County of Livingston, State of Michiganand by lot within any maturity, on any date occurring on or after November 1, 2025, at par plus accrued interest to the date fixed for redemption

NEW ISSUE—Book-Entry-Only RATING†*: Moody’s Investors Service, Inc.: Aaa

In the opinion of Axe & Ecklund, P.C., Bond Counsel, under existing law the interest on the Bonds is excluded from gross income for federal income tax purposes except as described under “TAX MATTERS” herein and the Bonds and the interest thereon are exempt from all taxation of the State of Michigan or a subdivision thereof, except estate taxes and taxes on gains realized from the sale, payment or other disposition of the Bonds.

$11,430,000COUNTY OF LIVINGSTON, STATE OF MICHIGAN

LIVINGSTON COUNTY REGIONAL SANITARY SEWER SYSTEMREFUNDING BONDS (HARTLAND TOWNSHIP), SERIES 2016

(Limited Tax General Obligation)

The Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 ( Limited Tax General Obligation) (the “Bonds”) are being issued by the Livingston County Regional Sanitary Sewer System (the “System”), Livingston County (the “County”), State of Michigan, pursuant to the provisions of Act 185, Public Acts of Michigan, 1957, as amended (“Act 185”), and Act 34, Public Acts of Michigan, 2001, as amended (“Act 34”). The Bonds were authorized by resolution of the County Board of Commissioners, adopted on January 19, 2016 (the “Resolution”). The Bonds shall be issued in anticipation of payments to be made by the Township of Hartland (the “Township”) pursuant to the contract dated May 1, 2003, as amended (the “Contract”), among the County, acting through its Board of Public Works, and the Township of Hartland.

The full faith and credit of the County have been pledged for the prompt payment of the principal of and interest on the Bonds. The Bonds will be a first budget obligation of the County payable from its general funds. The ability of the County to raise such funds is subject to applicable constitutional and statutory limitations on the taxing power of the County.

The Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry-only form in the denomination of $5,000 or any integral multiple thereof. Purchasers of beneficial interests in the Bonds (the “Beneficial Owners”) will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “THE BONDS-Book-Entry-Only System” herein.

Principal of and interest on the Bonds will be paid through the corporate trust office of U.S. Bank National Association, Detroit, Michigan (the “Paying Agent”). So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the Direct Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the Direct Participants and Indirect Participants, as more fully described herein. Interest will be payable semiannually on May 1 and November 1, commencing May 1, 2016, to the Bondholders of record as of the applicable record dates herein described.

Dated: Date of Delivery – March 08, 2016 Principal Due: November 1, years shown below

The Bonds will mature on November 1 in the years and amounts as follows:

(Base CUSIP: 53860R)

CUSIPNumber Year Amount

InterestRate Yield

CUSIPNumber Year Amount

InterestRate Yield

AR9 2016 $570,000 1.500% 0.500% AZ1 2024 $1,095,000 2.000% 1.640%AS7 2017 440,000 1.500 0.580 BA5 2025 1,065,000 3.000 1.820AT5 2018 455,000 2.000 0.690 BB3 2026 440,000 2.000 1.930AU2 2019 1,170,000 2.000 0.800 BC1 2027 425,000 3.000 2.160AV0 2020 1,175,000 2.000 0.910 BD9 2028 420,000 3.000 2.370AW8 2021 1,150,000 2.000 1.080 BE7 2029 410,000 3.000 2.560AX6 2022 1,120,000 2.000 1.260 BF4 2030 400,000 3.000 2.720AY4 2023 1,095,000 2.000 1.470

KeyBanc Capital Markets, Inc.The Bonds maturing prior to November 1, 2025 shall not be subject to optional redemption prior to maturity. The Bonds maturing

on or after November 1, 2026 are subject to optional redemption beginning November 1, 2025, in the manner and at the times described herein. See “THE BONDS-Optional Redemption” herein.

The Bonds will be offered when, as and if issued by the County subject to the approving legal opinion of Axe & Ecklund, P.C. Grosse Pointe Farms, Michigan, Bond Counsel. It is expected that the Bonds will be available for delivery through DTC on or about March 8, 2016.

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The date of this Official Statement is February 17, 2016.

† For an explanation of the rating, see “RATING” herein. § Copyright 2015, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-

Hill Companies, Inc. The City shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above.

* As of date of delivery.

No dealer, broker, salesperson or other person has been authorized by the County or the Township to give any information or to make any representations, other than those contained in the Official Statement. This Official Statement does not constitute any offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the affairs of the County or the Township since the date hereof. This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement and any addenda thereto were prepared relying on information of the County, the Township and other sources and are believed to be reliable. In making an investment decision, investors must rely on their own examination of the County and the Township and the terms of the offering, including the merits and risks involved.

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COUNTY OF LIVINGSTON

BOARD OF COMMISSIONERS

Chairperson Vice Chairperson Kate Lawrence Carol S. Griffith

Gary Childs Dennis L. Dolan David J. Domas

Donald S. Parker William Green Steven E. Williams Ronald L. VanHouten

BOARD OF PUBLIC WORKS

Director Chairman Vice Chairman Secretary Brian Jonckheere Arthur McCleer Michael Arens Terry Wilson

Dale Brewer Gregory Tatara Ronald VanHouten

ADMINISTRATION Treasurer Clerk

Elizabeth Hundley Drain Commissioner

Jennifer M. Nash Brian Jonckheere

Register of Deeds Finance Director Administrator Prosecuting Attorney Sally Reynolds Cindy Catanach Ken Hinton William J. Vailliencourt, Jr.

TOWNSHIP OF HARTLAND

Supervisor Manager Clerk Treasurer Bill Fountain James Wickman Larry Ciofu Kathleen Horning

Trustees Joseph Colaianne Mathew Germane Glenn Harper Joseph Petrucci

PROFESSIONAL SERVICES

Bond Counsel: Axe & Ecklund, P.C.

Financial Advisor: Public Financial Management, Inc.

Paying Agent: U.S. Bank National Association

Verification Agent: Robert Thomas CPA, LLC

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TABLE OF CONTENTS PAGE INTRODUCTION ........................................................................................................................................ 1 INTEREST .................................................................................................................................................... 1 OPTIONAL REDEMPTION ........................................................................................................................ 1 PURPOSE AND SECURITY ....................................................................................................................... 1 PLAN OF REFUNDING .............................................................................................................................. 2 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................... 3 THE BONDS ................................................................................................................................................ 3

Description and Form of the Bonds ............................................................................................ 3 Book-Entry-Only System............................................................................................................ 3 Transfer Outside Book-Entry-Only System................................................................................ 5

TAX MATTERS ........................................................................................................................................... 6 Amortizable Bond Premium ....................................................................................................... 7 Future Developments .................................................................................................................. 7

LEGAL PROCEEDINGS ............................................................................................................................. 7 LITIGATION ................................................................................................................................................ 7 APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY .............................................................. 8 RATING ....................................................................................................................................................... 8 FINANCIAL ADVISOR'S OBLIGATION .................................................................................................. 8 CONTINUING DISCLOSURE .................................................................................................................... 9 OTHER MATTERS .................................................................................................................................... 10 APPENDIX A: County of Livingston – General Financial, Economic & Statistical Information APPENDIX B: County of Livingston General Fund Budget Summaries and Comparative Financial

Statement APPENDIX C: Audited Financial Statements and Notes to Financial Statements of the County for

the Year Ended December 31, 2014 APPENDIX D: Township of Hartland - General Financial, Economic & Statistical Information APPENDIX E: Township of Hartland – General Fund Budget Summary and Comparative Financial

Statements APPENDIX F: Form of Legal Opinion APPENDIX G: Forms of Continuing Disclosure Undertaking

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OFFICIAL STATEMENT relating to

$11,430,0000

COUNTY OF LIVINSTON, STATE OF MICHIGAN

LIVINGSTON COUNTY REGIONAL SANITARY SEWER SYSTEM

REFUNDING BONDS (HARTLAND TOWNSHIP), SERIES 2016 (Limited Tax General Obligation)

INTRODUCTION

This Official Statement, including the cover page and appendices, of the Livingston County Regional Sanitary Sewer (the "System,"), including information related to the Township of Hartland (the "Township") and the County of Livingston (the "County"), is provided for the purpose of setting forth information in connection with the issuance and sale by the County of the Township's $11,430,000 Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 ( Limited Tax General Obligation ) (the "Bonds").

INTEREST

Interest on the Bonds will be payable on May 1, 2016 and semiannually on the 1st day of each November and May thereafter. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

OPTIONAL REDEMPTION

The Bonds or portions of the Bonds in multiples of $5,000 maturing on or after November 1, 2026, are subject to redemption at the option of the County in such order as the County may determine and by lot within any maturity, on any date occurring on or after November 1, 2025, at par plus accrued interest to the date fixed for redemption.

