Questions about financial statements from the City of Dayton!

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2014 Administration

Prepared By

DEPARTMENT OF FINANCE

MISSION STATEMENT

As stewards of the public trust, our mission is to provide leadership, excellent services and participatory government to enhance the quality of life and sense of community for all who live, work, raise families, or conduct business in Dayton.

Comprehensive Annual Financial Report January 1 – December 31, 2013

City of Dayton, Ohio

January 1, 2014 – December 31, 2014

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CITY OF DAYTON, OHIO

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014

Table of Contents

Title Page INTRODUCTION SECTION Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 1-4 Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 5-9 Organization of the City of Dayton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 10 List of Elected and Appointed Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 11 Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . .

. . . . . . . . . . . . . . . . . . I 12

FINANCIAL SECTION Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 1-2 Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 3-27 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 30-31 Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 32-33

Fund Financial Statements: Balance Sheet - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 34-35

Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F 36

Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F 38-39

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . . . . . . .

F 40

Statement of Revenues, Expenditures and Changes in

Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 41 Other Special Revenue Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 42 Statement of Net Position - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 44-47 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 48-49 Statement of Cash Flows - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 50-53 Statement of Fiduciary Assets and Liabilities - Fiduciary Funds. . . . . . . . . . . . . . . . . . . . . . . . . F 54

Notes to the Basic Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 55-105

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CITY OF DAYTON, OHIO

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014

Table of Contents

(Continued)

Combining Statements and Individual Fund Schedules: Combining Statements - Governmental Funds

Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual (Non-GAAP Budgetary Basis) - General Fund. . . . . . . . . . . . . . . . . . . . . . . . . . F 109 Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual (Non-GAAP Budgetary Basis) - Other Special Revenue Fund . . . . . . . . . . . . . . . . . F 110 Fund Descriptions - Nonmajor Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 111-112 Combining Balance Sheet - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . F 113 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 114 Combining Balance Sheet - Nonmajor Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . F 116-117

Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 118-119

Schedule of Revenues, Expenditures, and Changes in Fund Balance -

Budget and Actual (Non-GAAP Budgetary Basis) - Street Fund. . . . . . . . . . . . . . . . . . . . . . . F 120

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) –

Highway Maintenance Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 121 Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual (Non-GAAP Budgetary Basis) - Miscellaneous Grants Fund. . . . . . . . . . . . . . . . . . F 122 Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual (Non-GAAP Budgetary Basis) - Permanent Fund. . . . . . . . . . . . . . . . . . . . . . . . F 123

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Budgetary Basis) - Debt Service Fund. . . . . . . . . . . . . . . . . . . F 124

Combining Statements - Nonmajor Enterprise Funds Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F 125

Combining Statement of Net Position - Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . F 126 Combining Statement of Revenues, Expenses and Changes in Net Position - Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 127 Combining Statement of Cash Flows – Nonmajor Enterprise Funds. . . . . . . . . . . . . . . . . . . . . . F 128

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CITY OF DAYTON, OHIO

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2014

Table of Contents

(Continued)

Combining Statements – Internal Service Funds Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F 129

Combining Statement of Net Position - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . F 130-131 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 132-133 Combining Statement of Cash Flows - Internal Service Funds. . . . . . . . . . . . . . . . . . . . . . . . . F 134-135 Combining Statements - Fiduciary Funds Fund Descriptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F 136

Combining Statement of Changes in Assets and Liabilities - Agency Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F 137-140

STATISTICAL SECTION

Statistical Section Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 3 Net Assets/Position by Component – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 4-5 Changes in Net Assets/Position – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 6-9 Fund Balances, Governmental Funds – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . S 10-11 Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . S 12-13 Gross Income Tax Revenue by Payer Type – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . S 14 Income Tax Fund Revenue Distribution – Net of Refunds – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . S 14 Property Tax Levies and Collections – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 15 Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . S 16-17 Property Tax Rates – Direct and Overlapping Governments – Last Ten Fiscal Years. . . . . . . . . . . . . . . . .S 18-19 Principal Property Tax Payers – Current Year and Nine Years Ago. . . . . . . . . . . . . . . . . . . . . . . . . .S 20 Special Assessment Billings and Collections – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . .S 21 Ratios of Outstanding Debt By Type – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 22-23 Computation of Legal Debt Margin – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 24-25 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . .S 26

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CITY OF DAYTON, OHIO

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED DECEMBER 31, 2014

Table of Contents (Continued)

Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt To Total General Governmental Expenditures – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . S 27 Computation of Direct and Overlapping Debt – December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . S 28 Sewer Debt Loan Pledged Revenue Coverage Ohio Water Development Authority Loan – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . S 29 Dayton International Airport Enterprise Revenue Bond Coverage Dayton International Airport Revenue Refunding Bond Series – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 30 Business Indicators – Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 31 Growth in Land Area – Selected Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 32

Principal Employers – Current Year and Nine Years Ago. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 33 Estimated Civilian Labor Force and Annual Average Unemployment Rates – Last Ten Fiscal Years. . . . . . . . S 34 Estimated Per Capita Income and Personal Income – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . S 35 Dayton Metropolitan Statistical Area Employment, Nonagricultural Wage and Salary Employment in Selected Industries – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . S 36-37 Full Time Equivalent City Government Employees By Function/Program – Last Ten Fiscal Years. . . . . . . . S 38 School Enrollment Trends in Montgomery County – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . S 39 City of Dayton and Montgomery County, Ohio - Land Area – December 31, 2014. . . . . . . . . . . . . . . . . S 40 Building Permits Issued – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 41 Average Cost of Housing Construction – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . . . . . . S 42 Operating Indicators and Capital Asset Statistics – Last Ten Fiscal Years. . . . . . . . . . . . . . . . . . . . . . S 43

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The City provides a full range of services that include water supply and treatment, sewer and storm water maintenance, wastewater treatment, airport services, fire and emergency medical services, police protection, convention center, building inspection, neighborhood support, recreation and parks, golf, street and bridge maintenance, waste collection, and a municipal court system. The annual budget serves as the foundation for the City of Dayton’s financial planning and control. The City Commission is required to adopt the original budget after the second Monday in January and the final budget by no later than the close of the fiscal year. The budget is prepared by fund, function, and department. LOCAL ECONOMY The City of Dayton has a rich history with its citizens contributing controlled powered flight, the automobile self-starter, the cash register, and micro-encapsulation to the world. The City is working to reposition its economy to compete globally in the future with a diversified knowledge-based economy. Driven by achievements since the implementation of the City's 2007 revised economic development goals contained in CitiPlan, the 20/20 Vision and Focus 2010, the City continues to concentrate development efforts on the following industries to transform its economic base: • Aerospace Research and Development • Information Technology • Human Sciences and Healthcare • Advanced Materials and Manufacturing The Economic Development Aerospace Hub designation continues to create an active base for the development of aerospace and advanced materials industries. This will generate growth in Dayton’s burgeoning aerospace research and development sector by attracting more companies specializing in technology, advanced manufacturing, and innovation. Throughout 2014, the Aerospace Hub and its partners came together to promote Dayton as an ideal location for this project by leveraging our expanding technological expertise, highly-educated workforce, and proximity to Wright-Patterson Air Force Base. In 2013, GE Aviation opened the $51 million GE Aviation Electrical Power Integrated Systems Center on the campus of University of Dayton. In 2014, Emerson Climate Technologies announced the Helix, a $35 million innovation center located close to the GE Center. Emerson’s facility will research, develop, and test new technologies for the heating, ventilation, air conditioning and refrigeration industries. Eventually the building will house 35 – 50 researchers and support staff. In 2014, Dayton Children’s Hospital moved its information technology department from its main campus to Tech Town occupying 13,880 square feet. The Mathile Institute for the Advancement of Human Nutrition (a non-profit organization dedicated to advancing the nutritional health of the world’s children) will move to Tech Town in the first quarter of 2015. Other new leases in Tech Town in 2014 include:

 Autosoft, a provider of dealership management solutions,  Sigmatech, a consulting firm providing systems engineering and technical assistance aerospace, defense,

federal and commercial clients,  Tenet3 which focuses on consulting and strategy of cyber-security,  Imagineering Results Analysis Corp, a data analytics and open source architecture firm who supports

agriculture, energy renewables, and intelligence operations,  FMI Medical Systems, Inc., a diverse international group of engineers and physicists developing new

technologies for CT and PET/CT imaging in emerging international markets, and  Stratonics which specializes in the real-time measurement and control of industrial additive manufacturing

processes.

Health and social service facilities are continuing to make significant investments in Dayton. In 2014, Goodwill Easter Seals Miami Valley opened their new $11 million human services center on South Main Street. The facility is home to 125 employees. CareSource continued their expansion by executing a three year lease at 220 East Monument Ave. Children’s Hospital began work on a signature eight-story inpatient tower with an estimated cost of $140 million at its current location. In 2014, companies who specialize in advanced manufacturing also experienced growth in the City. idX Corporation completed renovations and moved into its new 450,000 ft2 facility. The move doubles the size of the operation and consolidates it under one roof. idX is a manufacturer of consumer retail displays made of wood, metal, glass, acrylic,

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vacuum forming, injection molding, laminate, and/or veneer that are used in retail, financial, hospitality, and point-of- purchase markets. Malt Products continued work on a $25 million expansion at their facility. The 50,000 square foot additions will double their local workforce from 35 to an estimated 70 employees. DOWNTOWN DEVELOPMENT Creating an attractive center city that likewise attracts people, businesses, and investment is a key strategy in the Greater Downtown Dayton Plan. In recent years, the City of Dayton has invested more than $20 million in major infrastructure improvements, such as street reconstruction, new bike racks, and upgrades to public spaces. Interest from businesses, organizations, and investors has increased — with many projects poised to grow jobs and positively impact the downtown environment in the long and short terms. In 2014, the Dayton Link Bike Share program was announced. Twenty-four bike stations in and around downtown will support 200 bicycles available to residents, workers, students, and visitors. In 2014, the Dayton Metro Library began work on a major renovation and expansion of their downtown operations. The project includes renovating and expanding the Main Library, including significantly more computers and dedicated spaces for quiet reading, study, and informal small group meetings. The former Hauer Music Building on Patterson will become the operations and training center for the entire Dayton-Montgomery County Library system. Other notable downtown activity included Dinsmore & Shohl, LLP committing to a 10-year lease and $1.5 million in renovations to their offices; and Barry Staff beginning construction of a 13,000 square foot headquarters for their operations. Housing remains a strong spot for Greater Downtown, particularly the downtown core. Occupancy rates in downtown housing remained high at more than 90 percent for both owner- and renter-occupied properties. In 2014, the Water Street Development was announced and construction began in the fall. Water Street is a $45 million mixed-use riverfront undertaking by Columbus-based Crawford-Hoying and Dayton-based Woodard Real Estate Resources. The project includes a 50,000 square foot commercial building, a three-level parking structure, 219 apartments and 24 town homes. City Properties Group was awarded $1.9 million in Façade Programs – The Downtown Façade Improvement Program is a matching grant program that seeks to enliven the built environment in the downtown core. In 2014, there were five projects that represented $1.1M in private investment. Since the inception of the Downtown Façade Program in 2009, there have been 40 projects representing $2.6M in private investment. Simms Development – Building on the success that started in 2011 (18 units at Patterson Square), the developer is nearing completion on another 31 units of offer loft-style living. He finished the build out of Rubicon Square which consists of 14 downtown loft style homes near Miami Valley Hospital. Since 2011, the developer has built 63 homes in Greater Downtown Dayton. Downtown Pop-up Shops - The Pop-Up Project is driven by volunteers from the young professional organizations Generation Dayton and UpDayton with support from the Downtown Dayton Partnership, the City of Dayton, the City of Dayton Neighborhood Mini-Grant Program, and community volunteers. Since its inception in 2011, the project has launched 16 shops (12 of which are still open), filled around 13,000 square feet of previously vacant space and created 29 jobs. NEIGHBORHOOD DEVELOPMENT The City continues to invest in neighborhood projects. Noted below are a few highlights of these projects: City-Owned Railroad Track – Spanning about 6 Miles, The City invested $900,000 ($401,500 were grants) to revitalize the track and bridge that serve businesses along the line and make way for rail serve to greenfield sites located along the line. City Parks - The City completed the first phase of upgrading 20 city parks. Approximately $500,000 was expended to renovate or rebuild tennis and basketball courts in ten parks throughout the city. DaVinci - The City, CityWide Development Corporation, and Dayton Children’s Medical Center collaborated to acquire and demolish five blighted commercial structures to facilitate a road realignment and park expansion that has been funded and will be under construction in 2020. A new children’s garden has been designed and fundraising is

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currently underway. Approximately 30 low and moderate income residents have taken advantage of the discounted paint program to fix their exterior curb appeal. Dayton Is Yours (DIY) Program - Assisted in over 100 organized neighborhood clean-up activities and assisted Housing Inspection by issuing over 600 courtesy notices from 15 to 21 neighborhoods. E. C. Doren Dayton Metro Library - Completed the building project with renovations to the E.C. Doren branch located on Troy Street in Old North Dayton. The renovations include Dedicated space for Adults, Teens and Children with comfortable lounge and table seating; Quiet Reading Area; Interactive Marketplace providing easy access to popular materials, Easy to browse collections of nearly 15,000 items, upgraded power and Wi-Fi connectivity; Children's Story and Program Room, and an outdoor reading terrace has been added. Genesis - Charlie Simms completed the final phase of his townhome development and 12 of the 14 units have been sold. Plans were finalized to reconstruct Brown Street, which will be underway in 2015. Moving Ohio Forward Project – The City processed 540 demolition housing projects comprising of 836 units. This project was reimbursed $6.6 million in Moving Ohio Forward funds. Northwest Dayton Metro Library - The largest of the new Branches in the Dayton Metro Library system, made possible by voter support of a bond issue in 2012, will be located at the corner of Philadelphia Drive and Hillcrest Avenue on the site where Fairview High School once stood. The 21st century Library will replace the aging and inefficient facilities currently housing the Dayton View, Fort McKinley, and Northtown-Shiloh Branches. The new Library will feature a meadow-themed Children’s area, a dedicated space for middle and high school students called Teen Edge, and an open and enclosed Adult Reading Room with a shared fireplace. The plans include an area that can accommodate a coffee vendor. The café, a large dividable meeting room, and a flexible program space will be available both during and outside of Library hours for use by Library patrons and other community partners. There will be more computers and other technology as well as convenient onsite parking. Oregon East – City Properties Group, a Kentucky-based developer, applied for Ohio Historic Preservation Tax Credits to rehabilitate and adaptively reuse the Weustoff and Getz Co. property to create about 40 apartments and space for restaurants or other businesses. Announcement on Ohio Historic Preservation Tax Credit was awarded on December 18, 2014 with a total tax credit of $1.9 million at a total project cost of $7.9 million. Roosevelt Homes II - An approximate $7 million dollar project located in an area of the Roosevelt neighborhood bounded by Edison St. (north), West Third St. (south), North James H. McGee Blvd. (east) and Marion St. (west). The City is providing $500,000 in HOME funds for eligible project costs of constructing 30 single family scattered site housing units. The homes will consist of ranch and two-story designs, and will all feature 4 bedrooms, 2 full bathrooms, and an oversized, detached two-car garage. Tree Replacement/Green Initiatives – The City expanded the tree farm project to six sites (over 3,000 trees). The City expanded urban agriculture partnership with The Ohio State University Extension and partnered with the Water Department to provide new water service lines for 10 community gardens and bill payments for 22 gardens. Wright-Dunbar – In 2014, The City provided HOME funds to Wright Dunbar Inc. to renovate an eleven unit apartment building for low/mid residents. The building is fully occupied. The City is working with CountyCorp to renovate five one-family homes in the Wright-Dunbar historic district. LONG-TERM FINANCIAL PLANNING Moody’s Investors Services confirmed Dayton’s general obligation bond credit rating at Aa2 and our non-tax revenue debt rating at Aa3. Standard & Poor’s (S & P) upgraded Dayton’s general obligation bonds from an AA rating to AA-; and its non-tax revenue debt rating from A+ to AA-. S & P confirmed Dayton’s Aviation general obligation bond credit rating at AA. In addition, Fitch retained Dayton’s BBB+ rating on Aviation. All three rating agencies announcements signal their confidence in Dayton’s financial management practices and long-term stability. Based on the City of Dayton FOCUS 2010 Report, the City is to maintain financial stability by continuing its well documented reputation of sound financial management and leadership. The City will focus internal resources on process improvements and automation to increase revenue collections as well as explore expanded assessments for

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selected City services. This is an opportunity for growth that stands as a continuous benchmark against which all major initiatives are measured. RELEVANT FINANCIAL POLICIES The City’s long-standing policy is to maintain minimum reserve levels equal to six to ten weeks of operating expenses. The City Commission’s policy is to apply the General Fund balance only to the following limited purposes: one-time strategic investments yielding a significant number of jobs; one-time strategic investments in technology reducing operating costs; and weathering a recession or economic shock during a maximum 18-month period. Consistent with city policy to maintain the general fund reserve without increasing the City’s income tax rate, city management took action to increase general fund revenues and reduce general fund expenditures. Retaining the permanent earnings tax rate at 2.25% means the City of Dayton has maintained the same earnings tax rate for at least 30 years. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) has awarded the Certificate of Achievement for Excellence in Financial Reporting to the City of Dayton for its CAFR for the year ended December 31, 2013, which represents the 32nd consecutive year for this award. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and organized CAFR, whose contents conform to program standards judged by the GFOA. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year. We believe that our current CAFR continues to conform to the Certificate of Achievement program requirements, and the 2014 CAFR has been submitted to the GFOA for their review.

By September of 2013, the Department of Finance was certified and officially became ISO 9001 certified and received ISO 9001 re-certification for 2014. The ISO 9001 certification requires an organization to demonstrate its ability to consistently provide products and services that meet customer needs and applicable statutory and regulatory requirements. Effective application of its systems enhances customer satisfaction by including processes for continual improvement and the assurance of conformity to customer needs and applicable statutory and regulatory requirements. This attainment is a great testament to its commitment to provide accurate and excellent financial services for the City and its stakeholders. I offer my sincere gratitude to the Finance Department, especially the Financial Analysis Team for their diligent work in completing the 2014 CAFR. I would also like to thank all other City departments, including the City Manager’s Office and the Office of Management and Budget who work to ensure the City’s financial health is sound, and to the those who contributed and assisted in the preparation of the report. Finally, I acknowledge and express my gratitude to the Mayor and City Commissioners for providing excellent leadership and support in the management of the City of Dayton’s finances. Respectfully submitted, C. LaShea Smith Finance Director

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I 11

CITY OF DAYTON, OHIO

LIST OF ELECTED AND APPOINTED OFFICIALS FOR THE YEAR ENDED DECEMBER 31, 2014

ELECTED OFFICIALS

Mayor Nan Whaley Commissioner Dean Lovelace Commissioner Joey D. Williams Commissioner Matt Joseph Commissioner Jeffrey Mims

APPOINTED OFFICIALS

City Manager Timothy H. Riordan Deputy City Manager Stanley A. Earley

Asst. City Manager for Strategic Development Shelley Dickstein Director ~ Aviation Terrence Slaybaugh

Acting Director ~ Building Services Michael Cromartie Director ~ Central Services Pete Hager Secretary and Chief Examiner ~ Civil Service Maurice Evans Executive Asst. to the Commission ~ City Commission Kery Gray Acting Director ~ Economic Development Shelley Dickstein

Director ~ Finance C. LaShea Smith Director and Chief ~ Fire Jeffrey Payne Executive Director ~ Human Relations Council Catherine Crosby Acting Director ~ Human Resources Brent McKenzie Acting Director ~ Law Lynn Donaldson Director ~ Management and Budget Barbara LaBrier

Clerk of Courts ~ Municipal Court Mark Owens Director ~ Planning and Community Development Aaron Sorrell Director and Chief ~ Police Richard Biehl Director ~ Public Works Fred Stovall Director ~ Recreation & Youth Services Joseph Parlette Director ~ Water Tammi Clements

I 12

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PLATTENBURG Certified Public Accountants

8260 NORTHCREEK DRIVE, SUITE 330 / CINCINNATI, OH 45236  (513) 891-2722  FAX (513) 891-2760 ONE PRESTIGE PLACE, SUITE 520 / DAYTON, OH 45342  (937) 433-0400  FAX (937) 433-0429

www.plattenburg.com

INDEPENDENT AUDITOR'S REPORT

Members of the City Commission City of Dayton, Ohio

We have audited the accompanying financial statements of the governmental activities, the business‐type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Dayton Ohio (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 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 CityWide Development Corporation, which represents 100 percent of the assets, net position, and revenues of the discretely presented component unit. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for CityWide Development Corporation, is based solely on the report 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.

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 report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business‐type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City, as of December 31, 2014, and the respective changes in financial position, and cash flows where applicable, thereof and the respective budgetary comparison for the General Fund and Other Special Revenue Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

F 1

PLATTENBURG Certified Public Accountants

Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages F3 – F27 be presented to supplement the basic financial statements. Such information, although not a 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. 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 and Other 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 introductory section, combining and individual nonmajor fund financial statements and schedules and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have 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 them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 18, 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 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. Dayton, Ohio June 18, 2015

F 2

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 3

The Management’s discussion and analysis of the City of Dayton’s (the “City”) financial performance provides an overall review of the City’s financial activities for the fiscal year ended December 31, 2014. Readers should also review the basic financial statements and the notes to the basic financial statements to enhance their understanding of the City’s financial performance. Financial Highlights Key financial highlights for 2014 are as follows:  The total net position of the City increased $41,782,698 in 2014. Net position of governmental activities

increased $30,164,930 or 5.92% over 2013 and net position of business-type activities increased $11,617,768 or 1.94% over 2013.

 The City had $224,613,249 in revenues related to governmental activities. General revenues accounted for $139,117,119 or 61.94% of total governmental activities revenue. Program specific revenues accounted for $85,496,130 or 38.06% of total governmental activities revenue.

 The City had $194,088,319 in expenses related to governmental activities; $85,496,130 of these expenses were offset by program specific charges for services, grants or contributions. The remaining expenses of the governmental activities of $108,592,189 were offset by general revenues (primarily property taxes, income taxes and unrestricted grants and entitlements) of $139,117,119.

 The general fund had revenues of $158,253,146 in 2014. The expenditures and other financing uses of the general fund totaled $157,533,269 in 2014. The net increase in the fund balance for the general fund was $719,877 or 1.18% above 2013.

 The other special revenue major fund had $2,253,386 in revenues and other financing sources and $2,510,837 in expenditures in 2014. The fund balance in the other special revenue fund was $5,421,005, a 4.53% decrease from 2013.

 The debt service major fund had $10,626,057 in revenues and other financing sources and $10,659,509 in expenditures in 2014. The fund balance in the debt service fund was $27,335,590, a 0.12% decrease from 2013.

 The capital improvements major fund had $28,218,381 in revenues and other financing sources and $22,911,061 in expenditures and other financing uses in 2014. The fund balance for the capital improvements fund increased $5,307,320 or 19.72 % over 2013.

 Net position for the business-type activities, which are made up of the Dayton International Airport, water, sewer, storm water and golf enterprise funds, increased in 2014 by $11,617,768.

 The Dayton International Airport enterprise fund had $32,264,673 in operating revenues and $38,917,715 in operating expenses in 2014. The Dayton International Airport enterprise fund also had non-operating revenues of $497,826, non-operating expenses of $2,477,861, transfers in of $300,000 and capital contributions of $7,696,841. The net position of the Dayton International Airport enterprise fund decreased $636,236 or 0.23% from 2013.

 The water enterprise fund had $53,299,887 in operating revenues and $45,497,082 in operating expenses in 2014. The water enterprise fund also had non-operating revenues of $160,435, non-operating expenses of $616,913 and capital contributions of $171,025. The net position of the water enterprise fund increased $7,517,352 or 4.23% over 2013.

 The sewer enterprise fund had $32,285,645 in operating revenues and $28,501,115 in operating expenses in 2014. The sewer enterprise fund also had non-operating revenues of $142,233 and non-operating expenses of $871,552. The net position of the sewer enterprise fund increased $3,055,211 or 2.71% over 2013.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 4

 In the general fund, the actual revenues were $243,745 lower than they were in the final budget and actual expenditures and other financing uses were $7,740,478 less than the amount in the final budget. Budgeted revenues decreased $812,100 from the original to the final budget. Budgeted expenditures and other financing uses increased $8,396,900 from the original to the final budget.

Using this Comprehensive Annual Financial Report This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City as an entire financial operating entity. The statements then proceed to provide an increasingly detailed look at specific financial activities. The Statement of Net Position and Statement of Activities provide information about the activities of the whole City, presenting both an aggregate view of the City’s finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the City’s most significant funds with all other nonmajor funds presented in total in one column. Reporting the City as a Whole Statement of Net Position and the Statement of Activities While this document contains a large number of funds used by the City to provide programs and activities, this review examines the City’s financial transactions and asks the question, “How did we do financially during 2014?” The statement of net position and the statement of activities answer this question. These statements include all assets, deferred outflows, liabilities, deferred inflows, revenues and expenses using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting will take into account all of the current year’s revenues and expenses regardless of when cash is received or paid. These two statements report the City’s net position and changes in net position. This change is important because it tells the reader that the financial position of the City has either improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Non-financial factors include the City’s property tax base, current property tax laws in Ohio restricting revenue growth, facility conditions, required community programs and others. In the statement of net position and the statement of activities, the City is divided into two distinct kinds of activities:

1. Governmental Activities - Most of the City’s programs and services are reported including police, fire, street and highway maintenance, HUD program operations, community and economic development and general administration. These services are funded primarily by property and income taxes and intergovernmental revenues including federal and state grants and other shared revenues.

2. Business-Type Activities - These services are provided on a charge for goods or services basis to recover

all or a significant portion of the expenses of the goods or services provided. The City’s airport, water, sewer, storm water and golf operations are reported.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 5

Reporting the City’s Most Significant Funds 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, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Fund financial reports provide detailed information about the City’s major funds. The City uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the City’s most significant funds. The analysis of the City’s major governmental and proprietary funds begins on page F 11 of this report. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, the readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains a multitude of individual governmental funds. The City has segregated these funds into major and nonmajor funds. The City’s major governmental funds are the general fund, other special revenue fund, debt service fund and capital improvements fund. Information for major funds is presented separately in the governmental fund balance sheet and in the governmental statement of revenues, expenditures, and changes in fund balances. Data from the other governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages F 34 - F 42 of this report and further detail on the City’s major and nonmajor governmental funds can be found in Note 2 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 airport, water, sewer, storm water and golf operations. The City reports the airport fund, water fund and sewer fund as major enterprise funds. These major funds are presented separately in the proprietary fund financial statements. The storm water fund and the golf fund are considered nonmajor funds and are combined into a single, aggregated presentation in the proprietary fund financial statements. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The basic proprietary fund financial statements can be found on pages F 44 - F 53 of this report.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 6

Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Agency funds are the City’s only fiduciary fund type. The basic fiduciary fund financial statement can be found on page F 54 of this report. Notes to the Basic 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. These notes to the basic financial statements can be found on pages F 55 - F 105 of this report. Government-Wide Financial Analysis The table below is a summary of the City’s net position at December 31, 2014 compared to December 31, 2013.

Net Position

Governmental Governmental Business-Type Business-Type

Activities Activities Activities Activities Total Total

2014 2013 2014 2013 2014 2013

Assets

Current and other assets 241,111,731$ 214,222,285$ 201,103,620$ 201,403,354$ 442,215,351$ 415,625,639$

Capital assets, net 427,617,360 422,129,761 502,734,210 492,617,247 930,351,570 914,747,008

Total assets 668,729,091 636,352,046 703,837,830 694,020,601 1,372,566,921 1,330,372,647

Deferred outflows 1,595,042 1,769,057 543,415 34,065 2,138,457 1,803,122

Total assest and deferred inflows 670,324,133 638,121,103 704,381,245 694,054,666 1,374,705,378 1,332,175,769

Liabilities

Long-term liabilities

outstanding 100,326,386 95,185,038 79,598,041 83,251,478 179,924,427 178,436,516 Other liabilities 15,936,303 17,447,453 13,346,303 10,984,055 29,282,606 28,431,508

Total liabilities 116,262,689 112,632,491 92,944,344 94,235,533 209,207,033 206,868,024

Deferred inflows 13,952,771 15,544,869 - - 13,952,771 15,544,869

Total liabilities and

deferred outflows 130,215,460 128,177,360 92,944,344 94,235,533 223,159,804 222,412,893

Net Position

Net investment

in capital assets 380,538,467 375,002,891 420,343,386 407,888,085 800,881,853 782,890,976

Restricted 64,768,896 63,085,637 - - 64,768,896 63,085,637 Unrestricted 94,801,310 71,855,215 191,093,515 191,931,048 285,894,825 263,786,263

Total net position 540,108,673$ 509,943,743$ 611,436,901$ 599,819,133$ 1,151,545,574$ 1,109,762,876$

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 7

Over time, net position can serve as a useful indicator of a government’s financial position. At December 31, 2014, the City’s assets and deferred outflows exceeded liabilities and deferred inflows by $1,151,545,574. At year-end, net positions were $540,108,673 and $611,436,901 for the governmental activities and the business-type activities, respectively. Capital assets reported on the government-wide statements represent the largest portion of the City’s assets and deferred outflows. At year-end, capital assets represented 67.68% of total assets and deferred outflows. Capital assets include land, right of ways, construction in progress (CIP), improvements other than buildings, buildings and improvements, equipment, software, vehicles and infrastructure. The City’s net investment in capital assets at December 31, 2014, was $380,538,467 and $420,343,386 in the governmental activities and business-type activities, respectively. These capital assets are used to provide services to citizens and are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources to repay the debt must be provided from other sources, since capital assets may not be used to liquidate these liabilities. As of December 31, 2014, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. A portion of the City’s net position, $64,768,896, represents resources that are subject to external restriction on how they may be used. In the governmental activities, the remaining balance of unrestricted net position of $94,801,310 may be used to meet the government’s ongoing obligations to citizens and creditors. The table on the next page shows the changes in net position for 2014 and 2013.

THIS SPACE LEFT BLANK INTENTIONALLY

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 8

Change in Net Position

Governmental Governmental Business-Type Business-Type Activities Activities Activities Activities Total Total

2014 2013 2014 2013 2014 2013 Revenues Program revenues: Charges for services and sales 52,402,680$ 38,488,069$ 116,396,412$ 109,603,111$ 168,799,092$ 148,091,180$ Operating grants and contributions 25,909,216 24,584,286 - - 25,909,216 24,584,286 Capital grants and contributions 7,184,234 11,761,088 7,939,351 13,857,011 15,123,585 25,618,099

Total program revenues 85,496,130 74,833,443 124,335,763 123,460,122 209,831,893 198,293,565

General revenues: Property taxes 12,918,102 14,355,108 - - 12,918,102 14,355,108 Income taxes 103,721,834 101,967,172 - - 103,721,834 101,967,172 Payment in lieu of taxes 1,771,683 1,406,710 - - 1,771,683 1,406,710 Unrestricted grants 15,529,135 15,376,160 - - 15,529,135 15,376,160 Interest 1,722,766 1,241,997 485,592 113,372 2,208,358 1,355,369 Miscellaneous 3,453,599 4,167,506 12,044,998 11,564,565 15,498,597 15,732,071

Total general revenues 139,117,119 138,514,653 12,530,590 11,677,937 151,647,709 150,192,590

Total revenues 224,613,249 213,348,096 136,866,353 135,138,059 361,479,602 348,486,155

Expenses: Downtown 3,973,957 3,596,856 - - 3,973,957 3,596,856 Youth, education and human services 3,499,722 2,904,850 - - 3,499,722 2,904,850 Community development 22,225,850 27,516,705 - - 22,225,850 27,516,705 Economic development 13,940,292 15,682,768 - - 13,940,292 15,682,768 Leadership and quality of life 42,943,946 42,108,488 - - 42,943,946 42,108,488 Corporate responsibility 14,189,753 16,027,649 - - 14,189,753 16,027,649 Public safety and justice 90,511,356 93,221,162 - - 90,511,356 93,221,162 Bond issuance costs 195,142 - - - 195,142 - Interest and fiscal charges 2,608,301 2,958,434 - - 2,608,301 2,958,434 Dayton International Airport - - 41,476,361 40,954,651 41,476,361 40,954,651 Water - - 46,245,372 46,445,617 46,245,372 46,445,617 Sewer - - 29,448,754 31,515,981 29,448,754 31,515,981 Other business-type activities: Storm water - - 5,480,442 5,312,757 5,480,442 5,312,757 Golf - - 2,957,656 2,956,261 2,957,656 2,956,261

Total expenses 194,088,319 204,016,912 125,608,585 127,185,267 319,696,904 331,202,179

Increase in net position before transfers 30,524,930 9,331,184 11,257,768 7,952,792 41,782,698 17,283,976

Transfers (360,000) - 360,000 - - -

Change in net position 30,164,930 9,331,184 11,617,768 7,952,792 41,782,698 17,283,976

Net position at beginning of year 509,943,743 500,612,559 599,819,133 591,866,341 1,109,762,876 1,092,478,900

Net position at end of year 540,108,673$ 509,943,743$ 611,436,901$ 599,819,133$ 1,151,545,574$ 1,109,762,876$

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 9

Governmental Activities Governmental activities net position increased $30,164,930 in 2014. This increase of 5.92% is due to the City’s continuing efforts to reduce costs and increase operational efficiency. Public safety and justice, which primarily supports the operations of the police and fire departments accounted for $90,511,356 of the total expenses of the City. These expenses were partially funded by $25,704,452 in direct charges to users of the services. Leadership and quality of life expenses totaled $42,943,946. Leadership and quality of life expenses were partially funded by $13,688,808 in direct charges to users of the services. The state and federal government contributed to the City a total of $25,909,216 in operating grants and contributions and $7,184,234 in capital grants and contributions. These revenues are restricted to a particular program or purpose. Of the total operating grants and contributions, $11,799,651 subsidized leadership and quality of life and $7,579,430 subsidized community development and neighborhoods. The total capital grants and contributions, $7,184,234 subsidized leadership and quality of life programs. General revenues totaled $139,117,119, and amounted to 61.94% of total governmental revenues. These revenues primarily consist of property and income tax revenue of $116,639,936. The other primary source of general revenues is grants and entitlements not restricted to specific programs, including local government and local government revenue assistance, making up $15,529,135. The statement of activities on pages F 32 – F 33 shows the cost of program services and the charges for services and grants offsetting those services. The following table shows, for governmental activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted State grants and entitlements. As can be seen in the graph below, the City is highly dependent upon property and income taxes as well as unrestricted grants and entitlements to support its governmental activities.

Governmental Activities – Program Revenues vs. Total Expenses

$74,833,443 $85,496,130

$204,016,912 $194,088,319

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

2014 2013

Program Revenues Expenses

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 10

Governmental Activities

Total Cost of Net Cost of Total Cost of Net Cost of Services Services Services Services

2014 2014 2013 2013 Program Expenses: Downtown 3,973,957$ 3,401,087$ 3,596,856$ 3,025,491$ Youth, education and human services 3,499,722 2,816,188 2,904,850 489,305 Community development and neighborhoods 22,225,850 11,628,597 27,516,705 13,276,185 Economic development 13,940,292 5,089,663 15,682,768 10,352,285 Leadership and quality of life 42,943,946 10,271,253 42,108,488 16,431,794 Corporate responsibility 14,189,753 11,124,834 16,027,649 13,206,369 Public safety and justice 90,511,356 61,615,953 93,221,162 69,443,606 Bond issuance costs 195,142 195,142 - - Interest and fiscal charges 2,608,301 2,449,472 2,958,434 2,958,434

Total Expenses 194,088,319$ 108,592,189$ 204,016,912$ 129,183,469$

The dependence upon general revenues for governmental activities is apparent, with 55.95% of expenses supported through taxes and other general revenues. Total governmental expenses were $194,088,319, program revenues were $85,496,130 and general revenues were $139,117,119.

Governmental Activities – General and Program Revenues

$85,496,130 $74,833,443

$138,514,653 $139,117,119

$25,000,000

$50,000,000

$75,000,000

$100,000,000

$125,000,000

$150,000,000

2014 2013

Program Revenues General Revenues

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 11

Business-Type Activities

Business-type activities include the Dayton International Airport, water, sewer, storm water and golf enterprise funds. Overall, the net position of the business-type activities increased $11,617,768 in 2014. This increase of 1.94% is due to the City’s continuing efforts to reduce costs and increase operational efficiency. These programs had program revenues of $124,335,763, general revenues of $12,530,590, transfers in of $360,000 and expenses of $125,608,585 for 2014. The graph below shows the business-type activities assets, deferred outflows, liabilities, deferred inflows and net position at year-end. See pages F 30 and F 31.

Net Position in Business - Type Activities

$92,944,344 $94,235,533

$599,819,133$611,436,901 $694,054,666$704,381,245

$200,000,000

$400,000,000

$600,000,000

$800,000,000

2014 2013

Liabilities Net Position Assets and deferred outflows

Financial Analysis of the Government’s Funds

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City’s net resources available for spending at year- end.

The City’s governmental funds (as presented on the balance sheet on page F 34 - F 35) reported a combined fund balance of $138,421,695 which is $9,387,076 higher than last year’s total of $129,034,619. The table below indicates the fund balances and the total change in fund balances as of December 31, 2014 for all major and nonmajor governmental funds.

Fund Balances Fund Balances Increase/ 12/31/14 12/31/13 (Decrease)

Major Funds: General 61,588,853$ 60,868,976$ 719,877$ Other special revenue 5,421,005 5,678,456 (257,451) Debt service 27,335,590 27,369,042 (33,452) Capital improvement 32,218,482 26,911,162 5,307,320 Other nonmajor governmental funds 11,857,765 8,206,983 3,650,782

Total 138,421,695$ 129,034,619$ 9,387,076$

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

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F 12

General Fund

The City’s general fund balance increased $719,877. See the table on the previous page.

2014 2013 Amount Amount

Revenues Income, property and other taxes 117,383,181$ 116,743,339$ 0.55 % Charges for services 25,945,726 25,884,749 0.24 % Licenses and permits 1,348,270 1,441,918 (6.49) % Fines and forfeitures 3,344,171 3,629,224 (7.85) % Investment income 1,584,111 1,441,224 9.91 % Special assessments 177,352 155,473 14.07 % Intergovernmental 5,063,826 4,250,814 19.13 % Other 3,406,509 3,711,621 (8.22) %

Total 158,253,146$ 157,258,362$ 0.63 %

Percentage Change

The above table assists in illustrating the revenues of the general fund. Overall revenues of the general fund increased $994,784. The most significant increases were in the areas of special assessments, intergovernmental and investment revenue. The increase in intergovernmental revenue was a result of the City receiving casino and racino tax revenue. The decrease in fines and forfeitures revenue is the result of less citations being issued and paid. Investment income increased $142,887 or 9.91% due to an increase in the fair market value of federal agency securities combined with an increase in the size of the portfolio, which generates additional interest earnings. See the following charts on the next page.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 13

General Fund Revenues – 2014

Investment Income 1.00%

Fines and Forfeitures 2.11%

Licenses and permits 0.85%

Charges for Services 16.40%

Intergovernmental 3.20%

Other Revenues 2.15%

Special assessment 0.11%

Taxes 74.18%

General Fund Revenues –2013

Taxes 74.23%

Fines and Forfeitures 2.31%

Investment Income 0.92%

Intergovernmental 2.70%

Licenses and permits 0.92%

Charges for Services 16.46%

Other Revenues 2.36%

Special assessment 0.10%

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 14

The table that follows assists in illustrating the expenditures of the general fund.

2014 2013 Amount Amount

Expenditures Downtown 3,133,077$ 3,121,684$ 0.36 % Youth, education and human services 43,715 94,956 (53.96) % Community development and neighborhoods 12,132,154 12,550,966 (3.34) % Economic development 8,518,467 7,637,298 11.54 % Leadership and quality of life 20,846,393 21,635,997 (3.65) % Corporate responsibility 14,969,909 14,559,687 2.82 % Public safety and justice 91,571,422 91,339,659 0.25 % Debt service - 37,599 (100.00) %

Total 151,215,137$ 150,977,846$ 0.16 %

Percentage Change

Overall expenditures of the general fund increased $237,291 or 0.16%. The largest expenditure of the City, public safety and justice, increased $231,763 or 0.25%. Police and Fire recruiting classes have been reinstated and mission critical job openings are being filled. With the local economy improving, the number of economic development projects increased, overall economic development expenditures increased by $881,169 or 11.54%. Some debt service expenditures that were paid from the general fund in fiscal year 2014 were not paid from the debt service fund in the current year, resulting in a decrease in debt service expenditures of $37,599 or 100.00%. See the charts below and on the following page.

General Fund Expenditures – 2014

Youth, education and human services

0.03%

Downtown 2.07%

Community development 8.02%

Economic development 5.63%

Leadership and quality of life

13.79%

Corporate responsibility 9.90%

Public safety and justice 60.56%

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 15

General Fund Expenditures – 2013

Downtown 2.07%

Community development 8.31%

Economic development 5.06%

Corporate responsibility 9.64%

Leadership and quality of life

14.33%

Youth, education and human services

0.06% Debt service

0.02%

Public safety and justice 60.51%

Other Special Revenue Fund

The City’s other special revenue fund balance decreased $257,451. See page F 38. The decrease in fund balance was the result of expenses exceeding revenues. The other special revenue major fund had $2,253,386 in revenues and other financing sources and $2,510,837 in expenditures in 2014. The fund balance in the other special revenue fund was $5,421,005, a 4.53% decrease from 2013. The Other Special Revenue fund has a variety of projects whose major revenue source is committed by a Commission ordinance. Currently, the largest project is the new $16 million street light assessment.

THIS SPACE LEFT BLANK INTENTIONALLY

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

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F 16

Debt Service

The City’s debt service fund balance decreased $33,452. See page F 38. The decrease in fund balance was the result of principal and interest expenses related to governmental activities debt exceeding revenues. The following tables illustrate the revenues and expenses of the debt service fund.

2014 2013 Amount Amount

Revenues Taxes 6,621,402$ 6,320,353$ 4.76 % Intergovernmental 2,561,893 2,497,546 2.58 % Special assessments 84,644 98,471 (14.04) % Investment income 50,599 51,860 (2.43) % Other 97,840 200,609 (51.23) %

Total 9,416,378$ 9,168,839$ 2.70 %

Percentage Change

2014 2013 Amount Amount

Expenditures Corporate responsibility 160,998$ 280,158$ (42.53) % Bond issuance costs 137,465 - 100.00 % Principal retirement 7,528,143 8,239,533 (8.63) % Interest and fiscal charges 2,832,903 3,115,638 (9.07) %

Total 10,659,509$ 11,635,329$ (8.39) %

Percentage Change

The decrease in special assessment revenue was due to the end of the collection period for one of the sidewalk assessments. The City issued bonds in 2014, which resulted in bond issuance costs. The City did not issue bonds or notes in 2013.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

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F 17

Capital Improvements

The City’s capital improvement fund increased by $5,307,320 or 19.72%. See page F 38. The tables below illustrate the revenues and expenses of the capital improvement fund. Revenues decreased $9,329,073 or 46.01%. The decrease in other revenue was $3,535,200, partially due to loan activity with CityWide, the City’s component unit. Intergovernmental revenue decreased in 2014 due to a decrease in capital grants. 2013 was the final year the City received American Recovery and Reinvestment Act grants to fund capital projects. Expenditures decreased $1,268,239 or 5.26%. In addition to the revenues listed below, the Capital Improvements fund had $17,273,282 in other financing sources, which included proceeds from general obligation bonds, State Infrastructure Bank loans, State Infrastructure Bank bonds and capital lease transactions to fund capital projects.

