bond to be an "arbitrage bond as defined in Section i0j(c)i2) of the internal Revenue Code oi 1951:, as_ amended (hereln'in this Section called the "Code").' '. ' (B) The issuer shall not permit at any time or times any proceeds oi any Series oi Bonds or any other iunds 0! the issuer to be used, directly or indirectly, in a manner which would result ln the exclusion oi any Bond iront the treatment attorded by Section i03(a) of the Code, as Irom time to time amended, by reason of the classification oi such Bond as an "industrial development bond" within the meaning_oi subsection (bl oi said Section. _ ' SECTION 700. Qgeration and Maintenance-oi the System. The issuer shall at all times operate and maintain the System in good repair and working order and will operate it efficiently and will taithluily and punctually perlorm all duties with relerence to the System required by the Constltutiori and laws of the State, including the 'malting.and collecting of sufliclent rates for water. and services rendered by the System and the segregation and application oi the Revenues oi the System in the manner provided in this Resolution. ' _ ' t.l- SECTION 7iJ5. Rates and Charges. (A) ' The _lssuer- snail tix_ and collect rates and charges for all water anti sewerage senvlces supplied by the System which shall be sufticient in each Bond Year, after melting duelallowance tor delinquencies in collection and alter providing tor the payment or the reasonable and necessaryexpenses oi operating and maintaining the System, to produce net Revenues (i) which are suliident to pay Debt Service on all Outstanding Bonds and to maintain the Funds and Accounts as herein provided and (ii) which result in each -Zh- o

278 -,-. t V., : It ; 1 ' at "1. _ ~,. v '~.1 _..I>, I. Fiscal Year in the greater of (a) the sum oi Debt Service payable on the Bonds in the ensuing Fiscal Year plus a'ii y required deposit to the Debt'Service Reserve Fund, or (bi a ratio oi net Revenues to average annual Debt Service ot not less than 1.25 to i. _ (B) The issuer will not permit tree Water or service to be supplied by the System to any person, lirm or corporation, public or prlvat_e,_ or to ahy public agency or instrumentaiity. _, - (C) The issuer agrees to pay tor water used tor lire lighting purposes through its iire hydrants a minimum annual rentalot $i00_.00 per year tor each tire hydrant connected to its waterworks system. ' 1 ' I _ " S SECTION 706. Maintenance oi Books and Records. The issuer will maintain and keep proper books of record and accounts separate -trorn aii other records and accounts in which shall be made full and correct entries oi all transactions relating to the System. Not later than three months alter!he'r.'.iose oi each Fiscal Year the issuer will cause an audit oi such books and accounts to be made by an independent f-irrn oi certified public accountants, showing the receipts oi and disbursements made for the account oi the System, and such audit shall be available tor inspection by the holders oi any of the Bonds. Each such audit, in addition to whatever matters may be thought proper by the accountant to be included therein, shall include the Ioliowing: " '~ i. A statement in detail oi the income and expenditures oi the System ior such Fiscal Year.. ' 2. A balance sheet as of the end of such Fiscal Year. 3. The accountant : comments regarding the manner in which the Issuer has carried out the requirements of this Resolution, and the accountant : recommendation tor any changes or improvements in the operation of the System. ' ii. The numher' oi sewer customers at the end oi the year, the number oi metered water customers at the end oi -the year, and the number oi unmetered water customers, if any, at the end of the year. ". _ V All expenses incurred in the making '0! the audits required by this Section shaii Be regarded and paid as a maintenance andoperation expense. issuer iurther agrees to furnish a copy oi each such audit to the Trustee and to any holder oi any oi the Bonds at his request, and the Trustee and any such holder shall have the right to discuss with the accountant making audit the_ contents at such audit and to ask ior sueifaddltlonal iniormatlon as it or he may reasonably require. -25-

279 .._..-.i_..._._-_ l-_.. ' 1 hr I - '\'. ~ ~., U ' =1. ' I -.~ _,-I.,. - -_ - - Said books of record and accounts shall at all reasonable times be open to inspection by the Trustee and by the holder or holders oi any oi the Bonds. _, SECTION 707. Insurance. The issuer will maintain and carry for the benefit oi the holders oi the Bonds, on all physical propel-ties'ol the System, insurance of the kinds and in the amounts normally carried by public utilities engaged in the operation of sewer and water systems. adequate publlc liability insurance, The'1ssuer will also carry All moneys received (or losses under any such insurance policies, except public liability policies, are hereby pledged to the issuer as security for the Bonds until and unless (i) such proceeds are paid out ln making good the loss or damage ln respect of which such proceeds are received, either by repairing the property damage or replacing the property destroyed, or (lil adequate provision is made tor such loss and damage within ninety days lrom the date oi the loss. Such insurance proceeds, to the extent not so used, shall he used for the retirement ol as many oi the Bonds es can be retired the_re\vlth through redemption or through purchase at prices not greater than the currently prevailing redemption prices. ' ' _ ' I SECTION 708. Sole or Encumbranee. ' ' The issuer will not sell, lease on in any manner dispose 01 the System or o_ny substantial part thereof until all 0! the Bonds have been paid in lull or provision is made therefor in accordance with Section 1201 (provided that this covenant shall not he construed to_ prevent the disposal by the issuer oi property which in its ludgernent has become inexpedient to use in connection with the System, when other property oi equal value is substituted thcreior or' the sale price thereof is applied by the.lssuer to renewals and replacements with respect to the System.. ' SECTION 709. Prior ' Lien ' Bonds. The issuer shall not issue any Series of Prior Lien Bonds under this Resolution, other than'any Prior Lien Bonds issued to refund Outstanding Prior Lid» Bonds (provided, however, if only a portion of the Prior Lien Bonds Outstanding '15 refunded and the relunding bonds require total principal and interest payments during any Fiscal Year in excess of the principal and interest which would have been required in said Fiscal Year to pay the Prior Lien Bonds reiunded thereby, then such Prior Lien Bonds may '-not be retunded without the consent ol (ii) the owners oi the unretunded portion 0! said Prior Lien Bonds or (ll) meeting the conditions set forth below), unless the iollowlng conditions are met:. - ~ ' - I (B) no event 0! default shall then exist and be continuing; and l -25-

280 _- I 1. ti - t - ~.. ' ' r ;I.--\, -.4. ;p 1. - r, It - (bl the Revenues, alter payment of Operating Expenses, for (i) any consecutive twelve calendar months in lhe eighteen month period ' immediately preceding the date of issuance oi such proposed Series of Prior Lien ends, or (ii) the Fiscal Year immediately preceding the date oi issuance of such proposed Series of Prior en Bonds, adjusted to reflect any increase in rates which has been adopted and which will take eflect during or subsequent to said period, but prior to a date not later than twelve months alter the date of issuance of such proposed Series 01 Prior Lien Bonds, were not less than i2$ J6 of average annual Debt Service, in any Fiscal Year, on all Outstanding Bonds and the Seriu o1 Prior Lien Bonus proposed to be ksued. SECTION 710. Other indebtedness and Liens. The issuer shall not Issue any bonds, notes or other evidences oi indebtedness,' other than a Series of Bonds as permitted herein, secured by a pledge of or other lien or charge on the Revenues equal to the lien o! any Prior Lien Bonds or the lien oi the Series 1984 Bonds. Any Series oi Bonds may, however, be additionally secured by letters oi credit, surety bonds or other credit enhancement devices. - SECTION 7.ll. Competitive Facilities. The issuer will not grant a lranchlse to any competing water or sewer system or service for operation within the boundaries of the lssueri - SECTION 712. Sewerage Connections; Enforcement of Charg_e_s. Acting in the exercise oi its police powers, the Issuer shall take all iawdul action necessary to require every owner, tenant or occupant of each lot or parcel oi land in the City within 300 teet or a street or other public way COn(i lnlng'li sewer line and upon which lot or parcel a building shall have been eonstueted lor residential, commercial or industrial uses, to connect said building with the sewer system and to cease to use any other method lor the di$po!i ll of sewerage, sewerage waste or other polluting matter ekcept those for which regulations of any governmental body having jurisdiction in the premises require otherwise. All such connections shall be mode in accordance with rules and regulations to be adopted from time to time by the Council, which rules and regulations may provide tor an Inspection charge to assure the proper making o1 such connection.. in addition to all other rights and remedies available to be used tor the ontorcernent oi sewerage charges and tor the compelling o! the making oi sewerage connections as aforesaid, the issuer shall exercise and enforce promptly and elficiently all rights given it under the laws oi Louisiana tor the enforcement and collection oi such charges and particularly those rights and remedies given it by Sub-Part C, Part ii, Chapter 9, Title 33 o1 the Louisiana Revised Statutes oi! ~ I.17-