With respect to partial redemptions, any portion of a Bond outstanding in a denomination larger

than the minimum authorized denomination may be redeemed provided such portion and the amount not being redeemed each constitutes an authorized denomination. If less than the entire principal amount of a Bond is called for redemption, upon surrender of the Bond to the Bond Registrar, the Bond Registrar shall authenticate and deliver to the registered owner a new Bond in the principal amount of the principal portion not being redeemed.

Notice of redemption shall be sent to the registered holder of each Bond being redeemed at least

30 days before the date fixed for redemption, which notice shall fix the date of record with respect to the redemption. Any defect in any notice of redemption shall not affect the validity of the redemption proceedings. Bonds so called for redemption shall not bear interest after the date fixed for redemption provided funds or sufficient government obligations then are on deposit with the Bond Registrar to redeem such Bonds.

PURPOSE AND SECURITY

The Bonds are being issued pursuant to the provisions of Act 185, Public Acts of Michigan, 1957, as amended (“Act 185”), and Act 34, Public Acts of Michigan, 2001, as amended ("Act 34"), Act 40, Public Acts of Michigan, 1956, as amended ("Act 40"), The Bonds were authorized by resolution of the County Board of Commissioners, adopted on January 19, 2016 (the “Resolution”). The Bonds shall be issued in anticipation of payments to be made by the Township of Hartland (the “Township”) pursuant to the contract dated May 1, 2003, as amended (the “Contract”), among the County, acting through its Board of Public Works, and the Township of Hartland.

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The Bonds are payable from the collection of annual installments of an assessment against the Township in an amount at least equal to the principal of and interest on the Bonds. Act 40 provides that the tax levying officials of the Township shall levy sufficient taxes to pay assessment installments and interest thereon as the same become due unless there has been set aside sufficient moneys therefor. TAXES IMPOSED BY THE TOWNSHIP ARE SUBJECT TO CONSTITUTIONAL TAX LIMITATIONS. The Bonds will be limited tax general obligation of the County. The County has pledged its full faith and credit for the prompt payment of the principal of and interest on the Bonds as the same shall become due. Each year the County shall be obligated, as a first budget obligation, to advance moneys from its general funds or to levy ad valorem property taxes on all taxable property within its corporate boundaries to pay such principal and interest as the same become due. The ability of the County to raise funds to pay such amounts is subject to applicable constitutional and statutory limitations on the taxing power of the County. See APPENDIX A herein for more detailed information.

The rights or remedies of holders of the Bonds may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors’ rights generally, now existing or hereafter enacted, and by the application of general principles of equity, including those relating to equitable subordination.

PLAN OF REFUNDING

The proceeds of the Bonds will be used to pay certain costs of issuance relating to the Bonds and for the refunding of the Prior Bonds, and to establish an escrow fund (the "Escrow Fund") composed of cash and non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or other obligations the principal of and interest on which are fully secured by the foregoing. The Escrow Fund will be held by the corporate trust office of U.S. Bank National Association, Detroit, Michigan, as escrow agent (the "Escrow Agent") and will be used to pay the principal of and interest on the Prior Bonds when due or at call for redemption. The Escrow Fund will be held by the Escrow Agent pursuant to an escrow agreement (the "Escrow Agreement") which irrevocably directs the Escrow Agent to make the payment of principal of and interest on the Prior Bonds when due or at call for redemption. The Escrow Fund will be such that the cash and the principal of, and interest payments received on the investments will be sufficient, without reinvestment, except as provided in the Escrow Agreement, to pay the principal of and interest on the Prior Bonds as they become due or are called for earlier redemption, as set forth in the following table.

Principal of and Interest on the Prior Bonds to be paid from the Escrow Fund 1F

Date 0BPrincipal Interest 1BTotal 04/14/2016 $11,575,000.00 $224,889.06 $11,799,889.06

TOTAL $11,575,000.00 $224,889.06 $11,799,889.06

The accuracy of the mathematical computations of the adequacy of cash to be held in the Escrow Fund and used, together with the earnings thereon, if any, to pay the principal of and interest on the Prior Bonds at call for redemption, supporting the conclusion of Bond Counsel that the interest on the Bonds is excluded from gross income for federal income tax purposes as indicated under the caption "TAX MATTERS" below, will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas (the "Verification Agent"). Such verification of accuracy of the computations shall be based upon information supplied by the Underwriter and the interpretations of Section 148 of the Internal Revenue Code of 1986, as amended, as provided by Bond Counsel.

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ESTIMATED SOURCES AND USES OF FUNDS

SOURCES Par Amount of the Bonds $11,430,000.00Original Issue Premium 510,118.20

Total Sources $11,940,118.20

USES SLGS Purchases $11,797,020.00Cost of Issuance 89,802.64Underwriter's Discount 53,295.56 Total Uses $11,940,118.20

THE BONDS

Description and Form of the Bonds

The Bonds will be issued in book-entry-only form as one fully registered Bond per maturity, without coupons, in the aggregate principal amount for each maturity set forth on the cover page hereof and may be purchased in denominations of $5,000 or any integral multiple thereof. The Bonds will be dated as of and bear interest from their date of delivery. Interest on the Bonds shall be payable semiannually each May 1 and November 1 to maturity or early redemption, commencing May 1, 2016. Interest on the Bonds shall be computed using a 360-day year with twelve 30-day months, and the Bonds will mature on the dates and in the principal amounts and will bear interest at the rates as set forth on the cover of this Official Statement.

The corporate trust office of U.S. Bank National Association, Detroit, Michigan, or its successor will serve as the bond registrar and paying agent (the “Paying Agent”) for the Bonds. For a description of the payment of principal of and interest on, along with transfers and exchanges on the Bonds, which are held in the book-entry-only system, see “Book-Entry-Only System” below. In the event the Bonds cease to be held in the book-entry-only system, then interest on the Bonds shall be payable when due by check or draft to the person or entity who or which is, as of the fifteenth (15th) day of the month preceding each interest payment date (the “Record Date”), the registered owner of record, at the owner’s registered address. See “Transfer Outside Book-Entry-Only System” below.

Book-Entry-Only System

The information in this section has been furnished by The Depository Trust Company, New York, New York ("DTC"). No representation is made by the County or, the Paying Agent as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the County or, the Paying Agent to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the County nor the Paying Agent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof.

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a

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member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company of DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is governed by the users of its regulated subsidiaries. Access to the DTC System is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the bonds on DTC's records. The ownership interest of each actual purchaser of each bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the bonds, except in the event that use of the book-entry system for the bonds is discontinued.

To facilitate subsequent transfers, all bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the bonds, such as redemptions, tenders, defaults and proposed amendments to the bond documents. For example, Beneficial Owners of bonds may wish to ascertain that the nominee holding the bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

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Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County or Township as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal and interest and redemption amounts, if any, on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detailed information from the County or Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, Paying Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, interest and redemption amounts, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the County or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the County or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds certificates are required to be printed and delivered.

The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bonds certificates will be printed and delivered.

The County and the Paying Agent cannot and do not give any assurances that DTC, the Direct Participants or the Indirect Participants will distribute to the Beneficial Owners of the Bonds (i) payments of principal of or interest on the Bonds, (ii) any document representing or confirming beneficial ownership interest in the Bonds, or (iii) notices sent to DTC or Cede & Co. its nominee, as the registered owner of the Bonds, or that it will do so on a timely basis or that DTC, Direct Participants or Indirect Participants will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with the Participants are on file with DTC.

Transfer Outside Book-Entry-Only System

In the event the Book-Entry-Only System is discontinued, the following provisions would apply to the Bonds. The Paying Agent shall keep the registration books for the Bonds (the “Bond Register”) at its designated corporate trust office. Subject to the further conditions contained in the Resolution, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations, upon surrender thereof at the principal corporate trust office of the Paying Agent by the registered owners or their duly authorized attorneys. Upon surrender of any Bonds to be transferred or exchanged, the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations. Upon surrender of any Bonds to be transferred or exchanged, the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations. During the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or any time following the mailing of any notice of redemption, the Paying Agent shall not be required to effect or register any transfer or exchange of any bond which has been selected for such redemption, except the Bonds properly surrendered for partial

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redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion. The Paying Agent shall not be required to effect or register any transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion. The County and the Paying Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owner of such Bonds for all purposes under the Resolution. No transfer or exchange made other than as described above and in the Resolution shall be valid or effective for any purposes under the Resolution.

TAX MATTERS

In the opinion of Axe & Ecklund, P.C., Bond Counsel, under existing law, the interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that with respect to corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. Bond Counsel is also of the opinion that, under existing law, the interest on the Bonds is excluded from taxable income for purposes of the State of Michigan personal income tax. Bond Counsel will express no opinion regarding any other federal or state tax consequences arising with respect to the Bonds and the interest thereon.