2014 2013 Amount Amount

Revenues Taxes 514,880$ 514,880$ - % Charges for services 361,283 75,403 379.14 % Licenses and permits - 1,423 (100.00) % Intergovernmental 8,151,407 14,624,737 (44.26) % Special assessments - 216 (100.00) % Payments in lieu of taxes 1,590,825 1,195,609 33.06 % Other 326,704 3,861,904 (91.54) %

Total 10,945,099$ 20,274,172$ (46.01) %

Percentage Change

2014 2013 Amount Amount

Expenditures Downtown 50,000$ 17,700$ 182.49 % Youth, education and human services 8 - 100.00 % Community development and neighbors 1,215,172 2,765,816 (56.06) % Economic development 2,516,591 4,366,314 (42.36) % Leadership and quality of life 2,297,546 1,841,771 24.75 % Corporate responsibility 193,839 109,061 77.73 % Public safety and justice - 2,464 (100.00) % Capital outlay 16,329,574 14,798,332 10.35 % Debt service 248,135 217,646 14.01 %

Total 22,850,865$ 24,119,104$ (5.26) %

Percentage Change

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

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F 18

2014 Budgeting Highlights – General Fund The City’s budgeting process is prescribed by the Ohio Revised Code (ORC) and the City of Dayton Charter, which was amended by voters in November of 2014. The budget is a representation of the City’s various adopted appropriations. The annual expenditure budget is limited by the amount of anticipated revenues and available cash balances certified by the Budget Commission in accordance with the Ohio Revised Code. Given that the City’s plans or priorities may change during the year or economic conditions may improve or deteriorate, revisions to the original budget are customary and necessary. For instance, if forecasted revenues are adjusted during the course of the year due to actual revenue performance, then the certificate of available resources and the appropriation should also be adjusted to ensure expenditures do not exceed available resources. In addition, if funding priorities change during the fiscal year, resources may be reallocated from one activity to another, necessitating a corresponding change in budget. Budgetary information is presented for the general fund on page F 41. With respect to changes to the general fund, the final budget reflects projected revenues that were $812,100 less than the original budget, largely due to a decline in charges for services. Consequently, actual revenues had a negative variance of $1.1 million or 0.7% compared to the original budget and $243,745 or 0.2% less than the final budget. Actual general fund revenues performed better in six categories relative to the original forecast and underperformed in four. As it relates to the final budget, actual revenues also exceeded the budget in six categories but fell short in four. Nevertheless, the variances to both the original and the final budget were lower than 1%, well under the 3% performance benchmark. Only one revenue category realized a variance in excess of 10%. Special assessments, at $177,352, were 32% or $57,352 over the original budget. The largest dollar value variance was the $1,686,551 negative variance to the original budget reported by charges for services, which translated into a 6.5% unfavorable difference. Underlying this decline were decreases in waste collection and EMS fees. Actual expenditures in 2014 were $3.5 million or 2.3% under (favorable) the original budget while the final budget was $7.5 million or 4.8% higher than actuals. Three of the eight programmatic areas realized variances in excess of 10%. Youth, education and human services was budgeted at $60,000 but actual expenditures came in at $43,596 or $16,404 under the original budget. Economic development reported expenditures $1.1 million higher than the original budget and $1.2 million or 13% under the final budget. The final economic development budget provided flexibility for potential financing incentives to encourage job creation and investment in the city. Finally, the “other expenditure” category realized a $499,089 or 54% favorable variance to the original budget and a 40% favorable variance to the final budget. This variance is a function of allowing some flexibility in contingency funds during the year. Actual operating transfers out were $4.2 million over the original budget and $287,568 under the final budget. A higher level of transfers was incorporated into the final budget given the lower than planned spending levels. In both the original and final budget, use of fund balance was anticipated for special project activities as well as for investments. Funds for special projects are often received in one year and spent in later years, which was the case in 2014 especially as it relates to economic development projects. With the economy improving, economic development activity has picked up pace, which bodes well for future revenue growth. When the adjustment is made for prior year encumbrances, the general fund ended the year with a $58.6 million fund balance, which is $2.9 million less than 2013.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

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F 19

Proprietary Funds The City’s proprietary funds provide the same type of information found in the government-wide financial statements for business-type activities, except in more detail. The City’s business-type funds (as presented on the statement of net position on pages F 44 - F 47) reported a combined net position of $610,881,474, which is $11,939,305 above last year’s total of $598,942,169. The following table indicates the net position and the total change in net position as of December 31, 2014 for all major and nonmajor business-type funds.

Net Position Net Position Increase 12/31/14 12/31/13 (decrease)

Major Funds: Dayton International Airport 280,088,725$ 280,724,961$ (636,236)$ Water 185,492,256 177,974,904 7,517,352 Sewer 116,033,420 112,978,209 3,055,211 Other Business-type activities 29,267,073 27,264,095 2,002,978

Total 610,881,474$ 598,942,169$ 11,939,305$

Dayton International Airport (DIA) The City’s Dayton International Airport net position decreased $636,236 or 0.23%. See the table above. The following tables illustrate the revenues and expenses of the Dayton International Airport fund.

2014 2013 Amount Amount

Operating Revenues Charges for services 26,454,375$ 24,723,701$ 7.00 % Other 5,810,298 5,413,741 7.33 %

Total 32,264,673$ 30,137,442$ 7.06 %

Percentage Change

Operating revenues of the DIA fund increased $2,127,231 or 7.06%.

2014 2013 Amount Amount

Operating Expenses Personal services 9,116,369$ 8,828,850$ 3.26 % Benefit payments 3,598,647 3,617,186 (0.51) % Contractual services 8,278,942 9,012,354 (8.14) % Materials and supplies 1,734,180 1,368,590 26.71 % Utilities 2,106,141 2,105,901 0.01 % Depreciation 12,004,886 11,854,315 1.27 % Other 2,078,550 1,831,119 13.51 %

Total 38,917,715$ 38,618,315$ 0.78 %

Percentage Change

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 20

Operating expenses increased $299,400 or 0.78%. This increase is due to an increase in personal services, which increased $287,519 or 3.26% due to wage/salary increases for personnel. Depreciation increased due to the capitalization of improvement work at the terminal.

2014 2013 Amount Amount

Nonoperating Revenues (Expenses) Interest revenue 132,657$ 91,047$ 45.70 % Interest expense and fiscal charges (2,010,646) (2,242,168) (10.33) % Increase(decrease) in fair market value of investments 16,195 (101,013) (116.03) % Other financing sources 348,974 - 100.00 % Bond issuance costs (467,215) - (100.00) % Transfers in 300,000 - 100.00 % Capital contributions 7,696,841 13,086,053 (41.18) %

Total 6,016,806$ 10,833,919$ (44.46) %

Percentage Change

Other operating revenues and expenses decreased $4,817,113 or 44.46% due to a decrease in capital contributions related to Federal grants, specifically the American Recovery and Reinvestment Act (ARRA) grants. Water The City’s water fund net position increased by $7,517,352 or 4.22%. See the table on F 19.

2014 2013 Amount Amount

Operating Revenues Charges for services 47,702,941$ 44,291,334$ 7.70 % Other 5,596,946 4,622,745 21.07 %

Total 53,299,887$ 48,914,079$ 8.97 %

Percentage Change

Operating revenues increased $4,385,808 or 8.97%. The City experienced a warmer and dryer summer and spring, which resulted in an increase in water consumption.

2014 2013 Amount Amount

Operating Expenses Personal services 14,489,441$ 14,114,923$ 2.65 % Benefit payments 5,913,600 6,274,767 (5.76) % Contractual services 6,070,667 6,754,371 (10.12) % Materials and supplies 4,358,464 4,339,131 0.45 % Utilities 5,823,990 5,355,087 8.76 % Depreciation 6,017,476 6,039,413 (0.36) % Other 2,823,444 2,828,876 (0.19) %

Total 45,497,082$ 45,706,568$ (0.46) %

Percentage Change

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 21

Operating expenses decreased $209,486 or 0.46%. Contractual services decreased $683,704 or 10.12%, in part as a result of decreased costs in management contracts.

2014 2013 Amount Amount

Nonoperating Revenues (Expenses) Interest revenue 133,940$ 163,302$ (17.98) % Interest expense and fiscal charges (557,445) (664,898) (16.16) % Increase (decrease) in fair market value of investments 26,495 (96,103) (127.57) % Capital contributions 171,025 120,381 42.07 % Loss on sale of capital assets (59,468) - (100.00) %

Total (285,453)$ (477,318)$ (40.20) %

Percentage Change

The loss on sale of capital assets was due to the disposal of assets that were not fully depreciated during 2014. Sewer The City’s sewer fund net position increased $3,055,211 or 2.70% during 2014. See page F 19.

2014 2013 Amount Amount

Operating Revenues Charges for services 32,034,019$ 30,245,346$ 5.91 % Other 251,626 1,489,741 (83.11) %

Total 32,285,645$ 31,735,087$ 1.73 %

Percentage Change

Operating revenues increased $550,558 or 1.73% due mainly to an increase in the collection of sewer fees. Other operating revenues decreased due to a change in account coding, with more of those revenues more appropriately attributed to charges for services.

2014 2013 Amount Amount

Operating Expenses Personal services 7,107,145$ 6,970,432$ 1.96 % Benefit payments 2,852,346 3,041,836 (6.23) % Contractual services 6,847,656 6,927,039 (1.15) % Materials and supplies 2,015,748 2,312,379 (12.83) % Utilities 2,786,808 3,081,051 (9.55) % Depreciation 5,760,652 7,004,965 (17.76) % Other 1,130,760 1,148,662 (1.56) %

Total 28,501,115$ 30,486,364$ (6.51) %

Percentage Change

Operating expenses decreased $1,985,249 or 6.51%. Materials and supplies expenses decreased by $296,631 or 12.83%. These expenses were primarily related to maintenance and repair costs.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 22

2014 2013 Amount Amount

Nonoperating Revenues (Expenses) Interest revenue 124,417$ 125,437$ (0.81) % Increase(decrease) in fair market value of investments 17,816 (74,795) 123.82 % Interest expense and fiscal charges (871,552) (1,001,056) 12.94 %

Total (729,319)$ (950,414)$ 23.26 %

Percentage Change

The increase in fair market value is an indication of fluctuation in the investment market at year end. Capital Assets and Debt Administration

Capital Assets

At December 31, 2014, the City had $930,351,570 (net of accumulated depreciation) invested in land, right of ways, buildings and improvements, improvements other than buildings, equipment, software, vehicles, infrastructure and construction in progress (CIP). Of this total, $427,617,360 was reported in governmental activities and $502,734,210 was reported in business-type activities. See Note 11 in the basic financial statements for additional capital asset disclosure. The following table shows December 31, 2014 balances compared to December 31, 2013:

Capital Assets At December 31 (Net of Depreciation)

Governmental Governmental Business-Type Business-Type Activities Activities Activities Activities Total Total

2014 2013 2014 2013 2014 2013

Land 69,839,860$ 69,689,132$ 42,965,353$ 42,965,353$ 112,805,213$ 112,654,485$ Construction in progress 13,656,873 12,307,497 30,498,257 42,888,244 44,155,130 55,195,741 Right of ways 14,007,402 14,007,402 - - 14,007,402 14,007,402 Buildings and improvements 67,138,406 68,473,855 128,530,043 131,950,299 195,668,449 200,424,154 Improvements other than buildings (IOTB) 14,892,517 15,899,724 278,953,665 254,358,136 293,846,182 270,257,860 Equipment 8,247,153 5,316,550 6,379,967 6,026,701 14,627,120 11,343,251 Software 314,395 477,043 1,205,965 744,430 1,520,360 1,221,473 Vehicles 13,895,333 13,498,450 14,200,960 13,684,084 28,096,293 27,182,534 Infrastructure 225,625,421 222,460,108 - - 225,625,421 222,460,108

Total 427,617,360$ 422,129,761$ 502,734,210$ 492,617,247$ 930,351,570$ 914,747,008$

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 23

The following graphs show the breakdown of governmental capital assets by category for 2014 and 2013.

Capital Assets - Governmental Activities 2014

Right of Ways 3.28%

Software 0.07%

CIP 3.19%

Land 16.33%

I.O.T.B. 3.48%

Equipment 1.93%

Vehicles 3.25%

Buildings & imp.

15.70%

Infrastructure 52.77%

Capital Assets - Governmental Activities 2013

Software 0.11%

Right of Ways 3.32%

CIP 2.92%

Land 16.51%

Buildings & imp.

16.22%

I.O.T.B. 3.77%

Equipment 1.26%

Vehicles 3.20%

Infrastructure 52.69%

The City’s largest governmental capital asset category is infrastructure which includes roads, bridges, culverts, sidewalks, curbs, annexed roadways, street lighting, and traffic signals. These items are immovable and of value only to the City; however, the annual cost of purchasing these items is quite significant. The net book value of the City’s infrastructure (cost less accumulated depreciation) represents approximately 52.77% of the City’s total governmental capital assets. The following graphs show the breakdown of business-type capital assets by category for 2014 and 2013.

Capital Assets - Business-Type Activities 2014

Software 0.24%

Vehicles 2.82%

Land 8.55%

CIP 6.07%

Buildings & imp.

25.57%

Equipment 1.27%

I.O.T.B 55.48%

Capital Assets - Business-Type Activities 2013

Software 0.15%

Vehicles 2.78%

Land 8.72%

CIP 8.71%

Buildings & imp.

26.79%

Equipment 1.22%

I.O.T.B 51.63%

The City’s largest business-type capital asset category is improvements other than buildings (I.O.T.B) which primarily includes runways for the airport, water lines, sewer lines and storm water catch basins. These items play a vital role in the income producing ability of the business-type activities. The net book value of the City’s I.O.T.B (cost less accumulated depreciation) represents approximately 55.48% of the City’s total business-type capital assets.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 24

Debt Administration

The City had the following long-term obligations outstanding At December 31, 2014 and 2013:

Governmental Governmental Activities Activities

2014 2013

General obligation bonds 38,620,000$ 38,541,400$ Revenue bonds 28,285,000 30,305,000 Special assessment bonds - 23,200

Total bonds 66,905,000 68,869,600

OPWC loans 617,964 661,507 State infrastructure bank loan 2,500,000 - State infrastructure bank bonds 3,540,000 - Lease purchase agreement 1,995,320 - Ohio Department of Development Loan 2,860,000 2,860,000

Total loans 11,513,284 3,521,507

Total long-term obligations 78,418,284$ 72,391,107$

Business-type Business-type Activities Activities

2014 2013

General obligation bonds 36,525,000$ 38,888,600$ Revenue bonds 29,390,000 32,090,000

Total bonds 65,915,000 70,978,600

Lease purchase agreements 648,196 - OWDA loans 7,662,986 8,433,383 OPWC loans 300,000 350,000

Total loans 8,611,182 8,783,383

Total long-term obligations 74,526,182$ 79,761,983$

See Note 14 in the basic financial statements for additional disclosures and detail regarding the City’s debt activity A comparison of the long-term obligations by category is depicted in the chart below.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 25

Long-term Obligations

$66,905,000 $65,915,000

$11,513,284 $8,611,182

15,000,000

30,000,000

45,000,000

60,000,000

75,000,000

Governmental Business-Type

Bonds

Loans

Economic Factors and the 2015 Budget During the second half of 2014 and the beginning of 2015, regional employment growth has been quite strong with even greater momentum expected during 2015 with the announcement of thousands of new jobs. In Dayton, Goodwill Easter Seals opened its new headquarters in late 2014, Children’s Medical Center has broken ground on a $140 million expansion to its campus and the exciting Water Street Development on the river with its class A office space and 200 luxury apartment units is well underway. Despite the positive momentum, the City’s general fund revenues decreased 1.2% or $2 million (on a budget basis) in 2014 as a result of the state of Ohio’s repeal of the estate tax and weaker charges for services; namely waste collection and EMS fees. Offsetting the decline was a 0.7% or $715,200 increase in income taxes, which marks their fourth consecutive year of growth. Employment and the Income Tax

The City’s largest single revenue source—the income tax—also reached its nadir in 2010 and has experienced four consecutive years of growth, rising 4.6% or $4.5 million over the four-year period. The components of the income tax also shed light on the condition of the Dayton economy. Specifically, growth in 2013 was solely attributable to the tax on business profits, which climbed 16% or $1.7 million, while the tax on wages earned in the city, or withholding, fell 1.2%. The dramatic growth in business profits is thought to be the result of changes in the federal tax code which prompted businesses to remit prior to the effective date. Accordingly, the tax on business profits sank significantly during the first 11 months of 2014, yet this tax category was able to end the year with flat growth due to a large payment received in December. For any economic recovery to gain real traction, wage and job growth is needed. This was realized in 2013 when withholding posted its second increase since 2006, rising 1.1%. The gain would have been greater except for the severe winter. When the first quarter is omitted, withholding growth was 2.1%. The original forecast for 2015 income tax is $103.6 million or just under 1% growth. This rate of growth is less than the long run trend of 1.6%. However, with accelerating employment growth, there is also a growing sense of optimism that stronger economic activity is on the horizon and, as such, early indictors are that growth will surpass the modest forecast.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 26

Property Values and the Property Tax Although the city of Dayton did not enjoy the dramatic home value appreciation that many metro areas realized during the real estate boom; we were not immune to their subsequent bust. The decline has continued with the Auditor’s revaluation conducted in 2014, impacting 2015 collections. To illustrate, total city real property valuations are down 26% from their peak in 2006 and are currently at their lowest levels since 2002. Moreover, 16,787 or 23% of properties in Dayton are vacant, according to the 2013 American Community Survey with many of these properties completely abandoned during the foreclosure process. This has left the City organization with over 6,000 vacant properties that must be mowed regularly during the spring and summer months and thousands of properties in such disrepair that demolition is the only option. With a typical vacant property demolition costing $10,000, the City is not in a financial position to accomplish this goal. At the same time that values have fallen, delinquencies have also been on the rise. In 2009, 11.6% of the current levy was delinquent. By 2012, that number had increased to 14.7%, but the delinquency rate improved to 13.1% in 2014. Additionally, reimbursements from the repeal of the tangible personal property tax and the public utility tax by the State have been eliminated for all current year expense levies, for Dayton that means the general fund. And finally, since 2012, 0.5 mills have been shifted from the general fund to the bond retirement fund to help offset the loss of revenue due to the recent decline in values. Taken together, these factors have depressed collections over the last few years with the 2015 forecast for property and other local taxes at $5.8 million, down from $6.2 million in 2014. State Revenue Sharing and the Local Government Fund When faced with a reported $8 billion deficit in their 2012/2013 biennial budget, the governor and legislature chose to dramatically cut long-standing revenue-sharing programs with local governments. These reductions included eliminating the reimbursements associated with the tangible personal property and public utility taxes for all current expense levies, which reduced general fund revenues by $1.6 million. In addition to the cuts to tangible personal property and public utility reimbursements, the state also slashed the local government fund by 50% over two state fiscal years and has completely eliminated the local share of dealers in intangible taxes. These actions reduced revenues by $6.3 million over the two-year period. And to further compound the situation, the legislature also passed legislation to eliminate the estate tax, 80% of which was credited to local governments. Though the effective date of the repeal was January of 2013, the City received $2.5 million in 2013 and $305,691 in 2014 from estates that predated the elimination of the tax. Taken together the impact of state revenue-sharing cuts exceeds $10 million in general fund support. Looking ahead to 2015, state-shared revenues are expected to decline another $143,000 due to the loss of estate taxes and tepid growth in state tax revenues that support the local government fund. Tax reform has reduced state income tax rates and eliminated or reduced what small business owners are required to pay in income taxes. Casino Tax Revenue On November 3, 2009, Ohio voters passed Issue 3 that amended the Ohio constitution permitting four casinos in Cincinnati, Columbus, Cleveland and Toledo. The amendment provided for a 33% tax on gross casino revenues, 90% of which is to be distributed to county governments (51%), school districts (34%), and the host city (5%). If the most populated city located in a county had a population over 80,000, then that city (Dayton included) would receive 50% of the county distribution.

CITY OF DAYTON, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2014

(UNAUDITED)

F 27

The first two casinos opened in May of 2012 and three of the four were operational by the end of 2012. Cincinnati opened its doors in March of 2013. While the City is grateful for any new revenue source, casino gross revenues are performing considerably short of original estimates and, consequently, have been revised downward. For 2012 and 2013, the City received $703,000 and $3 million, respectively. Casino revenues were $3.2 million in 2014, which was the first full year of operation for all four casinos. The estimate for 2015 is $3.3 million and is recorded under the intergovernmental category. Other Sources Given the reductions in state-shared revenues, and otherwise modest revenue growth, it was necessary to balance the 2015 budget with $2.5 million of the cash reserve. The planned use of the reserve proved necessary when the state legislature restricted the use of the City’s public safety photo enforcement program. The City has documented evidence that photo enforcement reduced accidents. And, while the program does generate revenue ($1.7 million in net revenue in 2014) its purpose is to deploy technology for both public safety and efficiency benefits. Cost Containment and Workforce Reductions After more than a decade of workforce reductions resulting in 700 or 40% fewer filled positions, 2013 marked the first year for stable employment levels followed by a slight increase in 2014. This is not to suggest, however, that cost containment is not still a reality for the City of Dayton organization. But what it does mean is that recruit classes for Police and Fire have been reinstated (after settling a lawsuit with the Department of Justice) and mission critical positions are being filled. Wage increases were very modest in 2013 and 2014 while converting to a self-insured health plan and investing in wellness initiatives have helped rein in costs. Labor negotiations for the 2015 -2017 contract years were successful with three of the City’s four bargaining groups, resulting in a three-year wage package of 3%, 2% and 2%. Additionally, the contracts contain several cost containment articles for health insurance. Next Year’s Budget and Rates The unencumbered general fund balance on a budgetary basis is expected to remain within the minimum policy parameter level of 6 weeks of operating reserves. Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information contact LaShea Smith, Finance Director, City of Dayton, 101 West Third Street, P.O. Box 22, Dayton, OH 45401-0022, or visit our website at www.daytonohio.gov.

THIS PAGE IS INTENTIONALLY LEFT BLANK

F 28

BASIC FINANCIAL STATEMENTS

F 29

Governmental Business-type Component Activities Activities Total Unit

Assets: Equity in pooled cash and investments. . . . . . 110,379,362$ 176,965,494$ 287,344,856$ 3,558,302$ Cash with fiscal and escrow agents. . . . . . . 5,922,802 - 5,922,802 - Receivables:

Property and other local taxes . . . . . . . . 21,031,744 - 21,031,744 - Municipal income taxes. . . . . . . . . . . 15,564,851 - 15,564,851 - Accounts. . . . . . . . . . . . . . . . . . . 6,920,927 15,064,505 21,985,432 141,446

Payments in lieu of taxes. . . . . . . . . . . 2,208,978 - 2,208,978 - Contracts. . . . . . . . . . . . . . . . . . . - - - 371,841 Special assessments . . . . . . . . . . . . . 17,313,771 1,922,993 19,236,764 - Accrued interest . . . . . . . . . . . . . . . 180,401 253,776 434,177 1,884,233 Due from other governments. . . . . . . . . 18,203,199 1,348,317 19,551,516 - Loans receivable. . . . . . . . . . . . . . . 29,081,524 - 29,081,524 14,698,305

Internal balance . . . . . . . . . . . . . . . . 542,226 (542,226) - - Due from component units. . . . . . . . . . . 12,094,900 1,497,786 13,592,686 - Materials and supplies inventory. . . . . . . . - 1,619,049 1,619,049 - Inventory held for resale. . . . . . . . . . . . 689,946 - 689,946 - Deposits. . . . . . . . . . . . . . . . . . . - - - 1,677 Prepayments . . . . . . . . . . . . . . . . . . 977,100 155,542 1,132,642 136,304 Restricted assets: Equity in pooled cash and cash equivalents. . . - 134,098 134,098 4,477,331 Cash with fiscal and escrow agents. . . . . . . - 2,684,286 2,684,286 - Equity investments. . . . . . . . . . . . . . . . . - - - 557,254 Capital assets:

Land and construction in progress. . . . . . 97,504,135 73,463,610 170,967,745 - Depreciable capital assets, net. . . . . . . . 330,113,225 429,270,600 759,383,825 30,582,327

Total capital assets, net. . . . . . . . . . . . . 427,617,360 502,734,210 930,351,570 30,582,327

Total assets . . . . . . . . . . . . . . . . . . . . 668,729,091 703,837,830 1,372,566,921 56,409,020

Deferred outflows of resources: Unamortized deferred charges on debt refunding 1,595,042 543,415 2,138,457 - Total deferred outflows of resources . . . . . . . 1,595,042 543,415 2,138,457 -

- - continued

Primary Government

CITY OF DAYTON

STATEMENT OF NET POSITION DECEMBER 31, 2014

MONTGOMERY COUNTY, OHIO

F 30

Governmental Business-type Component Activities Activities Total Unit

Liabilities: Accounts payable. . . . . . . . . . . . . . . . 1,963,805$ 2,798,873$ 4,762,678$ 272,793$ Contracts payable. . . . . . . . . . . . . . . . 3,581,637 5,959,036 9,540,673 - Retainage payable . . . . . . . . . . . . . . . 537,180 1,711,124 2,248,304 - Grants payable. . . . . . . . . . . . . . . . . - - - 463,424 Accrued wages and benefits payable . . . . . . 5,013,127 1,739,309 6,752,436 - Due to other governments . . . . . . . . . . . 4,668,750 627,431 5,296,181 - Due to primary government . . . . . . . . . . - - - 13,592,686 Accrued interest payable . . . . . . . . . . . . 171,804 376,432 548,236 1,240,316 Payable from restricted assets: Utility deposits. . . . . . . . . . . . . . . . . - 134,098 134,098 - Accrued liabilities and other payables. . . . . . - - - 1,207,735 Long-term liabilities:

Due within one year . . . . . . . . . . . . . 16,552,718 7,079,079 23,631,797 1,094,925 Due in more than one year. . . . . . . . . . 83,773,668 72,518,962 156,292,630 31,149,155

Total liabilities . . . . . . . . . . . . . . . . . . 116,262,689 92,944,344 209,207,033 49,021,034

Deferred inflows of resources: Property taxes levied for the next fiscal year. . . 12,789,539 - 12,789,539 - Payments in lieu of taxes levied for the next fiscal year . 1,163,232 - 1,163,232 -

Total deferred inflows of resources . . . . . . . . 13,952,771 - 13,952,771 -

Net position:

Net investment in capital assets. . . . . . . . . 380,538,467 420,343,386 800,881,853 (127,249) Restricted for:

Permanent fund: Expendable. . . . . . . . . . . . . . . . . 80,395 - 80,395 - Nonexpendable. . . . . . . . . . . . . . . . 102,228 - 102,228 - Capital projects . . . . . . . . . . . . . . . 9,321,820 - 9,321,820 - Debt service . . . . . . . . . . . . . . . . . 31,574,122 - 31,574,122 - Housing and urban development. . . . . . . 6,488,107 - 6,488,107 - Special projects. . . . . . . . . . . . . . . 5,421,005 - 5,421,005 - Street and highway projects . . . . . . . . . 3,742,967 - 3,742,967 - Other purposes. . . . . . . . . . . . . . . . 8,038,252 - 8,038,252 1,587,396

Unrestricted . . . . . . . . . . . . . . . . . . 94,801,310 191,093,515 285,894,825 5,927,839

Total net position . . . . . . . . . . . . . . . . . 540,108,673$ 611,436,901$ 1,151,545,574$ 7,387,986$

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF NET POSITION (continued) DECEMBER 31, 2014

Primary Government

F 31

Charges for Operating Grants Capital Grants Expenses Services and Sales and Contributions and Contributions

Governmental activities: Downtown . . . . . . . . . . . . . . . . . . 3,973,957$ 572,477$ 393$ -$ Youth, education and human services. . . . . 3,499,722 7,965 675,569 - Community development and neighborhoods. 22,225,850 3,017,823 7,579,430 - Economic development . . . . . . . . . . . . 13,940,292 6,401,968 2,448,661 - Leadership and quality of life . . . . . . . . . 42,943,946 13,688,808 11,799,651 7,184,234 Corporate responsibility. . . . . . . . . . . . 14,189,753 2,850,358 214,561 - Public safety and justice. . . . . . . . . . . . 90,511,356 25,704,452 3,190,951 - Interest and fiscal charges. . . . . . . . . . . 2,608,301 158,829 - - Bond issuance costs. . . . . . . . . . . . . 195,142 - - -

Total governmental activities . . . . . . 194,088,319 52,402,680 25,909,216 7,184,234

Business-type activities: Dayton International Airport. . . . . . 41,476,361 26,454,375 - 7,696,841 Water. . . . . . . . . . . . . . . . . 46,245,372 47,702,941 - 171,025 Sewer. . . . . . . . . . . . . . . . . 29,448,754 32,034,019 - - Other business-type activities: Storm Water. . . . . . . . . . . . . 5,480,442 7,330,340 - 71,485 Golf. . . . . . . . . . . . . . . . . . 2,957,656 2,874,737 - -

Total business-type activities . . . . . . 125,608,585 116,396,412 - 7,939,351

Total primary government . . . . . . . . 319,696,904$ 168,799,092$ 25,909,216$ 15,123,585$

Component Unit: CityWide Development Corporations . . . 6,164,685$ 4,786,137$ -$ 397,221$

General revenues: Property taxes levied for:

General purposes . . . . . . . . . . . . . . Debt service. . . . . . . . . . . . . . . . .

Income taxes levied for: General purposes . . . . . . . . . . . . . .

Payments in lieu of taxes . . . . . . . . . . . Grants and entitlements not restricted

to specific programs . . . . . . . . . . . . Investment earnings . . . . . . . . . . . . . Miscellaneous . . . . . . . . . . . . . . . .

Total general revenues . . . . . . . . . . . . .

Transfers . . . . . . . . . . . . . . . . . . . .

Total general revenues and transfers. . . . . . . . .

Change in net position . . . . . . . . . . . . .

Net position at beginning of year. . . . . . . .

Net position at end of year. . . . . . . . . .

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

Program Revenues

F 32

Governmental Business-type Component Activities Activities Total Unit

(3,401,087)$ -$ (3,401,087)$ -$ (2,816,188) - (2,816,188) -

(11,628,597) - (11,628,597) - (5,089,663) - (5,089,663) -

(10,271,253) - (10,271,253) - (11,124,834) - (11,124,834) - (61,615,953) - (61,615,953) - (2,449,472) - (2,449,472) -

(195,142) (195,142) (108,592,189) - (108,592,189) -

- (7,325,145) (7,325,145) - - 1,628,594 1,628,594 - - 2,585,265 2,585,265 -

- 1,921,383 1,921,383 - - (82,919) (82,919) - - (1,272,822) (1,272,822) -

(108,592,189) (1,272,822) (109,865,011) -

- - - (981,327)

6,235,698 - 6,235,698 - 6,682,404 - 6,682,404 -

103,721,834 - 103,721,834 -

1,771,683 - 1,771,683 -

15,529,135 - 15,529,135 - 1,722,766 485,592 2,208,358 1,714 3,453,599 12,044,998 15,498,597 225,224

139,117,119 12,530,590 151,647,709 226,938

(360,000) 360,000 - -

138,757,119 12,890,590 151,647,709 226,938

30,164,930 11,617,768 41,782,698 (754,389)

$509,943,743 599,819,133 $1,109,762,876 8,142,375

540,108,673$ 611,436,901$ 1,151,545,574$ 7,387,986$

Net (Expense) Revenue and Changes in Net Position

Primary Government

F 33

Other Special Debt Capital General Revenue Service Improvement

Assets: Equity in pooled cash and investments. . . . . 44,457,309$ 5,690,375$ 9,859,999$ 17,742,116$ Cash with fiscal and escrow agents. . . . . . . 675 - - 5,922,127 Receivables:

Property and other local taxes. . . . . . . . . 9,482,401 - 11,549,343 - Municipal income taxes. . . . . . . . . . . . 15,564,851 - - - Accounts. . . . . . . . . . . . . . . . . . . 6,404,681 67,279 18,750 312,800

Payments in lieu of taxes. . . . . . . . . . . - - - 2,208,978 Special assessments . . . . . . . . . . . . . 273,227 16,492,341 120,493 - Accrued interest . . . . . . . . . . . . . . . 153,568 1,910 - - Due from other funds . . . . . . . . . . . . 28,243 - - - Due from other governments. . . . . . . . . 6,029,114 - 194,611 4,995,559 Loans receivable. . . . . . . . . . . . . . . 6,375,620 - 16,370,000 6,335,904

Advances to other funds . . . . . . . . . . . . 200,000 - 1,086,841 - Prepayments . . . . . . . . . . . . . . . . . . 741,187 500 - - Due from component units. . . . . . . . . . . 3,474,667 - - 2,395,184

Total assets . . . . . . . . . . . . . . . . . . . . 93,185,543$ 22,252,405$ 39,200,037$ 39,912,668$

Liabilities: Accounts payable. . . . . . . . . . . . . . . . 1,159,790$ 46,194$ -$ 358,827$ Contracts payable. . . . . . . . . . . . . . . . 392,774 220,801 - 1,730,904 Accrued wages and benefits payable . . . . . . 4,571,575 24,992 - 7,571 Retainage payable . . . . . . . . . . . . . . . - - - 515,285 Compensated absences payable . . . . . . . . 60,367 - - - Advances from other funds. . . . . . . . . . . 217,584 - - - Due to other funds . . . . . . . . . . . . . . . 26,770 499 - 470 Due to other governments . . . . . . . . . . . 2,931,585 - - - Claimants payable . . . . . . . . . 7,163 - - -

Total liabilities . . . . . . . . . . . . . . . . . . 9,367,608 292,486 - 2,613,057

Deferred inflows of resources: Property taxes levied for the next fiscal year. . . 5,755,334 - 7,034,205 - Delinquent property tax revenue not available. . 3,694,204 - 4,515,138 - Accrued interest not available . . . . . . . . . . 78,957 982 - - Special assessments revenue not available. . . . 273,227 16,492,341 120,493 - Miscellaneous revenue not available. . . . . . . 2,984,935 45,591 - 126,843 Income tax revenue not available . . . . . . . . 6,246,844 - - - Intergovernmental revenue not available . . . . . . 3,195,581 - 194,611 2,745,308 Payments in lieu of taxes levied for the next fiscal year. - - 1,163,232 Delinquent payment in lieu of taxes revenue not available. - - - 1,045,746

Total deferred inflows of resources . . . . . . . . 22,229,082 16,538,914 11,864,447 5,081,129

Fund balances: Nonspendable . . . . . . . . . . . . . . . . . 11,113,881 500 - - Restricted. . . . . . . . . . . . . . . . . . . . - 5,420,505 26,915,684 15,704,146 Committed . . . . . . . . . . . . . . . . . . . 1,985,533 - 419,906 8,310,682 Assigned . . . . . . . . . . . . . . . . . . . . 21,268,158 - - 8,203,654 Unassigned. . . . . . . . . . . . . . . . . . . . 27,221,281 - - -

Total fund balances. . . . . . . . . . . . . . . . 61,588,853 5,421,005 27,335,590 32,218,482

Total liabilities, deferred inflows and fund balances . . 93,185,543$ 22,252,405$ 39,200,037$ 39,912,668$

GOVERNMENTAL FUNDS BALANCE SHEET

MONTGOMERY COUNTY, OHIO CITY OF DAYTON

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

DECEMBER 31, 2014

F 34

Other Total Governmental Governmental

Funds Funds

6,500,452$ 84,250,251$ - 5,922,802

- 21,031,744 - 15,564,851

102,999 6,906,509 - 2,208,978

427,710 17,313,771 956 156,434

- 28,243 6,950,713 18,169,997

- 29,081,524 - 1,286,841 - 741,687

6,225,049 12,094,900 20,207,879$ 214,758,532$

231,905$ 1,796,716$ 1,237,158 3,581,637

244,177 4,848,315 21,895 537,180

- 60,367 - 217,584

8,277 36,016 12,518 2,944,103

- 7,163 1,755,930 14,029,081

- 12,789,539 - 8,209,342

492 80,431 427,710 17,313,771

98,380 3,255,749 - 6,246,844

6,067,602 12,203,102 - 1,163,232 - 1,045,746

6,594,184 62,307,756

102,228 11,216,609

11,755,537 59,795,872 - 10,716,121 - 29,471,812 - 27,221,281

11,857,765 138,421,695

20,207,879$ 214,758,532$

F 35

Total governmental fund balances 138,421,695$

Amounts reported for governmental activities on the statement of net position are different than the net position because:

1. Capital assets used in governmental activities (excluding internal service funds capital assets) are not financial resources and therefore are not reported in the funds. 426,660,482

2. Other long-term assets are not available to pay for current- period expenditures and therefore are deferred in the funds. Property and other local taxes receivable 11,920,669$ Payments in lieu of taxes receivable 1,045,746 Municipal income taxes receivable 6,246,844 Accounts receivable 3,645,756 Special assessments receivable 17,313,771 Accrued interest receivable 80,431 Due from other governments 8,101,768 Total 48,354,985 3. Internal service funds are used by management to charge the costs of fleet management fire fleet management, stores and reproduction, workers' compensation, and plumbing to individual funds. The assets and liabilities of the internal service funds are included in governmental activities on the statement of net position. The net position of the internal service funds, including internal balances of $555,427 are: 17,700,815

4. In the statement of net position interest is accrued on bonds, whereas in governmental funds, interest is accrued when due. (171,804)

5. Unamortized deferred amounts on refundings are not recognized in the governmental funds. 1,595,042

6. Unamortized premiums on bond issuances are not recognized in the governmental funds. (5,290,503)

7. Long-term liabilities, including bonds and compensated absences are not due and payable in the current period and therefore are not reported in the funds (exclusive of internal service fund liabilities). General obligation bonds (38,620,000) Revenue bonds (28,285,000) Lease obligations (1,995,320) State Infrastructure Bank Loan (2,500,000) State Infrastructure Bank Bonds (3,540,000) Compensated absences (8,743,755) OPWC loans (617,964) ODOD Loan (2,860,000)

(87,162,039)

Net position of governmental activities 540,108,673$

DECEMBER 31, 2014

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES

F 36

THIS PAGE IS INTENTIONALLY LEFT BLANK

F 37

Other Special Debt Capital General Revenue Service Improvement

Revenues: Municipal income taxes . . . . . . . . . . . 103,916,809$ -$ -$ -$ Property and other taxes. . . . . . . . . . . 5,670,907 - 6,621,402 514,880 State shared taxes. . . . . . . . . . . . . . . 7,795,465 - 2,561,893 - Charges for services. . . . . . . . . . . . . 25,945,726 286,650 - 361,283 Licenses and permits . . . . . . . . . . . . 1,348,270 33,645 - - Fines and forfeitures . . . . . . . . . . . . 3,344,171 25,419 - - Intergovernmental. . . . . . . . . . . . . . 5,063,826 - - 8,151,407 Special assessments . . . . . . . . . . . . . 177,352 454,052 84,644 - Investment income. . . . . . . . . . . . . . 1,584,111 3,181 50,599 - Payments in lieu of taxes. . . . . . . . . . . - - - 1,590,825 Increase in FMV of investments. . . . . . 32,000 400 - - Other . . . . . . . . . . . . . . . . . . . . 3,374,509 1,394,747 97,840 326,704

Total revenues . . . . . . . . . . . . . . . . . 158,253,146 2,198,094 9,416,378 10,945,099

Expenditures: Current:

Downtown . . . . . . . . . . . . . . . . . . 3,133,077 - - 50,000 Youth, education and human services. . . . . 43,715 - - 8 Community development and neighborhoods. 12,132,154 73,736 - 1,215,172 Economic development . . . . . . . . . . . . 8,518,467 564,293 - 2,516,591 Leadership and quality of life . . . . . . . . . 20,846,393 1,127,026 - 2,297,546 Corporate responsibility. . . . . . . . . . . . 14,969,909 16,147 160,998 193,839 Public safety and justice. . . . . . . . . . . . 91,571,422 729,635 - -

Capital outlay . . . . . . . . . . . . . . . . - - - 16,329,574 Debt service:

Bond issuance costs . . . . . . . . . . . - - 137,465 57,677 Principal retirement. . . . . . . . . . . . - - 7,528,143 180,000 Interest and fiscal charges . . . . . . . . - - 2,832,903 10,458

Total expenditures . . . . . . . . . . . . . . . 151,215,137 2,510,837 10,659,509 22,850,865

Excess (deficiency) of revenues over (under) expenditures. . . . . . . . . . . 7,038,009 (312,743) (1,243,131) (11,905,766)

Other financing sources (uses): Bond issuance. . . . . . . . . . . . . . . . - - - 9,240,000 Capital lease transaction. . . . . . . . . . . - - - 1,995,320 Issuance of loans. . . . . . . . . . . . . . - - - 2,500,000 Transfers in . . . . . . . . . . . . . . . . . - 55,292 960,409 3,537,962 Transfers (out). . . . . . . . . . . . . . . . (6,318,132) - - - Premium on bond issuance . . . . . . . . . - - 249,270 - Discount on note issuance. . . . . . . . . . - - - (60,196)

Total other financing sources (uses) . . . . . . (6,318,132) 55,292 1,209,679 17,213,086

Net change in fund balances . . . . . . . . . . 719,877 (257,451) (33,452) 5,307,320

Fund balances at beginning of year. . . . . 60,868,976 5,678,456 27,369,042 26,911,162 Fund balances at end of year . . . . . . . . 61,588,853$ 5,421,005$ 27,335,590$ 32,218,482$

GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2014

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

F 38

Other Total Governmental Governmental

Funds Funds

-$ 103,916,809$ - 12,807,189

5,341,746 15,699,104 801,575 27,395,234

- 1,381,915 445,880 3,815,470

18,541,525 31,756,758 38,922 754,970

1,424 1,639,315 - 1,590,825

485 32,885 334,809 5,528,609

25,506,366 206,319,083

387 3,183,464 665,177 708,900

9,128,968 22,550,030 1,746,926 13,346,277 8,513,901 32,784,866

146,000 15,486,893 3,176,603 95,477,660

- 16,329,574

- 195,142 - 7,708,143 - 2,843,361

23,377,962 210,614,310

2,128,404 (4,295,227)

- 9,240,000 - 1,995,320 - 2,500,000

1,522,378 6,076,041 - (6,318,132) - 249,270 - (60,196)

1,522,378 13,682,303

3,650,782 9,387,076

8,206,983 129,034,619 11,857,765$ 138,421,695$

F 39

Net change in fund balances - total governmental funds 9,387,076$

Amounts reported for governmental activities in the statement of activities are different because:

1. Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays ($19,494,767) exceeded depreciation expense ($13,963,483) in the current period (exclusive of internal service fund activity). 5,531,284

2. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.