281 J. n ' 4 0. I _ xi Z. - i ' y '1I 0 I It It J 9. I - ' SECTION 713. General. The Issuer shall do and perlora-n_or cause to be done and perlormed all acts and things required to be done or periormed by or on behali oi the issuer under the provisions oi the Act and this Resolution in accordance with the terms oi such provisions. ARTICLE Vlll the Trustee. SECTION 801- SUPPLEMENTAL RE50LUTl_ONS Qlgplementol Resolutions Effective Upon Filing with For any one or more of the following purposes and at any time from time to time, a Supplemental Resolution may be adopted, which, upon the filing with the Trustee oi a copy thereof certified by an Authorized Ofiicer, shall be luily efiective in accordance with its terms: (l)_ to provide limitations and restrictions in addition to the limitations and restrictions contained in this Resolution on the authentication and delivery oi Bonds or the issuance oi other evidences oi indebtedness; (2) to add to the covenants and agreements oi the issuer in this Resolution other covenants and agreements to be observed by the issuer which are not contrary to or inconsistent with this Resolution as theretoiore in eiiect; (3) to add to the llmltatioru and restrictions In this Resolution other limitations and rutrictions to be observed by the issuer which are not contrary to or inconsistent with this Resolution as theretoiore in eiiect; (I4) to surrender any right, power or privilege reserved to er conferred upon the issuer by the terms oi this Resolution, but only ii the surrender oi such right, power or privilege is riot contrary to or inconsistent with the covennts and agteemems ol the issuer contained in this Resolution; (5) to authorize Bonds of a Series and in connection therewith specify and determine the matters and things reterred to in Section 205, and also any other matters and things relative to such Bonds which ere not contrary to or inconsistent with this Resolution as theretoiore in eflect, or to amend, modity or rescind any such authorization, specification or determination at any time prior to the delivery oi the initial Series oi Bonds: (6) to coniirm, as lurther assurance, any pledge under, and the subjection to any lien or pledge created or-to be created by, this Resolution, oi the Revenues or of any other moneys, securities or lunds;. (7) to modify any oi the provisions oi this Resolution in any respect whatever, provided that (J) such modification shall be and be expressed to be eiiective only alter all Bonds oi any Series Outstanding at the date oi the adoption oi such Supplemental Resolution shall cease to be Outstanding, and (ii) such Supplemental Resolutlon shall be specifically reierred to in the text of all Bonds of any Series delivered alter the date of the adoption oi such Supplemental Resolution and of Bonds issued in exchange therefor or in place thereoi; - (8) to cure any ambiguity, supply any omission, or cure or correct any detect or inconsistent provision of this Resolution; or i 1 i -28-

282 s - v ' ' I J t f 0 I. "-, ' '.. '. 5., r u ' 1 ' I 1.. I ' ', '- (9) to insert such provisions claritylng matters or questions arising under this Resolution as are necessary or deslmble and are not contrary to or inconsistent with this Resolution as theretoiore in eflect. SECTION gplementnl Resolutions Eflective with Consent 0! Bondholders. At any time or irom time to time it Supplemental Resolution may be adopted subject to consent by Bondholders in accordance with and subject to the provisions oi Article lx, which Supplemental Resolution, upon the filing with the Trustee of e copy thereot certified by an Authorized Otiicer and upon compliance with the provisions of Article IX, shall become fully eflectlve in accordance with its terms as provided in said Article. l ARTICLE IX n AMENDMENTS SECTION 901. Powers oi Amendment. Any modification or amendment of this Resolution or 01 the rights and obligations of the Issuer and oi the holders of the Bonds hereunder, in any particular, may be made by a Supplemental Resolution, with the written consent (i) ol the holders of a majority oi the Bond Obligation at the time such consent is given, (ii) in case less than allot the several Series of Bonds then Outstanding are alfected by the modification or amendment, ol the holders o1 a majority of the Bond Obligation at each Series so aflected and Outstanding at the time such consent ill given; except that it such modlilcation or amendment will, by its terms, not take eflect so long as any Bonds oi any specified like Series and maturity remain Outstanding, the consent o! the holders oi such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding tor the purpose 0! any calculation oi Bend Obligation under this Section. No such modification or amendment shall permit A sale, lease or encumbrance of the System or a change in the terms of redemption or maturity oi the principal of any Outstanding Bond or o! any installment cl interest thereon or as reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon without the consent ol the holder oi such Bond, o'r shall reduce the percentages or otherwise atiect the classes of Bonds the consent ol the holders of which is p required to eflect any such modification or amendment, or shall change or modliy any ol the rights or obligatlonsot any Fiduciary without its written assent thereto, without the consent oi the holders of all n! the Bonds then Outstanding- For tho purposes 01' this Section, a Series shell be deemed to be oliected by a modification l -29..

283 l s 1, I -\' I. I., _ I I: ~ '- r.-,_ I _ -e-1. t or amendment oi this Resolution ii tho same adversely affects or diminishes the rights-oi the holders oi Bonds oi such Series. _ 0 -It ARTICLE X REMEDIES ON DEFAULT 4 ' SECTION Events oi Default. ii one or more oi the following events (in this Resolution called "Events oi Default") shall happen, that is to say, (1) it default shall be made in the due and punctual payment oi the principal or Redemption Price o1.a.ny Bond when and. as the same shall become due and payable, whether at maturity or upon call for redemption, or otherwise; or ~ (2) ii detault shall be made in the due and punctual payment oi any installment oi interest on any Bond when and as such interest installment shall become due and payable; or (3) it detaulz shall be made by the issuer in the performance or observance of any other oi the covenants. agreements or conditions on its part in this Resolution, any Supplemental Resolution or in the Bonds contained, and such default shall continue Ior a period oi Iorty-ilve days alter written notice thcrooi to the issuer by the Trustee or by the holders of not less than 25% of the Bond Obligation; or ('0) it the Issuer shall iiie a petition or otherwise seek relief under any Federal or State bankruptcy law or similar law; then, upon the happening and continuance oi any Event oi Default the holders oi the Bonds, or the Trustee on their behall, shall be entitled to exercise all rights and powers tor which provision is made in the Act or in any provision oi law, including, _in the case oi an Event oi Datault specllled in (1) or (2) above, the right to apply to a court oi competent jurisdiction to appoint a receiver Xor the System. i ARTICLE Xi CONCERNING FIDUCIARIES SECTION il0l. Trustee; Appointment and Acceptance,,ol_ Eiuties. Commercial National Bunk in Shreveport, in the City oi Shreveport, Louisiana, is hereby appointed Trustee. The Trustee shall signily its acceptance oi the duties and obligations imposed upon it by this Resolution by executing and delivering to the issuer A written acceptance thereof. SECTION U02. Paul; Agents; Appointment and Acceptance oi Duties. (A) The issuer may appoint one or more Paying Agents Ior the Bonds issued pursuant to any Supplemental Resolution. (B) Each Paying Agent shall signify its acceptance o! the duties and obligations imposed upon it by -this Resolution by executing and delivering to the issuer and to the Trustee a written acceptance thereol..30.