The opinions on federal and State of Michigan tax matters are based on the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the County contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excludable from gross income for federal and State of Michigan income tax purposes. The County has covenanted to take the actions required of it for the interest on the Bonds to be and to remain excludable from gross income for federal and State of Michigan income tax purposes, and not to take any actions that would adversely affect that exclusion. Bond Counsel’s opinions assume the accuracy of the County’s certifications and representations and the continuing compliance with the County’s covenants. Noncompliance with these covenants by the County may cause the interest on the Bonds to be included in gross income for federal and State of Michigan income tax purposes retroactively to the date of issuance of the Bonds. After the date of issuance of the Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel’s attention, may adversely affect the exclusion from gross income for federal and State of Michigan income tax purposes of interest on the Bonds or the market prices of the Bonds.

The opinions of Bond Counsel are based on current legal authority and cover certain matters not directly addressed by such authority. They represent Bond Counsel’s legal judgment as to the excludability of interest on the Bonds from gross income for federal and State of Michigan income tax purposes but are not a guarantee of that conclusion. The Federal income tax opinion is not binding on the Internal Revenue Service (“IRS”) or any court. Bond Counsel cannot give and has not given any opinion or assurance about the effect of future changes in the Internal Revenue Code of 1986, as amended (the “Code”), the applicable regulations, the interpretations thereof or the enforcement thereof by the IRS.

Ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry the Bonds. Bond Counsel will express no opinion regarding any such consequences.

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Amortizable Bond Premium

For federal income tax purposes, the excess of the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold over the amount payable at maturity thereof constitutes for the original purchasers of such Bonds (collectively, the "Original Premium Bonds") an amortizable bond premium. Bonds other than Original Premium Bonds may also be subject to an amortizable bond premium determined generally with regard to the taxpayer's basis (for purposes of determining loss on a sale or exchange) and the amount payable on maturity or, in certain cases, on an earlier call date (such bonds being referred to herein collectively with the Original Premium Bonds as the "Premium Bonds"). Such amortizable bond premium is not deductible from gross income. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of the taxpayer's yield to maturity determined by using the taxpayer’s basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer’s adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment at maturity) of such Premium Bonds.

Future Developments

No assurance can be given that any future legislation or clarifications or amendments to the Code, if enacted into law, will not contain proposals which could cause the interest on the Bonds to be subject directly or indirectly to Federal or State of Michigan income taxation, adversely affect the market price or marketability of the Bonds, or otherwise prevent the holders from realizing the full current benefit of the status of the interest thereon. Bond Counsel expresses no opinion regarding any pending or proposed Federal or State of Michigan tax legislation.

Further, no assurance can be given that any actions of the Internal Revenue Service, including, but not limited to, selection of the Bonds for audit examination, or the course or result of any examination of the Bonds, or other Bonds which present similar tax issues, will not affect the market price of the Bonds.

INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS, INCLUDING THE IMPACT OF ANY PENDING OR PROPOSED FEDERAL OR STATE OF MICHIGAN TAX LEGISLATION.

LEGAL PROCEEDINGS

Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approval of Axe & Ecklund, P.C., Grosse Pointe Farms, Michigan, as Bond Counsel. A copy of the opinion of Bond Counsel will be provided with the Bonds, which opinion will be in substantially the form set forth in APPENDIX D. The legal fees of Bond Counsel in connection with the issuance of the Bonds are expected to be paid from Bond proceeds.

LITIGATION

The County Corporation Counsel has advised that the County is not currently involved in any litigation or administrative proceedings which would have any material adverse effect on the financial position of the County or would prohibit the issuance of the Bonds or the payment of the debt service thereon.

The County has not been served with any litigation, administrative action or proceeding, and to the best knowledge of the appropriate officials of the County, no litigation or administrative action or

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proceeding has been threatened against the County, seeking to restrain or enjoin the issuance and delivery of the Bonds, or questioning or contesting the validity of the Bonds or the proceedings or authorities under which they are authorized to be issued, sold, executed and delivered. A certificate to such effect will be delivered to the Underwriter at the time of the original delivery of the Bonds.

APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY

The County and the Township have both received a letter from the Department of Treasury of the State of Michigan stating that the County and the Township are in material compliance with the criteria of the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended, for a municipality to be granted qualified status. The County and the Township may therefore proceed to issue the Bonds without further approval from the Department of Treasury of the State of Michigan.

RATING

Moody's Investors Service ("Moody's") will assign, as of the date of delivery of the Bonds, its municipal bond rating of "Aaa" to the Bonds. No application has been made to any other ratings service for a rating on the Bonds. The County and the Township furnished to Moody's certain materials and information in addition to that provided herein. Generally, rating agencies base their ratings on such information and materials, and on investigations, studies and assumptions. There is no assurance that such ratings will prevail for any given period of time or that they will not be revised downward or withdrawn entirely by Moody's if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Bonds. Any ratings assigned represent only the views of Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, NY 10007, (212) 553-0377.

FINANCIAL ADVISOR'S OBLIGATION

Public Financial Management, Inc., Ann Arbor, Michigan (the "Financial Advisor"), has been retained by the Township and County to provide certain financial advisory services. The Financial Advisor assisted in the preparation of the Official Statement and in other matters relating to the planning, structuring and issuance of the Bonds.

The information contained in the Official Statement was prepared in part by the Financial Advisor and is based on information supplied by various officials from records, statements and reports required by various local, county or state agencies of the State of Michigan. To the best of the Financial Advisor's knowledge, all of the information contained in the Official Statement, which it assisted in preparing, while it may be summarized is complete and accurate. However, the Financial Advisor has not and will not independently verify the completeness and accuracy of the information contained in the Official Statement.

The Financial Advisor is a registered municipal advisor and is not engaged in the business of underwriting, marketing or trading of municipal securities or any other negotiable instrument. The Financial Advisor's duties, responsibilities and fees arise solely as financial advisor to the Township and County. The Financial Advisor's fees are expected to be paid from Bond proceeds.

Further information concerning the Bonds may be secured from Public Financial Management, Inc., 305 East Eisenhower Parkway, Suite 112, Ann Arbor, Michigan 48108, (734) 994-9700, Financial Advisor to the County.

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CONTINUING DISCLOSURE

The County and the Township (individually an "Obligated Person" and collectively, the "Obligated Persons") have each covenanted and will covenant for the benefit of the Bondholders and the Beneficial Owners (as hereinafter defined under this caption only), pursuant to the Resolutions and related Continuing Disclosure Undertakings to be delivered on the date of issuance of the Bonds to the to provide or cause to be provided: (i) each year, certain financial information and operating data relating to the respective Obligated Person for its preceding fiscal year (the "Annual Report") by not later than the date seven months after the end of its fiscal year, commencing with the Annual Report for each Obligated Person’s fiscal year, commencing with the Annual Report for the County's fiscal year ending December 31, 2015 and the Township's fiscal year ending March 31, 2016, provided, however that if the related audited financial statements of any Obligated Person are not available by such date, they will be provided when and if available, and unaudited financial statements in a format similar to the audited financial statements then most recently prepared for such Obligated Person will be included in the Annual Report; and (ii) with respect to the County, timely notices of the occurrence of certain enumerated events related to the respective Obligated Person. Currently, the County's and the Township's fiscal year commences on January 1 and the Township's fiscal year begins April 1. "Beneficial Owner" means, under this caption only, any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including any person holding Bonds through nominees, depositories and other intermediaries).

Each Annual Report will be filed with the Municipal Securities Rulemaking Board ("MSRB") electronically through the MSRB’s Electronic Municipal Market Access System ("EMMA"). If any Obligated Person is unable to provide the MSRB its Annual Report by the date required, such Obligated Person shall send, in a timely manner, to the MSRB through EMMA, a notice of the failure to file the Annual Report by such date. The notices of events will be filed by each Obligated Person with the MSRB through EMMA. These covenants have been made by each Obligated Person in order to assist the purchaser of the Bonds and registered brokers, dealers and municipal securities dealers in complying with the requirements of subsection (b)(5) of Rule 15c2-12 (the "Rule"). The information to be contained in each Annual Report, the enumerated events, the occurrence of which will require a notice, and the other terms of each Disclosure Certificate are set forth in Appendix F, "Forms of Continuing Disclosure Undertaking".

Except as noted herein, the County or the Township has not, in the previous five years, failed to comply, in any material respect, with any agreement or undertaking executed by the County or the Township pursuant to the Rule.

The County did file its 2011 audited financial statement 1 day late and filed late material event notices of rating changes affecting their underlying rating and the bond insurers for certain prior bond issues of the County. All material event disclosures have been filed by the County at this time.

The Township filed a late notice of material event regarding the Standard & Poor’s rating upgrade which occurred on December 19, 2013, the notice of material event was filed on January 23, 2014. Additionally, two of the Township’s disclosure agreements require the “Largest Employers” section to be included in the annual updates beginning with the 2012 filing. That section was not included in the 2012 or 2013 filing, but has been subsequently provided in the 2014 and 2015 filings.