Municipal income taxes (194,975)$ Property and other local taxes 225,404 Payments in lieu of taxes 180,858 Charges for services 2,140,980 Intergovernmental (577,751) Special assessments 16,423,854 Investment income 9,389 Total 18,207,759

3. Repayments of bond, loan and capital lease principal are expenditures in the governmental funds, but the repayments reduce long-term liabilities on the statement of net position.

Bond principal payments 7,664,600 Loan principal payments 43,543 Total 7,708,143

4. Issuance of bonds, loans and leases are recorded as an other financing source in the funds; however, in the statement of activities, they are not reported as revenues as they increase liabilities on the statement (13,735,320) of net position.

5. Premiums and discounts on bonds and notes are amortized over the life of the issuance in the statement of activities. (189,074)

6. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due. The additional interest reported in the statement of activities is due to the following:

Decrease in accrued interest payable 5,407 Amortization of bond premiums and discounts 403,668 Amortization of deferred charges on refundings (174,015) Total 235,060

7. 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 the governmental funds.

Compensated absences 480,701 Pollution remediation obligation 15,738 Total 496,439

8. Internal service funds used by management to charge the costs of fleet management, fire fleet management, stores and reproduction, workers' compensation, and plumbing to individual funds are not reported in the entity-wide statement of activities. Governmental fund expenditures and the related internal service funds revenues are eliminated. The net revenue (expense) of the internal service funds, including internal balances of $321,537, is allocated among governmental activities. 2,523,563

Change in net position of governmental activities 30,164,930$

FOR THE YEAR ENDED DECEMBER 31, 2014

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON, OHIO MONTGOMERY COUNTY, OHIO

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

F 40

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Municipal income taxes. . . . . . . . . . . . 102,711,400$ 102,094,400$ 102,649,505$ 555,105$ Property and other taxes. . . . . . . . . . . . 6,003,200 6,250,100 6,239,960 (10,140) State shared taxes . . . . . . . . . . . . . . . 7,391,700 7,397,200 7,242,146 (155,054) Charges for services. . . . . . . . . . . . . . 27,588,400 26,683,200 25,901,849 (781,351) Licenses and permits . . . . . . . . . . . . . 1,425,000 1,241,800 1,348,270 106,470 Fines and forfeitures . . . . . . . . . . . . . 3,140,000 3,290,900 3,316,271 25,371 Intergovernmental. . . . . . . . . . . . . . . 5,011,200 5,087,700 5,120,697 32,997 Special assessments . . . . . . . . . . . . . . 120,000 175,900 177,352 1,452 Investment income. . . . . . . . . . . . . . . 1,524,800 1,524,300 1,552,185 27,885 Other . . . . . . . . . . . . . . . . . . . . . 3,039,900 3,398,000 3,351,520 (46,480)

Total revenues . . . . . . . . . . . . . . . . . . 157,955,600 157,143,500 156,899,755 (243,745)

Expenditures: Current:

Downtown . . . . . . . . . . . . . . . . . . 3,001,700 3,453,300 3,193,510 259,790 Youth, education and human services. . . . . 60,000 - 43,596 (43,596) Community development and neighborhoods. 12,475,900 12,450,900 12,313,175 137,725 Economic development . . . . . . . . . . . . 8,349,700 10,733,800 9,496,949 1,236,851 Leadership and quality of life . . . . . . . . . 23,583,500 24,067,900 22,545,145 1,522,755 Corporate responsibility. . . . . . . . . . . . 16,609,000 16,693,100 15,689,840 1,003,260 Public safety and justice. . . . . . . . . . . . 93,619,100 94,355,700 91,394,641 2,961,059 Other . . . . . . . . . . . . . . . . . . . . . 1,429,200 1,300,800 930,111 370,689

Debt service: Principal retirement. . . . . . . . . . . . . . . 68,400 68,400 68,345 55 Interest and fiscal charges . . . . . . . . . . . 12,900 12,900 8,578 4,322

Total expenditures . . . . . . . . . . . . . . . . . 159,209,400 163,136,800 155,683,890 7,452,910

Excess (deficiency) of revenues over (under) expenditures. . . . . . . . . . . (1,253,800) (5,993,300) 1,215,865 7,209,165

Other financing uses: Transfers (out) . . . . . . . . . . . . . . . . . (2,136,200) (6,605,700) (6,318,132) 287,568

Total other financing uses . . . . . . . . . . . . . (2,136,200) (6,605,700) (6,318,132) 287,568

Net change in fund balances . . . . . . . . . . . (3,390,000) (12,599,000) (5,102,267) 7,496,733

Fund balance at beginning of year . . . . . . . 61,540,289 61,540,289 61,540,289 - Prior year encumbrances appropriated . . . . 2,175,743 2,175,743 2,175,743 - Fund balance at end of year . . . . . . . . . . 60,326,032$ 51,117,032$ 58,613,765$ 7,496,733$

Budgeted Amounts

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2014

F 41

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Charges for services. . . . . . . . . . . . . 296,000$ 359,800$ 380,414$ 20,614$ Licenses and permits . . . . . . . . . . . . 26,200 31,800 33,645 1,845 Special assessments . . . . . . . . . . . . . 353,400 429,400 454,052 24,652 Other . . . . . . . . . . . . . . . . . . . . 1,056,400 1,283,800 1,360,274 76,474

Total revenues . . . . . . . . . . . . . . . . . 1,732,000 2,104,800 2,228,385 123,585

Expenditures: Current:

Community development and neighborhoods. 92,500 92,500 87,641 4,859 Economic development . . . . . . . . . . . . 1,361,100 1,013,000 571,256 441,744 Leadership and quality of life . . . . . . . . . 310,000 2,217,000 1,849,071 367,929 Corporate responsibility. . . . . . . . . . . . - - 12,000 (12,000) Public safety and justice. . . . . . . . . . . . 1,094,100 1,160,100 892,927 267,173

Total expenditures . . . . . . . . . . . . . . . 2,857,700 4,482,600 3,412,895 1,069,705

Excess of expenditures over revenues . . . . . . (1,125,700) (2,377,800) (1,184,510) 1,193,290

Other financing sources: Transfers in . . . . . . . . . . . . . . . . . 43,000 52,300 55,292 2,992

Total other financing sources. . . . . . . . . . 43,000 52,300 55,292 2,992

Net change in fund balances . . . . . . . . . . (1,082,700) (2,325,500) (1,129,218) 1,196,282

Fund balances at beginning of year . . . . . 3,431,785 3,431,785 3,431,785 - Prior year encumbrances appropriated . . . 1,109,881 1,109,881 1,109,881 - Fund balance at end of year . . . . . . . . . 3,458,966$ 2,216,166$ 3,412,448$ 1,196,282$

CITY OF DAYTON, OHIO MONTGOMERY COUNTY, OHIO

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

OTHER SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

F 42

THIS PAGE IS INTENTIONALLY LEFT BLANK

F 43

Dayton Nonmajor International Enterprise Airport Water Sewer Funds

Assets: Current assets:

Equity in pooled cash and investments. . . . . . 51,813,385$ 63,640,940$ 49,897,757$ 11,613,412$ Receivables:

Accounts. . . . . . . . . . . . . . . . . . . 2,917,436 6,077,611 4,539,120 1,530,338 Special assessments . . . . . . . . . . . . . - 874,012 418,219 630,762 Accrued interest . . . . . . . . . . . . . . . 77,153 85,229 74,114 17,280 Due from other funds . . . . . . . . . . . . - 4,130,215 - - Due from other governments. . . . . . . . . 1,033,472 292,783 - 22,062

Advances to other funds . . . . . . . . . . . . - - - - Due from component units. . . . . . . . . . . - 1,497,786 - - Materials and supplies inventory. . . . . . . . 65,930 1,553,119 - - Inventory held for resale. . . . . . . . . . . . . - - - - Prepayments . . . . . . . . . . . . . . . . . . 90,292 45,440 14,828 4,982

Total current assets . . . . . . . . . . . . . . . . 55,997,668 78,197,135 54,944,038 13,818,836

Noncurrent assets: Capital assets:

Land and construction in progress. . . . . . 48,065,966 14,216,936 10,528,281 652,427 Depreciable capital assets, net. . . . . . . . 220,245,845 112,538,222 79,317,144 17,169,389

Total capital assets, net. . . . . . . . . . . . . 268,311,811 126,755,158 89,845,425 17,821,816 Restricted assets:

Equity in pooled cash and cash equivalents . - 134,098 - - Cash with fiscal and escrow agents . . . . . 2,684,286 - - -

Total restricted assets. . . . . . . . . . . . . . 2,684,286 134,098 - -

Total noncurrent assets . . . . . . . . . . . . . . 270,996,097 126,889,256 89,845,425 17,821,816

Total assets . . . . . . . . . . . . . . . . . . . . . 326,993,765 205,086,391 144,789,463 31,640,652

Deferred outflows of resources: Unamortized deferred charges on debt refunding 543,415 - - - Total deferred outflows of resources . . . . . . . 543,415 - - -

Total assets and deferred outflows of resources . 327,537,180 205,086,391 144,789,463 31,640,652

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF NET POSITION PROPRIETARY FUNDS

DECEMBER 31, 2014

Business-type Activities - Enterprise Funds

F 44

Business-type Activities Governmental

Enterprise Activities - Funds Internal Total Service Funds

176,965,494$ 26,129,111$

15,064,505 14,418 1,922,993 -

253,776 23,967 4,130,215 36,028 1,348,317 33,202

- 217,584 1,497,786 - 1,619,049 -

- 689,946 155,542 235,413

202,957,677 27,379,669

73,463,610 75,000 429,270,600 881,878 502,734,210 956,878

134,098 - 2,684,286 - 2,818,384 -

505,552,594 956,878

708,510,271 28,336,547

543,415 - 543,415 -

709,053,686 28,336,547

- - Continued

F 45

Dayton Nonmajor International Enterprise Airport Water Sewer Funds

Liabilities: Current liabilities:

Accounts payable. . . . . . . . . . . . . . . . 992,808 1,375,084 409,079 21,902 Contracts payable. . . . . . . . . . . . . . . . 3,491,274 1,282,730 1,175,015 10,017 Retainage payable . . . . . . . . . . . . . . . 936,984 335,100 439,040 - Accrued wages and benefits payable . . . . . . 497,638 723,769 364,704 153,198 Due to other funds . . . . . . . . . . . . . . . 1,495 7,600 3,447,004 684,928 Due to other governments . . . . . . . . . . . 482,887 140,575 618 3,351 Accrued interest payable . . . . . . . . . . . . 148,290 43,734 184,408 - Compensated absences payable - current. . . . 625,087 1,063,848 462,690 250,614 Advances from other funds. . . . . . . . . . . - - - 1,086,841 General obligation bonds payable . . . . . . . 400,000 925,000 935,000 - Revenue bonds payable . . . . . . . . . . . . 1,445,000 - - - OWDA loans payable . . . . . . . . . . . . . - - 800,295 - OPWC loans payable . . . . . . . . . . . . . - - 50,000 - Claims and judgments payable . . . . . . . . - - - - Capital lease obligations payable . . . . . . . 32,236 54,224 29,680 5,405 Payable from restricted assets: Utility deposits. . . . . . . . . . . . . . . . . - 134,098 - -

Total current liabilities . . . . . . . . . . . . . . 9,053,699 6,085,762 8,297,533 2,216,256

Long-term liabilities: Compensated absences payable . . . . . . . . 333,986 568,418 247,218 133,905 General obligation bonds payable . . . . . . . 8,590,000 12,705,000 12,970,000 - Revenue bonds payable . . . . . . . . . . . . 29,331,093 - - - OWDA loans payable . . . . . . . . . . . . . - - 6,862,691 - OPWC loans payable . . . . . . . . . . . . . - - 250,000 - Capital lease obligations payable . . . . . . . 139,677 234,955 128,601 23,418 Claims and judgments payable . . . . . . . . - - - -

Total long-term liabilities . . . . . . . . . . . . 38,394,756 13,508,373 20,458,510 157,323

Total liabilities . . . . . . . . . . . . . . . . . . . 47,448,455 19,594,135 28,756,043 2,373,579

Net position: Net investment in capital assets. . . . . . . . . . 224,660,875 111,507,328 66,363,384 17,811,799 Unrestricted . . . . . . . . . . . . . . . . . . . 55,427,850 73,984,928 49,670,036 11,455,274

Total net position. . . . . . . . . . . . . . . . . . 280,088,725$ 185,492,256$ 116,033,420$ 29,267,073$

Adjustment to reflect the consolidation of the internal service funds activities related to enterprise funds.

Net position of business-type activities

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

Business-type Activities - Enterprise Funds

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

STATEMENT OF NET POSITION (continued) PROPRIETARY FUNDS

DECEMBER 31, 2014

F 46

Business-type Activities Governmental

Enterprise Activities - Funds Internal Total Service Funds

2,798,873 167,089 5,959,036 - 1,711,124 - 1,739,309 164,812 4,141,027 17,443

627,431 1,724,647 376,432 -

2,402,239 187,352 1,086,841 200,000 2,260,000 - 1,445,000 -

800,295 - 50,000 -

- 3,910,961 121,545

134,098 -

25,653,250 6,372,304

1,283,527 100,104

34,265,000 - 29,331,093 -

6,862,691 - 250,000 - 526,651 -

- 3,607,897

72,518,962 3,708,001

98,172,212 10,080,305

420,343,386 881,878 190,538,088 17,374,364

610,881,474 18,256,242$

555,427

611,436,901$

F 47

Dayton Nonmajor International Enterprise Airport Water Sewer Funds

Operating revenues: Charges for services . . . . . . . . . . . . . 26,454,375$ 47,702,941$ 32,034,019$ 10,205,077$ Other operating revenues . . . . . . . . . . 5,810,298 5,596,946 251,626 37,154

Total operating revenues. . . . . . . . . . . . 32,264,673 53,299,887 32,285,645 10,242,231

Operating expenses: Personal services . . . . . . . . . . . . . . 9,116,369 14,489,441 7,107,145 2,885,629 Fringe benefits. . . . . . . . . . . . . . . . 3,598,647 5,913,600 2,852,346 1,202,463 Contract services. . . . . . . . . . . . . . . 8,278,942 6,070,667 6,847,656 2,089,855 Materials and supplies. . . . . . . . . . . . 1,734,180 4,358,464 2,015,748 458,086 Cost of sales. . . . . . . . . . . . . . . . . - - - - Utilities . . . . . . . . . . . . . . . . . . . 2,106,141 5,823,990 2,786,808 193,467 Claims expense . . . . . . . . . . . . . . . - - - - Depreciation. . . . . . . . . . . . . . . . . 12,004,886 6,017,476 5,760,652 817,610 Other . . . . . . . . . . . . . . . . . . . . 2,078,550 2,823,444 1,130,760 698,279

Total operating expenses. . . . . . . . . . . . 38,917,715 45,497,082 28,501,115 8,345,389

Operating income (loss) . . . . . . . . . . . . (6,653,042) 7,802,805 3,784,530 1,896,842

Nonoperating revenues (expenses): Operating grants. . . . . . . . . . . . . . - - - - Interest and fiscal charges . . . . . . . . . . (2,010,646) (557,445) (871,552) (54,921) Loss on sale of capital assets. . . . . . . . . - (59,468) - (4,500) Bond issuance costs . . . . . . . . . . . . . (467,215) - - - Interest income. . . . . . . . . . . . . . . . 132,657 133,940 124,417 31,663 Other financing sources . . . . . . . . . . . 348,974 - - - Increase in fair market value of investments. . . 16,195 26,495 17,816 2,409

Total nonoperating revenues (expenses). . . . (1,980,035) (456,478) (729,319) (25,349)

Income (loss) before contributions and transfers . . . . . . . . . . . . . . . . . . . (8,633,077) 7,346,327 3,055,211 1,871,493

Transfer in . . . . . . . . . . . . . . . . . . . 300,000 - - 60,000 Transfer out . . . . . . . . . . . . . . . . . . - - - - Capital contributions. . . . . . . . . . . . . . 7,696,841 171,025 - 71,485

Change in net position . . . . . . . . . . . . . (636,236) 7,517,352 3,055,211 2,002,978

Net position at beginning of year. . . . . . . 280,724,961 177,974,904 112,978,209 27,264,095

Net position at end of year . . . . . . . . . . 280,088,725$ 185,492,256$ 116,033,420$ 29,267,073$

Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds.

Change in net position of business-type activities

MONTGOMERY COUNTY, OHIO CITY OF DAYTON

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2014 PROPRIETARY FUNDS

CHANGES IN NET POSITION STATEMENT OF REVENUES, EXPENSES AND

Business-type Activities - Enterprise Funds

F 48

Business-type Activities Governmental

Enterprise Activities - Funds Internal Total Service Funds

116,396,412$ 31,885,295$ 11,696,024 575,525

128,092,436 32,460,820

33,598,584 3,113,937 13,567,056 1,245,816 23,287,120 1,177,357

8,566,478 2,487,488 - 3,384,479

10,910,406 24,262 - 18,610,783

24,600,624 79,835 6,731,033 103,335

121,261,301 30,227,292

6,831,135 2,233,528

- 40,000 (3,494,564) -

(63,968) - (467,215) - 422,677 41,437 348,974 -

62,915 4,970 (3,191,181) 86,407

3,639,954 2,319,935

360,000 - - (117,909)

7,939,351 -

11,939,305 2,202,026

16,054,216

18,256,242$

(321,537)

11,617,768$

F 49

Dayton Nonmajor International Enterprise Airport Water Sewer Funds

Cash flows from operating activities: Cash received from customers. . . . . . . . . . . . . 25,943,317$ 48,528,679$ 32,470,353$ 10,273,444$ Cash received from interfund services provided. . . . - - - - Cash received from other operations . . . . . . . . . 5,432,863 5,499,213 251,626 37,154 Cash payments for personal services. . . . . . . . . . (9,081,220) (14,438,097) (7,135,477) (2,885,840) Cash payments for fringe benefits. . . . . . . . . . . . (3,591,222) (5,902,297) (2,855,319) (1,204,176) Cash payments for contractual services . . . . . . . . (8,375,273) (6,741,666) (6,760,614) (2,050,421) Cash payments for materials and supplies . . . . . . . (1,753,226) (4,518,982) (2,098,306) (473,856) Cash payments for cost of goods sold. . . . . . . . . - - - - Cash payments for utilities. . . . . . . . . . . . . . . (2,023,919) (5,818,396) (3,024,694) (198,514) Cash payments for claims . . . . . . . . . . . . . . . - - - - Cash payments for other expenses . . . . . . . . . . . (2,038,452) (2,812,170) (1,119,705) (711,054)

Net cash provided by operating activities. . . . . . 4,512,868 13,796,284 9,727,864 2,786,737

Cash flows from noncapital financing activities: Cash received from advance from component unit. . . - 311,397 - - Cash payments for advance to component unit. . . . . - (687,773) - - Cash received from grants. . . . . . . . . . . . . . - - - - Cash received from transfers in . . . . . . . . . . . . 300,000 - - 60,000 Cash used in transfers out . . . . . . . . . . . . . . . - - - - Cash received from interfund loans . . . . . . . . . . - - - - Interest paid on interfund loans. . . . . . . . . . . . - - - (50,599) Cash used in repayment of interfund loans. . . . . . . - - - (37,592)

Net cash provided by (used in) noncapital financing activities. . . . . . . . . . . . . . . . . . 300,000 (376,376) - (28,191)

Cash flows from capital and related financing activities:

Capital contributions. . . . . . . . . . . . . . . . . . 8,728,505 171,025 - 71,485 Acquisition of capital assets . . . . . . . . . . . . . . (8,074,845) (14,239,602) (7,624,154) (548,968) Principal paid on loans. . . . . . . . . . . . . . . . . - - (820,397) - Interest paid on loans. . . . . . . . . . . . . . . . . - - (317,188) - Principal paid on bonds. . . . . . . . . . . . . . . (1,165,000) (890,000) (900,000) (188,600) Interest paid on bonds. . . . . . . . . . . . . . . . (2,069,645) (560,412) (571,400) (4,715) Bond issuance costs. . . . . . . . . . . . . . . . . . . . (467,215) - - - Payment to refunded bond escrow agent. . . . . . (29,055,505) - - - Premium on bonds. . . . . . . . . . . . . . . . . . 1,572,451 - - - Bond proceeds. . . . . . . . . . . . . . . . . . . 26,950,000 - - -

Net cash used in capital and related financing activities. . . . . . . . . . . . . . . . . . (3,581,254) (15,518,989) (10,233,139) (670,798)

Cash flows from investing activities: Interest received . . . . . . . . . . . . . . . . . . . . 128,394 150,922 126,016 27,637

Net cash provided by investing activities . . . . . . . 128,394 150,922 126,016 27,637

Net increase (decrease) in cash and investments. . . . . . . . . . . . . . . . . . . . . . . 1,360,008 (1,948,159) (379,259) 2,115,385

Cash and investments at beginning of year. . . . . . . 53,137,663 65,723,197 50,277,016 9,498,027

Cash and investments at end of year. . . . . . . . . . . . 54,497,671$ 63,775,038$ 49,897,757$ 11,613,412$

CITY OF DAYTON

FOR THE YEAR ENDED DECEMBER 31, 2014 PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS

MONTGOMERY COUNTY, OHIO

Business-type Activities - Enterprise Funds

F 50

Business-type Activities Governmental

Enterprise Activities - Funds Internal Total Service Funds

117,215,793$ -$ - 32,077,447

11,220,856 575,525 (33,540,634) (3,111,713) (13,553,014) (1,243,280) (23,927,974) (1,209,940)

(8,844,370) (2,523,056) - (3,454,970)

(11,065,523) (23,597) - (18,566,455)

(6,681,381) (315,409)

30,823,753 2,204,552

311,397 - (687,773) -

- 40,000 360,000 -

- (117,909) - 68,345

(50,599) - (37,592) (100,000)

(104,567) (109,564)

8,971,015 - (30,487,569) (36,150)

(820,397) - (317,188) -

(3,143,600) - (3,206,172) -

(467,215) - (29,055,505) -

1,572,451 - 26,950,000 -

(30,004,180) (36,150)

432,969 39,959

1,147,975 2,098,797

178,635,903 24,030,314

179,783,878$ 26,129,111$

- - Continued

F 51

Dayton Nonmajor International Enterprise Airport Water Sewer Funds

Reconciliation of operating income (loss) to net cash provided by operating activities:

Operating income (loss) . . . . . . . . . . . . . . . . . (6,653,042)$ 7,802,805$ 3,784,530$ 1,896,842$

Adjustments: Depreciation. . . . . . . . . . . . . . . . . . . . . . 12,004,886 6,017,476 5,760,652 817,610

Changes in assets and liabilities: Decrease (increase) in accounts receivable. . . . . . . . (1,571,479) 905,360 385,599 113,592 Decrease (increase) in due from other funds. . . . . . . . 4,098 (275,025) - - Decrease (increase) in due from other governments. . . 678,888 (29,443) - - Decrease (increase) in prepayments. . . . . . . . . . 35,913 90,542 30,050 (3,107) Decrease (increase) in special assessments receivable. . - 114,774 50,735 (45,225) Increase in materials and supplies inventory. . . . . . . . (4,244) (110,058) - - Increase in inventory held for resale. . . . . . . . . . . . - - - - Increase (decrease) in accounts payable. . . . . . . . . 92,202 200,175 (421,159) (56,470) Increase (decrease) in contracts payable . . . . . . . . . 642,780 (1,055,540) (351,553) 2,671 Increase (decrease) in retainage payable . . . . . . . . . (795,676) 105,669 356,024 (17,272) Increase (decrease) in accrued wages and benefits. . . . . 11,883 22,253 (15,724) (6,668) Increase (decrease) in due to other funds. . . . . . . . (451) (60,665) 164,290 86,955 Increase (decrease) in due to other governments. . . . . . 36,419 15,430 1 (6,935) Increase (decrease) in compensated absences payable. . . 30,691 40,394 (15,581) 4,744 Increase in utility deposits. . . . . . . . . . . . . . . . . - 12,137 - - Decrease in claims payable. . . . . . . . . . . . . . . . . - - - -

Net cash provided by operating activities . . . . 4,512,868$ 13,796,284$ 9,727,864$ 2,786,737$

Non-cash transactions:

At December 31, 2014, the Water, Sewer, Dayton International Airport and Storm Water enterprise funds purchased $1,905,097, $1,456,461, $4,222,344 and $6,334, respectively, in capital assets on account. At December 31, 2013, the Water, Sewer, Dayton International Airport and Storm Water enterprise funds purchased $1,317,913, $441,080, $2,161,531 and $23,922, respectively, in capital assets on account.

Business-type Activities - Enterprise Funds

CITY OF DAYTON MONTGOMERY COUNTY, OHIO

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2014 PROPRIETARY FUNDS (CONTINUED)

STATEMENT OF CASH FLOWS

During 2014, the Dayton International Airport received $2,249,160 in capital grants, which was recognized as a receivable in 2013. Receivables in the amount of $1,217,496, 120,381 and 22,062 have been recorded for capital grants in 2014 for the Dayton International Airport, Water and Storm Water enterprise funds, respectively.

During 2014, the Water, Sewer, Dayton International Airport and Storm Water enterprise funds entered into a capital lease for the radio equipment in the amounts of $289,179, $158,281, $171,913 and $28,823, respectively.

F 52

Business-type Activities Governmental

Enterprise Activities - Funds Internal Total Service Funds

6,831,135$ 2,233,528$

24,600,624 79,835

(166,928) 4,004 (270,927) 181,917 649,445 (6,732) 153,398 (220,670) 120,284 -

(114,302) - - (70,491)

(185,252) (51,283) (761,642) - (351,255) -

11,744 9,594 190,129 5,356

44,915 205,126 60,248 (4,834) 12,137 -

- (160,798)

30,823,753$ 2,204,552$

F 53

Agency

Assets: Equity in pooled cash

and cash equivalents . . . . . . . . . . . 3,175,813$ Investments with fiscal agent . . . . . . . . 652,761 Cash and cash equivalents with fiscal agent . . 1,403,016 Receivables:

Accounts . . . . . . . . . . . . . . . . . 174,382 Special assessments. . . . . . . . . . . . . 1,294,660 Intergovernmental. . . . . . . . . . . . . 90,671

Total assets . . . . . . . . . . . . . . . . . . 6,791,303$

Liabilities: Accounts payable . . . . . . . . . . . . . . 1,612$ Intergovernmental payable. . . . . . . . . . 2,332,612 Due to others. . . . . . . . . . . . . . . . 2,578,097 Withholdings and deposits. . . . . . . . . . 1,878,982

Total liabilities. . . . . . . . . . . . . . . . . 6,791,303$

SEE ACCOMPANYING NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF DAYTON

FIDUCIARY FUNDS DECEMBER 31, 2014

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

MONTGOMERY COUNTY, OHIO

F 54

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 55

NOTE 1 - DESCRIPTION OF THE CITY

The City of Dayton (the “City”) is located in Montgomery County in southwestern Ohio approximately seventy-six miles west of Columbus and fifty-four miles north of Cincinnati. The City charter was approved in 1913 and the City became the first large community in the United States to adopt the Commission-Manager Plan form of government. Subsequent amendments to the charter have been made. Legislative power is vested in a five-member commission, one of the members being the Mayor. The City Manager is the chief executive officer and the head of the administrative agencies of the City. The City Manager appoints all department heads, except the Secretary of the Civil Service Board and the Director of the Human Relations Council, who are appointed by the City Commission.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The basic financial statements (BFS) of the City have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to local governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. A. Reporting Entity

A reporting entity is comprised of the primary government, component units and other organizations that are included to ensure that the financial statements of the City are not misleading. The primary government consists of all funds, departments and agencies that are not legally separate from the City. For the City, this includes providing water supply and treatment, sewer and storm water maintenance, wastewater treatment, airport services, fire and emergency medical services, police protection, a convention center, building inspection, neighborhood support, recreation and parks, golf, street and bridge maintenance, waste collection and a municipal court.

Component units are legally separate organizations for which the City is financially accountable. The City is financially accountable for an organization if the City appoints a voting majority of the organization's Governing Board and (1) the City is able to significantly influence the programs or services performed or provided by the organization; or (2) the City is legally entitled to or can otherwise access the organization's resources; or (3) the City is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization; or (4) the City is obligated for the debt of the organization. Component units may also include organizations that are fiscally dependent on the City in that the City approves their budget, the issuance of their debt or the levying of their taxes for the organization. Based on the foregoing criteria, the financial activities of the following potential component units have been reflected in the accompanying BFS as follows:

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 56

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

DISCRETELY PRESENTED COMPONENT UNIT

The City has included one discretely presented component unit, the City-Wide Development Corporation (CWDC), as part of this report. CWDC was established in 1972 as a private, non-profit development organization which supports the City in a number of ways - primarily as its development financing arm. CWDC's relationship with the City is established via its stated mission: fostering economic development through creating and retaining jobs for City residents, providing administrative support to assist in neighborhood development, increasing tax revenues, and improving the Dayton area economy. Because the City appoints all members of CWDC's Board of Trustees and is empowered to remove them at will, CWDC is a component unit of the City. CWDC issues separately audited financial statements with a December 31 year end. Its most recently audited financial statements may be obtained from Citywide Development Corporation, 8 North Main Street, Dayton, Ohio 45402-1916. Further disclosures for the discretely presented component unit can be found in Note 22.

JOINTLY GOVERNED ORGANIZATIONS

Miami Valley Regional Planning Commission - The Miami Valley Regional Planning Commission (the Commission) is a jointly governed organization between Preble, Clark, Clinton, Darke, Greene, Miami and Montgomery Counties, the City of Dayton, City of Riverside, City of New Carlisle and the City of Huber Heights. The Commission prepares plans, including studies, maps, recommendations, and reports concerning the physical, environmental, social, economic, and governmental characteristics, functions, and services of the region. These reports show recommendations for systems of transportation, highways, parks and recreational facilities, water supply, sewage disposal, garbage disposal, civic centers and other public improvements and land uses which affect the development of the region. The degree of control exercised by any participating government is limited to its representation on the Board. Members of the Board are as follows: the officers of the Commission (elected by member representatives), the immediate past Chair of the Commission, the Commission member representing the City of Dayton, the Commission member representing each of the respective member counties, the representatives selected by each county caucus, a nongovernmental member and two at-large representatives. Payments to the Commission are made from the general fund. The City contributed $65,102 for the operation of the Commission during 2014. Financial information can be obtained from Brian Martin, Executive Director, at 1 South Main Street, Suite 260, Dayton, Ohio 45402.

Miami Valley Fire/EMS Alliance - The Miami Valley Fire/EMS Alliance (the Alliance) is a jointly

governed organization between municipal corporations and townships in Montgomery, Greene and Warren Counties. The purpose of the Alliance is to foster cooperation among the political subdivisions by promoting programs and recommending matters which will result in more efficient methods of delivering fire and emergency medical services in the region. The Board of the Alliance is made up of a representative appointed by the City of Dayton, a representative appointed by the members who are provided Fire/EMS Services by volunteers, two representatives appointed by the members who are provided Fire/EMS Services by a combination of full time employees and volunteers and a representative appointed by the members who are provided Fire/EMS Services by full time employees. Payments to the Alliance are made from the general fund. The City contributed $33,966 for the operation of the Alliance during 2014. Financial information can be obtained from Jackie Leland, Director, at 444 W. Third Street, Suite 20-231, Dayton, Ohio 45402.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 57

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Miami Township-Dayton Joint Economic Development District - In an effort to promote regional growth and economic development, the City has entered into a contract with Miami Township to create a Joint Economic Development District (JEDD). The City entered into a separate contract with Miami Township in July, 2005. In accordance with State law, the Districts Board of Trustees levied a 1.75% income tax effective January 1, 2008. The proceeds of that tax are allocated, in accordance with the contract, primarily to the Township. In consideration for its receipt of a share of the District’s income taxes, the City will receive 50% of the property tax revenue from parcels located within the District. The Township will utilize these JEDD revenues, in part, to construct infrastructure and improvement near the Dayton-Wright Brothers Airport. The City received $68,084 in revenues through the JEDD in 2014. Butler Township-Dayton Joint Economic Development District - In an effort to promote regional growth and economic development, the City has entered into a contract with Butler Township to create a Joint Economic Development District (JEDD). The City entered into a separate contract with Butler Township in July, 2006. In accordance with State Law, the Districts Board of Trustees levied a 1.75% income tax effective in 2008. The proceeds of that tax are allocated, in accordance with the contract, to the Township. In consideration for its receipt of a share of the District’s income taxes, the City will receive 50% of the property tax revenue from parcels located within the District. The District will utilize these JEDD revenues to facilitate economic development to create or preserve jobs and employment opportunities and to improve economic welfare. The City received $10,752 in revenues through the JEDD in 2014.

Economic Development/Government Equity Program - The Economic Development/Government Equity Program (ED/GE) was established pursuant to Ohio Revised Code Chapter 307 for the purpose of developing and promoting plans and programs designed to assure that County resources are efficiently used, economic growth is properly balanced, and that County economic development is coordinated with that of the State of Ohio and other local governments. Members include villages, township, and cities within Montgomery County, and Montgomery County itself. Cooperation and coordination between the members is intended to promote economic health and improve the economic opportunities of the people in Montgomery County by assisting in the establishment or expansion within the County of industrial, commercial or research facilities and by creating and preserving job and employment opportunities for the people of the County. The ED/GE Advisory Committee, made up of alternating member entities representatives, decides which proposed projects will be granted each year. Sales tax revenues, set aside by Montgomery County, are used to fund the projects. Members annually contribute to or receive benefits based on an elaborate zero-based formula designed to distribute growth in contributing communities to those communities experiencing less economic growth. Any member in default of paying its contributions will be liable for the amount of the contribution, any interest accrued, and penalties. During this time, the member will not be entitled to any allocations from ED/GE. Payments to ED/GE are made from the general fund.

The City did not contribute to the operation of ED/GE during 2014. Financial information can be obtained from Matt Dunn, ED/GE Coordinator, Montgomery County, 451 W. Third Street, 10th Floor, Dayton, OH 45422, 937-224-3850, e-mail: [email protected].

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 58

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Montgomery County Family and Children First Council - The City participates in the Montgomery County Family and Children First Council. The Council coordinates and integrates those services within Montgomery County which are available for families and children and establishes a comprehensive, coordinated, multi-disciplinary, interagency system for the delivery of such services in order to more effectively meet the needs of families and children. The Council is governed by a board of nineteen trustees, one of which is the Mayor of the City of Dayton. The City did not contribute to the operation of the Council during 2014. Financial information can be obtained from Tom Kelley, Executive Director, at 451 West Third Street, P.O. Box 972, Dayton, Ohio 45422-3100.

Hazardous Material Response Team - The City is a member of a Hazardous Material Response Team ("HAZMAT") which is a jointly governed organization with other local governments. The organization was created to provide hazardous material response protection and mutual assistance in the event of a hazardous material incident.

The HAZMAT Advisory Board oversees the operation of HAZMAT and consists of representatives from sixteen organizations. The City's ability to affect operations is limited to its representation on the Board.

The Board established hazardous materials incident response guidelines to provide for response procedures in the event of an incident. In the event of a hazardous material incident within any local government that is a member of this organization, the other members will respond to render assistance. The funding for the operation of the response team is through contributions from each entity. In addition, the persons or company responsible for any hazardous materials emergency is required by State law to reimburse the team any costs associated with clean up. There is no explicit and measurable equity interest in HAZMAT. During 2014, the City contributed $20,314 to HAZMAT. Financial information can be obtained from Danny Bristow, Executive Director at 444 West Third Street, Suite 20-231, Dayton, Ohio 45402.

Miami Valley Emergency Management Agency - The Miami Valley Emergency Management Agency (the Agency) is a jointly governed organization between various political subdivisions in the Miami Valley Region. The Agency is responsible for developing plans and programs that prepare the region to effectively prevent, respond to, and recover from catastrophic disasters.

The funding for the operation of the Agency is through contributions from each participating entity. Payments to the Agency are made from the general fund. The City contributed $28,305 for the operation of the Agency during 2014. Financial information can be obtained from Jeff Jordan, Executive Director, 117 South Main Street, Suite 721, Dayton, Ohio 45422.

B. Basis of Presentation

The City’s basic financial statements consist of government-wide statements, including a statement of

net position and a statement of activities, and fund financial statements which provide a more detailed level of financial information.

Government-wide Financial Statements - The statement of net position and the statement of activities display information about the City as a whole. These statements include the financial activities of the primary government, except for fiduciary funds. The activities of the internal service funds are eliminated to avoid “doubling up” revenues and expenses. The statements distinguish between those activities of the City that are governmental and those that are considered business-type activities.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 59

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) The statement of net position presents the financial condition of the governmental and business-type activities of the City at year end. The statement of activities presents a comparison between direct expenses and program revenues for each program or function of the City’s governmental activities and for the business-type activities of the City. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. Revenues which are not classified as program revenues are presented as general revenues of the City, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the City.

Fund Financial Statements - During the year, the City segregates transactions related to certain City functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the City at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. The internal service funds are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by type.

C. Fund Accounting

The City uses funds to maintain its financial records during the year. A fund is defined as a fiscal and accounting entity with a self balancing set of accounts. There are three categories of funds: governmental, proprietary and fiduciary.

1. Governmental Funds - Governmental funds are those through which most governmental functions

typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities and deferred inflows of resources is reported as fund balance. The following are the City's major governmental funds:

General fund - The general fund accounts for all financial resources except those required to be accounted for in another fund. Other special revenue fund - To account for monies committed by City ordinance to finance various special projects undertaken by the City. Debt service fund - To account for various revenues collected for payment of general obligation debt principal, interest and related costs. Capital improvement fund - To account for resources used to purchase equipment and construct capital assets.

Other governmental funds of the City are used to account for grants and other resources whose use is restricted to a particular purpose. These funds are nonmajor funds whose activity has been aggregated and presented in a single column in the BFS.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 60

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

2. Proprietary Funds - Proprietary fund reporting focuses on changes in net position, financial position and cash flows. Proprietary funds are classified as either enterprise or internal service.

a. Enterprise Funds - The enterprise funds may be used to account for any activity for which a

fee is charged to external users for goods or services. The following are the City’s major enterprise funds:

Dayton International Airport - To account for the provision of air traffic, primarily commercial, including air freight. Revenues are derived from landing fees, concessionaire fees, and space rentals. The Dayton-Wright Brothers Airport is included in this fund. Water - To account for the provision of water service and water pollution control activities of the City. The Department also provides water services to several areas outside the City. Revenue is generated by charges for services including those to other departments of the City. The water supply is maintained through the development of well fields, storage facilities and pumping. Sewer - To account for the provision of sanitary sewer service to the residential, commercial, and industrial consumers of the City and various communities within the Dayton Metropolitan area. The charges for services are based on the City’s needs for the cost of service and expenses of improvements to expand the capacity to meet the Environmental Protection Agency (EPA) standards.

Other enterprise funds of the City are used to account for the provision of storm sewers to the residents of the City and to account for the operations of the City’s six golf courses. These funds are nonmajor funds whose activity has been aggregated and presented in a single column in the BFS.

b. Internal Service Funds - The internal service funds account for the financing of services

provided by one department or agency to other departments or agencies of the City on a cost- reimbursement basis. The City’s internal service funds include programs for fleet maintenance, fire fleet maintenance, plumbing services, workers’ compensation, health insurance and stores and reproduction services.

3. Fiduciary Funds - Fiduciary fund reporting focuses on net position and changes in net position.

The fiduciary fund category is split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds and agency funds. Trust funds are used to account for assets held by the City under a trust agreement for individuals, private organizations, or other governments and are therefore not available to support the City’s own programs. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The City’s only fiduciary funds are agency funds which are used to account for items such as building permit surcharge, prisoner’s personal accounts, performance bonds, and as other situations where the City’s role is purely custodial, such as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, and other governments.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 61

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) D. Measurement Focus

Government-wide Financial Statements - The government-wide and proprietary fund financial statements are prepared using the economic resources measurement focus. All assets and deferred outflows and all liabilities and deferred inflows associated with the operation of the City are included on the statement of net position. Fund Financial Statements - All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities and deferred inflows generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.

Like the government-wide statements, all proprietary funds are accounted for on a flow of economic resources measurement focus. All assets and deferred outflows and all liabilities and deferred inflows associated with the operation of these funds are included on the statement of net position. The statement of changes in fund net position presents increases (i.e., revenues) and decreases (i.e., expenses) in total net position. The statement of cash flows provides information about how the City finances and meets the cash flow needs of its proprietary activities. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the City, these revenues are charges for services for the airport, water, sewer, storm water and golf enterprise funds and charges for services to other departments for goods and services provided by the internal service funds for fleet management, fire fleet management, stores and reproduction services, health insurance, a Workers’ Compensation program and plumbing shop services. Operating expenses are necessary costs incurred to provide the goods or services that are the primary activity of the fund. Agency funds do not report a measurement focus as they do not report operations.

E. Basis of Accounting

Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and agency funds also use the accrual basis of accounting. Differences in the accrual and modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred inflows and in the presentation of expenses versus expenditures.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 62

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Revenues - Exchange and Nonexchange Transactions - Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the City, available means expected to be received within sixty days of year end. Nonexchange transactions, in which the City receives value without directly giving equal value in return, include income taxes, property taxes, grants, entitlements and donations. On an accrual basis, revenue from income taxes is recognized in the period in which the income is earned (See Note 7). Revenue from property taxes is recognized in the year for which the taxes are levied (See Note 6). Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at year end: income tax, State-levied locally shared taxes (including gasoline tax, local government funds and permissive tax), fines and forfeitures, interest, grants, fees and rentals.

Deferred Inflows of Resources and Deferred Outflows of Resources - A deferred inflow of resources is an acquisition of net position by the City that is applicable to a future reporting period. A deferred outflow of resources is a consumption of net position by the City that is applicable to a future reporting period.

Property taxes for which there is an enforceable legal claim as of December 31, 2014, but which were levied to finance year 2015 operations, and other revenues received in advance of the year for which they were intended to finance, have been recorded as deferred inflows. Income taxes, payment in lieu of taxes and grants not received within the available period, grants and entitlements received before the eligibility requirements are met, and delinquent property taxes due at December 31, 2014, are recorded as deferred inflows on the governmental fund financial statements. Deferred outflows of resources represent a consumption of net position that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until then. For the City, deferred outflows of resources includes deferred charges on refundings. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter life of the refunded or refunding debt.

Expenses/Expenditures - On the accrual basis of accounting, expenses are recognized at the time they are incurred.

The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

F. Budgetary Process

The budgetary process is prescribed by provisions of the Ohio Revised Code and entails the preparation of budgetary documents within an established timetable. The major documents prepared are the tax budget, the certificate of estimated resources, and the appropriation ordinance, all of which are prepared on the budgetary basis of accounting. The certificate of estimated resources and the appropriations ordinance are subject to amendment throughout the year with the legal restriction that appropriations cannot exceed estimated resources, as certified. All funds, except agency funds, are legally required to be budgeted. The Capital Improvement fund and the HUD Programs fund, pursuant to the City's charter, are not required to be budgeted annually. These funds' appropriations, after their initial appropriations by Council at the time capital monies/grants are received (bond proceeds, etc.), remain intact until they are expended or modified by Council. Such monies are appropriated on a project level with specific identification of each project being budgeted.