284 i I -31- ' 4 ' 1 r - -u..'o- (C) The principal olfices oi the Paying Agents are designated as the respective oflices or agencies oi the issuer (or the payment oi the interest on and principal or Redemption Price of the Bonds. SECTION li03. Res -gonsibilities of Fiduciaries. The recitals of iact in this Resolution and in the Bonds contained shall be taken as the statements oi the issuer and no Fiduciary assumes any responsibility tor the correctness oi the same. No Fiduciary makes any representations as to the validity or sutticiency oi this Resolution or of any Bonds or in respect oi the security afforded 'by this Resolution, and no Fiduciary shall incur any liebiiity in respect thereoi. No Fiduciary shall be under any responsibility or duty with respect to the issuance oi the Bonds or the application oi the proceeds thereol. or the application oi any moneys paid to the issuer or ior any losses incurred upon the sale or redemliilon oi any securities purchased ior or held. in any Fund or Account under this Resolution. hie Fiduciary shall be under any responsibility or duty with respect to the application oi any moneys paid to any other Fiduciary. The Trustee shall be under no responsibility or duty with respect to the application oi any moneys placed on time deposit, at the direction oi the issuer, with any other Depositary. No Fiduciary shall be liable in connection with the performance of its duties under this Resolution except tor its own viililul misconduct, negligence or deiault. SEC1-'1ON il0-'0. Evidence on Which Fiduciaries May Act. (A) Each Fiduciary shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. Each Fiduciary may consult with counsel, who may or may not be oi counsel to the issuer, and the opinion oi such counsel shall be iuii and complete authorization and protection in respect ol any action taken or suflered by such Fiduciary under this Resolution in good faith and in accordance therewith. (B) Whenever any Fiduciary shall deenfit necessary or desirable that a matter be proved or established prior to taking or sultering any action under this Resolution, such mat-ter (unius other evidence in respect thereoi be therein specifically prescribed) may be deemed to be conclusively proved and established by o certificate oi an Authorized Oflicer, and sud: certificate shall be iuli warrant tor any action taken or sufiered in good talth under the provisions oi this Resolution upon the toith thereof; but in its discretion the Fiduciary may in lieu I i _.....5

285 l '..._ ,. _ 1. _-,. - I thereof accept other evidence oi such tact or matter or may require such iurthcr or additional evidence as to it may seem reasonable. (C) Except as otherwise expressly provided in this Resolution, any request, order, notice or other direction required or permitted to be turnished pursuant to any provision thereoi by the issuer to any Fiduciary _sl1all.be suttlciently executed it executed in the name of the issuer by an Authorized Oflicer. ' SECTION ll0. Certain Permitted Acts. Any Fiduciary may become the owner oi any Bonds or any other obligations oi the issuer with the same rights it would have it it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as Depositary tor, and permit any oi its otticers or directors to act as a member oi, or in any other capacity with respect to, any committee formed to protect the rights of Bondhoidars or the holders oi any other obligations oi the issuer or to eflect or aid in any reorganization growing out of the eniorcement o1 the Bonds or any other obligations of the Issuer or this Resolution, whether or not any such committee shall represent the holders at a majority in principal amount oi the Bonds then Outstanding. in addition, the Trustee may act as the Bank and as the Escrow Trustee. '..-..._..._._ SECTION Resignation of Trustee. The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than sixty days written notice to the issuer and publishing notice thereoi, specifying the date when such resignation shall take ettect, once in each week tor two successive calendar weeks in an Authorized Newspaper, and such resignation shall take eilect upon the day specified in such notice unless previously a successor shall have been appointed by the issuer or the bondholders as provided in Section i109, in which event such resignation shall take eilect immediately on the appointment oi such successor. SECTION Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing, tiled with the Trustee, and signed by the holders oi majority oi the Bond Obligation or their attorneys in 1act duly authorized, excluding any Bonds held by or tor the account ct the issuer. SECTION Aggointmeflt oi Successor Trustee. (A) in case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or -32.

286 0 0 3.v :- "- -..\_- conservator at the Trustee, or its property, shall be appointed, or it any public oflicer shall take charge or control o! the Trustee, or of its property or aflairs, a successor may be appointed by the holders oi a majority ot the Bond Obligation, excluding any Bonds held by or for the -account of the issuer, by an instrument or concurrent instruments in writing signed and acknowledged by such Bondhoiders or by the_ir attorneys-in-tact duly authorized and delivered to sulet successor Trustee, notification thereoi being given to the issuer and the predecessor Trustee; but (miess a successor Trustee shall have been appointed by the Bondholders as eioresaid) the issuer by a duly executed written instrument signed by an Authorized Officer of the Issuer shall forthwith appoint a Trustee to fill such vacancy until e successor Trustee shall be appointed by the Bondhelders as authorized ~in this Section. The issuer shall publish notice of any such appointment made by it once in each week for two consecutive calendar weeks, in an Authorized Newspaper, the first publication to be made within twenty days alter such appointment. successor Trustee appointed by the issuer shall. immediately and without further act, be superseded by a Trustee appointed by the Bondholders. (Bi Any 11 in a proper case no appointment oi a successor Trustee shall be made pursuant to the loregoing provisions 0! this Section within forty-live days alter the Trustee shall have given to the issuer written notice es provided in Section ll07 or after a vacancy in the oiiice of the Trustee shall have occurred by reason of its inability to act, the Trustee or the holder of any Bond may apply to any court oi competent jurisdiction to appoint a successor Trustee. Said court may thereupon, alt!-j such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. (C) Any Trustee appointed under the provisions ol this Section in succession to the Trustee shall be a bank or trust company organized under the laws o1 the State or a national banking association, and having a capitol and surplus aggregating at least $25,000,000, it there be such abanlqor trust cornpany or national banking association willing and able to eccept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon It by this Resolution.. SECTION U09. Transter oi Rights to Successor Trustee. Any successor Trustee appointed under this Resolution shall execute, acknowledge and deliver to its predecessor Trustee, and also to the Issuer, an instrument accepting such appointment, and thereupon such successor Trustee, without any further act. -33-