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OTHER MATTERS

All information contained in this Official Statement, in all respects, is subject to the complete body of information contained in the original sources thereof. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered statements of fact.

The County and the Township will deliver certificates that to their best knowledge and belief, this Official Statement, insofar as it pertains to the County and the Township respectively and their economic and financial condition, is true and correct as of the date of this Official Statement, and does not contain, nor omit, any material facts or information which would make the statements contained herein misleading.


By: /s/ Brian Jonckheere Its: Director, Livingston County Department of Public Works

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APPENDIX A


GENERAL FINANCIAL, ECONOMIC & STATISTICAL INFORMATION LOCATION AND DESCRIPTION

Livingston County (the “County”) covers an area of approximately 568.4 square miles. The County is located

in the southeastern portion of Michigan, 12 miles north of Ann Arbor, 45 miles southeast of Lansing and 40 miles northwest of downtown Detroit.

POPULATION

The U.S. Census reported and estimated population for the County is as follows:

County of Livingston % Change

2015 Estimate 186,809 3.23% 2010 U.S. Census 180,967 15.30 2000 U.S. Census 156,951 35.72 1990 U.S. Census 115,645 15.31 1980 U.S. Census 100,289 --

FISCAL YEAR

The County’s fiscal year begins on January 1st and ends on December 31st. FORM OF GOVERNMENT

Article VII of the Constitution of the State of Michigan of 1963 designates county government as a corporate

body with certain powers and immunities. The County may levy taxes, within a set limit, for county purposes and other taxes as may be appropriate. The County may adopt resolutions and ordinances relating to its concerns. The County Board has legislative, administrative, and other duties as prescribed by law.

County Commissioners are elected for two-year terms. Other County officers, such as the Clerk, Treasurer,

Register of Deeds, Sheriff, and Prosecuting Attorney are elected for four-year terms. PROPERTY VALUATIONS

Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which

property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value.

On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting

the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as “Taxable Value.” Since 1995, taxable property has had two valuations—State Equalized Value (“SEV”) and Taxable Value. Property taxes are levied on Taxable Value. Generally, the Taxable Value of property is the lesser of: (a) the Taxable Value of the property in the immediately preceding year, minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus additions, or (b) the property’s current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property’s SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of

the current true cash value. The Taxable Value of new construction is equal to current SEV. The Taxable Value and SEV of existing property are also adjusted annually for additions and losses.

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Responsibility for assessing taxable property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, the local Board of Review and ultimately to the Michigan Tax Tribunal.

In addition to limiting the annual increase in Taxable Value, the Michigan Constitution mandates a system of

equalization for assessments. Although the assessor for each local unit of government within a county is responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor.

Municipal assessments are then equalized to the 50% levels as determined by the County Department of

Equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits.

Property that is exempt from property taxes (e.g., churches, government property, public schools) is not

included in the SEV or Taxable Value data in this Official Statement. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax abated property is based upon SEV but is not included in either the SEV or Taxable Value data in this Official Statement except as noted.

History of Valuations

A history of the property valuations in the County is shown below:

Property Levy/ Total State Value as Valuation Taxable Percent Equalized Percent of 12/31 Year Value Change Value Change

2014 2015 $8,053,582,840 4.33% $9,284,997,469 8.56% 2013 2014 7,718,984,917 1.95 8,553,156,089 5.57 2012 2013 7,571,057,139 1.18 8,102,004,498 1.69 2011 2012 7,482,442,287 -1.64 7,967,343,738 -2.79 2010 2011 7,607,448,630 -4.35 8,195,851,938 -6.99

$0$2,000$4,000$6,000$8,000

$10,000

2015 2014 2013 2012 2011

MillionsHistory of Valuations

Total Taxable Value State Equalized Value

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1.55% 9.77%2.37%

78.60%

0.02%7.68%

Valuation Composition by Class

Agricultural Commercial Industrial

Residential Developmental Personal

A summary of the 2015 valuation subject to taxation is as follows:

2015 Taxable Value $8,053,582,840 Plus: 2015 Equivalent IFT Taxable Value1 44,941,639 Total 2015 Equivalent Taxable Value $8,098,524,479 Less: 2015 Captured Taxable Value2 (206,763,006) Net 2015 Taxable Value $7,891,761,473

1See “INDUSTRIAL FACILITY TAX ABATEMENTS” herein. 2See “TAX INCREMENT AUTHORITIES” herein. Source: Livingston County Equalization Department

Valuation Composition

A breakdown of the County’s 2015 Taxable Value by class, use and municipality is as follows:

2015 Percent By Use: Taxable Value of Total Real Property $7,435,256,396 92.32% Personal Property 618,326,444 7.68

TOTAL $8,053,582,840 100.00%

By Class: Agricultural $124,886,126 1.55% Commercial 786,995,486 9.77 Industrial 191,247,754 2.37 Residential 6,330,383,925 78.61 Developmental 1,743,105 0.02 Personal 618,326,444 7.68

TOTAL $8,053,582,840 100.00%

Valuation Composition by Class By Municipality: Townships Brighton $1,012,046,075 12.57% Cohoctah 103,007,581 1.28

Conway 109,048,583 1.35 Deerfield 159,454,953 1.98 Genoa 1,046,316,089 12.99 Green Oak 880,920,173 10.94 Hamburg 948,085,112 11.77 Handy 253,339,670 3.15 Hartland 597,777,184 7.42 Howell 326,993,700 4.06 Iosco 142,576,378 1.77 Marion 406,296,942 5.04 Oceola 496,341,433 6.16 Putnam 315,407,350 3.92 Tyrone 432,378,495 5.37 Unadilla 104,451,735 1.30 Cities Brighton 412,677,628 5.12 Howell 306,463,759 3.81

TOTAL $8,053,582,840 100.00%

Source: Livingston County Equalization Department.

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INDUSTRIAL FACILITY TAX ABATEMENTS

Under the provisions of Act 198 of the Public Acts of Michigan, 1974, as amended (“Act 198”), plant rehabilitation districts and/or industrial development districts may be established. Businesses in these districts are offered certain property tax incentives to encourage restoration or replacement of obsolete facilities and to attract new facilities in the area. The industrial facilities tax (“IFT”) is paid, at a lesser effective rate and in lieu of ad valorem property taxes, in such facilities for a period of up to 12 years. Qualifying facilities are issued abatement certificates for this period.

After expiration of the abatement certificate, the then-current SEV of the facility is returned to the ad valorem tax

roll. The owner of such facility may obtain a new certificate, provided it has complied with the provisions of Act 198.

The County has several IFT abatements outstanding with a total 2015 Taxable Value of $89,883,277, all of

which is taxed at half rate. For purposes of computing “Equivalent” Taxable Value, it has been shown in the “History of Valuations” table above as 50% of the Taxable Value.

Source: Livingston County Equalization Department

TAX INCREMENT AUTHORITIES

Act 450 of the Public Acts of Michigan, 1980, as amended (the “TIFA Act”), Act 197 of the Public Acts of

Michigan, 1975, as amended (the “DDA Act”), Act 281 of the Public Acts of Michigan, 1986, as amended (the “LDFA Act”) and Act 381, of the Public Acts of Michigan, 1996, as amended (the “Brownfield Act”) (together the “TIF Acts”) authorize the designation of specific districts known as Tax Increment Finance Authority (“TIFA”) Districts, Downtown Development Authority (“DDA”) Districts, Local Development Finance Authority (“LDFA”) Districts or Brownfield Redevelopment Authority (“BRDA”) Districts, authorized to formulate tax increment financing plans for public improvements, economic development, neighborhood revitalization, historic preservation and environmental cleanup within the district.

Tax increment financing permits the TIFA, DDA, LDFA, or BRDA to capture tax revenues attributable to

increases in value (“TIF Captured Value”) of real and personal property located within an approved development area while any tax increment financing plans by an established district are in place. These captured revenues are used by the District and are not passed on to the local taxing jurisdictions.

The County has several TIFA, DDA and LDFA Districts within its boundaries. The Districts which capture the

County’s taxes are as follows:

2015 Captured Taxable Values Municipality Ad Valorem Equivalent IFT1 Total

City of Howell LDFA $0 $37,548,947 $37,548,947 DDA #1 4,066,859 0 4,066,859 DDA #2 11,971,788 0 11,971,788

City of Howell Total $16,038,647 $37,548,947 $53,587,594 Village of Fowlerville

DDA $15,724,650 $0 $15,724,650 LDFA 0 25,831,320 25,831,320

Village of Fowlerville Total $15,724,650 $25,831,320 $41,555,970 Village of Pinckney

DDA $7,231,480 $0 $7,231,480 Village of Pinckney Total $7,231,480 $0 $7,231,480

1Represents 50% of the actual Taxable Value.