The City prepares its budget on a non-GAAP budgetary basis which is the modified accrual basis with certain exceptions. The legal level of budgetary control is at the department level. Budgetary modifications at this level may only be made by resolution of the City Commission. Estimated Resources - The County Budget Commission determines if the budget substantiates a need to levy all or part of previously authorized taxes and reviews estimated revenue. The Budget Commission certifies its actions to the City by October 1. As part of this certification, the City receives the official certificate of estimated resources, which states the projected revenues of each fund. Prior to December 31, the City must revise its budget so that the total contemplated expenditures from any fund during the ensuing year will not exceed the amount available as stated in the certificate of estimated resources. The revised budget then serves as the basis for the annual appropriation ordinance. On or about January 1, the certificate of estimated resources is amended to include unassigned fund balances at December 31 of the preceding year. The certificate may be further amended during the year if the fiscal officer determines, and the Budget Commission agrees, that an estimate needs to be either increased or decreased. The amounts reported on the budgetary statements reflect the amounts in the final amended official certificate of estimated resources issued during 2014.

Appropriations - A temporary appropriation measure to control expenditures may be passed on or about January 1 of each year for the period from January 1 to March 31. The annual appropriation ordinance must be passed by April 1 of each year for the period January 1 to December 31. The appropriation ordinance fixes spending authority at the fund and department level. The appropriation ordinance may be amended during the year as new information becomes available, provided that total fund appropriations do not exceed current estimated resources, as certified. The allocation of appropriations between line items within a department may be modified with approval of the City Manager. All other modifications may only be made by ordinance of City Commission. During the year, several supplemental appropriation measures were passed, however none of them were significant. The budget figures which appear in the statements of budgetary comparisons represent the final appropriation amounts, including all amendments and modifications.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Encumbrances - As part of formal budgetary control, purchase orders, contracts and other commitments for the expenditure of monies are recorded as the equivalent of expenditures on the non- GAAP budgetary basis in order to assign that portion of the applicable appropriation and to determine and maintain legal compliance. The Ohio Revised Code prohibits expenditures plus encumbrances from exceeding appropriations. On the GAAP basis, encumbrances outstanding at year end are reported as assignments of fund balances for subsequent-year expenditures for governmental funds.

Lapsing of Appropriations - At the close of each year, the unencumbered balance of each appropriation reverts to the respective fund from which it was appropriated and becomes subject to future appropriations. The encumbered appropriation balance is carried forward to the succeeding calendar year.

G. Cash and Cash Equivalents

Cash balances of the City's funds, except cash and cash equivalents and investments held by fiscal agents, are pooled and invested in order to provide improved cash management. Each fund's interest in the pool is presented as “equity in pooled cash and investments” on the statement of net position. During 2014, investments were limited to federal agency securities, U.S. Treasury notes, City owned debt, U.S. Government money market mutual funds and the State Treasury Asset Reserve of Ohio (STAR Ohio). Except for non-participating investment contracts, investments are stated at fair value which is based on quoted market prices. For U.S. Government money market mutual funds, fair value is determined by the fund's share price at December 31, 2014. Non-participating investment contracts, such as non-negotiable certificates of deposit, are reported at cost.

STAR Ohio is an investment pool managed by the State Treasurer's office which allows governments within the State to pool their funds for investment purposes. STAR Ohio is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of 1940. Investments in STAR Ohio are valued at STAR Ohio's shares price which is the price the investment could be sold for on December 31, 2014.

For purposes of the statement of cash flows and for presentation on the financial statements, the City's cash management pool and investments with original maturities of three months or less are considered to be cash and cash equivalents. Investments not part of the cash management pool, with an initial maturity of more than three months, are reported as investments.

The City utilizes a financial institution to service bonded debt as principal and interest payments become due. The balance in these accounts along with reserves held for replacement and improvement for enterprise funds, money held by the municipal court, money held by the Dayton Foundation and money in the executive savings plan are shown as "cash and cash equivalents with fiscal agents" and "investments with fiscal agents ".

Interest income is distributed to the funds according to City Ordinance and statutory requirements. Interest revenue earned during 2014 was $1,584,111 in the general fund, which includes $1,261,196 assigned from other City funds.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

H. Inventory of Supplies

Inventories are presented at the lower of cost or market on a first-in, first-out basis and are expensed when used.

I. Restricted Assets

Restricted assets are those which are legally restricted in their use by bond indentures, or other legal instruments. Restricted assets in the enterprise funds include “equity in pooled cash and cash equivalents” and “cash with fiscal and escrow agents”. The “equity in pooled cash and cash equivalents” represent utility deposits held by the City. The “cash with fiscal and escrow agents” are the proceeds from bond and loan issues that are required by the bond indenture or loan agreement to be held by a financial services corporation.

J. Capital Assets

General capital assets are those assets not specifically related to activities reported in the proprietary funds. These assets generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide statement of net position, but are not reported in the governmental fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business-type activities column of the government-wide statement of net position and in the respective funds.

All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated capital assets are recorded at their fair market values as of the date received. The City maintains a capitalization threshold of $5,000. The City’s infrastructure consists of bridges, curbs, lighting, sidewalks, and roads. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not. Interest incurred during the construction of capital assets is capitalized in the proprietary funds.

All reported capital assets are depreciated except for land, right of ways and construction in progress. Improvements are depreciated over the remaining useful lives of the related capital assets. Useful lives for infrastructure were estimated based on the City’s historical records of necessary improvements and replacement. Depreciation is computed using the straight-line method over the following useful lives:

Governmental Business-Type Activities Activities Description Estimated Lives Estimated Lives Improvements other than buildings 10 - 25 years 10 - 25 years Buildings and improvements 30 - 50 years 30 - 50 years Equipment 3 - 15 years 3 - 15 years Vehicles 3 - 25 years 3 - 25 years Software 5 - 10 years 5 - 10 years Infrastructure 20 - 50 years 20 - 50 years

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

K. Interfund Balances

On fund financial statements, receivables and payables resulting from short-term interfund loans are classified as “interfund loans receivable/payable”. On fund financial statements, long-term interfund loans are classified as “advances to/from other funds” on the balance sheet. All other outstanding balances outstanding between funds are reported as “due to/from other funds”. These amounts are eliminated in the governmental and business-type activities columns of the statement of net position, except for any net residual amounts due between governmental and business-type activities, which are presented as internal balances. Advances made from the City to its discretely presented component unit are reported on both the government-wide and fund financial statements as “advances to component unit”.

L. Prepayments

Payments made to vendors for services that will benefit periods beyond December 31, 2014, are recorded as prepaid items using the consumption method by recording a current asset for the prepaid amount at the time of the purchase and the expenditure/expense in the year in which services are consumed.

M. Compensated Absences

The City follows the provisions of Governmental Accounting Standards Board Statement No. 16 “Accounting for Compensated Absences”. Vacation and compensatory time benefits are accrued as a liability as the benefits are earned if the employees' rights to receive compensation are attributable to services already rendered and it is probable that the City will compensate the employees for the benefits through paid time off or some other means. The City records a liability for accumulated unused vacation time and compensatory time when earned for all employees with more than one year of service. Sick leave benefits are accrued using the termination method. An accrual for earned sick leave is made to the extent that it is probable that benefits will result in termination payments. The liability is an estimate based on the City's past experience of making termination payments. The total liability for vacation and sick leave payments has been calculated using pay rates in effect at the balance sheet date, and reduced to the maximum payment allowed by labor contract and/or statute, plus applicable additional salary related payments. City employees are granted vacation and sick leave in varying amounts. In the event of termination, an employee is reimbursed for accumulated vacation and sick leave at various rates.

The entire compensated absence liability is reported on the government-wide financial statements.

On governmental fund financial statements, compensated absences are recognized as liabilities and expenditures to the extent payments come due each period upon the occurrence of employee resignations and retirements. These amounts are recorded in the account “compensated absences payable” in the fund from which the employees who have accumulated leave are paid. The noncurrent portion of the liability is not reported. For proprietary funds, the entire amount of compensated absences is reported as a fund liability.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

N. Accrued Liabilities and Long-Term Obligations

All payables, accrued liabilities and long-term obligations payable from governmental funds are reported in the government-wide financial statements and all payables, accrued liabilities and long- term obligations payable from proprietary funds are reported on the proprietary fund financial statements.

In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources, are reported as obligations of the funds. However, claims and judgments and compensated absences that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they are due for payment during the current year. Bonds, capital leases and long-term loans are recognized as a liability on the fund financial statements when due.

O. Bond Premium and Discount/Accounting Gain or Loss

Bond premiums and discounts are deferred and amortized over the term of the bonds using the straight line method, which approximates the effective interest method. Bond premiums are presented as an addition to the face amount of the bonds. Bond discounts are presented as a reduction to the face amount of the bonds. For advance refundings resulting in the defeasance of debt reported in the government-wide financial statements and in the proprietary funds, the difference between the reacquisition price and the net carrying amount of the old debt is deferred and amortized as a component of interest expense. This accounting gain or loss is amortized over the remaining life of the old debt or the life of the new debt, whichever is shorter, and is presented as a deferred inflow or deferred outflow of resources On the governmental fund financial statements, bond premiums and discounts are recognized in the current period. The reconciliation between the bonds face value and the amount reported on the statement of net position is presented in Note 14.

P. Interfund Activity

Transfers between governmental and business-type activities on the government-wide statements are reported in the same manner as general revenues.

Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Repayments from funds responsible for particular expenditures/expenses to the funds that initially paid for them are not presented on the basic financial statements.

Q. Fund Balance

Fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows:

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) Nonspendable - The nonspendable fund balance classification includes amounts that cannot be spent because they are not in spendable form or legally required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash. It also includes the long-term amount of loans receivable in the general fund. Restricted - Fund balance is reported as restricted when constraints are placed on the use of resources that are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. Committed - The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by a formal action (ordinance) of City Commission (the highest level of decision making authority). Those committed amounts cannot be used for any other purpose unless City Commission removes or changes the specified use by taking the same type of action (ordinance) it employed to previously commit those amounts. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. Assigned - Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes, but do not meet the criteria to be classified as restricted nor committed. In accordance with the City’s fund balance policy, assigned amounts represent intended uses established by policies of City Commission, which includes giving the Finance Director the authority to constrain monies for intended purposes. Unassigned - Unassigned fund balance is the residual classification for the general fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is only used to report a deficit fund balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.

The City’s fund balance policy states that the City applies restricted resources first when expenditures are incurred for purposes for which restricted and unrestricted (committed, assigned, and unassigned) fund balance is available. Similarly, within unrestricted fund balance, committed amounts are reduced first, followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.

R. Estimates

The preparation of the BFS in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the BFS and accompanying notes. Actual results may differ from those estimates.

S. Contributions of Capital

Contributions of capital in proprietary fund financial statements arise from outside contributions of capital assets, tap-in fees to the extent they exceed the cost of the connection to the system, or from grants or outside contributions of resources restricted to capital acquisition and construction. Capital contributions are reported as revenue in the proprietary fund financial statements.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

T. Net Position

Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows. Net investment in capital assets, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The City did not have any net position restricted by enabling legislation. The City applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position are available.

NOTE 3 - ACCOUNTABILITY AND COMPLIANCE Change in Accounting Principles For 2014, the City has implemented GASB Statement No. 69, “Government Combinations and Disposals of Government Operations” and GASB Statement No. 70, “Accounting and Financial Reporting for Nonexchange Financial Guarantees”. GASB Statement No. 69 establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The Statement improves the decision usefulness of financial reporting by requiring that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The implementation of GASB Statement No. 69 did not have an effect on the financial statements of the City. GASB Statement No. 70 improves the recognition, measurement, and disclosures for state and local governments that have extended or received financial guarantees that are nonexchange transactions. The implementation of GASB Statement No. 70 did not have an effect on the financial statements of the City.

NOTE 4 - DEPOSITS AND INVESTMENTS

State Statutes classify monies held by the City into three categories: Active deposits are public deposits necessary to meet current demands on the treasury. Such monies must be maintained either as cash in the City Treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts. Inactive deposits are public deposits not required for use within the current five year period of designation of depositories as defined by the City’s investment policy. Inactive deposits must either be evidenced by certificates of deposit maturing not later than the end of the current period of designation of depositories, or by savings or deposit accounts including, but not limited to, passbook accounts. Interim deposits are deposits in interim monies. Interim monies are those monies which are not needed for immediate use, but which will be needed before the end of the current period of designation of depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than one year from the date of deposit or by savings or deposit accounts including passbook accounts.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 4 - DEPOSITS AND INVESTMENTS - (Continued)

Interim monies may be deposited or invested in the following securities:

1. United States Treasury Notes, Bills, Bonds, or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal or interest by the United States;

2. Bonds, notes, debentures, or any other obligations or securities issued by any federal government agency or instrumentality, including, but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, and Student Loan Marketing Association. All federal agency securities shall be direct issuances of federal government agencies or instrumentalities;

3. Written repurchase agreements in the securities listed above provided that the market value of the securities subject to the repurchase agreement must exceed the principal value of the agreement by at least two percent and be marked to market daily, and that the term of the agreement must not exceed thirty days;

4. Bonds and other obligations of the State of Ohio;

5. No-load money market mutual funds consisting exclusively of obligations described in items (1) or (2) above and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions; and,

6. The State Treasurer’s investment pool (STAR Ohio). The City may also invest any monies not required to be used for a period of six months or more in the following:

1. Bonds and other obligations guaranteed by the United States; 2. Discount notes of the Federal National Mortgage Association;

3. Bonds of the State of Ohio; and,

4. Bonds of any municipal corporation, village, county, township, or other political subdivision of Ohio,

as to which there is no default of principal, interest or coupons.

Protection of the City’s deposits is provided by the Federal Deposit Insurance Corporation (FDIC), by eligible securities pledged by the financial institution as security for repayment, by surety company bonds deposited with the treasurer by the financial institution or by a single collateral pool established by the financial institution to secure the repayment of all public monies deposited with the institution. Investments in stripped principal or interest obligations, reverse repurchase agreements and derivatives are prohibited. The issuance of taxable notes for the purpose of arbitrage, the use of leverage and short selling are also prohibited. An investment must mature within five years from the date of purchase unless matched to a specific obligation or debt of the City, and must be purchased with the expectation that it will be held to maturity.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 4 - DEPOSITS AND INVESTMENTS - (Continued) Investments may only be made through specified dealers and institutions. Payment for investments may be made only upon delivery of the securities representing the investments to the Finance Director or qualified trustee or, if the securities are not represented by a certificate, upon receipt of confirmation of transfer from the custodian. A. Cash on Hand

At year-end, the City had $23,175 in undeposited cash on hand which is included on the financial statements of the City as part of “equity in pooled cash and cash equivalents”.

B. Cash with Fiscal Agent

At year-end, the City had $5,922,127 in cash with fiscal agent held by a financial institution for unspent proceeds from the State Infrastructure Bank Loans and Bonds.

C. Deposits with Financial Institutions

At December 31, 2014, the carrying amount of all City deposits was $11,352,687. As of December 31, 2014, $14,548,521 of the City’s bank balance of $15,299,196 was exposed to custodial risk as discussed below, while $750,675 was covered by the FDIC.

Custodial credit risk is the risk that, in the event of bank failure, the City will not be able to recover deposits or collateral securities that are in the possession of an outside party. As permitted by Ohio Revised Code, the City’s deposits are collateralized by a pool of eligible securities deposited with Federal Reserve Banks, or at member banks of the Federal Reserve System, in the name of the depository bank and pledged as a pool of collateral against all public deposits held by the depository. The City has no deposit policy for custodial credit risk beyond the requirements of State statute. Although the securities were held by the pledging institutions’ trust department and all statutory requirements for the deposit of money had been followed, noncompliance with federal requirements could potentially subject the City to a successful claim by the FDIC.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 4 - DEPOSITS AND INVESTMENTS - (Continued)

D. Investments As of December 31, 2014, the City had the following investments and maturities:

6 months or 7 to 12 13 to 18 19 to 24 Greater than Investment type Fair Value less months months months 24 months

FFCB 51,635,424$ 5,002,050$ 13,009,600$ 4,999,550$ 7,975,720$ 20,648,504$ FHLB 39,371,723 - - 7,501,540 13,218,727 18,651,456 FHLMC 84,398,566 - 350,655 6,942,645 16,614,289 60,490,977 FNMA 53,141,257 5,005,600 2,250,518 1,995,080 5,629,864 38,260,195 UST 5,233,593 - - 1,995,780 - 3,237,813 City Owned Debt 1,600,000 - - - - 1,600,000 Executive Severance Money Market 652,761 652,761 - - - - U.S. Government Money Market 2,939,210 2,939,210 - - - - STAR Ohio 45,047,109 45,047,109 - - - -

Total 284,019,643$ 58,646,730$ 15,610,773$ 23,434,595$ 43,438,600$ 142,888,945$

Investment Maturities

The weighted average maturity of investments is 1.8 years.

Interest Rate Risk: The Ohio Revised Code generally limits security purchases to those that mature within five years of the settlement date. Interest rate risk arises because potential purchasers of debt securities will not agree to pay face value for those securities if interest rates subsequently increase. The City’s investment policy addresses interest rate risk by requiring the consideration of market conditions and cash flow requirements in determining the term of an investment.

Custodial Credit Risk: For an investment, custodial credit risk 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 investment or collateral securities that are in the possession of an outside party. The federal agency securities are exposed to custodial credit risk in that they are uninsured, unregistered and held by the counterparty’s trust department or agent, but not in the City’s name. The City has no investment policy dealing with investment custodial risk beyond the requirement in Ohio law that prohibits payments for investments prior to the delivery of the securities representing such investments to the Finance Director or qualified trustee. Credit Risk: STAR Ohio carries a rating of AAAm by Standard & Poor’s. Ohio law requires that STAR Ohio maintain the highest rating provided by at least one nationally recognized standard service rating. The City’s investment policy limits its investments in federal agency securities to ratings of A or better by Standard & Poor’s and Moody’s Investor Services. The City’s investments in federal agency securities and its investments in U.S. Government money market funds (JPMorgan US Government money market and JP Morgan Prime money market) were rated AA+ and Aaa by Standard & Poor’s and Moody’s Investor Services, respectively. Concentration of Credit Risk: The City’s investment policy addresses concentration of credit risk by requiring investments to be diversified to reduce the risk of loss resulting from over concentration of assets in a specific issue or specific class of securities.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 4 - DEPOSITS AND INVESTMENTS - (Continued) The following table includes the percentage of each investment type held by the City at December 31, 2014:

Investment type Fair Value % of Total

FFCB 51,635,424$ 18.18 FHLB 39,371,723 13.86 FHLMC 84,398,566 29.72 FNMA 53,141,257 18.72 UST 5,233,593 1.84 City Owned Debt 1,600,000 0.56 Executive Severance Money Market 652,761 0.23 U.S. Government Money Market 2,939,210 1.03 STAR Ohio 45,047,109 15.86

Total 284,019,643$ 100.00

E. Reconciliation of Cash and Investments to the Statement of Net Position

The following is a reconciliation of cash and investments as reported in the note above to cash and investments as reported on the statement of net position as of December 31, 2014:

Cash and investments per note Carrying amount of deposits 11,352,687$ Investments 284,019,643 Cash on hand 23,175 Cash with fiscal agent 5,922,127

Total 301,317,632$

Cash and investments per statement of net position Governmental activities 116,302,164$ Business type activities 179,783,878 Agency funds 5,231,590

Total 301,317,632$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 5 - INTERFUND TRANSACTIONS

A. Due from/to other funds consisted of the following at December 31, 2014, as reported on the fund statements:

Internal Due from

Due to General Water Service Total

General -$ -$ 26,770$ 26,770$ Capital Improvement 73 - 397 470 Other Special Revenue 499 - - 499 Nonmajor Governmental 6,557 445 1,275 8,277 Dayton International Airport 25 - 1,470 1,495 Water 3,957 - 3,643 7,600 Sewer 813 3,445,017 1,174 3,447,004 Nonmajor Enterprise 1 684,753 174 684,928

Internal Service 16,318 - 1,125 17,443

Due to total 28,243$ 4,130,215$ 36,028$ 4,194,486$

Due from

These balances resulted from the time lag between the dates that (1) interfund goods and services are

provided, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.

Amounts due to/from other funds between governmental funds are eliminated on the government-wide

financial statements. Amounts due to/from other funds between governmental activities and business- type activities are reported as an internal balance on the statement of net position.

B. Due to component unit and due from primary government consisted of the following at December 31,

2014, as reported on the fund statements:

Capital Nonmajor

Due from/Due to General improvements governmental Water Total

Component unit 3,474,667$ 2,395,184$ 6,225,049$ 1,497,786$ 13,592,686$

The City does not anticipate repayment of the advances to component unit within the next year.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 5 - INTERFUND TRANSACTIONS - (Continued)

C. Interfund transfers for the year ended December 31, 2014, consisted of the following, as reported on the fund statements:

Other Dayton Debt Special Capital International

Transfer from Service Revenue Improvements Airport Golf

General 842,500$ 55,292$ 3,537,962$ 300,000$ 60,000$ Internal Service 117,909 - - - -

Total 960,409$ 55,292$ 3,537,962$ 300,000$ 60,000$

Nonmajor Governmental Total

General 1,522,379$ 6,318,132$ Internal Service - 117,909

Total 1,522,379$ 6,436,041$

Transfer to

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. The City transferred $117,909 from the fire fleet internal service fund to the debt service fund for related debt payments. Transfers between governmental funds are eliminated on the government-wide financial statements. Transfers between governmental activities and business-type activities are reported as transfers on the statement of activities.

D. Advances to/from other funds for the year ended December 31, 2014, consisted of the following, as

reported on the fund statements:

Receivable fund Payable fund Amount Debt Service Nonmajor Enterprise 1,086,841$ General Internal Service 200,000 Internal Service General 217,584

Total 1,504,425$

Advances from the debt service fund to the golf fund (a nonmajor enterprise fund) are for debt service payments relating to the Series 2001 Golf Renovation General Obligation Bonds. The golf fund did not have the revenue to support complete repayment of the bonds. An agreement was made which allowed the debt service fund to pay a portion of the golf fund debt each year and the golf fund agreed to make payments of $281,505 each year for twenty years, eight years longer than the original issue date. Repayment on the loan began in 2013 with the complete loan being retired in 2019.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 5 - INTERFUND TRANSACTIONS - (Continued) Advances from the worker’s compensation internal service fund to the general fund are for manuscript debt issued during 2011. A portion of this loan will be repaid annually, with the complete loan being retired in 2017. The City also has $3,861,600 in manuscript bonds outstanding related to the recreational facilities project. The loan was made between sub-funds within the capital projects fund. Intrafund loans are not presented on the basic financial statements. The City also has $171,201 in manuscript bonds outstanding in the debt service fund related to special assessments. This loan was made between sub-funds of the debt service fund. Intrafund loans are not presented on the basic financial statements. Advances between governmental funds and business-type activities are reported as an internal balance on the statement of net position.

NOTE 6 - PROPERTY TAXES

Property taxes include amounts levied against all real and public utility property located in the City. Taxes collected from real property taxes (other than public utility) in one calendar year are levied in the preceding calendar year on the assessed value as of January 1 of that preceding year, the lien date. Assessed values are established by the County Auditor at 35 percent of appraised market value. All property is required to be revaluated every six years. Real property taxes are payable annually or semi-annually. If paid annually, payment is due December 31; if paid semi-annually, the first payment is due December 31, with the remainder payable by June 20. Under certain circumstances, State statute permits later payment dates to be established. For Montgomery County, the first half payment is due the middle of February and the second half payment is due the middle of July.

Public utility real and tangible personal property taxes collected in one calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of the second year preceding the tax collection year, the lien date. Public utility tangible personal property is assessed at varying percentages of true value; public utility real property is assessed at 35 percent of true value. 2014 public utility property taxes became a lien December 31, 2013, are levied after October 1, 2014, and are collected in 2015 with real property taxes. Public utility property taxes are payable on the same dates as real property taxes described previously. The County Treasurer collects property taxes on behalf of all taxing districts in the County, including the City of Dayton. The County Auditor periodically remits to the City its portion of the taxes collected. Property taxes receivable represents real property taxes, public utility taxes, delinquent tangible personal property taxes and other outstanding delinquencies which are measurable as of December 31, 2014 and for which there is an enforceable legal claim. In the governmental funds, the current portion receivable has been offset by deferred inflows of resources since the current taxes were not levied to finance 2014 operations and the collection of delinquent taxes has been offset by deferred inflows of resources since the collection of the taxes during the available period is not subject to reasonable estimation. On a full accrual basis, collectible delinquent property taxes have been recorded as a receivable and revenue while on a modified accrual basis the revenue is a deferred inflow of resources.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 6 - PROPERTY TAXES - (Continued) The full tax rate for all City operations for the year ended December 31, 2014 was $10 per $1,000 of assessed value. The assessed values of real and public utility property for tax year 2014 are as follows:

Real property

Residential/agricultural 911,387,470$

Commercial/industrial 411,867,400

Public utility

Real 1,657,560

Personal 95,857,230

Total assessed value 1,420,769,660$

NOTE 7 - INCOME TAX

On March 27, 1984, the City Commission levied a municipal income tax of 1.75% on substantially all income earned within the City. In addition, on March 14, 2006, the City renewed their additional .50% levy through December 31, 2014. The City income tax also applies to the net income of businesses located or doing business within the City. The residents of the City are required to pay income tax on income earned outside of the City; however, the City allows a credit for income taxes paid to another municipality up to 100% of the City's current tax rate.

Employers within the City are required to withhold income tax on employee compensation and remit the tax to the City of Dayton at least quarterly. Corporations and other individual taxpayers are required to pay their estimated tax quarterly and file a declaration annually. The City of Dayton administers the collection of income taxes and the assessment of interest and penalties. Income tax proceeds are to be used to pay the cost of administering the tax and are recorded in the general fund. Income tax revenue for 2014, as reported in the governmental fund financial statements on the modified accrual basis of accounting, was $103,916,809.

NOTE 8 - TAX INCREMENT FINANCING DISTRICT (TIF)

The City, pursuant to the Ohio Revised Code and City ordinances, has established four TIFs. A TIF represents a geographic area wherein property values created after the commencement date of the TIF are exempt, in whole or in part, from property taxes. Owners of such property, however, must pay amounts equal to the property taxes, known as “payments in lieu of taxes (PILOT)”, as though the TIF had not been established. These “PILOTS” are then dedicated to the payments for various public improvements within or adjacent to the TIF area. Property values existing before the commencement date of a TIF continue to be subjected to property taxes.

PILOT revenue was $1,590,825 in 2014 as reported in the fund financial statements. The TIF has a longevity of the shorter period of 30 years or until the public improvements are paid for. The property tax exemption then ceases; PILOT’s cease and property taxes then apply to the increased property values.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 9 - RECEIVABLES

Receivables at December 31, 2014, consisted of taxes, accounts (billings for user charged services), special assessments, accrued interest, loans and intergovernmental receivables arising from grants, entitlements, and shared revenue. All intergovernmental receivables have been classified as “due from other governments” on the basic financial statements. Receivables have been recorded to the extent that they are both measurable and available at December 31, 2014, as well as intended to finance 2014 operations. A summary of the principal items of receivables reported on the statement of net position follows: Governmental activities: Property and other local taxes 21,031,744$ Muncipal income taxes 15,564,851 Accounts 6,920,927 Payments in lieu of taxes 2,208,978 Special assessments 17,313,771 Accrued interest 180,401 Loans 29,081,524 Due from other governments 18,203,199

Business-type activities: Accounts 15,064,505 Special assessments 1,922,993 Accrued interest 253,776 Due from other governments 1,348,317

Receivables have been disaggregated on the face of the basic financial statements. Amounts reported as “due from other governments” in the governmental activities include local government and local government revenue assistance from the State of Ohio, motor vehicle license and gasoline taxes, homestead and rollback, grants and estate taxes. The amounts reported as “due from other governments” in the business-type activities include various State and federal grants whose eligibility requirements have been met by year end. The only receivables not expected to be collected within the subsequent year are the special assessments and the loans. The special assessments are collected over the term of the assessment and the loans receivable which will be collected annually through 2040 (See Note 10).

NOTE 10 - LOANS RECEIVABLE

A. Dayton-Montgomery County Port Authority

During 2008, the City issued $32,000,000 in economic development revenue bonds payable from nontax revenues of the City. The City loaned $20,100,000 of the proceeds to the Dayton-Montgomery County Port Authority (the “Port Authority”) to assist in financing the costs of constructing a parking facility to be used by CareSource, a nonprofit corporation. The Port Authority will make loan payments semiannually on July 1 and December 1 at a 4.67% interest rate. The final loan payment is due December 1, 2028. The Port Authority is currently in default of this loan and unpaid interest adds to the principal outstanding on the loan. At December 31, 2014, the amount owed to the City was $21,825,051. However, the City reports loans receivable net of uncollectible amounts. Due to the non- recourse language in the loan and the Port Authority’s current state of default, the City has recorded a receivable of $16,370,000 for this loan and considers $5,455,051 uncollectible. However, the Port Authority remains liable for the entire balance of the loan, including the portion in default.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 10 - LOANS RECEIVABLE - (Continued)

B. City-Wide Community Urban Redevelopment Corporation

On January 6, 2010, the City loaned the City-Wide Community Urban Redevelopment Corporation $6,335,904 to assist in the construction of a new recreation complex. At the end of seven years, the loan may be forgiven in exchange for the City gaining ownership of the recreation complex. This loan has an interest rate of 3.95% per year with principal payments beginning January 1, 2021. The final loan payment is due December 1, 2039. At December 31, 2014, the amount owed to the City was $6,335,904.

C. Dayton TechTown Investment Fund, LLC.

On June 28, 2010, the City loaned $7,375,620 to Dayton TechTown Investment Fund, LLC. for the continued development of a technology park. The loan has a 2.0% interest rate with required principal payments beginning June 27, 2017. The final loan payment is due June 27, 2040. At December 31, 2014, the amount owed to the City was $6,375,620.

THIS SPACE INTENTIONALLY LEFT BLANK

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 11 - CAPITAL ASSETS

A. Capital asset activity for the governmental activities for the year ended December 31, 2014 was as follows:

Balance Balance 12/31/13 Additions Deductions 12/31/14

Governmental activities: Capital assets, not being depreciated:

Land 69,689,132$ 150,728$ -$ 69,839,860$

Construction in progress 12,307,497 12,017,445 (10,668,069) 13,656,873 Right-of-ways 14,007,402 - - 14,007,402

Total capital assets, not being depreciated 96,004,031 12,168,173 (10,668,069) 97,504,135

Capital assets, being depreciated: Building improvements 146,713,472 1,348,917 - 148,062,389 Improvements other than buildings 57,367,249 - - 57,367,249 Equipment 27,393,214 4,254,553 - 31,647,767 Software 813,245 - - 813,245 Motor vehicles 47,718,204 2,573,443 (24,839) 50,266,808 Infrastructure 302,770,384 9,853,900 - 312,624,284

Total capital assets, being depreciated 582,775,768 18,030,813 (24,839) 600,781,742

Less: accumulated depreciation

Building improvements (78,239,617) (2,684,366) - (80,923,983) Improvements other than buildings (41,467,525) (1,007,207) - (42,474,732) Equipment (22,076,664) (1,323,950) - (23,400,614) Software (336,202) (162,648) - (498,850) Motor vehicles (34,219,754) (2,176,560) 24,839 (36,371,475) Infrastructure (80,310,276) (6,688,587) - (86,998,863)

Total accumulated depreciation (256,650,038) (14,043,318) 24,839 (270,668,517)

Total capital assets being depreciated, net 326,125,730 3,987,495 - 330,113,225

Governmental activities capital assets, net 422,129,761$ 16,155,668$ (10,668,069)$ 427,617,360$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 11 - CAPITAL ASSETS - (Continued) Depreciation expense was charged to functions of the governmental activities as follows: Governmental activities: Downtown 478,129$ Youth, education and human services 3,064 Community development and neighborhoods 523,072 Economic development 643,001 Leadership and quality of life 9,110,329 Corporate responsibility 665,241 Public safety and justice 2,620,482

Total depreciation expense - governmental activities 14,043,318$

B. Capital asset activity for the business-type activities for the year ended December 31, 2014, was as

follows: Balance Balance

12/31/13 Additions Deductions 12/31/14 Business-type activities: Capital assets, not being depreciated:

Land 42,965,353$ -$ -$ 42,965,353$ Construction in progress 42,888,244 28,686,547 (41,076,534) 30,498,257

Total capital assets, not being depreciated 85,853,597 28,686,547 (41,076,534) 73,463,610

Capital assets, being depreciated: Buildings and improvements 222,664,094 1,400,840 (26,684) 224,038,250 Improvements other than buildings 659,883,082 41,051,469 (53,368) 700,881,183 Equipment 20,643,589 1,827,142 - 22,470,731 Software 898,115 649,186 (7,500) 1,539,801 Vehicles 40,673,737 2,322,957 (281,928) 42,714,766

Total capital assets, being depreciated 944,762,617 47,251,594 (369,480) 991,644,731

Less: accumulated depreciation

Buildings and improvements (90,713,795) (4,794,412) - (95,508,207) Improvements other than buildings (405,524,946) (16,402,572) - (421,927,518) Equipment (14,616,888) (1,473,876) - (16,090,764) Software (153,685) (183,151) 3,000 (333,836) Vehicles (26,989,653) (1,746,613) 222,460 (28,513,806)

Total accumulated depreciation (537,998,967) (24,600,624) 225,460 (562,374,131)

Total capital assets being depreciated, net 406,763,650 22,650,970 (144,020) 429,270,600

Business-type activities capital assets, net 492,617,247$ 51,337,517$ (41,220,554)$ 502,734,210$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 11 - CAPITAL ASSETS - (Continued)

Depreciation expense was charged to the enterprise funds as follows:

Business-type Activities:

Dayton International Airport 12,004,886$

Water 6,017,476

Sewer 5,760,652

Storm water 545,967 Golf 271,643

Total depreciation expense - business-type activities 24,600,624$

C. Outstanding contractual commitments related to construction in progress for the year ended December

31, 2014, was as follows:

Governmental activities 10,321,675$

Water 8,453,643

Sewer 6,023,206 Dayton International Airport 8,954,901

Total outstanding contractual commitments 33,753,425$

NOTE 12 - LEASE PURCHASE AGREEMENT - LESSEE DISCLOSURE

In the current year, the City entered into a lease purchase agreement to assist in the purchase of new radio equipment. General capital assets acquired by the agreement have been capitalized in the amount equal to the present value of the future minimum lease payments as of the date of their inception. For the City, a corresponding liability was recorded in the government-wide financial statements. The City did not make any principal payments in 2014. Capital assets consisting of equipment have been capitalized in the amount of $2,643,516. This amount represents the present value of the minimum lease payments at the time of acquisition. The radios are being used by both enterprise and governmental activities and are capitalized in the amount of $1,995,320 in the governmental activities, $289,179 in the water fund, $158,281 in the sewer fund, $171,913 in the Dayton International Airport Fund and $28,823 in the storm water fund.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 12 - LEASE PURCHASE AGREEMENT - LESSEE DISCLOSURE - (Continued)

The following is a schedule of the future minimum lease payments required under the lease purchase agreement and the present value of the minimum lease payments as of December 31, 2014:

Dayton Year Ending Governmental Water Storm Water Sewer International

December 31, Activities Fund Fund Fund Airport

2015 $ 377,429 $ 54,695 $ 5,452 $ 29,938 $ 32,516 2016 1,652,860 239,547 23,876 131,115 142,407

Total minimum lease payments 2,030,289 294,242 29,328 161,053 174,923

Less: amount representing interest (34,969) (5,063) (505) (2,772) (3,010)

Present value of future minimum lease payments $ 1,995,320 $ 289,179 $ 28,823 $ 158,281 $ 171,913

NOTE 13 - OPERATING LEASE - LESSEE AND LESSOR DISCLOSURE

A. The City is the lessor of land and space at the Dayton International Airport (the “Airport”) under noncancellable leases. The leases are between the Dayton International Airport and various vendors that use the Airport for their operations. The cost of the leased area, the carrying value and the annual depreciation expense cannot be accurately determined as they represent varying percentages of the overall land and building assets of the Airport. The leases have varying terms from three to sixty-five years. The future minimum lease payments as of December 31, 2014, are as follows:

Year Ending Minimum

December 31, Lease Payments

2015 2,060,550$ 2016 2,110,025 2017 2,101,773 2018 2,074,839 2019 1,764,603

2020 - 2024 5,590,601 2025 - 2029 2,841,725 2030 - 2034 2,140,391 2035 - 2039 1,137,748 2040 - 2044 756,100 2045 - 2049 835,500 2050 - 2054 716,001

Totals 24,129,856$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 13 - OPERATING LEASE - LESSEE AND LESSOR DISCLOSURE - (Continued)

B. The City is the lessee of Recplex facility. The lease is between City-Wide Community Urban Redevelopment Corporation and the City of Dayton (See Note 10). The City is responsible for the operation and maintenance of the facility. This lease agreement expires on December 31, 2039 or upon written agreement by the City-Wide Community Urban Redevelopment Corporation and the City. The future minimum lease payments as of December 31, 2014 are as follows:

Year Ending Minimum

December 31, Lease Payments

2015 354,738$ 2016 365,380 2017 405,000 2018 417,150 2019 429,665

2020 - 2024 2,349,581 2025 - 2029 2,723,809 2030 - 2034 3,157,641 2035 - 2039 3,660,571

Totals 13,863,535$

NOTE 14 - LONG-TERM OBLIGATIONS

A. The City’s governmental activities long-term obligations at year-end and a schedule of current year activity are as follows:

Original Amounts

Issue Maturity Interest Issue Balance Balance Due in

Governmental activities: Date Date Rate (%) Amount 12/31/13 Increase Decrease 12/31/14 One Year

General obligation bonds:

Capital facilities 10/25/07 12/01/27 4.0 - 5.0 19,745,000 8,605,000 - (1,180,000) 7,425,000 1,015,000

Various purpose and refunding 07/28/09 12/01/29 2.5 - 5.0 26,483,111 16,531,400 - (2,881,400) 13,650,000 1,465,000

Capital improvement 09/22/10 12/01/15 1.5 - 2.0 2,680,000 1,100,000 - (545,000) 555,000 555,000

Energy conservation bonds 06/11/11 12/01/25 4.98 1,615,000 1,405,000 - (110,000) 1,295,000 110,000

Various purpose bonds 10/11/12 12/01/32 3.0 - 4.0 11,385,000 10,900,000 - (905,000) 9,995,000 945,000

Various purpose bonds 9/9/14 12/01/34 1.25 - 4.0 5,700,000 - 5,700,000 - 5,700,000 285,000

Total general obligation bonds 38,541,400 5,700,000 (5,621,400) 38,620,000 4,375,000

Revenue bonds:

Baseball revenue refunding bonds 12/30/09 12/01/19 2.25 - 3.5 7,925,000 4,975,000 - (770,000) 4,205,000 795,000

Economic development 09/22/10 12/1/31 2.0 - 4.125 2,500,000 2,240,000 - (95,000) 2,145,000 100,000

Economic development refunding bonds 11/14/12 12/01/28 3.0 - 5.0 24,170,000 23,090,000 - (1,155,000) 21,935,000 1,190,000

Total revenue bonds 30,305,000 - (2,020,000) 28,285,000 2,085,000

Special assessment bonds

Sidewalk construction 12/01/04 12/01/14 6.0 232,415 23,200 - (23,200) - -

Total special assessment bonds 23,200 - (23,200) - -

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 14 - LONG-TERM OBLIGATIONS - (Continued)

Original Amounts

Issue Maturity Issue Balance Balance Due in

Governmental activities: Date Date Amount 12/31/13 Increase Decrease 12/31/14 One Year

Other long-term obligations:

Ohio Public Works

Commission loan 07/01/02 07/01/17 239,750$ 104,536$ -$ (24,978)$ 79,558$ 25,734$

Ohio Public Works

Commission loan 4/5/2013 7/1/2029 556,971 556,971 - (18,565) 538,406 37,131

Ohio Department of

Development loan 04/01/10 04/21/25 2,860,000 2,860,000 - - 2,860,000 165,171

State Infrastructure

Bank loan 12/4/2014 11/15/2036 - 2,500,000 - 2,500,000 -

State Infrastructure

Bank bonds 12/4/2014 11/15/2036 - 3,540,000 - 3,540,000 -

Lease purchase agreement - 1,995,320 - 1,995,320 -

Judgments 39,856 83,683 (116,376) 7,163 7,163

Claims 7,679,656 18,449,985 (18,610,783) 7,518,858 3,910,961

Pollution remediation obligation 15,738 - (15,738) - -

Compensated absences 9,553,584 5,619,341 (6,081,347) 9,091,578 5,946,558

Total other long-term obligations 20,810,341 32,188,329 (24,867,787) 28,130,883 10,092,718

Total governmental activities 89,679,941$ 37,888,329$ (32,532,387)$ 95,035,883 16,552,718$

Add: unamortized bond premiums and discounts 5,290,503

Total on statement of net position 100,326,386$

General obligation bonds were used to construct street improvements and government construction projects. All general obligation bonds will be paid through the debt service fund from property tax revenues and other revenue sources of the City. On October 25, 2007, the City issued $19,745,000 in general obligation bonds to advance refund $10,035,000 of outstanding general obligation bonds. The remaining issuance of $9,540,000 was used for capital improvements. The $10,035,000 issuance proceeds were used to purchase securities which were placed in an irrevocable trust to provide resources for all future debt service payments on refunded debt. This refunded debt is considered defeased (in-substance) and accordingly, has been removed from the statement of net position. The refunding issue is comprised of current interest bonds, par value $19,745,000. The interest rates on the current interest bonds range from 4.0% to 5.0%. Interest payments of the current interest bonds are due on June 1 and December 1 of each year. The final maturity date stated on the issue is December 1, 2027.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

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NOTE 14 - LONG-TERM OBLIGATIONS - (Continued)

On July 28, 2009, the City issued general obligation bonds (Series 2009 various purpose and refunding bonds) in the amount of $27,255,000 for the following purposes: $771,889 to advance refund the callable portion of the Series 2001 golf renovation general obligation bonds, $5,023,111 to advance refund the callable portion of the Series 2001 capital facilities general obligation bonds, $8,730,000 to advance refund the callable portion of the Series 1998 capital facilities general obligation bonds and $12,730,000 for capital improvements. This refunded debt is considered defeased (in-substance) and accordingly, has been removed from the statement of net position. The refunded Series 2001 golf renovation general obligation bonds and the refunded Series 2001 capital facilities general obligation bonds both matured during 2014, and no longer have amounts outstanding. The balance of the refunded Series 1998 capital facilities general obligation bonds at December 31, 2014, is $7,425,000. The refunding issue for governmental activities is comprised of current interest bonds, par value $26,483,111. The interest rates on the current interest bonds range from 2.50% - 5.00%. Interest payments on the current interest bonds are due on June 1 and December 1 of each year. The final maturity stated in the issue is December 1, 2029.