287 .-t ~, shall become fully vested with all moneys, rights. powers. duties and obligations oi such predecessor Trustee, with like efleet as it originally named as Trustee. Any such successor Trustee shall promptly notity the Paying Agents oi its appointment as Trustee. SECTION i110. Resignation or Removal 9; Payil1g_Agent and Appointment oi Successor Paying Agent. (A) Any Paying Agent may at any time resign and be discharged.3: the duties and obligations createdby this Resolution by giving at least sixty days written notice to the issuer, the Trustee and the other Paying Agents. Any Paying Agent may he removed at any time by an instrument tiled with sud : Paying Agent and the Trustee and signed by the issuer. Any successor Paying Agent shall be appointed by the issuer and (subject to the requirements oi $ Cl10n 1192) shall be a bank or trust company organized under the laws oi any state o! the United States or a national banking association, having a capital and surplus aggregating at least $10,000,000, and willing and able to accept the ofiice on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. ' (B) in the event oi the resignation or removal of any Paying Agent, such Paying Agent shall pay over, assign and deliver any moneys held by it as Paying Agent to its successor, or ii there be no successor, to the Trustee. in the event that tor any reason there shall be a vacancy in the oiiice oi any Paying Agent, the Trustee shall act as such Paying Agent. l F! ARTICLE XI! MISCELLANEOUS ' SECi'l0N Deieasance. (A) Li the issuer shall pay or cause to be paid to the holders oi all Bonds then Outstanding, the principal and interest and Redemption Price, ii any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, then the covenants, agreements and other obligations oi the issuer to the Bondholders shall be dlsdtarged and satisfied. in such event, the Trustee shall, upon the request oi the issuer, execute and deliver to the issuer all such instruments as may be desirable to evidence such discharge and satisfaction and the Flduclaries shall pay over or deliver to the Issuer all moneys, securities and Iunds held by them pursuant to this Resolution which are not required ior the payment or redemption of Bonds not theretoiore surrendered for such payment or redemption. 1 i -30-

288 l\oi,4u. - ' P1" H ' :: (5) Bonds or interest installments for the payment or redemption ol which moneys shall have been set aside and shall be held lri trust by the Paying Agents (through deposit by the issuer oi iunds for suchpayment or redemption or otherwise) at a maturity or redemption date thereol shall be deemed to have been paid within the meaning and with the eflect expressed in paragraph (A) oi this Section. Any Bond shall, prior to maturity or redemption date thereof, be deemed to have been paid within the meaning and with the eliect expressed in paragraph (A) 0! this Section if (ii in case such Bond is to be redeemed on any date prior to its maturity, the issuer shall have given to the Trustee in torm satistactory to it irrevocable instructions to publish as provided in/ir_tide Vi oi this Resolution notice oi redemption on said date oi such Bond, and (ii) there shall have been deposited with the Trustee either moneys or investment Securities, as described in clause (a) oi the definition thereoi in Section i0i (or obligations secured by such investment Securltiu as to the payment of both principal and interest), in the amounts and having such terms as are necessary to provide moneys (whether as principal or interest) in an amount sulticienz to pay when due the principal or applicable Redemption Price thereoi, together with all accrued interest. Neither investment Securities, obligations secured thereby, or moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on any such securities shall be withdrawn or used for any purpose other than, and shall be held in trust tor, the payment ol the principal or Redemption Price, if applicable, and interest on said Bonds; provided that any cash received irom such principal or interest payments on such direct obligations of the United States of America deposited with the Trustee shall, to the extent practicable, he reinvested in direct obligations oi the United States oi America maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if applicable, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereol, as the case may be.. SECTION i202. Evidence of Signature-as of Bondhoider: and Ownership ol Bonds. (A) Any request, consent, revocation oi consent or other instrument which this Resolution may require or permit to be signed and executed by the Bondholders may be in one or rnore instruments oi similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys-in-fact appointed in writing. Prool of (3) the excmtion oi any such instrument, or ot an instrument appointing any such attorney, or (ii) the holding by anyzperson of the Bonds shall be -3jt :

289 "-.., 3.., U c, -.., ' r '- S -. suitlclent for any purpose oi this Resolution (except as otherwise therein expressly provided) ll made in the ioilowlng manner, or in any other manner satisfactory to the Trustee, which may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: ll) l D * I I ' 1 the tact and date oi the exewtion by any Bondholder or his attorney-in-tact ol such instrument may be proved by the certificate, which need not be acknowledged or verified, 01 on officer of a bank or trust company or oi any notary public or other oiilcer authorized to take acknowledgements of deeds, that the person signing such request or other instrument acknowledged to him the. execution thereof, or by an aifidavit of a witness oi suds execution, duly sworn to beiore such notary public or other oflicer. Where such execution is by an otilcer o! a corporation or association or a member of A partnership, on behall oi such corporation, association or partnership, such certificate or adidavit shall also constitute suflicient proot oi his authority; (2) the ownership of Bonds and the amount, numbers and other identification, and date oi holding the some shall be proved by the registry books. t r (B) Any request or consent by the owner oi any Bond shall bind all iuture owners oi such Bond in respect oi anything done or suflered to be done by the issuer or any Fiduciary ln accordance therewith. SECTlON i203. Moneys Held for Particular Bonds. The amounts held by any Fiduciary tor the payment due on any date with respect to particular Bonds shall, on and alter such date and pending such payment, be set aside on its books and held in trust by it tor the holders of the Bonds entitled thereto. SEC l'ion i200. Parties interested Herein. Nothing in this Resolution expressed or implied is intended or shall be construed to confer upon, or to give to, any person or corporation, other than the issuer, the Fiduciories and the holders ot the Bonds and Prior Bonds, any rlght,'remedy or claim under or by reason oi this Resolution or any covenant, condition or stipulation thereol; and all the covenants, stipulations, promisu and agreements in this Resolution contained by and on beholt oi the issuer shall be ior the sole and exclusive benefit oi the issuer, the Flduciaries and the holders of the Bonds and Prior Bonds., SECTION No Recourse on the Bonds. No recourse shall be had tor the payment oi the principal oi or interest on the Bonds or for any claim based thereon or on this Resolution against any rnornber of the Council or oillcer of the issuer or any person executing the Bonds. SECTION i206. Successors and Assigns. Whenever in this Resolution the issuer is named or reierred to, it shall be deemed to include its successors and assigns and all the covenants and agreements in this Resolution contained by or on r I I l.35-

290 .~;_ ' ti 1;- O I '0. _,.-... _.., _-'\\, v. Q,. behalf oi the issuer shall bind and enure to the benefit of its successors arid assigns whether so expressed or not. SECTION Certillcation of Proceedings. This Council, having 5. 4 '.. inve tigated the regularity oi the'pi-oceedings had in connection with the issuance 01 the Bonds herein authorized and having determined the some to be regular, each o! said Bonds shall contain the following recital, to-wit: - "it is certliied that this bond is authorized by and is issued in oonlorrnity with the requirements of the Constitution and statutes of the State oi Louisiana." _SEC i'ion Severabilig. in case any one or more oi the provisions of this Resolution or of the Bonds issued hereunder shall _ior any reason be held to be illegal or invalid, such illegality or invalidity shall not aflect any other provision 4 oi this Resolution or o1 the Bonds, but this Resolution and the Bonds shall be construed and entorced as it such illegal or involiid provisions had not been contained therein. Any constitutional or statutory provision enacted otter the date oi this Resolution which validates or makes legal any provision oi this Resolution,. the Bonds which would not otherwise be valid or legal shall be deemed to apply to this Resolution and to the Bonds. _ SECTION Publication oi Resolution. A copy oi this Resolution shall be published immediately alter its adoption in "The Shreveport Journal", a newspaper published in the City oi Shreveport, Louisiana, and being the ofllclol journal oi the issuer. For in period ol thirty (30) days from the date oi such publication any person in interest shall have the right to contest the legality oi this Resolution and oi the Bonds to be issued pursuant thereto and the provisions securing the Bonds. Alter the expiration of said thirty (30) days, no one shall have any right oi action to contest the validity of the Bonds or the provisions of this Resolution, and the Bonds shall be conclusively presumed to be legal and no court shall thereafter have authority to inquire into such matters. SECTION l2i0. Filing of Resolution. A certiiied copy 0! this Resolution shall he flied and recorded as soon as possible in the Mortgage Records of the Parishes of Caddo and Bossier, Louisiana. SECTION i2li.. Effective Date. This Rosoiutionshail take oflect ton (I0) days utter its adoption and approval, as provided by the City Charter. as follows: This Resolution having been submitted to a vote, the vote thereon was YE! -S: Messrs. iiuckaby, Peterson, Area-mint. Bu- ih. 5 YI0. Shyne and Pa:d:immd V I 1