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2015 Captured Taxable Values Municipality Ad Valorem Equivalent IFT1 Total

City of Brighton DDA #1 $21,137,233 $0 $21,137,233 DDA #2 60,001,615 0 60,001,615 DDA #3 63,571,700 0 63,571,700 LDFA 0 32,032,688 32,032,688

City of Brighton Subtotal $144,710,548 $32,032,688 $176,743,236 Less: County's 50% pass thru (72,355,274) (72,355,274)

City of Brighton Total $72,355,274 $104,387,962

Livingston County TOTAL Captured Value $206,763,006

1Represents 50% of the actual Taxable Value. Source: Livingston County Equalization Department.

MAJOR TAXPAYERS

The County’s top ten taxpayers and their 2015 Taxable Values are as follows:

2015 "Equivalent" Total

Taxpayer Product/Service Taxable Value IFT Value1 Valuation

Detroit Edison Co. Utility $95,771,115 $0 $95,771,115

Enbridge Energy Utility 79,404,415 0 79,404,415

General Motors2 Automotive 74,106,160 0 74,106,160

Consumers Energy Co. Utility 62,491,343 0 62,491,343

TRW, Inc. Automotive 14,935,493 15,453,810 30,389,303

ITC Utility 27,839,390 0 27,839,390

Ogihara America Corp. Automotive/Stamping 22,487,807 1,662,500 24,150,307

Wal-Mart Retail 17,055,933 0 17,055,933

Tanger Outlet Outlet Mall 16,112,900 0 16,112,900

Green Oak Village Place2 Commercial 15,607,244 0 15,607,244

TOTALS $425,811,800 $17,116,310 $442,928,110

Total 2015 Taxable Value $8,053,582,840 $44,941,639 $8,098,524,479 Total 10 Taxpayers as a % of Total 2015 Taxable Value 5.29% 38.09% 5.47%

1Represents 50% of the actual Taxable Value. 2Green Oaks Village Place is appealing approximately $4,700,000 of their taxable value assessment. Source: Livingston County Equalization Department

CONSTITUTIONAL ROLLBACK AND ASSESSMENT CAPS

Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in

a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be reduced through a Millage Reduction Fraction unless reversed by a vote of the electorate of the local taxing unit.

TAX RATES - (Per $1,000 of Valuation)

The following table shows the total County tax rates for the past five years.

County of Livingston 2015 2014 2013 2012 2011

Operating 3.3890 3.3897 3.3897 3.3897 3.3897 Ambulance 0.2999 0.3000 0.3000 0.3000 0.3000 Veteran's Relief 0.0500 0.0500 0.0500 0.0500 0.0500 TOTAL 3.7389 3.7397 3.7397 3.7397 3.7397


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TAX RATE LIMITATIONS

2015 Millage Maximum Allowable Expiration

Purpose Authorized Millage after Rollback Date of Levy Operating 5.0000 3.3890 N/A Ambulance 0.3000 0.2999 2030 Veteran’s Relief 0.1000 0.0999 N/A

Millage

Units of Government Rate Any School District - Non-Homestead 18.0000 County of Livingston 5.0000 Huron Clinton Authority 0.2500 Any Township 1.3000 Livigston County LESA 0.1000 TOTAL 24.6500

In addition, Article IX, Section 6, permits the levy of millage in excess of the above for:

1. All debt service on tax supported notes issued prior to December 23, 1978 or tax supported issues which

have been approved by the voters for which the County has pledged its full faith and credit. 2. Operating purposes for a specified period of time provided that such increased millage has been approved

by a majority of the qualified electors of the local unit voting thereon. OTHER JURISDICTIONS’ TAX RATES - (Per $1,000 of Valuation)

The following table provides the 2015 and 2014 tax rates for municipal units of government that are located

within the County’s boundaries.

Other Major Taxing Units 2015 2014 State Education Tax 6.0000 6.0000 Huron Clinton Metro Authority 0.2146 0.2146 City of Howell 17.1443 17.1443 Howell Public Schools

Homestead 6.4000 7.0600 Non-Homestead 24.4000 25.0600

Livingston LESA 2.3334 2.3361

Source: Livingston County Equalization Department TAX LEVIES AND COLLECTIONS

The County’s fiscal year begins January 1 and ends December 31. The County’s property taxes are due July 1

of each fiscal year (except for voted millages, which are due on December 1 of each fiscal year) and are payable without penalty or interest on or before the following February 14. All real property taxes remaining unpaid on March 1 of the year following the levy are turned over to the County Treasurer for collection. Livingston County annually pays from its Delinquent Tax Revolving Fund delinquent taxes on real property to all taxing units in the County, including the County, shortly after the date delinquent taxes are returned to the County Treasurer for collection. The payments from this fund have resulted in collections of taxes approaching 100% for all taxing units. If feasible, it is anticipated that the County will continue to reimburse all taxing units in the County for any uncollected taxes, but there is no assurance that this will be the case since the County is not obligated to continue this fund in future years. Delinquent personal property taxes are negligible. A history of tax levies and collections for the County is as follows:

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Levy Total Collections to Year Tax Levy March 1, Each Year2015 $31,855,492* In Process of Collection 2014 30,449,158 $29,690,306 97.51% 2013 29,814,421 28,989,553 97.232012 29,392,022 28,456,132 96.822011 29,993,041 28,887,931 96.322010 31,296,803 29,986,812 95.81

*Estimated.

Livingston County annually pays from its Delinquent Tax Revolving Fund delinquent taxes on real property to

all taxing units in the County. Act 206 of 1893, as amended, provides in part that: “The primary obligation to pay to the County the amount of taxes and interest thereon shall rest with the local taxing units, and if the delinquent taxes which are due and payable to the County are not received by the County for any reason, the County has full right of recourse against the taxing unit to recover the amount thereof and interest thereon…”

Public Act 124 of 1999 shortens the amount of time property owners have to pay their delinquent taxes before

losing their property. Property owners with taxes that are two years delinquent will be foreclosed and the property will be sold at public auction. For example, people who fail to pay their 2009 delinquent property taxes will lose their property in March 2012.

Source: Livingston County Treasurer’s Office

REVENUES FROM THE STATE OF MICHIGAN

The County receives revenue sharing payments from the State of Michigan under the State Revenue Sharing

Act of 1971, as amended (the “Revenue Sharing Act”). Under the Revenue Sharing Act the County receives its pro rata share of State revenue sharing distributions on a per capita basis. The County’s receipts could vary depending on the population of the County compared to the population of the State as a whole. The County’s revenue sharing distribution is subject to annual legislative appropriation and may be reduced or delayed by Executive Order during any State fiscal year in which the Governor, with the approval of the State Legislature’s appropriation committees, determines that actual revenues will be less than the revenue estimates on which appropriations were based.

The State’s ability to make revenue sharing payments to the County in the amounts and at the times specified in

the Revenue Sharing Act is subject to the State’s overall financial condition and its ability to finance any temporary cash flow deficiencies. Act 357, Public Acts of Michigan, 2004 (“Act 357”) amended the General Property Tax Act to temporarily eliminate statutory revenue sharing payments to counties by creating a reserve fund, against which counties could draw in lieu of annual revenue sharing payments, paid for by the permanent advancement of the counties’ property tax levy from December to July each year, beginning in 2005. Under Act 357, a county would resume receiving state revenue sharing payments in the first year in which the county’s property tax revenue reserve was less than the amount the county would have otherwise received in state revenue sharing payments. The County resumed receiving State revenue sharing payments during its fiscal year ending December 31, 2013.

Under the fiscal year 2015 budget, signed into law on June 30, 2014 by Governor Snyder, 80% of county

revenue sharing payments are made pursuant to the Revenue Sharing Act and 20% are distributed through an incentive-based program similar to the Economic Vitality Incentive Program established in fiscal year 2012 for cities, villages, and townships and eliminated in fiscal year 2015. The County Incentive Program (“CIP”) is continued in fiscal year 2015 with an increased appropriation of $65.4 million over fiscal year 2014 amounts. The CIP provides eligible counties distributions for complying with “best practices” such as increasing transparency and consolidating services. Eligible counties are those that would be eligible to resume receiving state revenue sharing payments under Act 357. Under the fiscal year 2015 CIP, an eligible county can receive (i) one-third of the money it is eligible for if it meets requirements for accountability and transparency, including making a citizen’s guide to its finances, a performance dashboard and a debt service report available for public viewing; (ii) another one-third if it develops plans to increase its existing level of collaboration and consolidation, both internally and with neighboring jurisdictions; and (iii) a final third if it develops and certifies an unfunded accrued liability plan. Under the fiscal year 2015 budget, a county may establish a set of best practice standards with respect to budget reserves, pension plans, other post-employment benefits, and bond or credit rating as an alternative to meeting the CIP requirements. Any portion of the CIP that the County would be eligible to receive would be subject to certain benchmarks that the County would need to meet, and there can be no assurance of what amount, if any, the County would receive under CIP or through the alternative establishment of best practice standards. The County anticipates meeting the requirement for clauses (i), (ii), and (iii) to receive fiscal year 2015 payments.