The reacquisition price exceeded the net carrying amount of the old debt by $639,021. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is equal to the life of the new debt issued. On October 11, 2012, the City issued $42,285,000 in various purpose bonds (Series 2012 various purpose bonds). Of this issue, $15,300,000 is reported as a liability in the water fund, $15,600,000 is reported as a liability of the sewer fund and the remaining $11,385,000 is a liability of the governmental activities. $2,460,000 was used to advance refund the callable portion of the Series 2004 capital facilities bonds. This refunded debt is considered defeased (in-substance) and accordingly, has been removed from the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $519,666. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is equal to the life of the new debt issued. The City has pledged future nontax revenues in the City’s general fund to repay $12,190,000 in Series 1999 economic development revenue bonds. The proceeds were used for the Dayton baseball stadium project. On December 30, 2009, the City issued revenue bonds (Series 2009 baseball revenue refunding bonds) to advance refund the callable portion of the Series 1999 baseball revenue bonds. This refunded debt is considered defeased (in-substance) and accordingly, has been removed from the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $180,965. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is equal to the life of the new debt issued. The balance of the refunded Series 1999 baseball revenue bonds at December 31, 2014 is $4,205,000. The Series 1999 revenue bonds are payable solely from nontax revenues in the City’s general fund and are payable through 2019. The most significant amounts of nontax revenues in the City’s general fund which are pledged for these purposes are derived from charges for services, investment earnings, fines and forfeitures and license and permit fees. Annual principal and interest payments on the revenue bonds are expected to require less than 2.57 percent of general fund nontax revenues. The total principal and interest remaining to be paid on the Series 2009 baseball revenue refunding bonds is $4,622,235. Principal and interest paid for the current year on the Series 1999 baseball revenue bonds was $770,000 and $150,293. General fund nontax revenues for the current year were $35,806,139.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 87

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued) The City has pledged future nontax revenues in the City’s general fund to repay $32,000,000 in Series 2008 economic development revenue bonds. The proceeds were used for the construction of parking facilities and a loan to the Dayton-Montgomery County Port Authority related to the construction of the parking facility. On November 14, 2012, the City issued revenue bonds (Series 2012 economic development refunding bonds) to advance refund the Series 2008 economic development bonds. This refunded debt is considered defeased (in-substance) and accordingly, has been removed from the statement of net position. The balance of the refunded Series 2008 economic development revenue bonds at December 31, 2014 is $21,935,000. The Series 2012 revenue bonds are payable solely from nontax revenues in the general fund and are payable through 2028. The most significant amounts of nontax revenues in the City’s general fund which are pledged for these purposes are derived from charges for services, investment earnings, fines and forfeitures and license permit fees. Annual principal and interest payments on the revenues bonds are expected to require less than 5.67 percent of general fund nontax revenues. The City has designated, through authorizing legislation, nontax revenues from the loan payments made by the Port Authority and income and profit related to the parking facility to be used for the debt repayment. The total principal and interest remaining to be paid on the Series 2012 revenue bonds is $28,437,762. Principal and interest paid for the current year prior to the refunding was $1,155,000 and $874,100. General fund nontax revenues for the current year were $35,806,139. The reacquisition price exceeded the net carrying amount of the old debt by $675,285. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is equal to the life of the new debt issued. The City has pledged future nontax revenues in the City’s general fund to repay $2,500,000 in Series 2010 economic development revenue bonds. The proceeds were used to assist in financing the costs of the demolition, site remediation and construction of public and private infrastructure improvements located in the Tech Town commercial park. The Series 2010 revenue bonds are payable solely from nontax revenues in the general fund and are payable through 2031. The most significant amounts of nontax revenues in the City’s general fund which are pledged for these purposes are derived from charges for services, investment earnings, fines and forfeitures and license permit fees. Annual principal and interest payments on the revenue bonds are expected to require less than .49 percent of general fund nontax revenues. The total principal and interest remaining to be paid on the Series 2010 revenue bonds is $2,964,297. Principal and interest paid for the current year was $95,000 and $78,979. General fund nontax revenues for the current year were $35,806,139. On September 9, 2014, the City issued various purpose general obligation bonds, par value $5,700,000. The interest rates on the current interest bonds range from 1.25% to 4.0%. Interest payments of the current interest bonds are due on June 1 and December 1 of each year. The final maturity date stated on the issue is December 1, 2033. Special assessment bond issues represent assessments for sidewalk, curb and gutter reconstruction, and lighting. They are payable from tax assessments against the property owner whose benefits from the improvements exceed that of the general public. The special assessment bond issues are backed by the full faith and credit of the City. In the event that an assessed property owner fails to make payments, the City will be required to pay the related debt. These bonds were paid from the debt service fund.

The City has two Ohio Public Works Commission loans. The first loan was issued for the East Fifth Street rehabilitation project. The loan was issued at a 3.0% interest rate and a maturity date of July 1, 2017. The loan will be paid from the debt service fund. The second loan was issued for the Brown Street reconstruction project. The loan was issued at 0% interest rate with a maturity date of January 2029. The loan will be paid from the debt service fund.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 88

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued) The Ohio Department of Development loan was issued for development of the Tech-Town project. The loan was issued at a 0% interest rate for the first sixty months and 3% for the remainder of the loan. There are no principal payments due on the loan for the first sixty months. The maturity date is April 1, 2025. Compensated absences will be paid from the fund from which the employees' salaries are paid which for the City is primarily the general fund, Street fund (a nonmajor governmental fund) and the HUD Programs fund (a nonmajor governmental fund). The judgments payable liability with be paid from the general fund. The claims payable liability will be paid from the Worker’s Compensation Internal Service fund and the Health Insurance Internal Service fund. See note 13 for detail on the lease purchase agreement. The pollution remediation obligation is for a liability for removing underground storage tanks. As of December 31, 2014, the City has completed all of the remediation work required at this site. On December 4, 2014, the Ohio Department of Transportation (“ODOT”) issued the City bonds, par value $3,540,000 and a loan in the amount of $2,500,000 through the State Infrastructure Bank (“SIB”). The bonds have a final maturity date of November 15, 2036 and an interest rate of 3.428%, with semi-annual principal and interest payments. The loan has a maturity date of November 1, 2036, with a 3.0% interest rate, beginning December 4, 2015. Principal and interest payments are due semi-annually. The loan has a zero percent interest rate until December 4, 2015. The Ohio Revised Code provides that the net debt of a municipal corporation, whether or not approved by the electors, shall not exceed 10.5% of the total value of all property in the municipal corporation as listed and assessed for taxation. In addition, the unvoted net debt of municipal corporations cannot exceed 5.5% of the total taxation value of property. The assessed valuation used in determining the City’s legal debt margin has been modified by House Bill 530 which became effective March 30, 2006. In accordance with House Bill 530, the assessed valuation used in calculating the City’s legal debt margin calculation excludes tangible personal property used in business, telephone or telegraph property, interexchange telecommunications company property, and personal property owned or leased by a railroad company and used in railroad operations. The statutory limitations on debt are measured by a direct ratio of net debt to tax valuation and expressed in terms of a percentage. At December 31, 2014, the City’s total debt margin was $95,568,020 and the unvoted debt margin was $24,529,537.

THIS SPACE INTENTIONALLY LEFT BLANK

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 89

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued) The following is a schedule of future principal and interest payments to retire the long-term obligations outstanding at December 31, 2014 for the governmental activities:

Year Ending

December 31, Principal Interest Total Principal Interest Total

2015 4,375,000$ 1,536,373$ 5,911,373$ 2,085,000$ 1,046,609$ 3,131,609$

2016 3,950,000 1,344,667 5,294,667 2,145,000 989,034 3,134,034

2017 3,915,000 1,195,514 5,110,514 2,210,000 913,184 3,123,184

2018 4,055,000 1,059,750 5,114,750 2,300,000 833,799 3,133,799

2019 3,360,000 913,324 4,273,324 2,395,000 735,866 3,130,866

2020 - 2024 9,435,000 2,983,799 12,418,799 8,590,000 2,444,056 11,034,056

2025 - 2029 7,085,000 1,284,092 8,369,092 8,235,000 756,534 8,991,534

2030 - 2031 2,445,000 213,486 2,658,486 325,000 20,212 345,212

Totals 38,620,000$ 10,531,005$ 49,151,005$ 28,285,000$ 7,739,294$ 36,024,294$

Year Ending

December 31, Principal Interest Total Principal Interest Total

2015 62,865$ 2,195$ 65,060$ 165,171$ 60,407$ 225,578$

2016 63,642 1,417 65,059 254,025 83,817 337,842

2017 64,444 616 65,060 261,750 75,447 337,197

2018 37,131 - 37,131 269,713 66,820 336,533

2019 37,132 - 37,132 277,917 57,934 335,851

2020 - 2024 185,656 - 185,656 1,521,645 146,626 1,668,271

2025 - 2029 167,094 - 167,094 109,779 744 110,523

Totals 617,964$ 4,228$ 622,192$ 2,860,000$ 491,795$ 3,351,795$

Year Ending

December 31, Principal Interest Total Principal Interest Total

2015 -$ 101,406$ 101,406$ -$ -$ -$

2016 75,000 107,056 182,056 - - -

2017 150,000 105,744 255,744 95,356 76,334 171,690

2018 150,000 103,494 253,494 98,238 73,452 171,690

2019 150,000 101,056 251,056 101,207 70,483 171,690

2020 - 2024 760,000 452,239 1,212,239 553,813 304,637 858,450

2025 - 2029 835,000 336,810 1,171,810 642,723 215,727 858,450

2030 2034 975,000 184,294 1,159,294 745,909 112,541 858,450

2035 - 2036 445,000 20,999 465,999 262,754 12,501 275,255

Totals 3,540,000$ 1,513,098$ 5,053,098$ 2,500,000$ 865,675$ 3,365,675$

State Infrastructure Bank State Infrastructure Bank

Bonds Loan

General Obligation Bonds Revenue Bonds

Commission Loans Ohio Public Works Ohio Department of

Development Loan

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 90

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued)

B. Changes during 2014 in the City's long-term business-type obligations were as follows:

Original Amounts

Issue Maturity Interest Issue Balance Balance Due in

Business-type activities: Date Date Rate (%) Amount 12/31/13 Increase Decrease 12/31/14 One Year

General obligation bonds:

Water 10/11/12 12/1/2032 3.0 - 4.0 $15,300,000 14,520,000$ -$ (890,000)$ 13,630,000$ 925,000$

Sewer 10/11/12 12/1/2032 3.0 - 4.0 15,600,000 14,805,000 - (900,000) 13,905,000 935,000

Dayton International Airport

parking garage 07/28/09 12/1/2029 1.75 to 6.5 10,820,000 9,375,000 - (385,000) 8,990,000 400,000

Golf renovations - refunding 07/28/09 12/1/2014 2.0 to 5.0 771,889 188,600 - (188,600) - -

Total general obligation bonds 38,888,600 - (2,363,600) 36,525,000 2,260,000

Revenue bonds:

Dayton International Airport 10/31/03 12/01/32 2.00 to 5.00 6,085,000 4,790,000 - (4,790,000) - -

Dayton International Airport 10/31/03 12/01/32 2.00 to 5.35 30,190,000 24,080,000 - (24,080,000) - -

Dayton International Airport 10/12/05 12/01/20 3.00 to 4.35 6,000,000 3,220,000 - (405,000) 2,815,000 425,000

Dayton international airport 9/9/14 12/01/32 2.30 to 5.00 26,950,000 - 26,950,000 (375,000) 26,575,000 1,020,000

Total revenue bonds 32,090,000 26,950,000 (29,650,000) 29,390,000 1,445,000

Other long-term obligations

Ohio water development

authority loan 01/01/03 07/01/23 3.80 to 3.95 15,079,710 8,433,383 - (770,397) 7,662,986 800,295

Ohio public works

Commission loan 07/01/97 01/01/20 0.00 1,000,000 350,000 - (50,000) 300,000 50,000

Compensated absences payable 3,625,518 2,362,976 (2,302,728) 3,685,766 2,402,239

Lease purchase agreement - 648,196 - 648,196 121,545

Total other long-term obligations 12,408,901 3,011,172 (3,123,125) 12,296,948 3,374,079

Total business-type activities 83,387,501$ 29,961,172$ (35,136,725)$ 78,211,948 7,079,079$

Less: unamortized bond premiums and discounts 1,386,093

Total on statement of net position 79,598,041$

Enterprise fund general obligation bonds were used for golf renovations and construction of a parking facility at the Dayton International Airport. The bonds will be paid from the golf nonmajor enterprise fund and the Dayton International Airport, respectively. On July 28, 2009, the City issued taxable general obligation bonds (Series 2009 Dayton International Airport parking garage bonds) for the acquisition, construction, furnishing and equipping of airport improvements, including parking facilities. The issue is comprised of current interest bonds, par value $10,820,000. The interest rates on the current interest bonds range from 1.75 - 6.50%. Interest payments on the current interest bonds are due on June 1 and December 1 of each year. The final maturity stated in the issue is December 1, 2029.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 91

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued)

The refunding of the Series 2001 golf renovation general obligations as described in Note 14.A. for business-type activities is comprised of current interest bonds, par value $771,889. The interest rates on the current interest bonds range from 2.50% - 5.00%. Interest payments on the current interest bonds are due on June 1 and December 1 of each year. The final maturity stated in the issue was December 1, 2014.

The Series 2012 water and sewer general obligation bonds are described in Note 14.A. Revenue bonds were issued for various projects at the Dayton International Airport. The revenue bonds are pledged against the revenue generated by the specific enterprise fund and will be paid from the respective enterprise fund. On October 12, 2005, the City issued $19,865,000 in revenue bonds (Series 2005 Bonds). A portion of the proceeds of the 2005 bonds will be used to pay costs of airport improvements including the acquisition, construction, furnishing and equipping of passenger boarding bridges, escalators, and stairwells in concourse and providing all necessary and related improvements. A portion of the proceeds were used to currently refund the Series 1995 bonds (principal $12,485,000) and variable interest rates. This refunded debt is considered defeased (in substance) and accordingly, has been removed from the statement of net position.

On October 31, 2003, the City issued revenue bonds (Series 2003 Bonds). A portion of the proceeds of the 2003 bonds were issued to retire $8,000,000 in general obligation bond anticipation notes that the City issued to pay costs of airport improvements and to prepay the City’s obligations for the lease-purchase agreement entered into to finance the terminal environment restoration project. Portions of the bonds were used to improve the airport by the acquisition, construction, furnishing and equipping of parking, roadway, airfield and terminal improvements and providing all necessary and related improvements. A portion of the proceeds was used to advance refund the Series 1992 bonds (principal $8,235,000) and variable interest rates. The issuance proceeds were deposited into a special escrow trust fund, which consists of cash and direct or guaranteed non-callable government obligations. The principal of this escrow trust, when due, will be sufficient to pay on the redemption date the principal of, redemption premium and interest on the Series 1992 bonds. This refunded debt is considered defeased (in substance) and accordingly, has been removed from the statement of net position. A portion of these bonds were defeased in 2007. On September 9, 2014, the City issued airport revenue bonds (Series 2014 Bonds), par value $26,950,000. The proceeds was used to advance refund the Series 2003A and 2003C revenue bonds. The issuance proceeds were deposited into a escrow trust fund, which consists of cash and direct or guaranteed non- callable government obligations. The principal of this escrow trust, when due, will be sufficient to pay on the redemption date the principal of, redemption premium and interest on the Series 2003A and 2003C bonds. This refunded debt is considered defeased (in substance) and accordingly, has been removed from the statement of net position. The balance of the refunded Series 2003A and 2003C airport revenue bonds at December 31, 2014 is $27,925,000. The reacquisition price exceeded the net carrying amount of the old debt by $534,479. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is equal to the life of the new debt issued. This advance refunding was undertaken to reduce the combined total debt service payments over the next 18 years by $5,411,940 and resulted in an economic gain of $3,664,034.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 92

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued) The City has pledged future airport revenues, net of specified operating expenses, to repay $36,275,000 in Series 2005 and $6,000,000 in Series 2014 airport revenue bonds. The Series 2005 and 2014 airport revenue bonds are payable solely from airport net revenues and are payable through 2032. Annual principal and interest payments on the bonds are expected to require less than 21.39 percent of net revenues. The total principal and interest remaining to be paid on the Series 2005 and 2014 airport revenue bonds is $41,704,162. Principal and interest paid for the current year and total customer net revenues were $1,173,031 and $5,484,501, respectively.

The City of Dayton's Wastewater Treatment Plant capital improvement project is funded through the joint efforts of the United States Environmental Protection Agency (EPA) and the Ohio Water Development Authority (OWDA). Repayment amounts include capital expenses, administration fees, and accrued interest. The Ohio Water Development Authority Loan will be paid from the sewer enterprise fund. At December 31, 2014, the City had outstanding borrowings of $7,662,986 through OWDA. The City has pledged future sewer revenues to repay OWDA loans. The loans are payable solely from sewer fund revenues and are payable through 2023. Annual principal and interest payments on the loans are expected to require 12.98 percent of net revenues. The total principal and interest remaining to be paid on the loans is $9,030,297. Principal and interest paid for the current year were $1,087,586 and total customer net revenues were $9,669,599.

In 1997, the City of Dayton was granted a $1,000,000 loan from the Ohio Public Works Commission. The purpose of the loan is to finance and reimburse the costs of replacing a wastewater treatment laboratory facility to meet Ohio Environmental Protection Agency and the Occupational Safety and Health Association requirements. The loan is being paid out of the sewer fund over 20 years, with semi-annual payments of $25,000. There is no interest on this loan. Compensated absences will be paid from the fund from which the employees' salaries are paid which, for the City, are the Dayton International Airport fund, the Water fund, the Sewer fund, the Storm Water fund and the Golf fund.

The following is a schedule of future principal and interest payments to retire the long-term obligations outstanding at December 31, 2014 for the business-type activities.

Year Ending General Obligation Bonds Revenue Bonds

December 31, Principal Interest Total Principal Interest Total

2015 2,260,000$ 1,601,909$ 3,861,909$ 1,445,000$ 1,237,784$ 2,682,784$ 2016 2,375,000 1,510,110 3,885,110 1,500,000 1,184,284 2,684,284

2017 1,860,000 1,412,170 3,272,170 1,550,000 1,128,134 2,678,134 2018 1,940,000 1,333,419 3,273,419 1,605,000 1,069,613 2,674,613

2019 9,965,000 5,329,091 15,294,091 1,675,000 999,676 2,674,676

2020 - 2024 10,655,000 3,002,629 13,657,629 7,255,000 3,963,501 11,218,501 2025 - 2029 7,470,000 621,888 8,091,888 8,420,000 2,257,900 10,677,900 2030 - 2032 - - - 5,940,000 473,270 6,413,270

Totals 36,525,000$ 14,811,216$ 51,336,216$ 29,390,000$ 12,314,162$ 41,704,162$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 93

NOTE 14 - LONG-TERM OBLIGATIONS - (Continued)

Year Ending OWDA Loan OPWC Loan

December 31, Principal Interest Total Principal Interest Total

2015 800,295$ 287,291$ 1,087,586$ 50,000$ -$ 50,000$ 2016 831,353 256,232 1,087,585 50,000 - 50,000

2017 863,616 223,969 1,087,585 50,000 - 50,000 2018 897,134 190,452 1,087,586 50,000 - 50,000

2019 931,950 155,635 1,087,585 50,000 - 50,000 2020 - 2023 3,338,638 253,732 3,592,370 50,000 - 50,000

Totals 7,662,986$ 1,367,311$ 9,030,297$ 300,000$ -$ 300,000$

NOTE 15 - RISK MANAGEMENT

A. Property and Liability

The City does not have municipal liability insurance. The City is self-insured for the purpose of handling, processing, and paying general municipality liability insurance claims in lieu of purchasing general municipality liability insurance. All claims activity is accounted for in the general fund. The City is fully insured through premium-based insurance policies for all other types of insurance. In 2014, the City contracted with various insurance companies to provide the following coverages:

Type of Coverage Coverage

Primary and Excess Airport Liability $100,000,000 Excess of Airport Policy 50,000,000 Property 891,443,245 Property: Supplemental Coverages 71,800,000

General Liability (North West Railway) 10,000,000 Commercial Liability (Convention Center) 2,000,000 Tenant Liability (Convention Center) 1,000,000 Errors and Omissions (Ambulance Attendants) 3,000,000

Errors and Omissions (Municipal Court) 500,000 Garagekeepers: Liability 2,000,000 Garagekeepers: Test Driving 1,000,000 Inland Marine 365,975 General Liability (Zion Cultural Center) 2,000,000 Excess Umbrella Coverage (Zion Cultural Center) 5,000,000 General Liability (Community Service Program for Dayton Municipal Court) 100,000 (Community Service Program for Dayton Municipal Court - Additional various coverages) 3,510,000 Travel (AD&D) 1,000,000 Executive Management Liability Policy 2,000,000 Public Officials Bond 2,500,000 Settled claims have not exceeded this commercial coverage in any of the past three years. There have been no significant reductions in insurance coverage from last year.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 94

NOTE 15 - RISK MANAGEMENT - (Continued) The City’s policy for reporting a claims liability is based on the requirements GASB Statement No. 10, “Accounting and Financial Reporting for Risk Financing and Related Insurance Issues”, as amended by GASB Statement No. 30, “Risk Financing Omnibus”, which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred, but not reported claims, be accrued at the estimated ultimate cost of settling the claims. It is the opinion of the City’s legal counsel that, as of December 31, 2014, there were $7,163 in outstanding claims pending that are reported as a component of claimants payable in the general fund. Claims activity for 2014 and 2013 are as follows:

Balance at Current Year Claim Balance at Year Beginning of Year Claims Payments End of Year

2014 39,856$ 83,683$ (116,376)$ 7,163$ 2013 93,450 66,510 (120,104) 39,856

B. Workers' Compensation

The City has elected to take advantage of the workers' compensation plan being offered by the State of Ohio. This plan, called retrospective rating, allows the City to pay a fraction of the premium it would pay as an experience-rated risk.

Retrospective rating constitutes a step closer to self-insurance. In the retrospective rating plan, the City agrees to assume a portion of the risk in return for a possible reduction in premiums. The greater the percentage of the risk the City assumes, the greater the potential reduction in the premium. If the City's loss experience is better than predicted by the experience-rating system, its premium obligation will be less than what it would have paid under experience rating. If its experience is worse than predicted, its premium obligation will be more than it would have been assessed under experience rating, limited to a maximum premium. The City has assumed the risk for individual claims up to a maximum of $300,000.

The City has agreed to pay all claims up to a maximum of 200% of what the City would have paid had the City remained an experience-rated risk. Claims exceeding these limits will be paid by the State. Each year, the City pays the State a "minimum premium" for retaining the risk of having to pay claims which exceeds the City's maximum claim limits. Ten years after each year the City elected the retrospective plan for workers' compensation, the City settles up for the reserve on any claims that are still open. The City has established a workers' compensation internal service fund to account for and finance its uninsured risks of loss in this program. The claims liability of $4,977,717 reported at December 31, 2014, as estimated by the third party administrator, is based on the requirements of GASB Statement No. 10, “Accounting and Financial Reporting for Risk Financing and Related Insurance Issues”, as amended by GASB Statement No. 30, “Risk Financing Omnibus”, which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred, but not reported claims, be accrued at the estimated ultimate cost of settling the claims. Of the $4,977,717 claims liability, $1,369,820 of the liability is due within one year and is reported as a current liability in the statement of net position for the proprietary funds. The remaining portion is a noncurrent liability of $3,607,897. The estimate was not affected by non- incremental claim adjustment expenses and does not include other allocated or unallocated claim adjustment expenses.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 95

NOTE 15 - RISK MANAGEMENT - (Continued) Changes in the funds' claims liability amount in 2014 and 2013 were:

Balance at Current Year Claim Balance at

Year Beginning of Year Claims Payments End of Year

2014 5,022,290$ 1,873,469$ (1,918,042)$ 4,977,717$ 2013 4,549,304 2,792,778 (2,319,792) 5,022,290

C. Health Insurance

On January 1, 2012, the City became self-insured for medical and prescription drug benefits (the “Program”). The Program is administered through a third-party administrator who manages and processes the claims. The City makes required payments to the third-party administrator to reimburse them for the claim payments. The City’s stop-loss coverage through the Program is limited to $200,000 per claim with a stop-loss annual coverage aggregate that is 115% of the expected annual claims amounts in the Program. The city has reported a liability in both the health insurance internal service fund and government-wide financial statements amounting to $2,541,141 for the claims payable liability. Changes in the claims payable liability in 2014 and 2013 were as follows:

Balance at Current Year Claim Balance at

Year Beginning of Year Claims Payments End of Year

2014 2,657,366$ 16,737,314$ (16,853,539)$ 2,541,141$ 2013 2,460,583 16,577,969 (16,381,186) 2,657,366

NOTE 16 - OTHER EMPLOYEE BENEFITS

A. Compensated Absences

The criteria for determining vacation, compensatory time and sick leave components are derived from negotiated agreements, personnel policies and State laws. Vacation time is accrued at the rate of one credit per month, plus one to ten additional credits per year for all employees except police, who receive up to 12 additional days per year, depending upon the length of service. A credit is generally equal to one complete work shift of eight (8) hours, but maybe worth additional periods for fire personnel. The maximum accrual which can be carried forward into January is thirty credits. Accumulated unused vacation time is paid to employees upon separation from the City. Compensatory time off in lieu of overtime pay is an option given to uniformed Police and Fire Personnel under union contract. It is given on the basis of time and one-half for actual hours worked. Police officers, sergeants, and lieutenants may use up to 136 hours in any year, and accumulate up to 272 hours in any year. An employee may only carry forward 136 hours in a calendar year. Currently, overtime pay is paid as overtime hours worked by those uniformed employees who have already accumulated the maximum hours allowed.

All uniformed employees of the Fire Department also have the option to choose compensatory time in lieu of overtime pay, and they may accumulate up to one hundred twenty hours of compensatory time. Employees who have accumulated the maximum hours are paid overtime as overtime hours are worked.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 96

NOTE 16 - OTHER EMPLOYEE BENEFITS - (Continued) Sick leave is accrued at the rate of one and one-fourth credits per month. The maximum sick leave accrual which can be carried forward into January is 125 credits. Accrued sick leave in excess of 125 credits must be converted to vacation credits in January at the rate of two sick leave days for one vacation day. A credit is generally equal to one complete work shift of eight (8) hours, but may be worth additional periods for fire personnel. Upon retirement, payment may be made for one-half of the total sick leave accumulation, up to a maximum of 140 days.

B. Insurance Benefits

The City is self-insured for medical benefits through Anthem Blue Cross/Blue Shield Health Maintenance insurance plans as described in Note 15.C. Dental insurance is provided to employees through Superior and Ohio AFSCME Care. Group Life and Accidental Death and Dismemberment insurance is provided to employees through Hartford Life and Accident Insurance Company. The City provided life insurance coverage amounts range from $20,000 to $300,000 according to employee position and employees may purchase additional supplemental coverage.

C. Deferred Compensation Plans

City employees and elected officials participate in either the International City Managers Association (ICMA) Deferred Compensation Plan, or the Ohio Public Employees Deferred Compensation Plan. These plans are created in accordance with Internal Revenue Code Section 457. Participation is on a voluntary payroll deduction basis. The plans permit deferral of compensation until future years. According to the plans, the deferred compensation is not available until separation from the City, retirement, death or an unforeseeable emergency.

NOTE 17 - PENSION PLANS

A. Ohio Public Employees Retirement System

Plan Description - The City participates in the Ohio Public Employees Retirement System (OPERS). OPERS administers three separate pension plans. The Traditional Pension Plan is a cost-sharing, multiple-employer defined benefit pension plan. The Member-Directed Plan is a defined contribution plan in which the member invests both member and employer contributions (employer contributions vest over five years at 20% per year). Under the Member-Directed Plan, members accumulate retirement assets equal to the value of the member and vested employer contributions plus any investment earnings. The Combined Plan is a cost-sharing, multiple-employer defined benefit pension plan that has elements of both a defined benefit and a defined contribution plan. Under the Combined Plan, employer contributions are invested by the retirement system to provide a formula retirement benefit similar to the Traditional Pension Plan benefit. Member contributions, whose investment is self-directed by the member, accumulate retirement assets in a manner similar to the Member-Directed Plan. OPERS provides retirement, disability, survivor and death benefits and annual cost of living adjustments to members of the Traditional Pension and the Combined Plans. Members of the Member-Directed Plan do not qualify for ancillary benefits. Authority to establish and amend benefits is provided by Chapter 145 of the Ohio Revised Code. OPERS issues a stand-alone financial report which may be obtained by visiting https://www.opers.org/investments/cafr.shtml, writing to OPERS, 277 East Town Street, Columbus, OH 43215-4642 or by calling (614) 222-5601 or (800) 222-7377.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 97

NOTE 17 - PENSION PLANS - (Continued) Funding Policy - The Ohio Revised Code provides statutory authority for member and employer contributions. For 2014, member and employer contribution rates were consistent across all three plans. The 2014 member contribution rates were 10.00% for members. The City’s contribution rate for 2014 was 14.00% of covered payroll.

The City’s contribution rate for pension benefits for members in the Traditional Plan and Combined Plan for 2014 was 12.00%. The City’s required contributions for pension obligations to the Traditional Pension and Combined Plans for the years ended December 31, 2014, 2013, and 2012 were $8,439,181, $8,827,637, and $6,976,584, respectively; 92.02% has been contributed for 2014 and 100% has been contributed for 2013 and 2012. The remaining 2014 pension liability has been reported as due to other governments on the basic financial statements. Contributions to the Member- Directed Plan for 2014 were $215,658 made by the City and $154,041 made by the plan members.

B. Ohio Police and Fire Pension Fund

Plan Description - The City contributes to the Ohio Police and Fire Pension Fund (OP&F), a cost- sharing multiple-employer defined benefit pension plan. OP&F provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by the Ohio State Legislature and are codified in Chapter 742 of the Ohio Revised Code. OP&F issues a publicly available financial report that includes financial statements and required supplementary information for the plan. That report may be obtained by writing to the OP&F, 140 East Town Street, Columbus, Ohio 43215-5164 or by visiting the website at www.op-f.org.

Funding Policy - From January 1, 2014 through July 1, 2014, plan members were required to contribute 10.75% of their annual covered salary. From July 2, 2014 through December 31, 2014, plan members were required to contribute 11.50% of their annual covered salary. Throughout 2014, the City was required to contribute 19.50% and 24.00% for police officers and firefighters, respectively. Contribution rates are established by State statute. For 2014, the portion of the City’s contributions to fund pension obligations was 19.00% for police officers and 23.50% for firefighters. The City’s required contributions for pension obligations to OP&F for police officers and firefighters were $4,799,997 and $4,583,936 for the year ended December 31, 2014, $3,876,616 and $3,931,652 for the year ended December 31, 2013, and $3,123,636 and $3,466,063, for the year ended December 31, 2012. 100% has been contributed for 2013 and 2012. 92.67% has been contributed for police and 92.61% has been contributed for firefighters for 2014. The remaining 2014 pension liability has been reported as due to other governments on the basic financial statements.

NOTE 18 - POSTRETIREMENT BENEFIT PLANS

A. Ohio Public Employees Retirement System Plan Description - OPERS maintains a cost-sharing multiple employer defined benefit post- employment healthcare plan, which includes a medical plan, prescription drug program and Medicare Part B premium reimbursement, to qualifying members of both the Traditional Pension and the Combined Plans. Members of the Member-Directed Plan do not qualify for ancillary benefits, including post-employment health care coverage.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 98

NOTE 18 - POSTRETIREMENT BENEFIT PLANS - (Continued) To qualify for post-employment health care coverage, age-and-service retirees under the Traditional Pension and Combined Plans must have ten years or more of qualifying Ohio service credit. The Ohio Revised Code permits, but does not mandate, OPERS to provide OPEB benefits to its eligible members and beneficiaries. Authority to establish and amend benefits is provided in Chapter 145 of the Ohio Revised Code. Disclosures for the healthcare plan are presented separately in the OPERS financial report which may be obtained by visiting https://www.opers.org/investments/cafr.shtml, writing to OPERS, 277 East Town Street, Columbus, OH 43215-4642 or by calling (614) 222-5601 or (800) 222-7377. Funding Policy - The post-employment healthcare plan was established under, and is administered in accordance with, Internal Revenue Code Section 401(h). State statute requires that public employers fund post-employment healthcare through contributions to OPERS. A portion of each employer’s contribution to the Traditional or Combined Plans is set aside for the funding of post-employment health care. Employer contribution rates are expressed as a percentage of the covered payroll of active employees. In 2014, local government employers contributed 14.00% of covered payroll. Each year the OPERS’ Retirement Board determines the portion of the employer contribution rate that will be set aside for the funding of the postemployment health care benefits. The portion of employer contributions allocated to fund post-employment healthcare for members in the Traditional Plan and Combined Plan for 2014 was 2.00%. The OPERS Retirement Board is also authorized to establish rules for the payment of a portion of the health care benefits provided, by the retiree or their surviving beneficiaries. Payment amounts vary depending on the number of covered dependents and the coverage selected. Active members do not make contributions to the post-employment healthcare plan. The City’s contributions allocated to fund post-employment health care benefits for the years ended December 31, 2014, 2013, and 2012 were $1,407,023, $630,293, and $2,826,071, respectively; 92.02% has been contributed for 2014 and 100% has been contributed for 2013 and 2012. The remaining 2014 post-employment health care benefits liability has been reported as due to other governments on the basic financial statements. Changes to the health care plan were adopted by the OPERS Board of Trustees on September 19, 2012, with a transition plan commencing January 1, 2014. With the recent passage of pension legislation under State Bill 343 and the approved health care changes, OPERS expects to be able to consistently allocate 4.00% of the employer contributions toward the health care fund after the end of the transition period.

B. Ohio Police and Fire Pension Fund

Plan Description - The City contributes to the OP&F Pension Fund sponsored health care program, a cost-sharing multiple-employer defined postemployment health care plan administered by OP&F. OP&F provides healthcare benefits including coverage for medical, prescription drugs, dental, vision, Medicare Part B Premium and long term care to retirees, qualifying benefit recipients and their eligible dependents.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 99

NOTE 18 - POSTRETIREMENT BENEFIT PLANS - (Continued) OP&F provides access to post-employment health care coverage to any person who receives or is eligible to receive a monthly service, disability or survivor benefit check or is a spouse or eligible dependent child of such person. The Ohio Revised Code allows, but does not mandate OP&F to provide OPEB benefits. Authority for the OP&F Board of Trustees to provide health care coverage to eligible participants and to establish and amend benefits is codified in Chapter 742 of the Ohio Revised Code. OP&F issues a publicly available financial report that includes financial statements and required supplementary information for the plan. That report may be obtained by writing to the OP&F, 140 East Town Street, Columbus, Ohio 43215-5164 or by visiting the website at www.op-f.org. Funding Policy - The Ohio Revised Code provides for contribution requirements of the participating employers and of plan members to the OP&F (defined benefit pension plan). Participating employers are required to contribute to the pension plan at rates expressed as percentages of the payroll of active pension plan members, currently, 19.50% and 24.00% of covered payroll for police and fire employers, respectively. The Ohio Revised Code states that the employer contribution may not exceed 19.50% of covered payroll for police employer units and 24.00% of covered payroll for fire employer units. Active members do not make contributions to the OPEB Plan. OP&F maintains funds for health care in two separate accounts, one account is for health care benefits under an Internal Revenue Code Section 115 trust and the other account is for Medicare Part B reimbursements administered as an Internal Revenue Code Section 401(h) account, both of which are within the defined benefit pension plan, under the authority granted by the Ohio Revised Code to the OP&F Board of Trustees. The Board of Trustees is authorized to allocate a portion of the total employer contributions made into the pension plan into the Section 115 trust and the Section 401(h) account as the employer contribution for retiree health care benefits. For 2014, the portion of employer contributions allocated to health care was 0.50% of covered payroll. The amount of employer contributions allocated to the health care plan each year is subject to the Trustees’ primary responsibility to ensure that the pension benefits are adequately funded and is limited by the provisions of Sections 115 and 401(h). The OP&F Board of Trustees also is authorized to establish requirements for contributions to the health care plan by retirees and their eligible dependents, or their surviving beneficiaries. Payment amounts vary depending on the number of covered dependents and the coverage selected. The City’s contributions to OP&F which were allocated to fund post-employment healthcare benefits for police officers and firefighters were $126,316 and $97,531 for the year ended December 31, 2014, $719,435 and $592,369 for the year ended December 31, 2013, and $1,653,689 and $1,356,286, for the year ended December 31, 2012. 100% has been contributed for 2013 and 2012. 92.67% has been contributed for police and 92.61% has been contributed for firefighters for 2014. The remaining 2014 post-employment health care benefits liability has been reported as due to other governments/pension obligation payable on the basic financial statements.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 100

NOTE 19 - BUDGETARY BASIS OF ACCOUNTING

While the City is reporting financial position, results of operations and changes in fund balance on the basis of generally accepted accounting principles (GAAP), the budgetary basis as provided by law is based upon accounting for certain transactions on a modified accrual basis with exceptions. The statement of revenues, expenditures and changes in fund balances - budget and actual (non-GAAP budgetary basis) presented for the general fund and other special revenue fund, a major special revenue fund, is presented on the budgetary basis to provide a meaningful comparison of actual results with the budget. The adjustments necessary to convert the results of operations of the general fund and other special revenue for the year ended December 31, 2014, on the GAAP basis to the budget basis are as follows:

Net Change in Fund Balance

General Other Special Revenue

Budget basis (5,102,267)$ (1,129,218)$

Net adjustment for revenues 1,353,391 (30,291)

Net adjustment for expenditures (1,171,058) (473,319)

Adjustment for encumbrances 5,639,811 1,375,377

GAAP basis 719,877$ (257,451)$

NOTE 20 - COMMITMENTS

The City utilizes encumbrance accounting as part of its budgetary controls. Encumbrances outstanding at year end may be reported as part of restricted, committed, or assigned classifications of fund balance. At year end, the City’s commitments for encumbrances in the governmental funds were as follows:

Year-End Fund Encumbrances General fund 4,177,347$ Other special revenue 1,109,312 Debt service 30,458 Capital improvement 12,226,784

Nonmajor governmental 18,098,243

Total 35,642,144$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 101

NOTE 21 - FUND BALANCE

Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources in the governmental funds. The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented below:

Other Nonmajor Total Special Debt Service Capital Improvement Governmental Governmental

Fund balance General Revenue Fund Fund Funds Funds

Nonspendable: Prepaids 741,187$ 500$ -$ -$ -$ 741,687$ Advances to other funds 200,000 - - - - 200,000 Advances to component unit 3,474,667 - - - - 3,474,667 Perpetual care - - - - 102,228 102,228 Loans receivable 6,375,620 - - - - 6,375,620

Unclaimed monies 322,407 - - - - 322,407

Total nonspendable 11,113,881 500 - - 102,228 11,216,609

Restricted: Street and highway programs - - - - 2,143,804 2,143,804 Special projects - 5,420,505 - - - 5,420,505 Housing and urban development - - - - 5,194,956 5,194,956 Debt service - - 26,915,684 - - 26,915,684 Capital projects - - - 15,704,146 - 15,704,146 Other purposes - - - - 4,336,427 4,336,427

Permanent fund - - - - 80,350 80,350

Total restricted - 5,420,505 26,915,684 15,704,146 11,755,537 59,795,872

Committed: Capital projects - - - 8,310,682 - 8,310,682 Downtown 12,477 - - - - 12,477 Community development 71,418 - - - - 71,418 Economic development 57,859 - - - - 57,859 Leadership and quality of life 587,817 - - - - 587,817 Corporate responsibility 738,248 - - - - 738,248 Public safety 517,714 - - - - 517,714

Special assessments - - 419,906 - - 419,906

Total committed 1,985,533 - 419,906 8,310,682 - 10,716,121

Assigned: Downtown 1,471 Community development 55,990 Economic development 18,746 Leadership and quality of life 257,262 Corporate responsibility 175,642 Public safety 168,591 Special payroll 3,135,301 Termination pay 1,414,660 Special assessments 185,997 Unemployment 981,886 Other purposes 339,058 MVH community based policing 81,795 Sunrise Bomberger Center 100,346 Mediation center 83,972 Professional development 143,230 Nationwide settlement 245,387 Judgments 1,236,794 Development 5,387,466 Real estate development 80,154 Subsequent year appropriations Capital projects - - - - - 1,471 - - - - 55,990 - - - - 18,746 - - - - 257,262 - - - - 175,642 - - - - 168,591 - - - - 3,135,301 - - - - 1,414,660 - - - - 185,997 - - - - 981,886 - - - - 339,058 - - - - 81,795 - - - - 100,346 - - - - 83,972 - - - - 143,230 - - - - 245,387 - - - - 1,236,794 - - - - 5,387,466 - - - - 80,154 7,174,410 - - - - 7,174,410 - - 8,203,654 - 8,203,654

Total assigned 21,268,158 - - 8,203,654 - 29,471,812

Unassigned 27,221,281 - - - - 27,221,281

Total fund balances 61,588,853$ 5,421,005$ 27,335,590$ 32,218,482$ 11,857,765$ 138,421,695$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 102

NOTE 22 - DISCRETELY PRESENTED COMPONENT UNIT

A. Basis of Accounting

CityWide adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statement and Management's Discussion and Analysis for State and Local Governments. GASB Statement No. 34 established new financial reporting requirements for state and local governments, and it was designed to make the financial statements more comprehensive and easier to use and understand. CityWide also adopted the provisions of GASB Statement No. 37, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments: Omnibus, and GASB Statement No. 38, Certain Financial Statement Disclosures. The most significant changes resulting from the implementation is the inclusion of Management's Discussion and Analysis. CityWide reports as a business-type activity, as defined by GASB Statement No. 34. Business-type activities are those that are financed in whole or in part by fees charged to external parties for goods or services. The financial statements have been prepared on an accrual basis. In 2010, the GASB issued statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The presented combined financial statements (including notes) reflect the standards noted above and consecutive statements through GASB Statement No. 66. GASB statements Nos. 67 through 71 became effective during 2014; however, management has reviewed these statements and determined they are not relevant to CityWide given the nature of its operations.

B. Deposits and Investments GASB Statement No. 3, Deposits With Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements, as amended by GASB Statement No. 40, requires disclosures to help assess actual and potential future deposit and investment market and credit risks. The following information regarding deposits and investments is presented using the categories of risk identified in GASB Statement No. 3. Deposits: The carrying amounts of CityWide’s deposits were $8,035,633 and $7,437,810 as of December 31, 2014 and 2013, respectively. The bank balance of CityWide’s deposits was $8,150,025 and $7,712,839 as of December 31, 2014 and 2013, respectively. Of the balance:

1. $2,250,914 and $2,462,174 were covered by federal depository insurance as of December 31, 2014 and 2013, respectively.

2. $5,899,111 and $5,250,665 were uncollateralized and uninsured as of December 31, 2014 and 2013, respectively.