291 ll ~, _. \, I-1: " D. -,. -, ' e -, _ \ - '. ' '.'--=~.'".-='~=- '.- ' -."»\ :-, -r '. 4- ' 1 ABSENT: NOT VOTINGQ I I \ And_the Resolution was declared adopted on this, th: 1,2 :h day 0! gm, ' zfl Clerk oi Council " Chairnmn I n ~ -33-

292 I \ - :u-, _ :- 1 -, = RESOLUTION NO. l3l20f 1954 ==-.:-*.=-». '.- MAY 221 L984. \ aaad by title and as rand motion by 11r...5co\:tc; seconded by nr, Atcnnnaux 0: introduetzon ' _ Jun: 12, L984 _ Read by cinle and as mad nation by ~1:...Bu:hl seconded by Mt. shxna, paaaod by the following vote; Ayes: ucuura. Huckaby, Peterson, nrcenaaux, Bush, scouts, Shyne and l- Btdinand. 7. Hays: None, _?" DEE PETERSON: ERIRHRN RPFROVBD 2 JOHN B. HUSSBYI A OR ORFINANCBS OR RESOLUTIONS ADOPTED AT ABOVE MEETDIQ OF CITY COUNCIL SIGNED BY mm mxoazlu-an. I 5'll98</ L5 _o clu ' /AD-L@ DIANNE THOMAS: CLERK! OP COUNCIL CIJERK O! COUNCIL \,

293 _. &... -_..i.._. _ 4 1 r.-~ ~ ' I,. ' " _ Exig1a r.é '1. ~'._~_ -. r-_l1.».- -~-- ;.:r cscrzow ocrosn AGREEMENT av AND BETWEEN crrv or suncvaronr, LOUISIANA AND COMMERCIAL NATIONAL BANK IN 5 -uzevcvoru AS ESCROW TRUSTEE X THIS ESCROW DEPOSIT AGREEMENT (the "I\grecment"),.doted_as of 19844, by and between the City oi Shreveport, State oi Ioutslona (the " ssuer"], and Commercial Natiorml Bnnlr ln Shreveport, in tho City o! Shreveport, Louisiana. a banking association organized under the laws ot the United States oi America and duly authorized to exercise corporate trust powers, as escrow trustee (the "Escrow Trustee"): VIlTNES5ETHz WHEREAS, the ltsuer has herotoloro duly authorized and issued its Woter and Sewer Revenue Bonds, i978 lletundlng Series A, dared May l, I978 and its Water and Sewer Revenue Bones, 197! Series B, dated September l, I978, which bonds are outstanding on the date hcrcol in the aggregate principal arnount.ot (the "Prior Bonds"); end WHEREAS, the issuer has authorized the issuance of not exceeding $32,000,000 of Water and Sewer Revenue Bonds, 19 Refunding Series A (the "Reiundlng Bonds") pursuant to a resolution adopted on - l98l, as supplemented by a first supplemental resolution adopted on, BM (collectively the "Resolution ) tor the purpose oi refunding the Prior Bonds; and WHEREAS, the Resolution provides that the proceeds trorn the sale ol the Retundlrtg Bonds (exclusive ol accrued interest thereon), together with certain other lunds andlor socurities, shall be placed in escrow with the Escrow Trustee and, together with the interest corned lrom the investment thereoi, will be sufliclent to pay, the principal oi and interest on the Prior Bonds as the some matures and becomes due; NOW, THEREFORE, in consideration oi the mutual covenants hereinalter sci iorth, and in order to provide tor the aioresnld rctundlng and thereby la) consolidate the outstanding debt o! the issuer payable lrorn water and sewer revenues, lb) reorganize the outstanding debt structure ot tho Issuer and lc) eliminate certain existing covenants restricting tho issuance o! additional indebtedness secured by water and sewer revenues, which covenants are otherwise inconsistent with the projected financing requirements e! the issuer necessary for the extension and improvement oi the water and sewer system thereol, the parties hereto agree as Iollowsz l. There is hereby created ontl etmbllshcd with the Escrow Trustee a special and irrevocable escrow designated the Escrow Fund (tho Escrow Fund") to be held in the custody oi the Escrow Trustee separate and apart tram other funds oi the issuer or oi the Escrow Trustee. Receipt ol u true and correct copy o! the Resolution is hereby adutowledged by the Escrow Trustee, end reterence herein to or citation herein oi any provision oi sold Resolution shall be deemed to incorporate the same as o part hereol in the some manner and with the same eflcct as ii iuliy set forth herein. 2. Concurrently with the execution oi this Agreement, the Issuer has herewith caused to be deposited with the Escrow Trustee and the Est:-ow Trustee acknowledges receipt ol the sum oi S irons the proceed: oi the Relunding Bonds. Concurrently with the execution Bi this Agreement and such deposit, the Escrow Trustee shall apply such moneys to the purchase of United States Treasury Obligations - State and Local GBV8fl'lI'l\Ci'iK Series (in hook iorm) described in Schedule A ott-nched hereto. Concurrently with such deposit, the issuer has deposited with the _Escrow Trustee and the Escrow Trustee hereby acknowlcfi receipt oi certain direct obligations at tho United States at America listed in eduio B attached hereto (tho obligations listed In Schedule A and Schedule 8 hereto are herelnattcr relcrred to at the Government Obligations"). Said purchase oi those Government Obligations described in sold Schedule A shall

294 APPENDIX D PROPOSED FORM OF OPINION OF BOND COUNSEL

295 December 17, 2015 Honorable City Council City of Shreveport State of Louisiana $120,000,000 CITY OF SHREVEPORT, STATE OF LOUISIANA WATER AND SEWER REVENUE AND REFUNDING BONDS, SERIES 2015 We have acted as co-bond counsel to the City of Shreveport, State of Louisiana (the City or Issuer ), in connection with the issuance by the City of the above-captioned bonds (the Bonds ). The Bonds will be issued as fully registered bonds, will be dated, bear interest at the rates, be subject to redemption prior to maturity and mature on the dates and in the principal amounts all as set forth in a bond purchase agreement (the Bond Purchase Agreement ) by and between the City and Siebert, Brandford Shank & Co. LLC, First Kentucky Securities Corp and First Southwest Company, LLC (collectively the Underwriters ) which was authorized pursuant to the Bond Ordinance (defined below). The Bonds have been issued by the Issuer pursuant to Resolution No. 131 of 1984 (the General Bond Resolution ) adopted by the City Council of the City, acting as the governing authority thereof (the Governing Authority ) on June 12, 1984, as amended and supplemented to the date hereof, particularly by Ordinance No. 108 of 2015 adopted by the Governing Authority on November 24, 2015 (the Supplemental Ordinance and together with the General Bond Resolution, the Bond Ordinance ), for the purpose of (i) refunding the Issuer s $11,315,000 Water and Sewer Revenue Bonds, Series 2006A (the Prior Bonds ), (ii) financing the acquisition and construction of improvements, extensions and replacements to the combined waterworks plant and system and sewer plant and system (the System ), (iii) purchasing a reserve fund surety, (iv) funding a municipal bond insurance policy, and (v) paying the costs of issuance of the Bonds (collectively, the Financing ), all pursuant to Section 1430 and Chapters 14 and 14-A of Title 39 of the Louisiana Revised Statutes of 1950, as amended and other constitutional and statutory authority (collectively, the Act ). The Bonds are being issued on a parity with the City's outstanding obligations issued pursuant to the General Bond Resolution and the supplements thereto, as amended (the Outstanding Prior Lien Bonds ) not being refunded by the Bonds, with respect to the pledge of revenues derived from the operation of the System, subject only to the payment of the reasonable and necessary expenses of operating and maintaining the System (the "Net Revenues"), for the payment of the principal and interest thereon.