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Purchasers of the Notes should be alerted to further modifications to revenue sharing payments to Michigan local governmental units, to potential consequent impact on the County’s general fund condition, and to the potential impact upon the market price or marketability of the Notes resulting from changes in revenues received by the County from the State.

The following table sets forth the amounts drawn from the County’s reserve fund in lieu of annual revenue

sharing payments from the State for the County’s fiscal years ended December 31, 2009 through December 31, 2014, and the amount of revenue sharing payments from the State for the fiscal years ended December 31, 2013, 2014 and 2015.

County of Livingston Fiscal Year Ended

December 31st

Amounts Drawn From County Reserve Fund1

Revenue Sharing Payments from

the State 2015 $02 $3,103,7142 2014 0 2,297,584 2013 1,429,811 2,463,336 2012 3,078,725 - 0 - 2011 2,997,785 - 0 - 2010 2,947,675 - 0 - 2009 2,905,570 - 0 -

1Amounts do not include state gas and weight tax distributions. 2Preliminary, unaudited. Source: Department of Treasury via website at www.michigan.gov/treasury and Audited Financial Statements

LABOR FORCE

A breakdown of the number of employees of the County and their affiliation with organized groups follows:

No. of Exp. Date

Employee Group Employees1 Affiliation of Contract Sheriff's Dept. - Sergeants 16 MAP 12/31/16 Sheriff's Dept. - Correction/Detectives/Deputies 98 LCDSA 12/31/16 Sheriff's Dept. - Lieutenant 6 MAP 12/31/16 Court 67 MAPE 12/31/16 Ambulance 68 MAFF 12/31/152 911 - Dispatchers/Call Takers/Shift Leaders 29 MAPE 12/31/16 Other 296 Non-Affiliated N/A

TOTAL 580

1Totals are for full-time authorized positions only and do not include 70 part-time employees. 2In negotiations.

Source: County of Livingston

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PENSION FUND

The County participates in the Michigan Public Employees Retirement Fund (MERS), which is administered by the State of Michigan.

During 2003, through collective bargaining, two employee groups (ambulance services and 911) opted to

institute a defined contribution plan administered by MERS. Existing employees were given the choice to stay in the defined benefit plan or move to the defined contribution plan. Effective in 2003, all new hires are automatically eligible for participation in the defined contribution plan.

During the year ended December 31, 2009, the County started a new hybrid pension plan for nonunion

employees hired after August 1, 2009 and court employees hired after January 1, 2011. Existing nonunion employees were given the option to remain in the defined benefit plan or to move into the hybrid plan effective February 1, 2010. The hybrid plan consists of a defined benefit component and a defined contribution component. Under the defined benefit component, the multiplier is 1.25 percent and there is a six-year vesting requirement. For existing employees who transferred into the hybrid plan, their prior years of eligible service were transferred from the defined benefit plan to the hybrid plan. Under the defined contribution component, participants are required to contribute at least 1 percent, but no more than 3 percent, of eligible wages to the plan. The County will match dollar-for-dollar all participant contributions of 2 percent or 3 percent. The County does not match any participant contributions below 2 percent. Participants are 100 percent vested in the employer match upon participation in the plan. For all employees participating in the hybrid plan, the County contributed $214,582 during the year ended December 31, 2014.

Nonunion employees who did not opt out of the defined benefit plan began contributing 5 percent of MERS

eligible compensation to the costs of the plan on January 1, 2010.

During the plan year ended, December 31, 2012, all bargaining units who participate in the defined benefit plans contribute 5 percent of MERS eligible compensation to the costs of the plan. In addition, newly hired employees have a lower retirement benefit than longer-term employees. For most bargaining units, newly hired employees have a multiplier of 2 percent compared to 2.25 percent of final average compensation for the existing employees of these bargaining units.

The County’s annual pension contributions for the past five fiscal years and a 2015 estimate are shown

below. In an effort to increase the funding level and reduce the County’s unfunded pension liability, the County made an additional $2 million contribution above the annual required contribution of $3,358,166 in 2014 for a total contribution of $5,358,166.

Fiscal Year Ended Employer

December 31st Contributions 2015 $4,804,357* 2014 5,358,166 2013 4,120,022 2012 3,882,020 2011 4,676,092 2010 3,630,017

*Estimated.

The following is a history of the County’s schedule of funding progress:

Valuation Date December 31 2014 2013 2012

Actuarial Value of Assets $90,491,111 $84,685,040 $79,875,603 Actuarial Accrued Liability (AAL) $121,303,876 $114,208,101 $108,155,474 Unfunded AAL (UAAL) $30,812,765 $29,523,061 $28,279,871 Funded Ratio 75% 74% 74% Covered Payroll $24,373,699 $23,254,390 $22,213,767 UAAL as a % of Covered Payroll 126% 127% 127%

Source: Livingston County and Audited Financial Statements

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MERS has informed the County that, beginning with the December 31, 2015 actuarial report, key assumptions in determining the County’s actuarial accrued liabilities which change, including:

• Fixed amortization policies • Decreased price inflation, wage inflation, and discount rate • A 7.75% assume investment rate of return (versus the previous rate of 8%) • A 5 year smoothing (versus the previous 10 year smoothing period) • The inclusion of a 0.25% administrative expense

For further details on the revised MERS assumptions, please see: http://www.mersofmich.com/Employer/Work-Scenarios/Unfunded-

Liability

OTHER POST-EMPLOYMENT BENEFITS

In addition to providing pension benefits, the County currently provides additional post employment health benefits to eligible participants and their beneficiaries. As of December 31, 2013, the plan had 274 members, including employees in active service, retired employees not yet receiving benefits, and retired employees and their spouses or beneficiaries currently receiving benefits. An employee is eligible to participate if they are a permanent employee and provided eligibility under County policy or an applicable collective bargaining agreement. The County maintains two plans, as follows:

1.) County of Livingston Retiree Health Care Plan (a defined benefit plan) for eligible employees hired on or before March 17, 2003

who have elected to remain in this program. Under this plan, the Retiree Health Care Trust Fund pays the monthly premiums for eligible participants, subject to the retirees paying for a share of the cost, depending on their status and/or years of service. The County pays to the Trust Fund based on an actuary for the Trust.

The following table reflects the calculated annual required contribution (ARC) versus the actual retiree healthcare contribution by Livingston County:

Year

Calculated ARC Actual

Contribution

Approximate Retiree Claims Paid

Projected Trust Fund Balance

2014 $1,465,222 $1,012,605 $18.20 million

2013 $791,944 $811,422 $17.26 million

2012 $760,737 $654,167 $13.96 million

2011 $1,530,000 $348,620 $896,158 $12.49 million

2010 $1,460,000 $1,461,736 $781,542 $12.71 million

2.) County of Livingston Retiree Health Savings Plan (defined contribution) for eligible employees hired after March 17, 2003, and/or participants of the Retiree Health Care Plan that made a voluntary irrevocable “opt- out” of the Retiree Health Care Plan and elected participation in this new program. The County funds this plan 100%, within a limit, ranging from $591 per year to $1,773, depending on the years of service with the County.

The County’s annual contributions to its postemployment healthcare over the past five years and the estimated contribution for

2015 are shown below:

Fiscal Year EndedDecember 31, County Contribution

2015 $0*2014 $530,4422013 $443,9132012 $479,3212011 $471,4392010 $405,957

*Estimated.

The Governmental Accounting Standards Board release of Statement Number 45 requires the County to recognize the cost of retiree health care over the working life of the employee, rather than at the time the health care premiums are paid. The pronouncement is effective beginning with the fiscal year ended December 31, 2008.

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Updates

During 2011, Livingston County negotiated changes to the Retiree Health Plan for all the Sheriff employee groups. They were offered a one-time irrevocable option to move from the Defined Benefit Plan to the Retiree Health Savings Plan. 37 employees elected to opt-out out of the Defined Benefit Plan. Additionally, all new hires go directly into the Retiree Health Savings Plan. This revision in retiree health plan funding reduced the annual required contribution from $2.3 million at its high to $775,272, and reduced the County’s unfunded liability from approximately $21.5 million to $3.2 million.