The FDIC insurance limit for non-interest bearing accounts and interest bearing accounts is up to $250,000. These limits were effective through December 31, 2014. Investments are recorded at fair value, which approximates cost due to the short-term nature of investments held.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 103

NOTE 22 - DISCRETELY PRESENTED COMPONENT UNIT - (Continued) A reconciliation between the classifications of “equity in pooled cash and investments” on the

statements of net position and the classifications of “deposits” and “investments” presented above per GASB Statement No. 3, as amended by GASB Statement No. 40, is as follows:

2014 2013

Equity in pooled cash and investments 3,558,302$ 3,342,069$

Restricted equity in pooled cash and investments 4,477,331 4,095,741

Total per combined statements of net position 8,035,633$ 7,437,810$

Deposits 8,035,633$ 7,437,810$

Total per GASB Statement No. 40 8,035,633$ 7,437,810$

C. Notes Payable/Advance from Primary Government

Notes and loans payable/due from primary government at December 31, 2014, consisted of the following:

Note Payable to Amount

Noninterest-bearing Note for Landing Project City of Dayton 5,433,600$ Noninterest-bearing Note for Wellfield Project City of Dayton 1,497,787 Note for Renovation of Western Manor City of Dayton and the Dayton

Montgomery County Housing Authority 52,349

Note for redevelopment of Hawthorn School Building City of Dayton 681,584 Note for Webster Street Project City of Dayton 180,000 Note for Phoenix Redevelopment Areas City of Dayton 2,272,699 Other Notes Payable City of Dayton 1,139,667 Loan Payable for Tech Town Campus City of Dayton 2,335,000

Total advance from primary government 13,592,686$

Note for Phoenix Project OHFA 300,000$ Note for Housing Loans Third-Party Insurance Company 671,106

Total notes payable to other parties 971,106$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 104

NOTE 22 - DISCRETELY PRESENTED COMPONENT UNIT - (Continued) The amounts payable to the City are shown on the Statement of Net position as "Due to Primary Government".

D. Loans Payable

Loans payable at December 31, 2014 consisted of the following: Description Maturity Date Amount

Real estate loan with a financial institution June 30, 2016 278,613$

Loan with City of Dayton classified as advance from primary government October 1, 2031 2,335,000

Real estate loan with a financial institution March 2018 549,201

Real estate loan with a financial institution December 31, 2039 8,351,000

Real estate loan with a financial institution June 27, 2040 9,894,000

Loan payable with a financial institution October 2017 29,953

Loan payable with a financial institution

(includes an interest rate swap) April 2019 1,680,800

Loan payable with a financial institution November 2016 450,242

Total 23,568,809$

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 105

NOTE 22 - DISCRETELY PRESENTED COMPONENT UNIT - (Continued) The debt service requirements to maturity are as follows:

Year Ending

December 31, Principal Interest Total

2015 790,045$ 781,617$ 1,571,662$ 2016 1,237,016 582,720 1,819,736 2017 997,641 544,215 1,541,856 2018 1,239,862 505,741 1,745,603 2019 670,528 471,926 1,142,454

Thereafter 18,633,716 4,871,118 23,504,834

Total 23,568,808$ 7,757,337$ 31,326,145$

CityWide has entered into an interest rate swap agreement with a bank, whereby the bank pays CityWide the same floating interest rate based on the notional principal of $1,680,800, and CityWide pays a fixed rate of 4.85% to the bank. The notional principal of the swap amortizes through April 2019. The fair valuation of the interest rate swap resulted in a mark to market liability of $20,777 and $29,278 as of December 31, 2014 and 2013; respectively, which is included in accrued liabilities in the combined financial statements. The interest rate swap agreement expires on April 15, 2019.

F. Operating Lease CityWide has various operating leases for office equipment and office space. The leases expire at various times through 2019. Rent expense associated with these leases was $16,203 for the year ended December 31, 2014. CityWide is responsible for various costs under the lease including insurance, taxes and maintenance. Future minimum lease payments due over the subsequent four years are as follows:

Year Ending

December 31, Amount

2015 15,532$ 2016 15,532 2017 14,062 2018 12,588 2019 7,343

Total 65,057$

G. Retirement Plans

CityWide maintains a defined-contribution pension plan administered by an unrelated insurance company. This noncontributory plan covers all salaried employees with at least one year of service. Amendments to the plan require approval by the Board of Trustees. CityWide contributed 8% for both 2014 and 2013, respectively, of each eligible employee's annual salary, plus 5.7% of salaries greater than $117,000. Plan contributions, net of forfeitures, were approximately $113,696 and $95,850 in 2014 and 2013, respectively.

CITY OF DAYTON, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

F 106

NOTE 22 - DISCRETELY PRESENTED COMPONENT UNIT - (Continued) CityWide also maintains a 401(k) plan for its employees. The plan is for employee contributions only.

2014 2013

Pension value 1,102,019$ 1,817,238$ 401(k) value 1,337,040 1,336,896

Total 2,439,059$ 3,154,134$

H. Contingencies

CityWide is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and, natural disasters. CityWide manages these risks through the purchase of commercial insurance. CityWide owns properties that are considered tainted due to previous environmental remediation issues that were cleaned up prior to purchase by CityWide. Management believes the risk of any further environmental liabilities arising from these properties to be minimal. CityWide receives various financial assistance from numerous federal, state and local agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability to the general fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements included herein or on the overall financial position of CityWide at December 31, 2014.

NOTE 23 - CONTINGENCIES

A. Litigation

The City is party to legal proceedings. The City is of the opinion that ultimate disposition of claims will not have a material effect, if any, on the financial condition of the City.

B. Grants

For the period January 1, 2014, to December 31, 2014, the City received federal and State grants for specific purposes that are subject to review and audit by grantor agencies or their designee. Such audits could lead to a request for reimbursement to the grantor agency for expenditures disallowed under the terms of the grant. Based on prior experience, the City believes such disallowance, if any, would be immaterial.

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COMBINING STATEMENTS AND INDIVIDUAL FUND SCHEDULES

F 107

THIS PAGE IS INTENTIONALLY LEFT BLANK

F 108

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Municipal income taxes. . . . . . . . . . . . 102,711,400$ 102,094,400$ 102,649,505$ 555,105$ Property and other taxes. . . . . . . . . . . . 6,003,200 6,250,100 6,239,960 (10,140) State shared taxes . . . . . . . . . . . . . . . 7,391,700 7,397,200 7,242,146 (155,054) Charges for services. . . . . . . . . . . . . . 27,588,400 26,683,200 25,901,849 (781,351) Licenses and permits . . . . . . . . . . . . 1,425,000 1,241,800 1,348,270 106,470 Fines and forfeitures . . . . . . . . . . . . . 3,140,000 3,290,900 3,316,271 25,371 Intergovernmental. . . . . . . . . . . . . . 5,011,200 5,087,700 5,120,697 32,997 Special assessments . . . . . . . . . . . . . 120,000 175,900 177,352 1,452 Investment income. . . . . . . . . . . . . . 1,524,800 1,524,300 1,552,185 27,885 Other . . . . . . . . . . . . . . . . . . . . 3,039,900 3,398,000 3,351,520 (46,480)

Total revenues . . . . . . . . . . . . . . . . . . 157,955,600 157,143,500 156,899,755 (243,745) Expenditures: General operating:

General government: Clerk of commission . . . . . . . . . . . . . . . . 1,012,000 1,070,500 1,059,807 10,693 Civil service board . . . . . . . . . . . . . . . . . 1,257,000 1,257,000 1,124,209 132,791 Human relations council . . . . . . . . . . . . . . 709,300 729,300 671,960 57,340 City manager's office . . . . . . . . . . . . . . . . 1,220,000 1,220,000 1,116,481 103,519 Deparment of public affairs. . . . . . . . . . . . . 765,000 770,000 678,009 91,991 Department of planning & community development. . . 1,569,400 1,569,400 1,439,259 130,141 Department of building services . . . . . . . . . . 2,699,700 2,734,700 2,482,194 252,506 Clerk of courts . . . . . . . . . . . . . . . . . . . 3,306,200 3,306,200 3,232,573 73,627 Municipal court. . . . . . . . . . . . . . . . . . . 3,978,000 3,978,000 3,909,989 68,011 Office of economic development. . . . . . . . . . 1,146,000 1,224,400 1,131,516 92,884 Department of management and budget . . . . . . . 882,000 882,000 808,559 73,441 Department of water . . . . . . . . . . . . . . . . 79,000 79,000 64,911 14,089 Department of law . . . . . . . . . . . . . . . . . 2,584,000 2,764,000 2,552,978 211,022 Department of finance . . . . . . . . . . . . . . . 3,056,000 3,056,000 2,975,399 80,601 Department of human resources . . . . . . . . . . . 797,000 901,000 874,982 26,018 Department of central services . . . . . . . . . . . . . . . . . 15,167,000 14,901,100 14,202,849 698,251 Department of police. . . . . . . . . . . . . . . . 48,294,200 49,027,000 47,956,192 1,070,808 Department of fire . . . . . . . . . . . . . . . . . 36,104,200 36,108,000 35,090,563 1,017,437 Department of public works . . . . . . . . . . . . 18,682,600 18,787,800 17,858,544 929,256 Department of recreation and youth services. . . . . 5,988,700 6,433,800 6,092,457 341,343 Non-deparmental . . . . . . . . . . . . . . . . . 1,447,200 1,318,800 998,757 320,043 Special projects . . . . . . . . . . . . . . . . . . 8,383,600 10,937,500 9,284,779 1,652,721

Debt service: Principal retirement . . . . . . . . . . . . . . 68,400 68,400 68,345 55 Interest and fiscal charges . . . . . . . . . . . . 12,900 12,900 8,578 4,322

Total expenditures. . . . . . . . . . . . . . . . . . . 159,209,400 163,136,800 155,683,890 7,452,910

Excess (deficiency) of revenues over (under) expenditures. . . . . . . . . . . . . . . (1,253,800) (5,993,300) 1,215,865 7,209,165 Other financing uses:

Transfers (out) . . . . . . . . . . . . . . . . . (2,136,200) (6,605,700) (6,318,132) 287,568

Total other financing (uses). . . . . . . . . . . . . (2,136,200) (6,605,700) (6,318,132) 287,568

Net change in fund balances . . . . . . . . . . . . . . (3,390,000) (12,599,000) (5,102,267) 7,496,733

Fund balance at beginning of year. . . . . . . . . . 61,540,289 61,540,289 61,540,289 - Prior year encumbrances appropriated. . . . . . . 2,175,743 2,175,743 2,175,743 -

Fund balance at end of year. . . . . . . . . . . . . $ 60,326,032 $ 51,117,032 $ 58,613,765 $ 7,496,733

FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

GENERAL FUND

F 109

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Charges for services. . . . . . . . . . . . . . 296,000$ 359,800$ 380,414$ 20,614$ Licenses and permits . . . . . . . . . . . . . 26,200 31,800 33,645 1,845 Special assessments . . . . . . . . . . . . . . 353,400 429,400 454,052 24,652 Other . . . . . . . . . . . . . . . . . . . . . 1,056,400 1,283,800 1,360,274 76,474

Total revenues. . . . . . . . . . . . . . . . . . 1,732,000 2,104,800 2,228,385 123,585 Expenditures: Various departments . . . . . . . . . . . . . 2,857,700 4,482,600 3,412,895 1,069,705

Total expenditures . . . . . . . . . . . . . . . . 2,857,700 4,482,600 3,412,895 1,069,705

Excess of expenditures over revenues . . . . . . (1,125,700) (2,377,800) (1,184,510) 1,193,290

Other financing sources: Transfers in . . . . . . . . . . . . . . . . . . . . . 43,000 52,300 55,292 2,992

Total other financing sources. . . . . . . . . . . . . . 43,000 52,300 55,292 2,992

Net change in fund balance. . . . . . . . . . . . (1,082,700) (2,325,500) (1,129,218) 1,196,282

Fund balance at beginning of year. . . . . . . . 3,431,785 3,431,785 3,431,785 - Prior year encumbrances appropriated. . . . . 1,109,881 1,109,881 1,109,881 -

Fund balance at end of year . . . . . . . . . . . 3,458,966$ 2,216,166$ 3,412,448$ 1,196,282$

FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

OTHER SPECIAL REVENUE FUND

F 110

To account for miscellaneous grant projects. These projects include food service for children at child care and recreation centers, additional police patrol in high density traffic areas, juvenile court mediation services, and drug rehabilitation programs. Funding sources include the United States Departments of Justice, Housing and Urban Development, Agriculture, Education, Interior and Transportation and the Ohio Departments of Education, Development, Highway Safety, and Natural Resources.

To account for various program funds administered by the Department of Housing and Urban Development. Such monies are appropriated on a project level with specific identification of each project being budgeted. Budget basis financial statements for these funds are not, therefore, presented in this report because such statements would not be meaningful. The first three programs listed below are entitlement grants. Funds are granted annually using a statutory formula.

Miscellaneous Grants

To account for lighting the freeways through Dayton. Funds are provided by shared tax revenues and registration fees from the State of Ohio and Montgomery County, respectively.

Emergency Shelter Grant Program (EMRG) was established in 1987 to provide for the creation and operations of emergency shelters for the homeless.

HOME Program was established in 1990 to expand the supply of decent and affordable housing for low income families.

Urban Development Action Grants (UDAG) are granted on a project basis. The City has used these funds for projects such as the renovation of the Arcade and The Landing rental housing downtown.

The Community Development Block Grant Program (CDBG) was established in 1974 to assist in the development of viable urban communities, to conserve and renew older urban areas, to improve the living environment of low and moderate income families, and to develop opportunities for economic growth.

COMBINING STATEMENTS - NONMAJOR GOVERNMENTAL FUNDS

CITY OF DAYTON, OHIO

To account for monies for all street and road repairs and general upkeep to ensure safe, smooth transportation for all users of Dayton roadways. Funds are provided by shared tax revenues and registration fees from the State of Ohio and Montgomery County, respectively.

Street

The special revenue funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes. The following are the nonmajor special revenue funds which the City of Dayton operates:

Nonmajor Special Revenue Funds

HUD Programs

Highway Maintenance

F 111

The City reports only one permanent fund to account for the above activity. No combining schedules are required.

Nonmajor Permanent Fund

Permanent funds are used to account for resources that are legally restricted to the extent that earnings, and not principal, may be used for purposes that support City programs. Included in the permanent fund is the Schantz Waldruhe Park Trust which accounts for interest earned on Dayton Power & Light stock that is used for the improvement, care and maintenance of Waldruhe Park and the Forrest B. Lucas Foundation which accounts for interest earned on a contribution made by Forrest B. Lucas that is to be used for fire department training purposes.

F 112

Nonmajor Nonmajor Total Nonmajor Special Revenue Permanent Governmental

Funds Fund Funds Assets:

Equity in pooled cash and cash equivalents . . 6,317,916$ 182,536$ 6,500,452$ Receivables:

Accounts. . . . . . . . . . . . . . . . . . . 102,999 - 102,999 Special assessments . . . . . . . . . . . . . 427,710 - 427,710

Accrued interest . . . . . . . . . . . . . . . 869 87 956 Due from other governments. . . . . . . . . 6,950,713 - 6,950,713

Due from component units. . . . . . . . . . . 6,225,049 - 6,225,049

Total assets. . . . . . . . . . . . . . . . . . . . 20,025,256$ 182,623$ 20,207,879$

Liabilities: Accounts payable. . . . . . . . . . . . . . . . 231,905$ -$ 231,905$ Contracts payable. . . . . . . . . . . . . . . . 1,237,158 - 1,237,158 Accrued wages and benefits payable . . . . . . 244,177 - 244,177

Retainage payable . . . . . . . . . . . . . . . . . . . 21,895 - 21,895 Due to other funds . . . . . . . . . . . . . . . 8,277 - 8,277 Due to other governments . . . . . . . . . . . 12,518 - 12,518

Total liabilities . . . . . . . . . . . . . . . . . . 1,755,930 - 1,755,930

Deferred inflows of resources: Accrued interest not available . . . . . . . . . 447 45 492 Special assessments revenue not available. . . . 427,710 - 427,710 Miscellaneous revenue not available . . . . . . 98,380 - 98,380 Intergovernmental revenue not available . . . . 6,067,602 - 6,067,602

Total deferred inflows of resources . . . . . . . . 6,594,139 45 6,594,184

Fund Balances: Nonspendable . . . . . . . . . . . . . . . . . - 102,228 102,228 Restricted. . . . . . . . . . . . . . . . . . . . 11,675,187 80,350 11,755,537

Total fund balances. . . . . . . . . . . . . . . . 11,675,187 182,578 11,857,765

Total liabilities, deferred inflows of resources and fund balances . . . . . . . . 20,025,256$ 182,623$ 20,207,879$

CITY OF DAYTON, OHIO

COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS

DECEMBER 31, 2014

F 113

Nonmajor Nonmajor Total Nonmajor

Special Revenue Permanent Governmental Funds Fund Funds

Revenues: State shared taxes. . . . . . . . . . . . . . . 5,341,746$ -$ 5,341,746$ Charges for services. . . . . . . . . . . . . . 801,575 - 801,575 Fines and forfeitures . . . . . . . . . . . . . 445,880 - 445,880 Intergovernmental. . . . . . . . . . . . . . . 18,541,525 - 18,541,525 Special assessments . . . . . . . . . . . . . . 38,922 - 38,922 Investment income . . . . . . . . . . . . . . 1,281 143 1,424 Increase in FMV of investments. . . . . . . . 465 20 485 Other . . . . . . . . . . . . . . . . . . . . . 334,809 - 334,809

Total revenues . . . . . . . . . . . . . . . . . . 25,506,203 163 25,506,366

Expenditures: Current:

General government: Downtown. . . . . . . . . . . . . . . . . . . 387 - 387 Youth, education and human services. . . . . 665,177 - 665,177 Community development and neighborhoods. 9,128,968 - 9,128,968 Economic development . . . . . . . . . . . . 1,746,926 - 1,746,926 Leadership and quality of life . . . . . . . . . 8,513,901 - 8,513,901 Corporate responsibility. . . . . . . . . . . . 146,000 - 146,000 Public safety and justice. . . . . . . . . . . . 3,176,603 - 3,176,603

Total expenditures. . . . . . . . . . . . . . . . . 23,377,962 - 23,377,962

Excess of revenues over expenditures. . . . . . . 2,128,241 163 2,128,404

Other financing sources:

Transfers in . . . . . . . . . . . . . . . . . . . 1,522,378 - 1,522,378

Total other financing sources . . . . . . . . . . . 1,522,378 - 1,522,378

Net change in fund balances . . . . . . . . . . . . 3,650,619 163 3,650,782

Fund balances at beginning of year. . . . . . . . 8,024,568 182,415 8,206,983

Fund balances at end of year . . . . . . . . . . . 11,675,187$ 182,578$ 11,857,765$

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 114

THIS PAGE IS INTENTIONALLY LEFT BLANK

F 115

Highway HUD Street Maintenance Programs

Assets: Equity in pooled cash and cash equivalents . . 980,074$ 510,593$ 205,051$ Receivables:

Accounts. . . . . . . . . . . . . . . . . . . 51,984 - 51,015 Special assessments. . . . . . . . . . . . . . - - 427,710

Accrued interest . . . . . . . . . . . . . . . - - 261 Due from other governments. . . . . . . . . 2,180,093 209,358 818,084

Due from component units. . . . . . . . . . . - - 6,225,049

Total assets . . . . . . . . . . . . . . . . . . . 3,212,151$ 719,951$ 7,727,170$

Liabilities: Accounts payable. . . . . . . . . . . . . . . . 66,037$ 2,937$ 14,051$ Contracts payable. . . . . . . . . . . . . . . . - - 1,145,078 Accrued wages and benefits payable . . . . . . 106,534 11,309 64,235

Retainage payable . . . . . . . . . . . . . . . . - - 9,929 Due to other funds . . . . . . . . . . . . . . . 2,318 - 5,770 Due to other governments. . . . . . . . . . . . - - -

Total liabilities . . . . . . . . . . . . . . . . . . 174,889 14,246 1,239,063

Deferred inflows of resources: Accrued interest not available . . . . . . . . . - - 134 Special assessments revenue not available. . . . - - 427,710 Miscellaneous revenue not available . . . . . . 51,050 - 47,330 Intergovernmental revenue not available . . . . 1,409,499 138,614 817,977

Total deferred inflows of resources . . . . . . . . 1,460,549 138,614 1,293,151

Fund Balances: Restricted. . . . . . . . . . . . . . . . . . . . 1,576,713 567,091 5,194,956

Total fund balances. . . . . . . . . . . . . . . . 1,576,713 567,091 5,194,956

Total liabilities, deferred inflows of resources and fund balances . . . . . . . . 3,212,151$ 719,951$ 7,727,170$

CITY OF DAYTON, OHIO

COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS

DECEMBER 31, 2014

F 116

Miscellaneous Grants Total

4,622,198$ 6,317,916$

- 102,999 - 427,710

608 869 3,743,178 6,950,713

- 6,225,049

8,365,984$ 20,025,256$

148,880$ 231,905$ 92,080 1,237,158 62,099 244,177 11,966 21,895

189 8,277 12,518 12,518

327,732 1,755,930

313 447 - 427,710 - 98,380

3,701,512 6,067,602

3,701,825 6,594,139

4,336,427 11,675,187

8,365,984$ 20,025,256$

F 117

Highway HUD Street Maintenance Programs

Revenues: State shared taxes. . . . . . . . . . . . . . . 4,911,113$ 430,633$ -$ Charges for services. . . . . . . . . . . . . . 410,621 - 16,118 Fines and forfeitures . . . . . . . . . . . . . - - - Intergovernmental. . . . . . . . . . . . . . . 99,691 - 9,664,057 Special assessments . . . . . . . . . . . . . . - - 38,922 Investment income . . . . . . . . . . . . . . - - 507 Increase (decrease) in FMV of investments . . . - - (71) Other . . . . . . . . . . . . . . . . . . . . . 129,169 - 70,359

Total revenues . . . . . . . . . . . . . . . . . . 5,550,594 430,633 9,789,892

Expenditures: Current: General government:

Downtown. . . . . . . . . . . . . . . . . . . - - 387 Youth, education and human services. . . . . - - 665,177 Community development and neighborhoods. 120 - 7,164,730 Economic development . . . . . . . . . . . . - - 130,322 Leadership and quality of life . . . . . . . . . 6,440,839 203,421 1,696,697 Corporate responsibility. . . . . . . . . . . . - - 146,000 Public safety and justice. . . . . . . . . . . . - - 192,940

Total expenditures. . . . . . . . . . . . . . . . . 6,440,959 203,421 9,996,253

Excess (deficiency) of revenues over (under) expenditures . . . . . . . . . . . . (890,365) 227,212 (206,361)

Other financing sources:

Transfers in . . . . . . . . . . . . . . . . . . . 1,100,000 - -

Total other financing sources . . . . . . . . . . . 1,100,000 - -

Net change in fund balances . . . . . . . . . . . . 209,635 227,212 (206,361)

Fund balances at beginning of year. . . . . . . . . . . . . . . 1,367,078 339,879 5,401,317

Fund balances at end of year . . . . . . . . . . 1,576,713$ 567,091$ 5,194,956$

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 118

Miscellaneous Grants Total

-$ 5,341,746$ 374,836 801,575 445,880 445,880

8,777,777 18,541,525 - 38,922

774 1,281 536 465

135,281 334,809

9,735,084 25,506,203

- 387 - 665,177

1,964,118 9,128,968 1,616,604 1,746,926

172,944 8,513,901 - 146,000

2,983,663 3,176,603

6,737,329 23,377,962

2,997,755 2,128,241

422,378 1,522,378

3,420,133 3,650,619

916,294 8,024,568

4,336,427$ 11,675,187$

F 119

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: State shared taxes . . . . . . . . . . . . . . . . 5,006,900$ 5,016,500$ 4,994,513$ (21,987)$ Charges for services . . . . . . . . . . . . . . . 411,700 412,400 410,621 (1,779) Other . . . . . . . . . . . . . . . . . . . . . . 166,700 167,000 166,297 (703)

Total revenues. . . . . . . . . . . . . . . . . . . 5,585,300 5,595,900 5,571,431 (24,469) Expenditures: Department of public works . . . . . . . . . . . 5,468,900 6,668,800 6,479,327 189,473

Total expenditures. . . . . . . . . . . . . . . . . 5,468,900 6,668,800 6,479,327 189,473

Excess (deficiency) of revenues over (under) expenditures. . . . . . . . . . . 116,400 (1,072,900) (907,896) 165,004

Other financing sources: Transfers in . . . . . . . . . . . . . . . . . . . - 1,104,900 1,100,000 (4,900)

Total other financing sources . . . . . . . . . . . - 1,104,900 1,100,000 (4,900)

Net change in fund balance . . . . . . . . . . . . 116,400 32,000 192,104 160,104

Fund balance at beginning of year. . . . . . . . . 952,790 952,790 952,790 - Prior year encumbrances appropriated. . . . . 16,677 16,677 16,677 -

Fund balance at end of year. . . . . . . . . . . 1,085,867$ 1,001,467$ 1,161,571$ 160,104$

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

STREET FUND FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

F 120

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: State shared taxes . . . . . . . . . . . . . . . . 400,000$ 400,000$ 429,402$ 29,402$

Total revenues. . . . . . . . . . . . . . . . . . . 400,000 400,000 429,402 29,402 Expenditures: Department of public works . . . . . . . . . . . 440,000 440,000 400,000 40,000

Total expenditures. . . . . . . . . . . . . . . . . 440,000 440,000 400,000 40,000

Net change in fund balance . . . . . . . . . . . . (40,000) (40,000) 29,402 69,402

Fund balance at beginning of year. . . . . . . . 354,096 354,096 354,096 - Prior year encumbrances appropriated. . . . . 182,495 182,495 182,495 -

Fund balance at end of year. . . . . . . . . . . 496,591$ 496,591$ 565,993$ 69,402$

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

HIGHWAY MAINTENANCE FUND FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

F 121

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Fines and forfeitures . . . . . . . . . . . . . . 2,385,600$ 2,609,900$ 765,921$ (1,843,979)$ Intergovernmental. . . . . . . . . . . . . . . . 30,073,500 32,899,800 9,655,306 (23,244,494) Other . . . . . . . . . . . . . . . . . . . . . . 869,800 951,500 279,249 (672,251)

Total revenues. . . . . . . . . . . . . . . . . . . 33,328,900 36,461,200 10,700,476 (25,760,724) Expenditures: Various departments . . . . . . . . . . . . . . 24,416,300 27,233,500 16,968,184 10,265,316

Total expenditures. . . . . . . . . . . . . . . . . 24,416,300 27,233,500 16,968,184 10,265,316

Excess (deficiency) of revenues over (under) expenditures . . . . . . . . . . . . 8,912,600 9,227,700 (6,267,708) (15,495,408)

Other financing sources: Transfers in . . . . . . . . . . . . . . . . . . . 1,315,600 1,439,200 422,378 (1,016,822)

Total other financing sources . . . . . . . . . . . 1,315,600 1,439,200 422,378 (1,016,822)

Net change in fund balances . . . . . . . . . . . . 10,228,200 10,666,900 (5,845,330) (16,512,230)

Fund balance at beginning of year. . . . . . . . 871,597 871,597 871,597 - Prior year encumbrances appropriated. . . . . 9,875,038 9,875,038 9,875,038 -

Fund balance at end of year . . . . . . . . . . . 20,974,835$ 21,413,535$ 4,901,305$ (16,512,230)$

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

MISCELLANEOUS GRANTS FUND FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

F 122

Variance with Final Budget

Positive

Original Final Actual (Negative)

Revenues: Other . . . . . . . . . . . . . . . . . . . . . . 200$ 200$ 127$ (73)$

Total revenues. . . . . . . . . . . . . . . . . . . 200 200 127 (73) Expenditures:

Other . . . . . . . . . . . . . . . . . . . . . . 50,000 50,000 - 50,000

Total expenditures. . . . . . . . . . . . . . . . . 50,000 50,000 - 50,000

Net change in fund balances . . . . . . . . . . . . (49,800) (49,800) 127 49,927

Fund balance at beginning of year. . . . . . . . . . 289,781 289,781 289,781 -

Fund balance at end of year . . . . . . . . . . . 239,981$ 239,981$ 289,908$ 49,927$

FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

PERMANENT FUND

F 123

Variance with Final Budget

Positive Original Final Actual (Negative)

Revenues: Property and other taxes. . . . . . . . . . . . 6,678,300$ 7,023,600$ 7,136,282$ 112,682$ Intergovernmental. . . . . . . . . . . . . . . 2,397,500 2,521,500 2,561,893 40,393 Special assessments . . . . . . . . . . . . . . 79,200 83,300 84,644 1,344 Other . . . . . . . . . . . . . . . . . . . . . 106,800 112,300 114,062 1,762

Total revenues. . . . . . . . . . . . . . . . . . 9,261,800 9,740,700 9,896,881 156,181 Expenditures: Department of finance . . . . . . . . . . . . 12,283,700 12,283,700 11,455,862 827,838

Total expenditures. . . . . . . . . . . . . . . . 12,283,700 12,283,700 11,455,862 827,838

Excess of expenditures over revenues . . . . . . (3,021,900) (2,543,000) (1,558,981) 984,019

Other financing sources: Premium on bond issuance. . . . . . . . . . . . 104,600 110,000 249,270 139,270 Transfers in . . . . . . . . . . . . . . . . . . . 951,300 1,000,500 842,500 (158,000)

Total other financing sources . . . . . . . . . . . 1,055,900 1,110,500 1,091,770 (18,730)

Net change in fund balance . . . . . . . . . . . (1,966,000) (1,432,500) (467,211) 965,289

Fund balance at beginning of year. . . . . . . . 12,782,294 12,782,294 12,782,294 - Prior year encumbrances appropriated. . . . . 30,458 30,458 30,458 -

Fund balance at end of year . . . . . . . . . . . 10,846,752$ 11,380,252$ 12,345,541$ 965,289$

FOR THE YEAR ENDED DECEMBER 31, 2014

Budgeted Amounts

CITY OF DAYTON, OHIO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS)

DEBT SERVICE FUND

F 124

COMBINING STATEMENTS - NONMAJOR ENTERPRISE FUNDS

Nonmajor Enterprise Funds

CITY OF DAYTON, OHIO

The enterprise funds account for operations that are financed and operated in a manner similar to private business enterprises where the intent is that costs (expenses, including depreciation) of providing services to the general public on a continuing basis be recovered primarily through user charges, or where it has been decided that a periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The following are the nonmajor enterprise funds which the City of Dayton operates:

Storm Water

To account for the provision of storm sewers to the residents of the City of Dayton. Charges for services are used to maintain the storm sewers throughout the City.

Golf

To account for the operations of the City's six golf courses. Revenue is generated by golf fees charged for the use of the facilities. The six golf courses provide needed green space inside the City with three providing scenic cover to the City's north well field.

F 125

Storm Water Golf Total

Assets: Current assets:

Equity in pooled cash and cash equivalents . . 11,445,501$ 167,911$ 11,613,412$ Receivables:

Accounts. . . . . . . . . . . . . . . . . . . 1,530,338 - 1,530,338 Special assessments . . . . . . . . . . . . . 630,762 - 630,762 Accrued interest . . . . . . . . . . . . . . . 17,280 - 17,280 Due from other governments . . . . . . . . . . . . 22,062 - 22,062

Prepayments . . . . . . . . . . . . . . . . . . - 4,982 4,982 Total current assets. . . . . . . . . . . . . . . . . 13,645,943 172,893 13,818,836

Noncurrent assets: Capital assets:

Land and construction in progress. . . . . . 57,500 594,927 652,427 Depreciable capital assets, net . . . . . . . . 13,165,100 4,004,289 17,169,389

Total capital assets, net. . . . . . . . . . . . . 13,222,600 4,599,216 17,821,816

Total noncurrent assets. . . . . . . . . . . . . . 13,222,600 4,599,216 17,821,816

Total assets. . . . . . . . . . . . . . . . . . . . . 26,868,543 4,772,109 31,640,652

Liabilities: Current liabilities:

Accounts payable. . . . . . . . . . . . . . . . 19,122 2,780 21,902 Contracts payable. . . . . . . . . . . . . . . . 4,648 5,369 10,017 Accrued wages and benefits payable . . . . . . 116,758 36,440 153,198 Due to other funds . . . . . . . . . . . . . . . 684,753 175 684,928 Due to other governments . . . . . . . . . . . - 3,351 3,351 Compensated absences payable - current . . . . 178,519 72,095 250,614 Advances from other funds. . . . . . . . . . . - 1,086,841 1,086,841 Capital lease obligations payable . . . . . . . 5,405 - 5,405

Total current liabilities . . . . . . . . . . . . . . 1,009,205 1,207,051 2,216,256

Long-term liabilities: Compensated absences payable . . . . . . . . 95,384 38,521 133,905 Capital lease obligations payable . . . . . . . 23,418 - 23,418

Total long-term liabilities . . . . . . . . . . . . 118,802 38,521 157,323

Total liabilities. . . . . . . . . . . . . . . . . . . 1,128,007 1,245,572 2,373,579

Net position: Net investment in capital assets . . . . . . . . . 13,217,952 4,593,847 17,811,799

Unrestricted (deficit). . . . . . . . . . . . . . . 12,522,584 (1,067,310) 11,455,274

Total net position . . . . . . . . . . . . . . . . . 25,740,536$ 3,526,537$ 29,267,073$

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS

DECEMBER 31, 2014

F 126

Storm Water Golf Total

Operating revenues: Charges for services. . . . . . . . . . . . . 7,330,340$ 2,874,737$ 10,205,077$ Other operating revenues . . . . . . . . . . 28,284 8,870 37,154

Total operating revenues. . . . . . . . . . . . 7,358,624 2,883,607 10,242,231

Operating expenses: Personal services . . . . . . . . . . . . . . 2,142,297 743,332 2,885,629 Fringe benefits. . . . . . . . . . . . . . . . 914,442 288,021 1,202,463 Contract services. . . . . . . . . . . . . . . 1,352,352 737,503 2,089,855 Materials and supplies . . . . . . . . . . . . 150,638 307,448 458,086 Utilities . . . . . . . . . . . . . . . . . . . 78,767 114,700 193,467 Depreciation . . . . . . . . . . . . . . . . . 545,967 271,643 817,610 Other. . . . . . . . . . . . . . . . . . . . . 263,858 434,421 698,279

Total operating expenses. . . . . . . . . . . . 5,448,321 2,897,068 8,345,389

Operating income (loss). . . . . . . . . . . . . . 1,910,303 (13,461) 1,896,842

Nonoperating revenues (expenses): Interest and fiscal charges . . . . . . . . . . . - (54,921) (54,921) Loss on sale of capital assets. . . . . . . . . . . (4,500) - (4,500) Interest income. . . . . . . . . . . . . . . . . 31,663 - 31,663 Increase in fair market value of investments . . 2,409 - 2,409

Total nonoperating revenues (expenses) . . . . . 29,572 (54,921) (25,349)

Income (loss) before transfers and contributions. . . . . 1,939,875 (68,382) 1,871,493

Transfer in . . . . . . . . . . . . . . . . . . . - 60,000 60,000 Capital contributions. . . . . . . . . . . . . . 71,485 - 71,485

Change in net position . . . . . . . . . . . . . 2,011,360 (8,382) 2,002,978

Net position at beginning of year . . . . . . . 23,729,176 3,534,919 27,264,095

Net position at end of year . . . . . . . . . . 25,740,536$ 3,526,537$ 29,267,073$

FOR THE YEAR ENDED DECEMBER 31, 2014

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS

F 127

Storm Water Golf Total

Cash flows from operating activities: Cash received from customers. . . . . . . . . . . . . 7,398,707$ $2,874,737 10,273,444$ Cash received from other operations. . . . . . . . . . 28,284 8,870 37,154 Cash payments for personal services. . . . . . . . . . (2,137,050) (748,790) (2,885,840) Cash payments for fringe benefits . . . . . . . . . . . (916,382) (287,794) (1,204,176) Cash payments for contractual services . . . . . . . . (1,305,320) (745,101) (2,050,421) Cash payments for materials and supplies . . . . . . . (165,266) (308,590) (473,856) Cash payments for utilities. . . . . . . . . . . . . . . (78,588) (119,926) (198,514) Cash payments for other expenses . . . . . . . . . . . (263,847) (447,207) (711,054)

Net cash provided by operating activities. . . . . . . 2,560,538 226,199 2,786,737

Cash flows from noncapital financing activities: Cash used in repayment of interfund loans . . . . . . - (37,592) (37,592) Interest paid on interfund loans. . . . . . . . . . . . . - (50,599) (50,599) Transfers in. . . . . . . . . . . . . . . . . . . . . . - 60,000 60,000

Net cash used in noncapital financing activities . . . . . . . . . . . . . . . . . - (28,191) (28,191)

Cash flows from capital and related financing activities:

Capital contributions . . . . . . . . . . . . . . . . . 71,485 - 71,485 Acquisition of capital assets . . . . . . . . . . . . . . (532,768) (16,200) (548,968) Principal paid on bonds. . . . . . . . . . . . . . . . . - (188,600) (188,600) Interest paid on bonds. . . . . . . . . . . . . . . . . . - (4,715) (4,715)

Net cash used in capital and related financing activities . . . . . . . . . . . . . . . . (461,283) (209,515) (670,798)

Cash flows from investing activities: Interest received. . . . . . . . . . . . . . . . . . . . . 27,637 - 27,637

Net cash provided by investing activities . . . . . . . 27,637 - 27,637

Net increase (decrease) in cash and cash equivalents. . . . . . 2,126,892 (11,507) 2,115,385

Cash and cash equivalents at beginning of year. . . . . 9,318,609 179,418 9,498,027 Cash and cash equivalents at end of year . . . . . . . . $ 11,445,501 $ 167,911 $ 11,613,412

Reconciliation of operating income to net cash provided by operating activities:

Operating income. . . . . . . . . . . . . . . . . . . . . . 1,910,303$ (13,461)$ 1,896,842$

Adjustments: Depreciation . . . . . . . . . . . . . . . . . . . . . . . 545,967 271,643 817,610

Changes in assets and liabilities: Decrease in accounts receivable. . . . . . . . . . . . . . 113,592 - 113,592 Decrease (increase) in prepayments. . . . . . . . . . . . . 1,875 (4,982) (3,107) Increase in special assessments receivable . . . . . . . . (45,225) - (45,225) Decrease in accounts payable. . . . . . . . . . . . . . . (43,238) (13,232) (56,470) Increase (decrease) in contracts payable . . . . . . . . . 4,262 (1,591) 2,671 Decrease in retainage payable . . . . . . . . . . . . . (17,272) - (17,272) Increase (decrease) in accrued wages and benefits. . . . . (8,530) 1,862 (6,668) Increase (decrease) in due to other funds. . . . . . . . . . 86,967 (12) 86,955 Decrease in due to other governments . . . . . . . . . . . - (6,935) (6,935) Increase (decrease) in compensated absences payable . . 11,837 (7,093) 4,744

Net cash provided by operating activities. . . . . . . . . . $ 2,560,538 $ 226,199 $ 2,786,737

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 128

Stores and Reproduction

Health Insurance

Workers' Compensation

Plumbing Shop

To account for claims and administrative payments to cover the cost of servicing the City's self-insured insurance program for medical and prescription drug benefits.

CITY OF DAYTON, OHIO

COMBINING STATEMENTS - INTERNAL SERVICE FUNDS

The internal service funds account for the financing of goods or services provided by one department or agency to other departments of the City of Dayton on a cost-reimbursement basis. Accounting for these funds is designed to accumulate all of the costs incurred by the internal service funds in providing goods and services to other departments. However, charges to the other departments are not intended to produce a significant profit in the long run, but to recover the total costs of providing goods or services.

To account for claims and administrative payments to cover risks due to job-related injuries to City employees. Revenues are derived from pro-rated charges against personnel costs of each department to cover claim payments and costs of administering the fund.

To account for plumbing services to departments within the City.

Fleet Management To account for the maintenance of City vehicles. Revenues are derived from direct charges to other departments for fuel usage and repairs. General maintenance is charged to the other funds on a pro-rated basis.

Stores is used in purchasing and storage of office materials and supplies for the entire organization. The other departments are charged the cost of the materials and supplies plus an average of fifteen percent markup to cover the overhead cost of operating this fund. Reproduction is used to account for the reproducing of written material, and the print, binding and distribution of the City's various publications. All costs are recouped from charges to other departments within the organization on a per-job basis.

Fire Fleet Management To account for the maintenance of City fire vehicles and to charge for maintenance of fire vehicles from other municipalities. A majority of the maintenance will be provided to City fire vehicles. Revenues are derived from direct charges to the fire department within the general fund and from fees charged to other municipalities.