296 Bond Counsel Opinion Page 2 The City has entered into certain covenants and agreements with the owner of the Bonds with respect to the security and payment of the Bonds, including a covenant with respect to the fixing of rates and collection of fees for the services and facilities of the System (as defined in the Bond Ordinance) and a provision for the issuance of pari passu obligations hereafter under certain conditions and restrictions, for the terms of which reference is made to the Bond Ordinance. The City has executed a Tax Regulatory Agreement and Non-Arbitrage Certificate (the Tax Agreement ) with respect to certain representations, warranties and covenants regarding the Internal Revenue Code of 1986, as amended (the Code ). In order to defease and/or refund the Prior Bonds, the Issuer has entered into an Escrow Deposit Agreement (the Escrow Agreement ) with Whitney Bank, Baton Rouge, Louisiana as Escrow Trustee (the Escrow Trustee ), pursuant to which a portion of the proceeds of the Bonds, exclusive of accrued interest, has been deposited in trust with the Escrow Trustee for the purpose of providing moneys to pay the principal of and interest on the Prior Bonds through and including the redemption date therefor, irrevocable provision having been made in the Escrow Agreement for the call for redemption on January 11, 2016 of the Prior Bonds. We have examined the provisions of the Louisiana Constitution of 1974 (the Constitution ) and statutes of the State of Louisiana, including the Act, a certified transcript of the proceedings of the Issuer relating to the issuance of the Bonds, and such other documents, proofs and matters of law as we deemed necessary or appropriate to render this opinion. As to questions of fact material to our opinion, we have relied upon representations contained in the Bond Ordinance, the certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. On the basis of the foregoing examinations, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The City is a validly existing political subdivision of the State of Louisiana with the corporate power to adopt the Bond Ordinance and to authorize and issue the Bonds. 2. Said proceedings, documents and proofs show lawful authority for the issuance of the Bonds, pursuant to the Act and the Bond Ordinance. 3. The Bonds have been duly authorized, executed and delivered, and (to the extent of the sum of the purchase price paid to the City) constitute legally binding, special and limited obligations of the City and are payable solely from the Net Revenues, and neither the Bonds nor the debt they represent constitute an indebtedness or pledge of the general credit of the City within the meaning of any constitutional or statutory limitation of indebtedness.

297 Bond Counsel Opinion Page 3 4. The Bonds have been issued on a parity with the Outstanding Prior Lien Bonds, rank equally with and enjoy complete parity of lien with the Outstanding Prior Lien Bonds on the Net Revenues, and the lien of the owners of the Bonds. Additional pari passu bonds may also be issued from time to time within the terms, limitations and restrictions contained in the Bond Ordinance. 5. The Bond Ordinance has been duly adopted by the governing authority of the City and constitutes a valid, binding and enforceable obligation of the City. 6. Interest on the Bonds is excluded 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; however, for the purpose of computing the federal alternative minimum tax imposed on certain corporations, such interest is taken into account in determining adjusted current earnings. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements in the Tax Agreement. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. Under the Act and other constitutional and statutory authority, the Bonds and the income therefrom are exempt from all taxation by the State of Louisiana or any political subdivision thereof. 8. The Escrow Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Issuer. Except as stated above, we express no opinion as to any federal, state or local tax consequences resulting from the ownership of, receipt of interest on or disposition of the Bonds. We have relied on representations of the Issuer with respect to matters and questions of fact material to our opinion without undertaking to verify the same by independent investigation, and have assumed continuing compliance with covenants in the Bond Ordinance pertaining to those sections of the Code which affect the exclusion from gross income of interest on the Bonds for federal income tax purposes. This opinion is specifically limited to the laws of the State of Louisiana and of the United States of America. It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds and the Bond Ordinance may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and that their enforceability may also be subject to the

298 Bond Counsel Opinion Page 4 exercise of the sovereign police powers of the State of Louisiana, or its governmental bodies, and the exercise of judicial discretion in appropriate cases. Our opinions expressed herein are issued to and for the sole benefit of the addressee stated above and are issued for the sole purpose of the transaction specifically referred to herein. No persons other than the above addressee may rely upon this opinion without our express prior written consent. This opinion may not be utilized by any person for any other purpose whatsoever and may not be quoted or distributed by any person without our express prior written consent. We assume no obligation to supplement this opinion if any applicable laws change after the date hereof or if we become aware of any facts that might change the opinion expressed herein after the date hereof. Respectfully submitted, THE BOLES LAW FIRM (A Professional Corporation) JACQUELINE SCOTT & ASSOCIATES, APLC

299 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

300 CONTINUING DISCLOSURE CERTIFICATE $120,000,000 City of Shreveport, State of Louisiana Water and Sewer Revenue Refunding Bonds Series 2015 This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by the City of Shreveport, State of Louisiana (the City ), acting through its duly elected Mayor and the City Council (the City Council ), the entity created and charged by the City s Home Rule Charter with the issuance and administration of the revenue debt of the City, acting through its duly authorized Director of Finance, in connection with the issuance of $120,000,000 Water and Sewer Revenue Refunding Bonds, Series 2015 (the Bonds ). The Bonds are being issued pursuant to Resolution No. 131 of 1984 adopted by the City Council of the City, as the governing authority (the City Council ), on June 12, 1984, as amended and supplemented from time to time (the General Bond Resolution ), particularly by Ordinance No. 108 of 2015 adopted by the City Council on November 24, 2015 (the Thirty-First Supplemental Resolution and, together with the General Bond Resolution, the Bond Ordinance ). The Bonds are being issued by the City under the authority of Section 39:1430 (the Revenue Bond Act ) and Chapters 14 and 14-a of Title 39 of the Louisiana Revised Statutes of 1950, as amended (La. R.S. 39: ) (the Refunding Act and together with the Revenue Bond Act, the Act ), and other constitutional and statutory authority. The City is an obligated person within the meaning of the hereinafter defined Rule. The City covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. (a) This Disclosure Certificate is being executed and delivered by the City for the benefit of the Bondholders and the Beneficial Owners and in order to assist the Participating Underwriters in complying with subsection (b)(5) of the Rule. (b) In consideration of the purchase and acceptance of any and all of the Bonds by those who shall hold the same or shall own beneficial ownership interests therein from time to time, this Disclosure Certificate shall be deemed to be and shall constitute a contract between the City and the Bondholders and Beneficial Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the City shall be for the benefit of the Bondholders and Beneficial Owners of any and all of the Bonds. SECTION 2. this Disclosure Certificate: Definitions. The following capitalized terms shall have the following meanings in Annual Report shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. Audited Financial Report shall mean the City s Comprehensive Annual Financial Report (CAFR). Beneficial Owner shall mean any person who has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bondholders when used with reference to a Bond or Bonds, shall mean the registered owner of any Outstanding Bond or Bonds. Dissemination Agent shall mean the duly appointed Director of Finance of the City or any successor Dissemination Agent designated by the City. EMMA shall mean the Electronic Municipal Market Access system of the MSRB. As of the date of this Disclosure Certificate, the EMMA Internet Web site address is GAAP shall mean generally accepted accounting principles, as such principles are prescribed, in part, by the Financial Accounting Standards Board and modified by the Government Accounting Standards Board and in effect from time to time. Listed Events shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. 1