GENERAL FUND – FUND BALANCE

The County’s General Fund fund balance for the last five years has been as follows:

Fiscal Year Ended, December 31st

Fund Balance

2014 $24,502,986 2013 24,784,248 2012 23,528,416

2011 23,235,865

2010 22,220,705

Source: Audited Financial Statements

DEBT STATEMENT - (As of 03/02/16 – including Bonds described herein)

Self-Supporting or Portion Paid

Directly by Benefited DIRECT DEBT GROSS Municipalities NET

General Obligation Limited Tax Notes* $800,000 $800,000 $0 Special Assessment Bonds (LTGO) 825,000 825,000 0 Water, Sewer and Wastewater Bonds (LTGO) 37,035,000 37,035,000 0 Drain Bonds (LTGO) 3,304,526 3,175,026 129,500 Capital Improvement Bonds 23,330,000 0 23,330,000

TOTAL DIRECT DEBT $65,294,526 $44,135,026 $23,459,500

Less: Prior Bonds Being Refunded By Refunding Bonds (11,575,000) (11,575,000) Plus: Refunding Bonds 11,430,000 11,430,000

NET DIRECT DEBT $65,149,526 $41,690,026 $23,459,500

OVERLAPPING DEBT Cities $17,685,000 Townships 126,598,205 Villages 6,785,000 School Districts 666,085,470 Intermediate School Districts 3,806,484 Community Colleges 2,530,206 Libraries 5,574,662

TOTAL OVERLAPPING DEBT $829,065,027

NET DIRECT AND OVERLAPPING DEBT $852,524,527

*As of 02/05/16 Source: Municipal Advisory Council of Michigan

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DEBT RATIOS

Estimated County Population 186,809 2015 Taxable Value $8,053,582,840 2015 State Equalized Value (SEV) $9,284,997,469 2015 True Cash Value (TCV) $18,569,994,938

Per Capita 2015 Taxable Value $43,111.32 Per Capita 2015 State Equalized Value $49,703.16 Per Capita 2015 True Cash Value $99,406.32

Per Capita Net Direct Debt $125.58 Per Capita Net Direct and Overlapping Debt $4,563.62

Percent of Net Direct Debt of 2015 Taxable Value 0.2913% Percent of Net Direct and Overlapping Debt of 2015 Taxable Value 10.5857%

Percent of Net Direct Debt of 2015 SEV 0.2527% Percent of Net Direct and Overlapping Debt of 2015 SEV 9.1817%

Percent of Net Direct Debt of 2015 TCV 0.1263% Percent of Net Direct and Overlapping Debt of 2015 TCV 4.5909%

LEGAL DEBT MARGIN - (As of 03/02/16 – including Bonds described herein)

2015 State Equalized Value (SEV) $9,284,997,469 Legal Debt Limit - 10% of SEV $928,499,747

Total Bonded Debt Outstanding $65,149,526

LEGAL DEBT MARGIN AVAILABLE $863,350,221

DEBT HISTORY

The County has no record of default on its obligations.

FUTURE FINANCING

The County does not have plans for additional capital financings in the next 18 months

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SCHEDULE OF LONG-TERM BOND MATURITIES - (As of 03/02/16 – including Bonds described herein)

Water and Special Capital

Drain Sewer Assessment Improvement Percent Year Bonds Bonds Bonds Bonds TOTAL Repaid 2016 $479,526 $4,265,000 $75,000 $1,255,000 $6,074,526 2017 195,000 3,745,000 75,000 1,300,000 5,315,000 2018 195,000 3,705,000 75,000 1,335,000 5,310,000 2019 195,000 4,430,000 75,000 1,385,000 6,085,000 2020 195,000 4,425,000 75,000 1,425,000 6,120,000 45% 2021 190,000 2,670,000 75,000 1,470,000 4,405,000 2022 195,000 2,650,000 75,000 1,520,000 4,440,000 2023 200,000 2,405,000 75,000 1,580,000 4,260,000 2024 195,000 1,920,000 75,000 1,625,000 3,815,000 2025 115,000 1,905,000 75,000 1,680,000 3,775,000 77% 2026 115,000 1,290,000 75,000 1,735,000 3,215,000 2027 115,000 1,045,000 0 1,790,000 2,950,000 2028 115,000 1,045,000 0 1,860,000 3,020,000 2029 115,000 695,000 0 1,690,000 2,500,000 2030 115,000 695,000 0 540,000 1,350,000 97% 2031 115,000 0 0 560,000 675,000 2032 115,000 0 0 580,000 695,000 2033 115,000 0 0 0 115,000 2034 115,000 0 0 0 115,000 2035 115,000 0 0 0 115,000 100%

Total $3,304,526 $36,890,000 $825,000 $23,330,000 $64,349,526

HOUSING

New Units 2015 2014 2013 2012 2011 Single Family 198 530 609 304 164 Two Family 0 0 0 0 0 Attach Condo 22 94 36 17 8 Multi-Family 36 145 47 48 0 Total New 256 769 692 369 172 Less Demolished Units (7) (28) (23) (9) (11)

Net Total 249 741 669 360 161

Source: SEMCOG via website www.semcog.org

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LARGEST EMPLOYERS

Listed below are the largest employers that are located within the County of Livingston that include 400 or more employees:

Company Product or Service Approx. # of Employees

Largest Employers within Livingston County General Motors Automotive 2,500 Magna International of America Motor Vehicle Supplies &New Parts 676 Citizens Insurance Co. of America Insurance Company 675 Livingston County Government 6561 Brighton School District Education 600 State of Michigan Government 596 Howell Public School District Education 534 CHE Trinity Health Health Care 527 Livingston Educational Service Agency Education 520 Hartland Consolidated Schools Education 466 Pinckney Community Schools Education 423

1Includes 130 part-time employees. Source: Crain’s Detroit Business 2015 Book of Lists, Manta Intelligence Company (www.manta.com) and the County of Livingston

EMPLOYMENT BREAKDOWN

The U.S. Census Bureau, 2010-2014 American Community Survey reports the occupational breakdown of

persons 16 years and over for the County of Livingston is as follows:

County of Livingston Number Percent

PERSONS BY OCCUPATION 89,806 100.00% Management, Business, Science, & Arts 34,436 38.34 Service 13,553 15.09 Sales & Office 22,870 25.47 Natural Resources, Construction & Maintenance 8,342 9.29 Production, Transportation & Material Moving 10,605 11.81

A-15

The U.S. Census Bureau, 2010-2014 American Community Survey reports the breakdown by industry for persons 16 years and over in the County of Livingston is as follows:

County of Livingston

Number Percent PERSONS BY INDUSTRY 89,806 100.00% Agriculture, Forestry, Fishing, Hunting & Mining 779 0.87 Construction 6,359 7.08 Manufacturing 16,164 18.00 Wholesale Trade 2,755 3.07 Retail Trade 11,025 12.28 Transportation, Warehousing & Utilities 3,091 3.44 Information 1,554 1.73 Finance, Insurance, Real Estate, & Rental and Leasing 5,752 6.40 Professional, Scientific, Management, Administrative & Waste Management 9,023 10.05 Educational, Health & Social Services 19,268 21.45 Arts, Entertainment, Recreation, Accommodation & Food Services 7,220 8.04 Other Professional & Related Services (Except Public Administration) 4,112 4.58 Public Administration 2,704 3.01

UNEMPLOYMENT RATES

The U.S. Department of Labor, Bureau of Labor Statistics, reports unemployment averages for the County of Livingston as compared to the State of Michigan are as follows:

Annual County of State of Average Livingston Michigan

December, 2015 4.2% 4.5% 2014 6.7 7.3 2013 7.8 8.9 2012 8.0 9.1 2011 9.0 10.4 2010 11.2 12.6

POPULATION BY AGE

The 2010 U.S. Census estimate of population by age for the County of Livingston is as follows:

County of Livingston Number Percent

Total Population 180,967 100.00% 0 through 19 years 50,572 27.95% 20 through 64 years 108,751 60.09% 65 years and over 21,644 11.96%

Median Age 40.9 years

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INCOME

The U.S. Census Bureau, 2010-2014 American Community Survey estimate of household income for the County of Livingston is as follows:

County of Livingston

Number Percent HOUSEHOLDS BY INCOME 68,279 100.00% Less than $10,000 2,240 3.28 $10,000 to $14,999 1,624 2.38 $15,000 to $24,999 4,641 6.80 $25,000 to $34,999 5,024 7.36 $35,000 to $49,999 8,407 12.31 $50,000 to $74,999 13,007 19.05 $75,000 to $99,999 11,248 16.47 $100,000 to $149,999 13,383 19.60 $150,000 to $199,999 5,258 7.70 $200,000 or MORE 3,447 5.05

Median Income $73,694

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APPENDIX B

COUNTY OF LIVINGSTON GENERAL FUND BUDGET SUMMARIES AND COMPARATIVE

FINANCIAL STATEMENTS

County of Livingston General Fund Budget

As Amended As Adopted 2015 2016

Revenue: Taxes $26,933,888 $26,945,000 License & Permits 351,517 405,600 Federal Grants 24,500 20,000 State Sources 5,832,768 5,217,676 Contributions from Local Units 28,100 29,043 Charges for Services 5,331,736 5,807,029 Fines & Forfeitures 327,000 330,000 Interest & Rents 1,058,571 1,573,780 Other Revenue 2,493,367 2,659,101 Operating Transfers In 448,219 445,325

Total Revenue $42,829,666 $43,432,554

Expenditures: Court System $11,828,798 $12,291,924 Sheriff Department 18,168,336 16,469,414 Other Public Safety 47,269 162,535 Infrastructure and Development 3,823,457 3,475,624 Health and Human Services 2,418,400 2,393,885 General Government 8,793,406 9,080,159

Total Expenditures $45,079,666 $43,873,541

Excess of Expenditures (over) under Revenues ($2,250,000) ($440,987)

Estimated Beginning Fund Balance $24,502,986 $22,252,986

Projected Fund Balance Ending $22,252,986 $21,811,999

NOTE: The 2015 General Fund Adopted Budget included a $2.25 million transfer to the Jail Renovation Construction Fund. Approximately $1.28 million of the Jail Renovation transfer was not incurred in 2015. The 2016 budget will be amended to reflect the transfer occurring in 2016.