F 129

Fleet Fire Fleet Stores and Health Management Management Reproduction Insurance

Assets: Current assets:

Equity in pooled cash and investments. . . . . . 554,855$ 171,113$ 170,493$ 8,883,894$ Receivables:

Accounts. . . . . . . . . . . . . . . . . . . 249 14,169 - - Accrued interest . . . . . . . . . . . . . . . - - - - Due from other funds . . . . . . . . . . . . - - 36,028 - Due from other governments. . . . . . . . . - 33,202 - -

Prepayments . . . . . . . . . . . . . . . . . . - 14,535 - 220,878 Inventory held for resale . . . . . . . . . . . . 378,060 311,886 - - Advances to other funds . . . . . . . . . . . . . . . - - - -

Total current assets. . . . . . . . . . . . . . . . 933,164 544,905 206,521 9,104,772

Noncurrent assets: Capital assets:

Land . . . . . . . . . . . . . . . . . . . . - 75,000 - - Depreciable capital assets, net . . . . . . . . 59,044 687,312 12,008 -

Total noncurrent assets. . . . . . . . . . . . . . 59,044 762,312 12,008 -

Total assets. . . . . . . . . . . . . . . . . . . . . 992,208 1,307,217 218,529 9,104,772

Liabilities: Current liabilities:

Accounts payable. . . . . . . . . . . . . . . . 88,153 19,566 26,552 2,514 Accrued wages and benefits payable . . . . . . 101,960 28,626 3,617 5,278 Due to other funds . . . . . . . . . . . . . . . 13,201 146 - 3,382 Due to other governments . . . . . . . . . . . - - - - Compensated absences payable - current. . . . 49,429 10,316 22,227 9,886 Advances from other funds. . . . . . . . . . . 200,000 - - - Claims and judgments payable . . . . . . . . - - - 2,541,141

Total current liabilities . . . . . . . . . . . . . . 452,743 58,654 52,396 2,562,201

Long-term liabilities: Compensated absences payable . . . . . . . . 26,411 5,512 11,876 5,282 Claims and judgements payable . . . . . . . . - - - -

Total long-term liabilities . . . . . . . . . . . . 26,411 5,512 11,876 5,282

Total liabilities . . . . . . . . . . . . . . . . . . . 479,154 64,166 64,272 2,567,483

Net position: Net investment in capital assets . . . . . . . . . 59,044 687,312 12,008 -

Unrestricted. . . . . . . . . . . . . . . . . . . . 454,010 555,739 142,249 6,537,289

Total net position . . . . . . . . . . . . . . . . . 513,054$ 1,243,051$ 154,257$ 6,537,289$

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS

DECEMBER 31, 2014

F 130

Workers' Plumbing Compensation Shop Total

15,843,316$ 505,440$ 26,129,111$

- - 14,418 23,967 - 23,967

- - 36,028 - - 33,202 - - 235,413 - - 689,946

217,584 - 217,584

16,084,867 505,440 27,379,669

- - 75,000 27,468 96,046 881,878

27,468 96,046 956,878

16,112,335 601,486 28,336,547

10,292 20,012 167,089 10,287 15,044 164,812

714 - 17,443 1,724,647 - 1,724,647

84,062 11,432 187,352 - - 200,000

1,369,820 - 3,910,961

3,199,822 46,488 6,372,304

44,915 6,108 100,104 3,607,897 - 3,607,897

3,652,812 6,108 3,708,001

6,852,634 52,596 10,080,305

27,468 96,046 881,878 9,232,233 452,844 17,374,364

9,259,701$ 548,890$ 18,256,242$

F 131

Fleet Fire Fleet Stores and Health Management Management Reproduction Insurance

Operating revenues: Charges for services. . . . . . . . . . . . . 8,164,774$ 1,284,259$ 204,909$ 18,471,977$ Other operating revenues . . . . . . . . . . 201,645 31,588 326,547 -

Total operating revenues. . . . . . . . . . . . 8,366,419 1,315,847 531,456 18,471,977

Operating expenses: Personal services . . . . . . . . . . . . . . 1,636,134 488,210 129,599 159,762 Fringe benefits. . . . . . . . . . . . . . . . 722,416 195,220 55,715 26,076 Contract services. . . . . . . . . . . . . . . 524,187 154,907 269,606 - Materials and supplies . . . . . . . . . . . . 2,222,534 9,048 530 8,301 Cost of sales . . . . . . . . . . . . . . . . . 3,044,256 293,201 47,022 - Utilities . . . . . . . . . . . . . . . . . . . - 24,262 - - Claims expense . . . . . . . . . . . . . . . - - - 16,737,314 Depreciation . . . . . . . . . . . . . . . . . 26,370 27,052 6,005 - Other. . . . . . . . . . . . . . . . . . . . . 27,568 2,378 26,649 25,300

Total operating expenses. . . . . . . . . . . . 8,203,465 1,194,278 535,126 16,956,753

Operating income (loss) . . . . . . . . . . . . 162,954 121,569 (3,670) 1,515,224

Nonoperating revenues: Operating grants . . . . . . . . . . . . . . . . . - - - - Interest income. . . . . . . . . . . . . . . . . - - - - Increase in fair market value of investments . . - - - -

Total nonoperating revenues. . . . . . . . . . . . . - - - -

Income (loss) before transfers. . . . . . . . . . 162,954 121,569 (3,670) 1,515,224

Transfers out . . . . . . . . . . . . . . . . . - (117,909) - -

Change in net position. . . . . . . . . . . . . . 162,954 3,660 (3,670) 1,515,224

Net position at beginning of year. . . . . . . 350,100 1,239,391 157,927 5,022,065

Net position at end of year . . . . . . . . . . 513,054$ 1,243,051$ 154,257$ 6,537,289$

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 132

Workers' Plumbing Compensation Shop Total

3,324,855$ 434,521$ 31,885,295$ 13,183 2,562 575,525

3,338,038 437,083 32,460,820

490,028 210,204 3,113,937 164,123 82,266 1,245,816 225,294 3,363 1,177,357 127,957 119,118 2,487,488

- - 3,384,479 - - 24,262

1,873,469 - 18,610,783 9,159 11,249 79,835

21,440 - 103,335

2,911,470 426,200 30,227,292

426,568 10,883 2,233,528

40,000 - 40,000 41,437 - 41,437 4,970 - 4,970

86,407 - 86,407

512,975 10,883 2,319,935

- - (117,909)

512,975 10,883 2,202,026

8,746,726 538,007 16,054,216

9,259,701$ 548,890$ 18,256,242$

F 133

Fleet Fire Fleet Stores and Health Management Management Reproduction Insurance

Cash flows from operating activities: Cash received from interfund services provided . . . 8,340,926$ 1,297,937$ 207,231$ 18,471,977$ Cash received from other operations . . . . . . . . . 201,645 31,588 326,547 Cash payments for personal services . . . . . . . . . (1,713,819) (504,120) (112,745) (158,318) Cash payments for fringe benefits. . . . . . . . . . . (726,318) (196,044) (54,492) (26,050) Cash payments for contractual services . . . . . . . . (526,798) (156,594) (292,558) - Cash payments for materials and supplies . . . . . . . (2,281,377) - (933) (8,301) Cash payments for cost of goods sold . . . . . . . . . (3,094,426) (313,522) (47,022) - Cash payments for utilities. . . . . . . . . . . . . . . - (23,597) - - Cash payments for claims. . . . . . . . . . . . . . . . - - - (16,853,539) Cash payments for other expenses . . . . . . . . . . . (27,676) (2,391) (23,668) (240,282)

Net cash provided by operating activities. . . . . . . 172,157 133,257 2,360 1,185,487

Cash flows from noncapital financing activities:

Cash payments for interfund loans. . . . . . . . . . . (100,000) - - - Cash received from operating grants . . . . . . . . . - - - - Cash received from interfund loans. . . . . . . . . . . - - - - Cash used in transfers out . . . . . . . . . . . . . . . - (117,909) - -

Net cash provided by (used in) noncapital financing activities . . . . . . . . . . . . . . . . . (100,000) (117,909) - -

Cash flows from capital and related financing activities: Acquisition of capital assets . . . . . . . . . . . . . - - - -

Net cash used in capital and related financing activities . . . . . . . . . . . . - - - -

Cash flows from investing activities: Interest received. . . . . . . . . . . . . . . . . . . . - - - -

Net cash provided by investing activies . . . . . . . - - - -

Net increase (decrease) in cash and cash equivalents. . . . . 72,157 15,348 2,360 1,185,487

Cash and cash equivalents at beginning of year. . . . . . . . . . . . . . . . . . . 482,698 155,765 168,133 7,698,407

Cash and cash equivalents at end of year . . . . . . . $ 554,855 $ 171,113 $ 170,493 $ 8,883,894

Reconciliation of operating income (loss) to net cash provided by operating activities:

Operating income (loss) . . . . . . . . . . . . . . . . . 162,954$ 121,569$ (3,670)$ 1,515,224$

Adjustments: Depreciation . . . . . . . . . . . . . . . . . . . . . . 26,370 27,052 6,005 -

Changes in assets and liabilities: Decrease (increase) in accounts receivable . . . . . . . . (249) 4,253 - - Decrease in due from other funds. . . . . . . . . . . . 163,438 16,157 2,322 - Increase in due from other governments. . . . . . . . - (6,732) - - Decrease (increase) in prepayments . . . . . . . . . . . . - 208 - (220,878) Increase in inventory held for resale. . . . . . . . . . . . (50,170) (20,321) - - Increase (decrease) in accounts payable . . . . . . . . (61,463) 18,584 (20,374) 2,514 Increase (decrease) in accrued wages and benefits. . . . 7,237 2,293 (168) (1,689) Increase (decrease) in due to other funds . . . . . . . . 12,864 (10,779) 3,382 Increase in due to other governments. . . . . . . . . . - - - - Increase (decrease) in compensated absences payable. . (88,824) (19,027) 18,245 3,159 Decrease in claims payable. . . . . . . . . . . . . . . . - - - (116,225)

Net cash provided by operating activities . . . . . . . . $ 172,157 $ 133,257 $ 2,360 $ 1,185,487

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 134

Workers' Plumbing Compensation Shop Total

3,324,855$ 434,521$ 32,077,447$ 13,183 2,562 575,525

(406,720) (215,991) (3,111,713) (158,010) (82,366) (1,243,280) (230,605) (3,385) (1,209,940) (125,056) (107,389) (2,523,056)

- - (3,454,970) - - (23,597)

(1,712,916) - (18,566,455) (21,392) - (315,409)

683,339 27,952 2,204,552

- - (100,000) 40,000 - 40,000 68,345 - 68,345

- - (117,909)

108,345 - (109,564)

- (36,150) (36,150)

39,959 - 39,959

831,643 (8,198) 2,098,797

15,011,673 513,638 24,030,314 $ 15,843,316 $ 505,440 $ 26,129,111

426,568$ 10,883$ 2,233,528$

9,159 11,249 79,835

- - 4,004 - - 181,917 - - (6,732) - - (220,670) - - (70,491)

(2,431) 11,887 (51,283) (629) 2,550 9,594

69 (180) 5,356 205,126 - 205,126

90,050 (8,437) (4,834) (44,573) - (160,798)

$ 683,339 $ 27,952 $ 2,204,552

F 135

Guaranty Payroll Withholding Performance Bond Special Improvement District Developer Construction Payments GMR Trading Project Deposit of Taxes/Courthouse Square Miami Township-Dayton JEDD Dependent Care Butler Township-Dayton JEDD Fire Proceeds EPA GMR Trading Project Urban Renewal Comp Dep Municipal Courts Building Permit Surcharge Executive Severance

Agency funds are custodial in nature, and thus, do not recognize revenues or expenditures, only changes in assets and liabilities. These funds are used to record the collection and payment of employee payroll, withholdings, medical and life insurance premiums, refundable deposits, PERS, Police and Fire Pension funds, taxes collected for other governments, conduit debt and municipal court.

Agency Funds

CITY OF DAYTON, OHIO

COMBINING STATEMENTS - FIDUCIARY FUNDS

Fiduciary funds are used to account for assets held by the City in a trustee capacity, or as an agent for individuals, private organizations, other governmental units, and/or funds. The following are the City's fiduciary fund types:

F 136

Balance Balance 12/31/13 Additions Deductions 12/31/14

Guaranty Assets: Equity in pooled cash and cash equivalents. . . . . . 49,649$ -$ -$ 49,649$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 49,649$ -$ -$ 49,649$

Liabilities: Intergovernmental payable. . . . . . . . . . 49,649$ -$ -$ 49,649$

Total liabilities. . . . . . . . . . . . . . . . . . . . . 49,649$ -$ -$ 49,649$

Performance Bond Assets: Equity in pooled cash and cash equivalents. . . . . . 14,119$ -$ -$ 14,119$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 14,119$ -$ -$ 14,119$

Liabilities: Withholdings and deposits. . . . . . . . . . . . . . 14,119$ -$ -$ 14,119$ Total liabilities. . . . . . . . . . . . . . . . . . . . . 14,119$ -$ -$ 14,119$

Developer Construction Payments Assets: Equity in pooled cash and cash equivalents. . . . . . 23,000$ -$ 20,000$ 3,000$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 23,000$ -$ 20,000$ 3,000$

Liabilities: Due to others. . . . . . . . . . . . . . . . . . . . . 23,000$ -$ 20,000$ 3,000$ Total liabilities. . . . . . . . . . . . . . . . . . . . . 23,000$ -$ 20,000$ 3,000$

Deposit of Taxes/Courthouse Square Assets: Accounts receivable. . . . . . . . . . . . . . . . . . 258,089$ 174,382$ 258,089$ 174,382$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 258,089$ 174,382$ 258,089$ 174,382$

Liabilities: Intergovernmental payable. . . . . . . . . . 83,706$ 83,711$ 83,706$ 83,711$ Due to others. . . . . . . . . . . . . . . . . . . . . 174,383 90,671 174,383 90,671

Total liabilities. . . . . . . . . . . . . . . . . . . . . 258,089$ 174,382$ 258,089$ 174,382$

Dependent Care Assets: Equity in pooled cash and cash equivalents. . . . . . 2,228$ -$ -$ 2,228$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 2,228$ -$ -$ 2,228$

Liabilities: Intergovernmental payable. . . . . . . . . . 2,228$ -$ -$ 2,228$

Total liabilities. . . . . . . . . . . . . . . . . . . . . 2,228$ -$ -$ 2,228$

- - Continued

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS

FOR THE YEAR ENDED DECEMBER 31, 2014

F 137

Balance Balance 12/31/13 Additions Deductions 12/31/14

Fire Proceeds Assets: Equity in pooled cash and cash equivalents. . . . . . 907,078$ 153,632$ 13,374$ 1,047,336$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 907,078$ 153,632$ 13,374$ 1,047,336$

Liabilities: Intergovernmental payable. . . . . . . . . . 907,078$ 153,632$ 13,374$ 1,047,336$

Total liabilities. . . . . . . . . . . . . . . . . . . . . 907,078$ 153,632$ 13,374$ 1,047,336$

Urban Renewal Comp Dep Assets: Equity in pooled cash and cash equivalents. . . . . . 53,520$ -$ -$ 53,520$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 53,520$ -$ -$ 53,520$

Liabilities: Withholdings and deposits. . . . . . . . . . . . . . 53,520$ -$ -$ 53,520$ Total liabilities. . . . . . . . . . . . . . . . . . . . . 53,520$ -$ -$ 53,520$

Building Permit Surcharge Assets: Equity in pooled cash and cash equivalents. . . . . . 8,681$ 6,466$ 1,265$ 13,882$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 8,681$ 6,466$ 1,265$ 13,882$

Liabilities: Accounts payable . . . . . . . . . . . . . . . . . . 1,265$ 1,612$ 1,265$ 1,612$ Due to others. . . . . . . . . . . . . . . . . . . . . 7,416 4,854 - 12,270

Total liabilities. . . . . . . . . . . . . . . . . . . . . 8,681$ 6,466$ 1,265$ 13,882$

Payroll Withholding Assets: Equity in pooled cash and cash equivalents. . . . . . 2,100,488$ 1,246,029$ 2,100,488$ 1,246,029$

Receivables: Intergovernmental. . . . . . . . . . . . . 90,671 90,671 90,671 90,671

Total assets. . . . . . . . . . . . . . . . . . . . . . . 2,191,159$ 1,336,700$ 2,191,159$ 1,336,700$

Liabilities: Accounts payable . . . . . . . . . . . . . . . . . . 43,747$ -$ 43,747$ -$

Due to others. . . . . . . . . . . . . . . . . . . . . 134,465 178,118 134,465 178,118 Withholdings and deposits. . . . . . . . . . . . . . 2,012,947 1,158,582 2,012,947 1,158,582 Total liabilities. . . . . . . . . . . . . . . . . . . . . 2,191,159$ 1,336,700$ 2,191,159$ 1,336,700$

Special Improvement District Assets: Equity in pooled cash and cash equivalents. . . . . . 45,098$ 125,375$ 45,098$ 125,375$

Receivables: Special assessments. . . . . . . . . . . . 2,589,321 - 1,294,661 1,294,660

Total assets. . . . . . . . . . . . . . . . . . . . . . . 2,634,419$ 125,375$ 1,339,759$ 1,420,035$

Liabilities: Due to others. . . . . . . . . . . . . . . . . . . . . 2,634,419$ 125,375$ 1,339,759$ 1,420,035$

Total liabilities. . . . . . . . . . . . . . . . . . . . . 2,634,419$ 125,375$ 1,339,759$ 1,420,035$

- - Continued

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2014

CITY OF DAYTON, OHIO

F 138

Balance Balance 12/31/13 Additions Deductions 12/31/14

GMR Trading Project Assets: Equity in pooled cash and cash equivalents. . . . . . 40,900$ 6,046$ -$ 46,946$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 40,900$ 6,046$ -$ 46,946$

Liabilities: Intergovernmental payable. . . . . . . . . . 40,900$ 6,046$ -$ 46,946$

Total liabilities. . . . . . . . . . . . . . . . . . . . . 40,900$ 6,046$ -$ 46,946$

Miami Township-Dayton JEDD Assets: Equity in pooled cash and cash equivalents. . . . . . 399,214$ 492,747$ 399,214$ 492,747$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 399,214$ 492,747$ 399,214$ 492,747$

Liabilities: Accounts payable . . . . . . . . . . . . . . . . . . 38,775$ -$ 38,775$ -$ Intergovernmental payable. . . . . . . . . . 360,439 531,522 399,214 492,747

Total liabilities. . . . . . . . . . . . . . . . . . . . . 399,214$ 531,522$ 437,989$ 492,747$

Butler Township-Dayton JEDD Assets: Equity in pooled cash and cash equivalents. . . . . . 53,053$ 61,874$ 53,053$ 61,874$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 53,053$ 61,874$ 53,053$ 61,874$

Liabilities: Accounts payable . . . . . . . . . . . . . . . . . . 8,146$ -$ 8,146$ -$ Intergovernmental payable. . . . . . . . . . 44,907 70,020 53,053 61,874

Total liabilities. . . . . . . . . . . . . . . . . . . . . 53,053$ 70,020$ 61,199$ 61,874$

EPA GMR Trading Project Assets: Equity in pooled cash and cash equivalents. . . . . . 19,108$ -$ -$ 19,108$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 19,108$ -$ -$ 19,108$

Liabilities: Due to others. . . . . . . . . . . . . . . . . . . . 19,108$ -$ -$ 19,108$ Total liabilities. . . . . . . . . . . . . . . . . . . . . 19,108$ -$ -$ 19,108$

- - Continued

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2014

CITY OF DAYTON, OHIO

F 139

Balance Balance 12/31/13 Additions Deductions 12/31/14

Municipal Courts Assets: Cash and cash equivalents with fiscal agent . . 1,455,286$ 1,403,016$ 1,455,286$ 1,403,016$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 1,455,286$ 1,403,016$ 1,455,286$ 1,403,016$

Liabilities: Intergovernmental payable. . . . . . . . . . 522,818$ 548,121$ 522,818$ 548,121$ Due to others. . . . . . . . . . . . . . . . . . . . . 932,468 854,895 932,468 854,895

Total liabilities. . . . . . . . . . . . . . . . . . . . . 1,455,286$ 1,403,016$ 1,455,286$ 1,403,016$

Executive Severance Assets: Investments with fiscal agent . . . . . . . . 693,429$ 143,937$ 184,605$ 652,761$ Total assets. . . . . . . . . . . . . . . . . . . . . . . 693,429$ 143,937$ 184,605$ 652,761$

Liabilities: Withholdings and deposits. . . . . . . . . . . . . . 693,429$ 143,937$ 184,605$ 652,761$ Total liabilities. . . . . . . . . . . . . . . . . . . . . 693,429$ 143,937$ 184,605$ 652,761$

Total Agency Funds Assets: Equity in pooled cash and cash equivalents. . . . . . 3,716,136$ 2,092,169$ 2,632,492$ 3,175,813$ Investments with fiscal agent . . . . . . . . 693,429 143,937 184,605 652,761 Cash and cash equivalents with fiscal agent . . 1,455,286 1,403,016 1,455,286 1,403,016

Receivables: Accounts . . . . . . . . . . . . . . . . . 258,089 174,382 258,089 174,382 Special assessments. . . . . . . . . . . . 2,589,321 - 1,294,661 1,294,660 Intergovernmental. . . . . . . . . . . . . 90,671 90,671 90,671 90,671

Total assets. . . . . . . . . . . . . . . . . . . . . . . 8,802,932$ 3,904,175$ 5,915,804$ 6,791,303$

Liabilities: Accounts payable . . . . . . . . . . . . . . . . . . 91,933$ 1,612$ 91,933$ 1,612$ Intergovernmental payable. . . . . . . . . . 2,011,725 1,393,052 1,072,165 2,332,612 Due to others. . . . . . . . . . . . . . . . . . . . . 3,925,259 1,253,913 2,601,075 2,578,097 Withholdings and deposits. . . . . . . . . . . . . . 2,774,015 1,302,519 2,197,552 1,878,982 Total liabilities. . . . . . . . . . . . . . . . . . . . . 8,802,932$ 3,951,096$ 5,962,725$ 6,791,303$

FOR THE YEAR ENDED DECEMBER 31, 2014

CITY OF DAYTON, OHIO

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS (CONTINUED)

F 140

THIS PAGE INTENTIONALLY LEFT BLANK

FISCAL CAPACITY OF THE CITY

STATISTICAL SECTION

THE FOLLOWING UNAUDITED STATISTICAL TABLES REFLECT SOCIAL AND ECONOMIC DATA, FINANCIAL TRENDS AND

S 1

THIS PAGE IS INTENTIONALLY LEFT BLANK

S 2

Contents Page

Financial Trends

S 4 - S 13

Revenue Capacity

S 14 - S 21

Debt Capacity

S 22 - S 30

Demographic and Economic Information

S 31 - S 42

Operating Information

S 43

CITY OF DAYTON, OHIO

STATISTICAL SECTION

These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Sources: Sources are noted on the individual schedules. The City implemented GASB Statement 63 in 2012; schedules presenting net position begin in that year.

These schedules contain information to help the reader assess the City's most significant local revenue source, the income tax, property tax and special assessments.

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.

This part of the City of Dayton'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.

This schedule 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.

S 3

2005 2006 2007 (1) 2008 (1) Governmental activities Net investment in capital assets 228,383,145$ 242,926,214$ 271,643,144$ 282,480,043$ Restricted 65,403,080 71,779,813 332,238,842 378,805,983 Unrestricted 44,629,417 43,854,526 43,818,871 16,945,325

Total governemental activities net assets/position 338,415,642$ 358,560,553$ 647,700,857$ 678,231,351$

Business-type activities Net investment in capital assets 328,655,724$ 346,386,163$ 380,238,011$ 389,630,233$ Unrestricted 129,939,569 136,579,525 127,953,698 144,931,193

Total business-type activities net assets/position 458,595,293$ 482,965,688$ 508,191,709$ 534,561,426$

Primary government Net investment in capital assets 557,038,869$ 589,312,377$ 651,881,155$ 672,110,276$ Restricted 65,403,080 71,779,813 332,238,842 378,805,983 Unrestricted 174,568,986 180,434,051 171,772,569 161,876,518

Total primary government net assets/position 797,010,935$ 841,526,241$ 1,155,892,566$ 1,212,792,777$

(1) Amounts have been restated from prior year's CAFR.

(2) The City implemented GASB Statements No. 63 and 65 in 2012. Only balances after December 31, 2011 are presented in accordance with GASB Statements No. 63 and 65.

Source: City of Dayton financial records

(ACCRUAL BASIS OF ACCOUNTING) LAST TEN FISCAL YEARS

NET ASSETS/POSITION BY COMPONENT

CITY OF DAYTON, OHIO

S 4

2009 (1) 2010 2011 (1) (2) 2012 (1) 2013 2014

300,486,474$ 321,452,359$ 332,540,773$ 370,313,674$ 375,002,891$ 380,538,467$ 91,563,337 99,691,871 77,231,301 71,969,027 63,085,637 64,768,896 10,040,732 7,086,581 42,181,978 58,329,858 71,855,215 94,801,310

402,090,543$ 428,230,811$ 451,954,052$ 500,612,559$ 509,943,743$ 540,108,673$

401,965,547$ 419,111,268$ 429,634,383$ 401,528,337$ 407,888,085$ 420,343,386$ 144,144,446 146,350,941 145,543,923 190,338,004 191,931,048 191,093,515

546,109,993$ 565,462,209$ 575,178,306$ 591,866,341$ 599,819,133$ 611,436,901$

702,452,021$ 740,563,627$ 762,175,156$ 771,842,011$ 782,890,976$ 800,881,853$ 91,563,337 99,691,871 77,231,301 71,969,027 63,085,637 64,768,896

154,185,178 153,437,522 187,725,901 248,667,862 263,786,263 285,894,825

948,200,536$ 993,693,020$ 1,027,132,358$ 1,092,478,900$ 1,109,762,876$ 1,151,545,574$

S 5

2005 2006 2007 2008 Expenses Governmental activities: Downtown 5,064,225$ 4,978,385$ 5,666,737$ 5,570,112$ Youth, education and human services 2,070,638 1,886,238 2,408,097 2,583,667 Community development and neighbors 20,037,194 20,050,274 21,459,480 21,460,067 Economic development 7,162,137 9,348,825 15,999,955 9,810,580 Leadership and quality of life 46,407,089 43,411,252 43,224,368 48,563,961 Corporate responsibility 16,907,149 20,544,073 17,892,823 17,442,665 Public safety and justice 94,599,294 98,533,695 101,277,697 101,533,014 Other 2,547,338 1,105,280 1,378,197 683,122 Bond issuance costs - - - - Interest and fiscal charges 3,072,035 3,043,887 2,904,913 4,849,682

Total governmental activities expenses 197,867,099 202,901,909 212,212,267 212,496,870

Business type activities: Dayton International Airport 40,802,335 39,032,293 41,813,989 31,958,820 Water 44,674,367 45,200,207 45,401,676 45,811,605 Sewer 28,319,647 32,375,482 30,889,719 30,855,192 Golf 2,536,878 3,121,707 3,322,911 3,196,937 Storm Water 4,933,239 4,491,851 5,030,425 5,090,241

Total business-type activities expenses 121,266,466 124,221,540 126,458,720 116,912,795

Total primary government expenses 319,133,565$ 327,123,449$ 338,670,987$ 329,409,665$

Program Revenues Governmental activities: Charges for services: Downtown 517,512$ 505,552$ 704,984$ 570,059$ Youth, education and human services 20,593 17,994 19,333 40,322 Community development and neighbors 1,942,351 2,204,445 3,000,683 2,313,335 Economic development 2,092,562 1,179,367 1,328,746 1,161,369 Leadership and quality of life 5,693,276 4,380,757 4,251,275 5,128,446 Corporate responsibility 2,310,305 2,169,808 2,533,128 2,341,620 Public safety and justice 16,737,568 16,911,515 17,363,610 17,328,246 Other 573,462 979,787 1,129,885 27,277 Interest and fiscal charges - - - - Operating grants and contributions 17,571,173 16,701,482 19,245,962 20,423,979 Capital grants and contributions 12,149,725 11,253,574 15,536,992 13,489,575

Total governmental activities program revenue 59,608,527 56,304,281 65,114,598 62,824,228

Business type activities: Charges for services: Dayton International Airport 40,174,905 41,820,112 39,311,221 31,067,418 Water 43,578,504 47,088,482 50,944,369 48,944,620 Sewer 27,796,918 32,379,198 31,322,099 30,398,157 Golf 2,931,243 3,295,321 3,353,732 3,291,376 Storm Water 6,698,328 4,898,132 6,663,178 6,688,476 Capital grants and contributions 18,926,901 15,408,247 15,058,562 21,316,626

Total business-type activities program revenue 140,106,799 144,889,492 146,653,161 141,706,673

Total primary government program revenue 199,715,326$ 201,193,773$ 211,767,759$ 204,530,901$

CITY OF DAYTON, OHIO

CHANGES IN NET ASSETS/POSITION LAST TEN FISCAL YEARS

(ACCRUAL BASIS OF ACCOUNTING)

S 6

2009 2010 2011 (1) 2012 2013 2014

5,182,850$ 5,159,078$ 2,922,503$ 3,894,895$ 3,596,856$ 3,973,957$ 2,264,862 2,514,310 2,395,344 1,058,361 2,904,850 3,499,722

21,342,171 26,843,290 32,086,879 31,880,468 27,516,705 22,225,850 14,263,940 8,432,763 10,105,180 9,492,689 15,682,768 13,940,292 47,091,889 41,299,206 40,275,561 35,672,811 42,108,488 42,943,946 17,707,683 16,832,625 15,884,692 15,225,815 16,027,649 14,189,753 95,706,450 96,284,218 94,294,723 93,120,303 93,221,162 90,511,356

- - - - - - - - - 693,878 - 195,142

3,620,502 3,978,196 4,556,429 2,767,292 2,958,434 2,608,301

207,180,347 201,343,686 202,521,311 193,806,512 204,016,912 194,088,319

40,310,513 30,688,222 32,572,362 36,571,471 40,954,651 41,476,361 45,672,640 46,619,869 47,618,625 44,084,645 46,445,617 46,245,372 31,994,865 30,931,209 32,420,315 29,765,334 31,515,981 29,448,754

3,281,384 3,026,601 2,922,959 3,123,360 2,956,261 2,957,656 5,401,928 6,389,207 6,177,790 4,997,022 5,312,757 5,480,442

126,661,330 117,655,108 121,712,051 118,541,832 127,185,267 125,608,585

333,841,677$ 318,998,794$ 324,233,362$ 312,348,344$ 331,202,179$ 319,696,904$

588,229$ 629,749$ 672,824$ 531,072$ 571,365$ 572,477$ 7,618 7,092 8,674 11,032 17,205 7,965

2,289,894 2,240,217 3,106,283 2,547,442 3,456,330 3,017,823 1,438,105 4,317,785 1,997,277 2,445,796 3,446,864 6,401,968 4,411,912 6,136,336 5,673,292 5,001,134 6,942,907 13,688,808 2,853,032 2,452,413 3,118,657 2,518,064 2,667,492 2,850,358

17,398,578 18,243,867 22,027,599 23,624,400 21,385,906 25,704,452 - - - - - - - - - - - 158,829

24,147,823 33,479,834 35,387,609 34,438,364 24,584,286 25,909,216 25,771,047 17,935,099 12,849,894 12,626,114 11,761,088 7,184,234

78,906,238 85,442,392 84,842,109 83,743,418 74,833,443 85,496,130

30,655,950 25,673,711 23,644,457 24,508,791 24,723,701 26,454,375 47,743,750 49,318,157 43,529,551 45,700,719 44,291,334 47,702,941 30,998,739 32,558,557 30,119,740 33,115,458 30,245,346 32,034,019

3,250,241 3,180,466 2,946,618 3,123,224 2,997,480 2,874,737 7,083,455 7,213,504 5,264,927 7,383,856 7,345,250 7,330,340

17,098,233 18,967,012 14,064,510 10,436,869 13,857,011 7,939,351

136,830,368 136,911,407 119,569,803 124,268,917 123,460,122 124,335,763

215,736,606$ 222,353,799$ 204,411,912$ 208,012,335$ 198,293,565$ 209,831,893$ -- Continued

S 7

2005 2006 2007 2008 Net (Expense)/Revenue Governmental activities (138,258,572)$ (146,597,628)$ (147,097,669)$ (149,672,642)$ Business-type activities 18,840,333 20,667,952 20,194,441 24,793,878

Total primary government net expense (119,418,239)$ (125,929,676)$ (126,903,228)$ (124,878,764)$

General Revenues and Other Changes in Net Assets/Position Governmental activities: Property taxes 20,719,101$ 21,788,008$ 23,444,142$ 24,167,118$ Income taxes 112,169,475 117,876,441 113,785,961 108,868,331 Payments in lieu of taxes - - - - Grants and entitlements 18,276,100 19,192,977 17,600,763 17,912,684 Investment earnings 3,383,886 5,084,176 7,064,009 5,340,622 Miscellaneous 3,644,141 2,862,437 7,547,653 11,889,101 Transfers - (61,500) (239,196) 344,798

Total governmental activities general revenues 158,192,703 166,742,539 169,203,332 168,522,654

Business type activities: Investment earnings 1,537,561 3,640,943 4,894,727 2,764,220 Miscellaneous - - - - Gain on sale of capital assets - - - - Transfers - 61,500 239,196 (344,798)

Total business-type activities 1,537,561 3,702,443 5,133,923 2,419,422 Total primary government 159,730,264$ 170,444,982$ 174,337,255$ 170,942,076$

Changes in Net Assets/Position Governmental activities 19,934,131$ 20,144,911$ 22,105,663$ 18,850,012$ Business-type activities 20,377,894 24,370,395 25,328,364 27,213,300

Total primary government 40,312,025$ 44,515,306$ 47,434,027$ 46,063,312$

(1) The City implemented GASB Statements No. 63 and 65 in 2012. Only balances after December 31, 2011 are presented in accordance with GASB Statement No. 63.

Source: City of Dayton financial records

(CONTINUED) (ACCRUAL BASIS OF ACCOUNTING)

CITY OF DAYTON, OHIO

CHANGES IN NET ASSETS/POSITION LAST TEN FISCAL YEARS

S 8

2009 2010 2011 (1) 2012 2013 2014

(128,274,109)$ (115,901,294)$ (117,679,202)$ (110,063,094)$ (129,183,469)$ (108,592,189)$ 10,169,038 19,256,299 (2,142,248) 5,727,085 (3,725,145) (1,272,822)

(118,105,071)$ (96,644,995)$ (119,821,450)$ (104,336,009)$ (132,908,614)$ (109,865,011)$

19,070,860$ 18,798,224$ 19,373,301$ 10,055,324$ 14,355,108$ 12,918,102$ 99,817,917 98,399,957 100,129,761 100,336,653 101,967,172 103,721,834

- 1,426,155 669,323 1,076,054 1,406,710 1,771,683 14,827,230 16,327,237 19,159,472 14,833,540 15,376,160 15,529,135

1,311,141 1,960,831 1,945,150 1,931,883 1,241,997 1,722,766 4,673,485 5,123,860 1,199,153 3,848,415 4,167,506 3,453,599 (662,961) 5,298 368,339 354,169 - (360,000)

139,037,672 142,041,562 142,844,499 132,436,038 138,514,653 138,757,119

716,568 101,215 236,896 557,911 113,372 485,592 - - 13,509,995 10,757,208 11,564,565 12,044,998 - - - - - -

662,961 (5,298) (368,339) (354,169) - 360,000

1,379,529 95,917 13,378,552 10,960,950 11,677,937 12,890,590 140,417,201$ 142,137,479$ 156,223,051$ 143,396,988$ 150,192,590$ 151,647,709$

10,763,563$ 26,140,268$ 25,165,297$ 22,372,944$ 9,331,184$ 30,164,930$ 11,548,567 19,352,216 11,236,304 16,688,035 7,952,792 11,617,768

22,312,130$ 45,492,484$ 36,401,601$ 39,060,979$ 17,283,976$ 41,782,698$

S 9

2005 2006 2007 (2) 2008 (2) General Fund Nonspendable -$ -$ -$ -$ Committed - - - - Assigned - - - - Unassigned - - - - Reserved 4,846,464 2,985,745 3,646,545 2,418,755 Unreserved, reported in: Designated for future years' expenditures 3,573,236 6,949,009 8,284,213 10,172,634 Undesignated 36,132,638 27,407,200 30,035,615 31,002,915

Total general fund 44,552,338$ 37,341,954$ 41,966,373$ 43,594,304$

Other Special Revenue Nonspendable -$ -$ -$ -$ Restricted - - - - Reserved 1,387,955 947,858 2,664,425 3,449,888 Unreserved (deficit), reported in: 6,821,975 9,976,403 8,307,519 8,226,916

Total other special revenue 8,209,930$ 10,924,261$ 10,971,944$ 11,676,804$

Debt Service Fund Nonspendable -$ -$ -$ -$ Restricted - - - - Committed - - - - Reserved 13,298,438 15,080,926 18,676,879 43,092,546

Total debt service fund 13,298,438$ 15,080,926$ 18,676,879$ 43,092,546$

Capital Improvement Fund Nonspendable -$ -$ -$ -$ Restricted - - - - Committed - - - - Assigned - - - - Reserved 14,836,284 22,459,015 30,413,308 27,221,279 Unreserved (deficit) 2,013,719 1,797,815 (12,394,589) (10,819,429)

Total capital improvement fund 16,850,003$ 24,256,830$ 18,018,719$ 16,401,850$

Other governmental Funds Nonspendable -$ -$ -$ -$ Restricted - - - - Reserved 32,669,118 32,270,832 29,372,979 28,917,903 Unreserved (deficit), reported in: Designated, special revenue funds - 1,253,000 1,146,380 1,116,000 Special revenue funds (14,757,901) (18,389,902) (12,982,580) (14,876,682) Permanent fund 58,896 67,805 79,836 60,413 Capital projects funds (4,384,639) (1,480,796) - -

Total governmental funds 13,585,474$ 13,720,939$ 17,616,615$ 15,217,634$

Total Fund Balances, Governmental Funds 96,496,183$ 101,324,910$ 107,250,530$ 129,983,138$

(1) The City implemented GASB Statement No. 54 in 2011. Only balances after December 31, 2011 are presented in accordance with GASB Statement No. 54.

(2) Amounts have been restated from prior year's CAFR.

Source: City of Dayton financial records

CITY OF DAYTON, OHIO

FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS

(MODIFIED ACCRUAL BASIS OF ACCOUNTING

S 10

2009 2010 2011 (1) (2) 2012 (2) 2013 2014

-$ -$ 9,695,165$ 10,166,112$ 10,556,945$ 11,113,881$ - - 4,543,378 2,952,023 1,877,155 1,985,533 - - 11,900,572 17,106,981 22,147,568 21,268,158 - - 29,291,035 31,114,283 26,287,308 27,221,281

3,571,816 3,131,124 - - - -

6,585,539 5,322,656 - - - - 25,681,059 26,153,904 - - - -

35,838,414$ 34,607,684$ 55,430,150$ 61,339,399$ 60,868,976$ 61,588,853$

-$ -$ 476$ -$ 500$ - - 5,821,124 5,971,337 5,678,456 5,420,505

3,397,002 8,141,647 - - - - 9,163,395 6,104,504

12,560,397$ 14,246,151$ 5,821,600$ 5,971,337$ 5,678,456$ 5,421,005$

-$ -$ 553$ -$ -$ -$ - - 39,378,381 28,369,891 26,962,021 26,915,684 - - 192,652 331,130 407,021 419,906

42,188,046 42,541,211 - - - -

42,188,046$ 42,541,211$ 39,571,586$ 28,701,021$ 27,369,042$ 27,335,590$

-$ -$ -$ -$ 6,563$ -$ - - 4,758,591 10,424,439 8,427,005 15,704,146 - - 5,026,521 8,436,236 9,591,625 8,310,682 - - 11,243,145 6,790,703 8,885,969 8,203,654

26,133,688 28,184,390 - - - - (21,142,062) (18,628,322) - - - -

4,991,626$ 9,556,068$ 21,028,257$ 25,651,378$ 26,911,162$ 32,218,482$

-$ -$ 102,228$ 103,727$ 102,228$ 102,228$ - - 11,128,174 10,856,667 8,104,755 11,755,537

46,929,773 76,695,945 - - - -

398,848 - - - - - (31,069,843) (57,406,792) - - - -

76,302 70,250 - - - - - - - - - -

16,335,080$ 19,359,403$ 11,230,402$ 10,960,394$ 8,206,983$ 11,857,765$

111,913,563$ 120,310,517$ 133,081,995$ 132,623,529$ 129,034,619$ 138,421,695$

S 11

2005 2006 2007 2008 Revenues Taxes 154,210,979$ 159,082,912$ 157,223,154$ 152,514,608$ Charges for services 22,898,740 22,083,074 24,051,832 23,926,449 Licenses and permits 1,903,063 1,750,262 1,861,236 1,817,153 Fines and forfeits 1,944,186 3,450,859 2,044,271 2,908,861 Intergovernmental 17,329,078 28,044,012 31,643,646 25,707,748 Special assessments 652,363 1,076,163 505,670 546,047 Payments in lieu of taxes - - - - Investment income 3,483,518 5,131,388 7,393,303 4,286,751 Increase (decrease) in FMV of investments - - - 599,485 Other 6,554,510 2,862,437 7,547,653 11,889,101 Total revenues 208,976,437 223,481,107 232,270,765 224,196,203

Expenditures Current: Downtown 4,093,181 4,183,009 4,651,014 4,604,197 Youth, education and human services 2,060,357 1,928,205 2,420,958 2,581,447 Community development and neighborhoods 19,230,564 18,959,062 21,016,004 20,981,602 Economic development 7,049,497 9,464,377 15,082,881 11,191,284 Leadership and quality life 40,423,448 37,073,237 36,925,472 41,676,303 Corporate responsibility 15,423,671 19,489,965 16,597,674 16,401,770 Public safety and justice 92,422,480 97,403,724 98,432,234 100,009,551 Other 2,544,612 1,107,606 1,377,348 685,888 Capital outlay 22,818,819 17,501,729 28,529,727 24,852,628 Debt service: Principal retirement 5,774,552 7,480,101 5,789,851 6,652,464 Interest and fiscal charges 3,097,330 3,076,308 2,884,154 4,707,848 Bond issuance costs - - 312,327 598,836 Total expenditures 214,938,511 217,667,323 234,019,644 234,943,818 Excess(deficiency) of revenues over expenditures (5,962,074) 5,813,784 (1,748,879) (10,747,615)

Other Financing Sources (Uses) Sale of capital assets 101,600 100,000 - - Transfers in 16,692,371 21,682,063 13,418,525 9,831,205 Transfers out (16,732,871) (21,843,563) (13,757,721) (9,556,407) Bonds issued - - 19,745,000 32,000,000 Issuance of loans - - - 239,750 Payment of refunded bond escrow agent - - (10,383,734) - Premium (discount) on bond issuance - - 491,061 (348,901) (Discount) on note issuance - - - - Capital lease transactions 205,326 - - - Total other financing sources (uses) 266,426 (61,500) 9,513,131 32,165,647

Net change in fund balance (5,695,648)$ 5,752,284$ 7,764,252$ 21,418,032$

Capital expenditures 21,930,329$ 17,332,478$ 27,702,620$ 24,555,847$

Debt service as a percentage of noncapital expenditures 4.60% 5.27% 4.20% 5.40%

Source: City of Dayton financial records

CITY OF DAYTON, OHIO

CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS

(MODIFIED ACCRUAL BASIS OF ACCOUNTING)

S 12

2009 2010 2011 2012 2013 2014

139,011,038$ 136,753,834$ 134,006,534$ 128,586,427$ 131,413,081$ 132,423,102$ 25,037,733 26,265,870 26,910,213 27,256,576 26,855,263 27,395,234

1,630,319 1,314,956 1,561,850 1,616,712 1,458,434 1,381,915 2,106,189 2,276,856 2,402,917 5,926,766 4,217,985 3,815,470

39,699,451 50,996,557 55,538,646 45,662,634 38,037,763 31,756,758 422,608 380,767 333,328 297,589 344,211 754,970

- 1,039,654 604,596 873,495 1,195,609 1,590,825 2,927,657 1,926,077 1,730,915 1,858,064 1,497,795 1,639,315

(1,085,864) 50,814 186,772 80,325 (240,888) 32,885 4,648,485 9,506,045 4,148,279 6,282,291 9,830,450 5,528,609

214,397,616 230,511,430 227,424,050 218,440,879 214,609,703 206,319,083

4,143,788 4,117,582 3,804,513 3,346,771 3,139,384 3,183,464 2,280,237 2,512,611 2,409,496 2,518,658 2,902,251 708,900

22,259,601 26,873,157 32,366,889 31,889,756 28,406,652 22,550,030 15,047,900 13,900,769 10,063,494 9,529,602 15,142,478 13,346,277 40,991,411 41,347,850 30,741,740 28,678,675 32,029,419 32,784,866 17,125,159 15,536,916 14,967,599 13,901,301 15,163,461 15,486,893 95,240,850 95,698,192 93,849,670 94,598,883 95,650,844 95,477,660

- - - - - - 34,908,638 18,226,238 15,253,781 16,942,861 14,798,332 16,329,574

8,047,222 8,030,000 9,516,702 9,918,875 8,446,175 7,708,143 3,557,790 3,828,281 4,401,891 2,785,143 3,164,241 2,843,361

586,476 137,068 - 693,878 - 195,142 244,189,072 230,208,664 217,375,775 214,804,403 218,843,237 210,614,310

(29,791,456) 302,766 10,048,275 3,636,476 (4,233,534) (4,295,227)

- - - - - - 11,818,503 12,481,039 6,767,335 8,590,551 6,838,592 6,076,041

(12,678,413) (12,488,042) (6,455,775) (8,168,518) (6,750,939) (6,318,132) 34,408,111 5,180,000 1,615,000 35,555,000 - 9,240,000

- 2,860,000 - - 556,971 2,500,000 (22,528,097) - - (35,364,951) - -

311,474 13,884 - 5,435,222 - 249,270 - - - - - (60,196) - - - - - 1,995,320

11,331,578 8,046,881 1,926,560 6,047,304 644,624 13,682,303

(18,459,878)$ 8,349,647$ 11,974,835$ 9,683,780$ (3,588,910)$ 9,387,076$

39,799,258$ 29,626,529$ 18,744,758$ 21,668,262$ 16,716,779$ 19,494,767$

5.68% 5.91% 7.01% 6.58% 5.74% 5.52%

S 13

Year Withholding

% of withholding to

total Total Non-

withholding

% of non- withholding to

total Total Individual Accounts

% of individual to

total Business Accounts

% of Business

to total Total

2005 100,076,600$ 85.80% 16,567,146$ 14.20% 116,643,746$ 5,321,371$ 4.56% 11,245,776$ 9.64% 116,643,746$

2006 102,033,754 86.79% 15,532,269 13.21% 117,566,023 4,962,179 4.22% 10,570,090 8.99% 117,566,023

2007 101,226,600 86.33% 16,034,631 13.67% 117,261,231 5,790,379 4.94% 10,244,253 8.74% 117,261,231

2008 96,917,767 85.31% 16,683,194 14.69% 113,600,961 5,041,787 4.44% 11,641,406 10.25% 113,600,961

2009 90,581,920 87.41% 13,048,061 12.59% 103,629,981 4,485,865 4.33% 8,562,196 8.26% 103,629,981

2010 87,502,256 86.64% 13,497,453 13.36% 100,999,709 4,073,345 4.03% 9,424,110 9.33% 100,999,709

2011 86,866,507 84.51% 15,915,982 15.49% 102,782,489 4,732,700 4.60% 11,183,282 10.88% 102,782,489

2012 89,759,346 86.27% 14,286,616 13.73% 104,045,962 4,129,840 3.97% 10,156,776 9.76% 104,045,962

2013 88,682,519 84.47% 16,301,796 15.53% 104,984,315 4,482,437 4.27% 11,819,358 11.26% 104,984,315

2014 89,661,242 84.68% 16,219,013 15.32% 105,880,255 4,323,182 4.08% 11,895,831 11.24% 105,880,255

Year General Fund Total % Increase (Decrease) General Fund Total

% Increase (Decrease)

2005 112,281,500$ 112,281,500$ 3.49% 112,824,119$ 112,824,119$ 4.72%

2006 113,767,671 113,767,671 1.32% 112,619,532 112,619,532 -0.18%

2007 112,794,901 112,794,901 -0.86% 113,156,087 113,156,087 0.48%

2008 110,449,891 110,449,891 -2.08% 109,008,881 109,008,881 -3.67%

2009 100,430,248 100,430,248 -9.07% 99,831,456 99,831,456 -8.42%

2010 98,205,983 98,205,983 -2.21% 98,824,027 98,824,027 -1.01%

2011 99,668,943 99,668,943 1.49% 100,362,688 100,362,688 1.56%

2012 101,624,151 101,624,151 1.96% 100,450,896 100,450,896 0.09%

2013 101,934,268 101,934,268 2.27% 101,359,488 101,359,488 0.99%

2014 102,649,505 102,649,505 1.01% 103,916,809 103,916,809 3.45%

Source: City of Dayton financial records

Budget Basis GAAP (Modified Accrual Basis)

CITY OF DAYTON, OHIO

GROSS INCOME TAX REVENUE BY PAYER TYPE LAST TEN FISCAL YEARS

INCOME TAX FUND REVENUE DISTRIBUTION NET OF REFUNDS

LAST TEN FISCAL YEARS

S 14

Fiscal year Total tax levy

Current tax collections

Percent of levy collected

Delinquent tax collections (1)

Total tax collections

Percent of total tax

collections to tax levy

Outstanding delinquent

taxes

Percent of outstanding delinquent

taxes to tax levy

2005 20,559,068$ 19,464,064$ 94.67% 2,004,760$ 21,468,824$ 104.43% 3,621,335$ 17.61%

2006 22,098,556 20,809,488 94.17% 2,343,469 23,152,957 104.77% 2,526,394 11.43%

2007 20,334,804 19,544,381 96.11% 1,998,653 21,543,034 105.94% 3,390,837 16.68%

2008 19,483,451 17,932,392 92.04% 1,661,231 19,593,623 100.57% 5,911,972 30.34%

2009 18,205,975 17,052,225 93.66% 1,195,497 18,247,722 100.23% 4,700,112 25.82%

2010 17,867,159 16,460,622 92.13% 957,426 17,418,048 97.49% 5,879,954 32.91%

2011 16,976,964 15,321,147 90.25% 890,712 16,211,859 95.49% 6,723,836 39.61%

2012 15,724,338 13,342,279 84.85% 982,606 14,324,885 91.10% 6,590,787 41.91%

2013 15,270,433 13,344,519 87.39% 895,002 14,239,521 93.25% 7,927,702 51.92%

2014 15,459,902 13,432,271 86.88% 1,136,015 14,568,286 94.23% 8,043,185 52.03%

Source: County Auditor; Montgomery County, Ohio

Montgomery County

CITY OF DAYTON, OHIO

PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

(1) Delinquent tax records are maintained by an external agency, Montgomery County. The agency does not currently track delinquent taxes by levy year and the City is researching other options for capturing this data for future reporting.