301 MSRB shall mean the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the single centralized repository for the collection and availability of continuing disclosure documents for purpose of the Rule. The continuing disclosure documents must be provided to the MSRB in searchable portable document format (PDF) to the following: Municipal Securities Rulemaking Board Electronic Municipal Market Access Center Act shall mean the Securities Exchange Act of 1934, as amended. Official Statement shall mean the final Official Statement for the Bonds dated December, Participating Underwriter shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the primary offering of the Bonds. Rule shall mean Rule 15c2-12 promulgated by the SEC pursuant to the 1934 Act, as the same may be amended from time to time, together with all interpretive guidances or other official interpretations or explanations thereof that are promulgated by the SEC. SEC shall mean the Securities and Exchange Commission. Securities Counsel shall mean legal counsel expert in federal securities law. State shall mean the State of Louisiana. State Information Repository shall mean any public or private depository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Disclosure Certificate, there is no State Information Depository. SECTION 3. Provision of Annual Reports. (a) Each year, the City shall provide, or shall cause the Dissemination Agent to provide, not later than six months from the end of the City s fiscal period, commencing with the City s Annual Report for its fiscal year ending December 31, 2014, to the MSRB an Annual Report for the preceding fiscal year that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than five (5) business days prior to said date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City or an employee or official thereof). In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package and may include by specific reference other information as provided in Section 4 of this Disclosure Certificate; (b) If the City is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the City shall send a notice, in a timely manner, to the MSRB, in substantially the form attached as Exhibit A. (c) If the City s fiscal year changes, the City shall send written notice of such change to the MSRB, in substantially the form attached as Exhibit B. (d) The Dissemination Agent shall, if the Dissemination Agent is other than the City or an employee or official thereof, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate and stating the date it was provided. (e) In connection with providing the Annual Report, the Dissemination Agent (if other than the City or an employee or official thereof) is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the Annual Report for purposes of the Rule or any other state or federal securities law, rule, regulation, or administrative order. SECTION 4. reference the following: Content of Annual Reports. The City s Annual Report shall contain or include by (a) The Audited Financial Statements of the City for its fiscal year immediately preceding the due date of the Annual Report. 2

302 prepared. (b) The accounting principles pursuant to which the Audited Financial Statements were (c) The total amount of water and sewer revenue debt of the City issued, as well as any water and sewer revenue debt which has been authorized but not yet issued. The City s financial statements shall be audited and prepared in accordance with GAAP with such changes as may be required from time to time in accordance with State law. The City reserves the right to cross-reference any or all such annual financial information and operating data to other documents to be provided to the MSRB. The City reserves the right to modify, from time to time, the specific types of information provided or the format of the presentations of such information, to the extent necessary or appropriate in the judgment of the City; provided however, that the City agrees that any modifications will be made consistent with Section 9. Any or all of the items listed above may be included by specific reference to other documents available to the public on the MSRB s Internet Web site or filed with the SEC. The City shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) The City covenants to provide, or cause to be provided, to the MSRB notice of the occurrence of any of the following events with respect to the Bonds, in a timely manner not in excess of ten (10) business days after the occurrence of the event. Each notice shall be so captioned and shall prominently state the date, title and CUSIP numbers of the Bonds. (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves, if any, reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) 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 status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of Bondholders, if material; (8) Bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property, if any, securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the City; 1 1 For the purposes of this event, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing government body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of 3

303 (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (15) failure to provide the Annual Report, as required by the Rule; and/or (16) other material event notice. (b) In connection with providing a notice of the occurrence of a Listed Event, the Dissemination Agent (if other than the City or an employee or official thereof), solely in its capacity as such, is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the notice for purposes of the Rule or any other state or federal securities law, rule, regulation, or administrative order. (c) The City acknowledges that the rating changes referred to above in Section 5(a)(11) of this Disclosure Certificate may include, without limitation, any change in any rating on the Bonds. (d) The City acknowledges that it is not required to provide a notice of a Listed Event with respect to credit enhancement when the credit enhancement is added after the primary offering of the Bonds, the City does not apply for or participate in obtaining such credit enhancement, and such credit enhancement is not described in the Official Statement. (e) As of the date of this Disclosure Certificate, the Listed Events described in subsections (a)(5), and (10) are not applicable to the Bonds. SECTION 6. Mandatory Electronic Filing with EMMA. All filings with the MSRB under this Disclosure Certificate shall be made by electronically transmitting such filings through the EMMA Dataport at as provided by the amendments to the Rule adopted by the SEC in Securities Exchange Release No on December 5, SECTION 7. Termination of Reporting Obligation. (a) The City s obligations under this Disclosure Certificate shall terminate upon the legal defeasance of the Bonds or the prior redemption or payment in full of all of the Bonds. (b) This Disclosure Certificate, or any provision hereof, shall be null and void in the event that the City (i) receives an opinion of Securities Counsel, addressed to the City, to the effect that those portions of the Rule that require such provisions of this Disclosure Certificate, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, amended, or modified, or are otherwise deemed to be inapplicable to the Bonds, as shall be specified in such opinion and (ii) files notice to such effect with the MSRB. SECTION 8. Dissemination Agent. The City, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be the duly appointed Director of Finance of the City. Except as otherwise provided in this Disclosure Certificate, the Dissemination Agent (if other than the City or an employee or official thereof) shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction or substantially all of the assets or business of the City. 4

304 SECTION 9. Amendment; Waiver. (a) Notwithstanding any other provision of this Disclosure Certificate, this Disclosure Certificate may be amended, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (1) if the amendment or waiver relates to the provisions of Section 3(a), (b), (c), 4 or 5(a), it may only be 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 identity, nature, or status of the City or the type of business conducted by the City; (2) this Disclosure Certificate, as so amended or taking into account such waiver, would, in the opinion of Securities Counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (3) the amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders or Beneficial Owners. (b) In the event of any amendment to, or waiver of a provision of, this Disclosure Certificate, the City shall describe such amendment or waiver in the next Annual Report and shall include an explanation of the reason for such amendment or waiver. In particular, if the amendment results in a change to the annual financial information required to be included in the Annual Report pursuant to Section 4 of this Disclosure Certificate, the first Annual Report that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. Further, if the annual financial information required to be provided in the Annual Report can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Report that does not include such information. (c) If the amendment results in a change to the accounting principles to be followed in preparing financial statements as set forth in Section 4 of this Disclosure Certificate, the Annual Report for the year in which the change is made shall include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of such differences and the impact of the changes on the presentation of the financial information. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in accounting principles shall be filed by the City or the Dissemination Agent (if other than the City or an employee or official thereof) at the written direction of the City, with the MSRB. SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. Failure to Comply. In the event of a failure of the City or the Dissemination Agent (if other than the City or an employee or official thereof) to comply with any provision of this Disclosure Certificate, any Bondholder or Beneficial Owner may bring an action to obtain specific performance of the obligations of the City or the Dissemination Agent (if other than the City or an employee or official thereof) under this Disclosure Certificate, but no person or entity shall be entitled to recover monetary damages hereunder under any circumstances, and any failure to comply with the obligations under this Disclosure Certificate shall not constitute a default with respect to the Bonds or under the Bond Resolution. SECTION 12. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate. SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters, the Bondholders, and the Beneficial Owners, and shall create no rights in any other person or entity. 5