S 15

Tax year For Assessed value Estimated actual

value Assessed value Estimated actual

value

2005 2006 1,788,313,190$ N/A 220,535,502$ N/A 96,908,670$ N/A

2006 2007 1,769,490,590 5,112,178,829 169,588,051 1,176,189,344 94,401,800 54,216,988

2007 2008 1,767,313,000 5,049,465,714 107,769,573 1,356,704,408 73,262,480 188,151,369

2008 2009 1,732,074,470 4,948,784,200 13,367,820 213,885,120 75,155,200 193,012,218

2009 2010 1,710,322,150 4,886,634,714 2,088,420 20,884,200 74,305,290 190,829,495

2010 2011 1,688,719,230 4,824,912,086 - - 77,611,120 199,709,660

2011 2012 1,492,173,530 4,091,911,043 - - 80,260,280 220,093,655

2012 2013 1,441,010,830 4,117,173,800 - - 86,032,460 221,379,468

2013 2014 1,451,672,070 4,147,634,486 - - 94,318,140 242,685,716

2014 2015 1,323,254,870 3,780,728,200 - - 97,514,790 250,914,681

Source: County Auditor; Montgomery County, Ohio

N/A - Information not available

(1) - Tangible personal property tax was phased out beginning in 2007

CITY OF DAYTON, OHIO

ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

Montgomery County

Real Property Personal Property (1) Public Utilities

S 16

Percent of total assessed

Assessed value Total direct tax

rate Estimated actual

value to total estimated

actual value

2,105,757,362$ 10$ 6,171,703,279$ 34.12%

2,033,480,441 10.00 6,125,085,429 33.20%

1,948,345,053 10.00 6,594,321,491 29.55%

1,820,597,490 10.00 5,355,681,538 33.99%

1,786,715,860 10.00 5,098,348,409 35.04%

1,766,330,350 10.00 5,024,621,746 35.15%

1,572,433,810 10.00 4,312,004,698 36.47%

1,527,043,290 10.00 4,338,553,268 35.20%

1,545,990,210 10.00 4,390,320,202 35.21%

1,420,769,660 10.00 4,031,642,881 35.24%

Total

S 17

Fiscal Year Debt Service

Fund Judgement Trust Fund

Street Maintenance

Fund Total

Capital Improvement

Fund Debt Service

Fund General Total

2005 1.17$ - 0.33$ 1.50$ - 3.50$ 5.00$ 8.50$

2006 0.40 - - 0.40 - 4.60 5.00 9.60

2007 0.40 - - 0.40 - 4.60 5.00 9.60

2008 0.40 - - 0.40 - 4.60 5.00 9.60

2009 0.40 - - 0.40 - 4.60 5.00 9.60

2010 0.40 - - 0.40 - 4.60 5.00 9.60

2011 0.40 - - 0.40 - 4.60 5.00 9.60

2012 0.40 - - 0.40 - 4.80 4.80 9.60

2013 0.40 - - 0.40 - 5.00 4.60 9.60

2014 0.40 - - 0.40 - 5.10 4.50 9.60

Source: County Auditor; Montgomery County, Ohio

CITY OF DAYTON, OHIO

PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS

LAST TEN FISCAL YEARS (PER $1,000 OF ASSESSED VALUATION)

Montgomery County

(1) The Ohio Constitution places a ten-mill limitation upon the combined property tax levied by the County, the School District, and the City. The City has been permitted to levy only 1.5 mills of that ten-mill limitation. The Constitution permits the City to levy additional millage beyond 1.5 mills upon approval of the electorate. The City Charter also has a ten-mill limitation which prohibits the City from levying a total tax rate for all purposes in excess of ten mills.

By November 6, 1945 Charter AmendmentDirect 10 Mill Limitation (By Ohio Constitution)

S 18

City of Dayton

Grand Total (1)

Dayton City School District

Montgomery County

Montgomery County Public

Library

10.00$ 70.85$ 18.24$ 0.26$

10.00 70.85 18.24 1.25

10.00 70.85 20.25 1.25

10.00 75.75 20.94 1.25

10.00 75.75 20.94 1.75

10.00 76.52 20.94 1.75

10.00 77.52 20.94 1.75

10.00 79.85 20.94 3.31

10.00 79.85 21.94 3.31

S 19

Taxpayer Assessed

Valuation Rank

Percentage of Total City

Taxable Assessed Value

Assessed Valuation Rank

Percentage of Total City

Taxable Assessed Value

Dayton Power and Light Company 83,485,020$ 1 5.88% 45,061,890$ 1 2.14% Vectren Energy Delivery 12,933,170 2 0.91% 9,742,040 8 0.46% KND Real Estate 29 LLC 6,551,310 3 0.46% Dayton Hotel II LLC 5,171,320 4 0.36% Miami Valley Hospital 4,380,130 5 0.31% DUCRU SPE LLC 3,953,770 6 0.28% Titan Loan Investment Fund LP 3,643,960 7 0.26% Cloud Park Apartment 3,620,670 8 0.25% Premier Plaza LP 3,567,170 9 0.25% Cargill Inc. 3,353,880 10 0.24% Delphi Automotive Systems Corporation 28,184,910 2 1.34% NCR 27,332,800 3 1.30% Ohio Bell Telephone Company 20,476,260 4 0.97% Behr Dayton Thermal 17,307,270 5 0.82% Arts Center Foundation 16,082,190 6 0.76% Dayton Heart Hospital 10,020,610 7 0.48% Reynolds and Reynolds 8,209,400 9 0.39% Marriott International 7,490,000 10 0.36%

Total 130,660,400$ 9.20% 189,907,370$ 9.02%

Source: County Auditor; Montgomery, County, Ohio

Fiscal Year 2014 Fiscal Year 2005

CITY OF DAYTON, OHIO

PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO

S 20

Fiscal Year

Current Assements Due (1) (3)

Current Assessment

Collected (1)

Percent of Current Collections to

Current Assessments

Delinquent Assessments

Collected Total Assessments

Collected

Percent of Total Assessments Collected to

Current Due (2)

2005 1,838,846$ 763,031$ 41.50% 138,406$ 901,437$ 49.02%

2006 2,439,603 1,529,084 62.68% 741,577 2,270,661 93.08%

2007 2,339,548 2,023,233 86.48% 815,408 2,838,641 121.33%

2008 3,065,046 2,195,831 71.64% 419,295 2,615,126 85.32%

2009 3,404,912 1,829,865 53.74% 330,272 2,160,137 63.44%

2010 3,599,298 1,799,212 49.99% 260,117 2,059,329 57.21%

2011 4,432,302 2,280,991 51.46% 302,809 2,583,800 58.29%

2012 6,257,674 2,027,236 32.40% 277,857 2,305,093 36.84%

2013 4,727,901 2,010,113 42.52% 537,153 2,547,266 53.88%

2014 4,727,901 1,916,141 40.53% 498,060 2,414,201 51.06%

(1) Reported on a cash basis and includes collections of delinquent utility bills.

(2) Total collections exceed Current Assessment Due because of high collection of curb, gutter and sidewalk delinquent assessments.

(3) Current Assessments Due increased in 2012 as a result of weed, nuisance and delinquent utility assessments

Note: This table reflects only those special assessments collected through the County Auditor's Office.

Source: County Auditor; Montgomery County, Ohio

CITY OF DAYTON, OHIO

SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS LAST TEN FISCAL YEARS

S 21

Fiscal Year

General Obligation

Bonds Revenue

Bonds

Special Assessment

Bonds

Ohio Department

of Development

Loan Capital Lease

Obligations

General Obligation

Notes OPWC Loans SIB Loans SIB Bonds

2005 54,962,646$ 10,955,000$ 977,100$ -$ 3,255,561$ -$ -$ -$ -$

2006 49,727,772 9,500,000 753,500 - 2,612,121 - - - -

2007 54,900,224 9,015,000 555,600 - 1,995,000 - - - -

2008 49,441,334 40,500,000 409,600 - 1,494,000 - 208,176 - -

2009 56,284,054 39,925,000 299,500 - - - 197,334 - -

2010 52,818,927 40,650,000 211,800 2,860,000 - - 175,161 - -

2011 46,884,969 38,780,000 136,900 2,860,000 - - 152,317 - -

2012 49,149,087 33,923,806 63,100 2,860,000 - - 128,782 - -

2013 42,465,128 31,886,369 23,200 2,860,000 - - 661,507 - -

2014 42,556,962 29,758,933 - 2,860,000 1,995,320 - 617,964 2,500,000 3,419,608

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

Source: City of Dayton financial records

(1) Source: Bureau of Economic Analysis, US Department of Commerce. Personal Income for 2011 and 2012 are not available.

Governmental Activities

CITY OF DAYTON, OHIO

RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS

S 22

General Obligation

Bonds Revenue

Bonds OWDA Loans OPWC Loans

Capital Lease Obligations

General Obligation

Notes Total Primary

Government Personal Income (1)

Percentage of Personal

Income Per

Capita

2,292,354$ 80,210,000$ 21,005,877$ 750,000$ 132,516$ 6,675,000$ 181,216,054$ 26,452,240,000$ 0.69% 1,131$

2,087,228 70,730,000 17,624,367 700,000 67,630 6,715,000 160,517,618 27,693,775,000 0.58% 1,010

1,874,776 39,185,000 15,055,215 650,000 - 3,285,000 126,515,815 28,596,630,000 0.44% 796

1,653,666 38,095,000 11,774,364 600,000 - 1,885,000 146,061,140 29,736,127,000 0.49% 932

12,195,946 36,980,000 11,118,492 550,000 - 485,000 158,035,326 29,436,435,000 0.54% 1,025

11,591,073 35,825,000 10,437,177 500,000 - - 155,069,138 30,220,395,000 0.51% 1,094

10,860,031 34,625,000 9,888,914 450,000 - - 144,638,131 N/A N/A 1,020

41,031,571 33,265,591 9,175,000 400,000 - - 169,996,937 N/A N/A 1,199

38,888,600 31,953,977 8,433,383 350,000 - - 157,522,164 N/A N/A 1,099

36,525,000 30,776,093 7,662,986 300,000 648,196 - 159,621,062 N/A N/A 1,113

Business-Type Activities

S 23

2005 2006 2007 2008

Assesed Value (2) 2,105,757,362$ 2,033,480,441$ 1,948,345,053$ 1,820,597,490$

Legal debt margin: Debt limitation - 10.5% of Assesed Value 221,104,523 213,515,446 204,576,231 191,162,736

Total Voted and Unvoted Debt Outstanding 176,184,321 157,837,860 124,821,234 144,393,875

Less: Exempt Debt Airport General Obligation Bonds and Notes (6,675,000) (6,715,000) (3,430,000) (1,885,000) Airport Revenue Bonds (67,639,245) (64,350,209) (39,007,904) (37,921,735) Water General Obligation Bonds (3) - - - - Sewer General Obligation Bonds (3) - - - - Special Assessment Bonds and Notes (977,100) (753,500) (555,600) (409,600) Economic Development Bonds (10,955,000) (9,500,000) (9,015,000) (40,500,000)

Total Exempt Debt (86,246,345) (81,318,709) (52,008,504) (80,716,335)

Total Debt Applicable to Limitation - Within 10.5% Limitations 89,937,976 76,519,151 72,812,730 63,677,540

Less: Amount Available in Debt Service Fund to pay debt applicable to limitation (5,435,549) (7,777,979) (16,499,004) (15,943,399)

Net Debt Within 10.5% Limitation 84,502,427 68,741,172 56,313,726 47,734,141

Overall Debt Margin Within 10.5% Limitations 136,602,096$ 144,774,274$ 148,262,505$ 143,428,595$

Unvoted Debt Limitation - 5.5% of Assessed Valuation 115,816,655$ 111,841,424$ 107,158,978$ 100,132,862$

Debt Within 5.5% Limitations 89,937,976 76,519,151 72,812,730 63,677,540

Less Amount Available in Debt Service Fund (5,435,549) (7,777,979) (16,499,004) (15,943,399)

Net Debt Within 5.5% Limitation 84,502,427 68,741,172 56,313,726 47,734,141

Unvoted Debt Margin Within 5.5% Limitation 31,314,228$ 43,100,252$ 50,845,252$ 52,398,721$

Source: City of Dayton financial records

(1) Airport and Waterworks revenue bonds are shown on the balance sheet net of a discount and unamortized deferred charges. For 2014, this amount was $842,678

(2) Assessed valutions have been revised to agree with the assessed valution by each tax year as provided by the Montgomery County Auditor.

(3) Water and Sewer general obligation bonds are exempt debt.

CITY OF DAYTON, OHIO

COMPUTATION OF LEGAL DEBT MARGIN LAST TEN FISCAL YEARS

S 24

2009 2010 2011 2012 2013 2014

1,786,715,860$ 1,766,330,350$ 1,572,433,810$ 1,527,043,290$ 1,545,990,210$ 1,420,769,660$

187,605,165 185,464,687 165,105,550 160,339,545 162,328,972 149,180,814

158,035,326 155,069,138 144,638,131 169,996,937 157,522,164 159,621,062

(11,305,000) (10,470,000) (10,115,000) (9,750,000) (9,375,000) (8,990,000) (36,810,567) (35,659,399) (34,462,592) (33,265,591) (32,090,000) (30,232,678)

- - - (15,300,000) (14,520,000) (13,630,000) - - - (15,600,000) (14,805,000) (13,905,000)

(299,500) (211,800) (136,900) (63,100) (23,200) - (39,925,000) (40,650,000) (38,780,000) (32,235,000) (30,305,000) (28,285,000) (88,340,067) (86,991,199) (83,494,492) (106,213,691) (101,118,200) (95,042,678)

69,695,259 68,077,939 61,143,639 63,783,246 56,403,964 64,578,384

(15,536,249) (17,092,706) (14,927,743) (10,776,956) (10,184,042) (10,965,590)

54,159,010 50,985,233 46,215,896 53,006,290 46,219,922 53,612,794

133,446,155$ 134,479,454$ 118,889,654$ 107,333,255$ 116,109,050$ 95,568,020$

98,269,372$ 97,148,169$ 86,483,860$ 83,987,381$ 85,029,462$ 78,142,331$

69,695,259 68,077,939 61,143,639 63,783,246 56,403,964 64,578,384

(15,536,249) (17,092,706) (14,927,743) (10,776,956) (10,184,042) (10,965,590)

54,159,010 50,985,233 46,215,896 53,006,290 46,219,922 53,612,794

44,110,362$ 46,162,936$ 40,267,964$ 30,981,091$ 38,809,540$ 24,529,537$

S 25

Fiscal Year Population (3) Assessed value (2)

Gross general bonded debt (1)

Less: Amounts

available in Debt Service

Fund (4) Net general

bonded debt (1)

Ratio of net general bonded

debt to assessed value

Net general bonded debt

per capita

2005 160,293 2,105,757,362$ 57,255,000$ 5,435,549$ 51,819,451$ 2.46% 323$

2006 158,873 2,033,480,441 51,815,000 7,777,979 44,037,021 2.17% 277$

2007 158,873 1,948,345,053 56,775,000 11,950,293 44,824,707 2.30% 282$

2008 156,771 1,820,597,490 51,095,000 15,943,399 35,151,601 1.93% 224$

2009 154,200 1,786,715,860 68,480,000 15,536,249 52,943,751 2.96% 343$

2010 141,759 1,766,330,350 64,410,000 17,092,706 47,317,294 2.68% 334$

2011 141,759 1,572,433,810 57,745,000 14,927,743 42,817,257 2.72% 302$

2012 141,759 1,527,043,290 90,180,658 9,583,585 80,597,073 5.28% 569$

2013 143,355 1,545,990,210 81,353,728 10,184,042 71,169,686 4.60% 496$

2014 143,355 1,420,769,660 79,081,962 10,965,590 68,116,372 4.79% 475$

(1) Net general bonded debt is defined as bonded debt supported by taxes less Debt Service Fund fund balance (which does not include assigned for encumbrances, advances or loans receivable).

(2) Source: County Auditor, Montgomery County, Ohio

(3) Source: U.S. Census Bureau and Miami Valley Regional Planning Commission

(4) Debt Service Fund fund balance does not include assigned for encumbrances, advances or loans receivable

CITY OF DAYTON, OHIO

RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA

LAST TEN FISCAL YEARS

S 26

Fiscal Year Principal Interest

Bond issuance

costs Total debt

service

Total general governmenal expenditures

Ratio of debt service to total general

governmental expenditures

2005 8,774,552$ 3,097,330$ -$ 11,871,882$ 217,938,511$ 5.45%

2006 7,480,101 3,076,308 - 10,556,409 217,667,323 4.85%

2007 5,789,851 2,884,154 312,327 8,986,332 234,019,644 3.84%

2008 6,652,464 4,707,848 598,836 11,959,148 234,943,818 5.09%

2009 8,047,222 3,557,790 586,476 12,191,488 244,189,072 4.99%

2010 8,030,000 3,828,281 137,068 11,995,349 230,208,664 5.21%

2011 9,516,702 4,401,891 - 13,918,593 217,375,775 6.40%

2012 9,918,875 2,785,143 693,878 13,397,896 214,804,403 6.24%

2013 8,446,175 3,164,241 - 11,610,416 218,843,237 5.31%

2014 7,708,143 2,843,361 195,142 10,746,646 210,614,310 5.10%

Source: City of Dayton financial records

CITY OF DAYTON, OHIO

RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES

LAST TEN FISCAL YEARS

S 27

Political subdivision of State of Ohio Debt Outstanding

Percentage applicable to

Dayton Amount applicable

to Dayton

Direct City of Dayton 159,621,062$ 100.00% 159,621,062$ Total Direct Debt 159,621,062 159,621,062

Overlapping Montgomery County 40,798,567 15.74% 6,420,234 Dayton Metro Library District 174,480,000 19.99% 34,878,552 Dayton City School District 176,735,000 83.92% 148,316,012 Miami Valley Career Center 6,160,000 2.28% 140,448 Greene County Career Center 50,002 0.53% 265 Vandalia Butler City School District 49,429,129 2.51% 1,240,671 Mad River Local School District 7,650,000 23.22% 1,776,330 Huber Heights City School District 75,120,000 11.67% 8,766,504 Trotwood-Madison City School District 29,407,992 4.03% 1,185,142 Fairborn City School District 13,005,000 3.48% 452,574 Northridge Local School District 4,520,000 31.90% 1,441,880

Total Overlapping Debt 577,355,690 204,618,612

Total Direct and Overlapping Debt 736,976,752$ 364,239,674$

Source: County Auditor; Montgomery County, Ohio and Ohio Municipal Advisory Council (OMAC)

CITY OF DAYTON, OHIO

COMPUTATION OF DIRECT AND OVERLAPPING DEBT

Debt of the City, authorized by the Council but not by a vote of the electors, is subject to overlapping restrictions with each respective county and school district. Limitations apply to each county total and should not be considered cumulatively. Total debt service charges for and one year of all overlapping debt must not exceed ten mills (1%) of the assessed property value. This determination is made by the respective county auditors each time a subdivision proposes to issue unvoted debt. The most recent data prepared by the county auditors for this purpose is as of December 31, 2014.

AS OF DECEMBER 31, 2014

S 28

Net Revenue Available for

Year Debt Service (1) Principal Interest Total Coverage

2005 7,965,366$ 3,483,808$ 1,333,562$ 4,817,370$ 1.65

2006 7,947,706 3,381,510 1,101,749 4,483,259 1.77

2007 8,480,924 3,257,274 882,616 4,139,890 2.05

2008 7,661,321 3,280,851 675,575 3,956,426 1.94

2009 7,262,150 655,872 463,620 1,119,492 6.49

2010 9,596,696 681,315 438,177 1,119,492 8.57

2011 7,850,586 548,263 406,141 954,404 8.23

2012 10,831,537 713,914 373,672 1,087,586 9.96

2013 8,304,330 741,617 345,967 1,087,584 7.64

2014 9,687,415 770,397 317,188 1,087,585 8.91

(1)

Source: City of Dayton financial records

Net Revenue Available for Debt Service is computed by adding operating income (loss) for the reporting period to depreciation expense, interest revenue and the fair market value adjustment.

CITY OF DAYTON, OHIO

SEWER DEBT LOAN PLEDGED REVENUE COVERAGE OHIO WATER DEVELOPMENT AUTHORITY LOAN

LAST TEN FISCAL YEARS

Debt Service Requirements

S 29

Net Revenue Available for

Year Debt Service (1) Principal Interest Total Coverage

2005 12,196,929$ 3,005,000$ 3,085,715$ 6,090,715$ 2.00

2006 16,742,217 3,630,000 2,813,589 6,443,589 2.60

2007 16,112,888 3,750,000 3,062,695 6,812,695 2.37

2008 11,735,966 1,090,000 1,894,488 2,984,488 3.93

2009 6,230,427 1,115,000 1,860,958 2,975,958 2.09

2010 10,544,858 1,155,000 1,823,404 2,978,404 3.54

2011 13,284,695 1,200,000 1,780,969 2,980,969 4.46

2012 9,162,019 1,245,000 1,733,902 2,978,902 3.08

2013 6,342,789 1,290,000 1,683,228 2,973,228 2.13

2014 8,233,042 1,350,000 1,628,664 2,978,664 2.76

used for payment of debt service charges and all Customer Facility Charges (CFC). For 2007 and 2008, no PFC were used for payment of debt service charges. In 2012, bond proceeds of $2,591,965 were included, as the project was completed and excess proceeds were used for debt service.

Source: City of Dayton financial records

expense and interest revenue. Also included in this calculation is the portion of Passenger Facility Charges (PFC) which were

(2) Debt service requirements are exclusive of refunding transactions and additional principal payments made to retire bonds.

CITY OF DAYTON, OHIO

DAYTON INTERNATIONAL AIRPORT ENTERPRISE REVENUE BOND COVERAGE DAYTON INTERNATIONAL AIRPORT REVENUE REFUNDING BOND SERIES

LAST TEN FISCAL YEARS

Debt Service Requirements (2)

(1) Net Revenue Available for Debt Service is computed by adding operating income (loss) for the reporting period to depreciation

S 30

Year

Square Mile Area City of Dayton Year

End (1) Air Passengers (2)

Scheduled Airline Freight

(2)

2005 56 (+/-) 2,438,210 370,329 2006 56 (+/-) 2,607,167 166,613 2007 56 (+/-) 2,833,081 10,455 2008 56 (+/-) 2,928,018 9,471 2009 56 (+/-) 2,506,271 10,388 2010 56 (+/-) 2,526,839 8,092 2011 56 (+/-) 2,528,856 8,549 2012 56 (+/-) 2,607,528 10,069 2013 56 (+/-) 2,503,961 7,819 2014 56 (+/-) 2,282,211 9,132

Year Active Gas Meters (3)

Vehicle Registrations (4)

2005 84,458 120,623 2006 88,573 130,190 2007 81,606 123,640 2008 80,900 106,186 2009 80,233 102,921 2010 79,508 122,513 2011 78,753 123,008 2012 78,140 122,573 2013 77,647 116,811 2014 77,369 120,939

Source: 1 Square Miles for City of Dayton - Division of Planning, City of Dayton 2 Dayton International Airport 3 Vectren 4 Bureau of Motor Vehicles

CITY OF DAYTON, OHIO

BUSINESS INDICATORS LAST TEN FISCAL YEARS

S 31

Square miles at

Year December 31

1955 27

1960 34 1965 36

1970 40 1975 43

1980 54 1985 55

1990 55 1995 56

2000 56 2005 56

2010 56.5 2011 56.5 2012 56.5 2013 56.5 2014 56.5

Source: Division of Planning City of Dayton

CITY OF DAYTON, OHIO

GROWTH IN LAND AREA SELECTED YEARS

S 32

Employer Employees Rank

Percentage of Total Dayton Labor Force Employees Rank

Percentage of Total Dayton Labor Force

Premier Health Partners (1) 13,500 1 22.88% Kettering Health Network (2) 7,115 2 12.06% Montgomery County 4,328 3 7.34% 5,082 2 11.05% Sinclair Community College 2,601 4 4.41% 2,029 6 4.41% University of Dayton 2,990 5 5.07% 1,750 9 3.80% Dayton Public Schools 2,102 6 3.56% 3,143 3 6.83% Veterans Administration 2,060 7 3.49% 1,700 10 3.69% Childrens Medical Hospital 1,945 8 3.30% 2,739 4 5.95% City of Dayton 1,850 9 3.14% CareSource 1,400 10 2.37% Delphi Automotive Systems Corporation 7,847 1 17.06% NCR Corporation 2,700 5 5.87% Behr Dayton Thermal Products 2,000 8 4.35% Frisch's Restaurant Inc. 2,000 7 4.35%

Total 39,891 67.61% 30,990 67.36%

Source: Dayton Business Journal

(1) Premier Health Partners includes Miami Valley Hospital and Good Samaritan Hosptial, ,

(2) Kettering Health Network includes Grandview Hospital

Fiscal Year 2005

CITY OF DAYTON, OHIO

PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

Fiscal Year 2014

S 33

U.S.

Year Labor Force Unemployment

rate Labor force Unemployment

rate Labor force Umployment

rate Unemployment

rate

2005 272,200 6.40% 71,200 7.60% 5,900,400 7.60% 5.90%

2006 271,900 6.05% 71,000 8.30% 5,839,200 5.37% 4.60%

2007 275,200 6.20% 71,500 7.20% 5,976,500 5.60% 4.60%

2008 270,500 8.40% 70,000 9.40% 5,954,200 7.60% 5.80%

2009 267,234 11.40% 69,188 12.60% 5,970,188 10.20% 9.30%

2010 261,705 10.10% 67,763 11.30% 5,897,559 10.10% 9.60%

2011 257,589 9.40% 61,108 11.00% 5,806,467 8.60% 8.90%

2012 252,888 7.00% 59,558 7.90% 5,747,885 7.20% 8.10%

2013 249,000 8.00% 59,000 9.40% 5,766,000 7.40% 7.40%

2014 250,300 6.00% 59,100 7.10% 5,719,000 5.70% 6.20%

Source: State of Ohio Labor Market Information

Montgomery County Dayton Ohio

CITY OF DAYTON, OHIO

ESTIMATED CIVILIAN LABOR FORCE AND ANNUAL AVERAGE UNEMPLOYMENT RATES

LAST TEN FISCAL YEARS

S 34

United States

Year Per capita

income % of national

average Total personal

income Per capita

income % of national

average Per capita

income % of national

average Per capita

income

2005 31,792$ 92.16% 5,096,035,056$ 32,133 93.15% 31,867 92.38% 34,495

2006 33,195 90.42% 5,273,789,235$ 33,658 91.68% 33,320 90.76% 36,714

2007 34,314 88.87% 5,451,568,122$ 34,732 89.95% 34,874 90.32% 38,611

2008 34,724 87.35% 5,443,716,204$ 34,715 87.33% 35,511 89.33% 39,751

2009 34,943 89.28% 5,388,210,600$ 35,669 91.14% 35,381 90.40% 39,138

2010 35,886 88.42% 5,087,163,474$ 36,302 89.45% 36,395 89.68% 40,584

2011 37,410 89.79% 5,303,204,190$ 37,684 90.45% 37,791 90.71% 41,663

2012 39,891 89.56% 5,654,908,269$ 39,795 89.34% 40,057 91.59% 43,735

2013 40,353 91 5,720,400,927 40,150 90.14% 40,865 91.74% 44,543

2014 N/A N/A N/A N/A N/A 42,571 92.29% 46,129

Source: Bureau of Economic Analysis

N/A - Information not available

Montgomery County Ohio

CITY OF DAYTON, OHIO

ESTIMATED PER CAPITA INCOME AND PERSONAL INCOME LAST TEN FISCAL YEARS

Dayton (MSA)

S 35

Industry 2005 2006 2007 2008 2009

Total 409.4 408.2 408.2 396.2 372.6

Goods-Producing Industries 73.8 71.7 67.8 60.6 50.6

Natural Resources, Mining and Construction 15.4 15.2 14.7 13.7 11.6

Manufacturing 58.4 56.5 53.1 46.9 39.0

Service-Providing Industries 335.7 336.5 335.6 335.6 322.0

Trade, Transportation, and Utilities 71.1 70.0 68.7 67.0 63.1

Information 11.1 10.6 10.9 12.1 11.0

Financial Activies 19.0 20.1 20.1 18.6 16.8

Professional and Business Services 52.3 52.3 52.2 51.7 45.5

Educational and Health Services 63.7 64.7 65.8 68.9 68.7

Leisure and Hospitality 37.3 37.8 37.3 37.2 36.3

Other Services 16.7 16.4 16.0 15.5 14.9

Government 64.5 64.8 64.5 64.6 65.6

(1) Dayton Metropolitan Statistical Area includes Greene, Miami, Montgomery, and Preble Counties.

Source: Bureau of Labor Market Information and Ohio Department of Job and Family Services

LAST TEN FISCAL YEARS (IN THOUSANDS, EXCEPT PERCENT)

(2) Nonagricultural employment excludes farm workers, proprietors, the self-employed, unpaid family workers, and domestic workers.

CITY OF DAYTON, OHIO

DAYTON METROPOLITAN STATISTICAL AREA EMPLOYMENT (1) NONAGRICULTURAL WAGE AND SALARY EMPLOYMENT IN SELECTED INDUSTRIES (2)

S 36

2010 2011 2012 2013 2014

370 376.1 378.1 376.5 371.9 100%

49.4 51.2 52.6 52.7 50.6 13.6%

10.9 11.1 11.4 11.4 11.7 3.2%

38.5 40.1 41.2 41.3 39.0 10.5%

320.1 324.9 325.5 323.7 321.3 86.4%

61.4 62.4 64.6 64.9 64.4 17.3%

10.5 9.8 8.9 8.7 8.5 2.3%

16.5 17.0 17.3 17.3 17.3 4.7%

45.6 48.3 48.7 47.5 48.6 13.1%

69.0 69.9 70.2 69.8 70.2 18.9%

36.2 37.0 37.1 36.9 37.2 10.0%

15.2 15.1 14.7 15.1 14.0 3.8%

65.6 65.4 64.0 63.5 61.1 16.4%

Percentage of Total 2014

employment

S 37

Function/Program 2005 2006 2007 (1) 2008 2009 2010 (2) 2011 2012 2013 2014

Governmental activities: Downtown 34 29 36 34 32 16 15 14 15 15 Youth, education and human services 3 3 4 1 1 - 1 1 1 1 Community development and neighbors 174 168 131 139 170 132 136 134 130 128 Economic development 40 39 45 43 42 35 33 26 30 32 Leadership and quality of life 299 281 421 368 251 143 184 178 171 303 Corporate responsibility 169 164 187 178 163 137 133 134 137 133 Public safety and justice 1,056 1,072 1,134 1,118 1,056 943 863 866 868 864

Business-type activities: Dayton International Airport 178 175 180 160 145 128 133 138 140 144 Water 253 242 257 260 267 245 237 218 232 164 Sewer 122 120 142 134 141 113 110 109 113 70 Golf 17 19 86 70 66 15 16 15 14 14 Storm Sewer 124 124 144 143 134 89 89 89 83 66

Total Full-Time Equivalent (FTE) 2,469 2,436 2,767 2,648 2,468 1,996 1,950 1,922 1,934 1,934

Source: City of Dayton ITS and Manangement & Budget

(1) - Starting in 2007 the City included both Fulltime and Parttime employees in the calculation so that the total would match the number of employees on record. (2) - 2010 represents current employment at year-end

CITY OF DAYTON, OHIO

FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS

S 38

Year

2005 10,569 17,074 22,555 50,198 15,972

2006 10,503 16,870 22,786 50,159 17,054

2007 10,395 16,913 22,443 49,751 14,963

2008 10,920 17,662 23,259 51,841 14,486

2009 10,908 17,558 25,249 53,715 14,939

2010 11,214 18,447 25,942 55,603 15,122

2011 10,776 18,304 25,223 54,303 15,166

2012 11,186 17,789 23,641 52,616 14,515

2013 10,857 17,595 22,884 51,336 14,505

2014 11,368 17,779 21,358 50,505 14,013

Source: (1) University of Dayton, Registrar's Office (2) Wright State University, Budget Planning & Resource Analysis (3) Sinclair Community College, Institute of Planning & Research (4) Dayton City School District PK - 12

CITY OF DAYTON, OHIO

SCHOOL ENROLLMENT TRENDS IN MONTGOMERY COUNTY

The University of Dayton (1)

Wright State University (2)

Sinclair Community College (3)

Total Colleges/ Universities

Dayton Public Schools (4)

LAST TEN FISCAL YEARS

S 39

Jurisdiction Square Miles

Dayton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Less portion outside of Montgomery County. . . . . . .

Other incorporated areas in Montgomery County 174 excluding Dayton . . . . . . . . . . . . . . . . . . . . .

Unincorporated Townships within 233 Montgomery County . . . . . . . . . . . . . . . . . . .

Total approximate area of Montgomery County 463

Source: Division of Planning City of Dayton (County Land Records)

DECEMBER 31, 2014

CITY OF DAYTON, OHIO

CITY OF DAYTON AND MONTGOMERY COUNTY, OHIO

LAND AREA

S 40

Year Permits issued (1) Valuation (1)

2005 957 135,844,107$

2006 948 106,199,962

2007 843 135,523,498

2008 757 76,613,598

2009 793 111,538,280

2010 627 61,926,890

2011 624 76,837,017

2012 976 110,167,787

2013 1,020 71,059,409

2014 611 86,836,950

Source: (1) City of Dayton Divison of Business Services, Permit Section

CITY OF DAYTON, OHIO

BUILDING PERMITS ISSUED LAST TEN FISCAL YEARS

New Construction

S 41

Year Units Total Permit

Value

Single-family average

structure cost

% Change from previous

year % Change from 2004

2005 215 25,306,493$ 117,705$ -0.70% -0.70%

2006 186 19,292,702 103,724 -11.88% -12.49%

2007 134 12,431,781 92,774 -10.56% -21.73%

2008 150 11,491,562 76,610 -17.42% -35.37%

2009 123 11,114,593 90,363 17.95% -23.76%

2010 27 3,823,530 141,612 56.72% 19.47%

2011 90 9,516,794 105,742 17.02% -10.79%

2012 153 13,518,608 88,357 -16.44% -25.46%

2013 44 3,459,005 78,614 -11.03% -33.68%

2014 7 629,989 89,998 14.48% -24.07%

Source: Census Bureau

CITY OF DAYTON, OHIO

AVERAGE COST OF HOUSING CONSTRUCTION LAST TEN FISCAL YEARS

S 42

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Public Service Highways and Streets Streets (miles) ** 855 967 969 1,718 1,718 1,718 1,718 1,718 1,718 1,718 Streetlights 23,421 18,650 18,650 20,163 20,163 20,252 20,235 20,391 20,427 19,720 Traffic Signals N/A 325 325 325 325 325 313 313 314 320 Computerized Signals N/A 178 225 275 275 275 275 275 314 320

Public Safety Police Headquarters 1 1 1 1 1 1 1 1 1 1 Training Academy 1 1 1 1 1 1 1 1 1 1 Number of Districts 5 5 5 5 5 5 5 5 5 5 Number of Employees 414 506 512 505 474 455 385 413 409 405

Fire Headquarters 1 1 1 1 1 1 1 1 1 1 Training Academy 1 1 1 1 1 1 1 1 1 1 Fire Stations 12 12 12 12 12 12 12 12 12 12 Number of Employees 366 385 383 379 346 341 332 308 314 318

City Fleet (public safety) Fire N/A 101 99 96 97 94 99 108 84 88 Police 393 288 354 354 307 320 324 314 304 289

Recreation and parks Parks Acreage 1,400 1,389 1,389 1,389 1,374 1,374 1,374 1,374 1,374 1,374 Playgrounds 49 49 49 49 42 42 42 42 42 42 Total Facilities * 182 186 221 205 184 181 181 180 180 169 Parks 72 72 72 62 60 60 60 60 60 60 Swimming Pools 14 19 8 3 4 5 4 4 4 4 Tennis Courts 22 22 65 65 63 63 63 63 63 50 Community Centers 10 9 2 2 - 3 3 3 3 3 Senior Centers 2 2 1 1 1 1 - - - - Athletic Complexes 2 2 2 2 2 2 2 2 2 2 Specialized Facilities 4 4 1 1 - - - - 1 1 Shelter Houses 53 53 53 53 37 37 37 37 37 36 Golf Courses 3 3 3 3 3 3 3 3 3 3 Spray Park Facilities N/A N/A 7 7 6 6 7 7 7 7 Recreation Centers N/A N/A 4 4 5 - - - - 3 Cultural Centers N/A N/A 2 1 2 - 1 1 1 1 Teen Centers N/A N/A 1 1 1 1 1 - - -

Water Water Mains (miles) 799.00 800.28 803.07 803.33 804.29 806.12 807.03 806.61 807.03 807.03 Maximum Daily Capacity 51.30 50.30 51.60 46.53 43.79 43.82 43.21 44.30 41.00 42.00 (millions of gallons)

Sewer Sanitary Sewers (miles) 600.00 601.28 601.39 602.85 603.11 603.05 603.18 603.27 603.40 603.40 Storm Sewers (miles) 401.00 402.28 402.85 403.35 403.61 403.62 403.67 403.67 403.67 403.67 Maximum Daily Capacity 36.03 37.56 35.97 35.06 32.61 33.72 33.03 29.80 28.69 28.33 (millions of gallons)

Source: Various Departments, City of Dayton * 2008-2013 Recreation facilities include only those that were operational in a calendar year N/A - Information not available **Prior to 2008, straightline miles mode of measurement was used. After 2008, the mode of measurement was in Lane miles.

CITY OF DAYTON, OHIO

OPERATING INDICATORS AND CAPITAL ASSET STATISTICS LAST TEN FISCAL YEARS

S 43

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S 44