305 SECTION 14. Transmission of Information and Notices. Unless otherwise required by law or this Disclosure Certificate and, in the sole determination of the City or the Dissemination Agent, as applicable, subject to technical and economic feasibility, the City or the Dissemination Agent, as applicable, shall employ such methods of information and notice transmission as shall be requested or recommended by the herein designated recipients of such information and notices. SECTION 15. Additional Disclosure Obligations. The City acknowledges and understands that other State and federal laws, including, without limitation, the Securities Act of 1933, as amended, and Rule 10b-5 promulgated by the SEC pursuant to the 1934 Act, may apply to the City, and that under some circumstances, compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the City under such laws. SECTION 16. Governing Law. This Disclosure Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Disclosure Certificate shall be instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to the extent this Disclosure Certificate addresses matters of federal securities laws, including the Rule, this Disclosure Certificate shall be construed and interpreted in accordance with such federal securities laws and official interpretations thereof. CITY OF SHREVEPORT, STATE OF LOUISIANA By: Director of Finance Dated:,

306 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Obligated Person: Name of Issuer: Name of Bond Issue: City of Shreveport, State of Louisiana City of Shreveport, State of Louisiana $120,000,000 City of Shreveport, State of Louisiana, Water and Sewer Revenue Bonds, Series 2015 Date of Bonds: December, 2015 NOTICE IS HEREBY GIVEN that the City of Shreveport, State of Louisiana, has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Certificate with respect to the Bonds. The City of Shreveport, State of Louisiana anticipates that the Annual Report will be filed by. CITY OF SHREVEPORT, STATE OF LOUISIANA By: Director of Finance Dated: 7

307 EXHIBIT B NOTICE OF CHANGE IN FISCAL YEAR Name of Obligated Person: Name of Issuer: Name of Bond Issue: City of Shreveport, State of Louisiana City of Shreveport, State of Louisiana $120,000,000 City of Shreveport, State of Louisiana, Water and Sewer Revenue Bonds, Series 2015 Date of Bonds: December, 2015 NOTICE IS HEREBY GIVEN that the fiscal year of the City Shreveport, State of Louisiana has changed. Previously, the City s fiscal year ended on. It now ends on. CITY OF SHREVEPORT, STATE OF LOUISIANA By: Director of Finance Dated: 8

308 APPENDIX F FORM OF SPECIMEN MUNICIPAL BOND INSURANCE POLICY

309 MUNICIPAL BOND INSURANCE POLICY ISSUER: BONDS: $ in aggregate principal amount of Policy No: -N Effective Date: Premium: $ ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the

310 Page 2 of 2 Policy No. -N United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. AGM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to AGM and shall not be deemed received until received by both and (b) all payments required to be made by AGM under this Policy may be made directly by AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Insurer's Fiscal Agent is the agent of AGM only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of AGM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer. ASSURED GUARANTY MUNICIPAL CORP. By Authorized Officer A subsidiary of Assured Guaranty Municipal Holdings Inc. 31 West 52nd Street, New York, N.Y (212) Form 500NY (5/90)

311 APPENDIX G FORM OF SPECIMEN MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY

312 EXHIBIT B }\SSURED GUARANTY MUNICIPAL MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY ISSUER: BONDS: Policy No.: Effective Date: Premium: $ Temiination Date: ASSURED GUARANTY MUNICIPAL CORP. ( AGM ), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to.the_ trustee<(th e "Trusts-e") or paying agent (the "Paying Agent ) as set forth in the documentation (the f'bond Document"),providing for the issuance of and securing the Bonds, for the benefit of the Owners, subject only to the tem1s of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment, by the Issuer. 2 AGM will make payment as provided in this Polig:y;tq the Trustee or Paying Ageriton the later of the Business Day on which such principal andjnterest becomes Due for Paymentor the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, in a form reasonably satisfactory to it. A Notice of Nonpayment will be reoeivedon a given Business Day if it is received pn'or to 1:00 p.m. (New York time) on*such Business Day; otherwise, it will be deemed received on the next Business Day. If any _Notioe of Nonpaymer it received by AGM is incomplete, it shall be deemed not to have been by AGM for purposes of the preoeclng sentence and AGM shall promptly so advise the Trustee, Paying Agent or Issuer, as appropriate, who may submit an amended Notice of Nonpayment. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation ofagm under this Policy. Upon such payment, AGM shall become entitled to reimbursement of the amount so paid (together with interest and expenses) pursuant to the Insurance Agreement. I The amoum available under this Policy for payment shall not exceed the Policy Limit. The amount available at any particular time to be paid to the Trustee or Paying Agent under the terms of this Policy shall automatically be reduced by any payment under this Policy. However, after such payment, the amount available under this Poficy shall be reinstated in full or in part, but only up to the Policy Limit, to the extent of the reimbursement of such payment (exclusive of interest and expenses) to AGM by or on behalf of the Issuer. Within three Business Days of such reimbursement AGM shall provide the Trustee, the Paying Agent and the Issuer with notice of the reimbursement and reinstatement. Payment under this Policy shall not be available with respect to (a) any Nonpayment that occurs prior to the Effective Date or after the Temiination Date of this Policy or (b) Bonds that are not outstanding under the~bond Document. If the amount payable under this Policy is also payable under another insurance policy or surety bond insuring the Bonds, payment first shall be made under this Policy to the extent of the amount available under this Policy up to the Policy Limit. In no event shall AGM incur duplicate liability for the same amounts owing with respect to the Bonds that are covered under this Policy and any other insurance policy or surety bond thatagm has issued. Except to the extent expressly modified by an endorsement hereto, the following tenns shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York are, orthe Insurers Fiscal Agent is, authonzed or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal ofa Bond, payable on the stated maturity date thereof orthe date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the

313 Page 2 of 2 Policy No. stated date for payment of interest. Insurance Agreement" means the Insurance Agreement dated as of ttie effective date hereof in respect of this Policy, as the same may be amended or supplemented from time to time. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer that has been recovered from such Owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or trelecopied notice, subsequently confinhed in a signed writing, or written notice by registered or certified mail, from the Issuer, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner' means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the tenhs of such Bond to payment of principal or interestthereunder, except that "Owner shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. "Policy Limit" shall be the dollaramount of the debt service reserve fund required to be maintained for the Bonds by the Bond Document front time lb time (the Debt Sen/ice Resen/e Requirement ), but in no event shall the Policy Limitexceed $. The Policy Limit shall automatically and irrevocably be reduced from time to time by the amount of each reduction in the Debt Service Reserve Requirement, as provided in the Bond Document. I AGM may appoint a fiscal agent (the "Insurers Fiscalfigent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and,notioe address of the Insurers Fiscal Agent. From and after the date of receipt of such notice,~b'y\the Tnistee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall besimultaneously delivered to the Insurers Fiscal Agent and to,agm andshall not be\deer ried received untilreceived by both and (b) all payments required to be made by AGM underthis Policy may be made directlyrby AGM or by the Insurers Fiscal Agent on behalf of AGM. The Insurers Fiscal Agent is the agent "of AGM only and the Insurers Fiscal Agent shall in no event berliable to any Ownerfor any act ofthe Insurers Fiscal Agentor any failure of AGM to depositor cause to be deposited sufficientfurids to make payments due under this Policy. To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit ofeach Owner, all fights (whether by"oountercla r'n, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreementor instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsementq hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be cancelled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF TI-IE NEW YORK INSURANCE LAW. In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer. ASSURED GUARANTY MUNICIPAL CORP. Form 501 NY (s/so) By Authorized Officer (212)