B-2

County of Livingston General Fund

Comparative Balance Sheet

For Fiscal Years Ended December 31

2012 2013 2014

Assets: Cash & Investments $23,019,337 $24,365,826 $23,797,599 Receivables:

Taxes 1,464,033 1,147,179 1,103,681 Accounts 130,576 94,317 145,370 Accrued Interest Receivable 15,917 8,128 33,147 Due from Other Governmental Units 566,289 1,022,536 3,043,454

Due from Other Funds 30,000 Advance to Component Unit 36,133 12,978 Prepaid Costs & Other Assets 539,260 295,133 327,662 Advances to Other Fund 167,340 195,091 166,231

Total Assets $25,968,885 $27,141,188 $28,617,144

Liabilities: Accounts Payable $764,569 $736,385 $774,825 Due to Other Governmental Units 182,507 2,891 6,495 Accrued & Other Liabilities 544,150 690,075 791,365 Deferred Revenue 949,243

Total Liabilities $2,440,469 $1,429,351 $1,572,685

Deferred Inflows of Resources Unavailable Revenue $927,589 $2,541,473

Total Deferred Inflows of Resources $0 $927,589 $2,541,473

Fund Balance: Nonspendable $742,733 $503,202 $493,893 Committed 2,324,375 Assigned 15,000,000 15,000,000 15,000,000 Unassigned 7,785,683 9,281,046 6,684,718

Total Fund Balance $23,528,416 $24,784,248 $24,502,986

Total Liabilities and Fund Balance $25,968,885 $27,141,188 $28,617,144


B-3

County of Livingston General Fund

Comparative Statement of Revenues, Expenditures and Changes in Fund Balance

For Fiscal Years Ended December 31 2012 2013 2014

Revenue: Taxes $24,805,729 $25,289,472 $26,001,750 Licenses & Permits 290,599 365,489 444,402 Federal Sources 30,743 34,644 42,210 State Sources 2,066,131 4,522,056 5,184,564 Charges for Services 8,193,048 7,780,009 5,871,487 Fines & Forfeits 425,422 376,283 317,959 Interest & Rental Income 68,837 57,191 373,780 Other Revenue 1,011,856 939,871 828,660

Total Revenue $36,892,365 $39,365,015 $39,064,812

Expenditures: General Government $5,725,597 $8,754,383 $8,822,463 Court Systems 9,810,366 9,204,648 9,561,209 Public Safety 14,306,833 13,834,829 15,190,060 Health & Welfare 2,151,663 1,542,355 1,636,980 Community & Economic Development 4,471,356 2,725,091 2,913,040

Total Expenditures $36,465,815 $36,061,306 $38,123,752

Excess of Revenue Over (Under) Expenditures $426,550 $3,303,709 $941,060

Other Financing Sources (Uses): Operating Transfers In $3,438,331 $1,448,080 $2,077,449 Operating Transfers Out (3,572,330) (3,495,957) (3,299,771)

Total Other Financing Sources (Uses): ($133,999) ($2,047,877) ($1,222,322)

Excess of Revenue & Other Sources Over (Under) Expenditures & Other Uses $292,551 $1,255,832 ($281,262)

Fund Balance - Beginning $23,235,865 $23,528,416 $24,784,248

Fund Balance - Ending $23,528,416 $24,784,248 $24,502,986


[THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX C


AUDITED FINANCIAL STATEMENTS

The auditor has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Notes and accordingly will not express any opinion with respect to the accuracy or completeness of such financial documents, statements or materials.


Independent Auditor's Report

To the County Board of Commissioners Livingston County, Michigan

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-typeactivities, the aggregate discretely presented component units, each major fund, and the aggregateremaining fund information of Livingston County, Michigan (the "County") as of and for the year endedDecember 31, 2014 and the related notes to the financial statements, which collectively compriseLivingston County, Michigan'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 inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did notaudit the financial statements of Livingston County Road Commission, which represents 59 percent, 72percent, and 80 percent of the assets, net position, and revenues of discretely presented componentunits, respectively. Those financial statements were audited by other auditors, whose report has beenfurnished to us, and our opinion, insofar as it relates to the amounts included for Livingston County RoadCommission, is based solely on the report of the other auditors. We conducted our audit in accordancewith auditing standards generally accepted in the United States of America and the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller General of theUnited States. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement. Livingston CountyRoad Commission was not audited under Government Auditing Standards.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade 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 forour audit opinions.

1


Opinions

In our opinion, based on our audit and the report of other auditors, the financial statements referred toabove present fairly, in all material respects, the respective financial position of the governmentalactivities, the business-type activities, the aggregate discretely presented component units, each majorfund, and the aggregate remaining fund information of Livingston County, Michigan as of December 31,2014 and the respective changes in its financial position and cash flows for the year then ended, inaccordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 2 to the basic financial statements, the 2014 basic financial statements have beenrestated to show a change in reporting entity. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplemental Information

Accounting principles generally accepted in the United States of America require that the management'sdiscussion and analysis, pension and OPEB systems schedules of funding progress and employercontributions, and the major fund budgetary comparison schedules be presented to supplement the basicfinancial statements. Such information, although not a part of the basic financial statements, is required bythe Governmental Accounting Standards Board, which considers it to be an essential part of financialreporting for placing the basic financial statements in an appropriate operational, economic, or historicalcontext. We have applied certain limited procedures to the required supplemental information inaccordance with auditing standards generally accepted in the United States of America, which consistedof inquiries of management about the methods of preparing the information and comparing theinformation 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 expressan opinion or provide any assurance on the information because the limited procedures do not provide uswith sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise Livingston County, Michigan's basic financial statements. The other supplemental information,as identified in the table of contents, and Livingston Essential Transportation System schedules arepresented for the purpose of additional analysis and are not a required part of the basic financialstatements.

The other supplemental information, as identified in the table of contents, is the responsibility ofmanagement and was derived from and relates directly to the underlying accounting and other recordsused to prepare the basic financial statements. Such information has been subjected to the auditingprocedures 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 otherrecords used to prepare the basic financial statements or to the basic financial statements themselves, andother additional procedures in accordance with auditing standards generally accepted in the United Statesof America. In our opinion, the other supplemental information, as identified in the table of contents, isfairly stated in all material respects in relation to the basic financial statements as a whole.

2

C-1


The Livingston Essential Transportation System schedules have not been subjected to the auditingprocedures applied in the audit of the basic financial statements and, accordingly, we do not express anopinion 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 19, 2015 onour consideration of Livingston County, Michigan's internal control over financial reporting and on ourtests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and othermatters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering Livingston County, Michigan'sinternal control over financial reporting and compliance.

June 19, 2015

3

Livingston County, Michigan

Management’s Discussion and Analysis

4

Our discussion and analysis of Livingston County, Michigan’s (the “County”) financial performance provides an overview of the financial activities for the fiscal year ended December 31, 2014. This should be read in conjunction with the County’s financial statements.

Financial Highlights

The following represents the most significant financial highlights for the year ended December 31, 2014:

� The County’s primary source of General Fund revenue is property taxes, representing 63.2 percent of total revenue. The percentage increase in property tax revenue for Livingston County 7-10 years ago was impressive: 12.5 percent in 2005, 9.7 percent in 2006, and 4.2 percent in 2007. The growth trend was not sustainable long term and Livingston County saw a decrease in General Fund tax revenue for five consecutive years at a cumulative loss of approximately $11.5 million. In 2013, the County finally began to see signs of recovery, which was reflected in a 1.95 percent increase in tax revenue over 2012 and then again in 2014 with an increase of 2.8 percent realized over 2013. Property tax revenue is expected to continue at a slightly higher rate in 2015.

� The County faces several challenges from amendments to the Property Tax Act. Public Act 356 imposed a mandatory and permanent shift from a December to a July tax levy. This legislation creates a major challenge for counties like ours with calendar fiscal years because our largest revenue source is billed six months after the beginning of annual operations and collected nine months into the fiscal year. This created cash flow concerns and the potential risk of having to incur costs to borrow money to sustain operations during the first nine months of the year. To avoid this, the County has assigned $15 million of fund balance to cover operating requirements. Also challenging is Proposal A, which limits the increase of taxable value to the rate of inflation, or 5 percent, whichever is lowest for individual properties. The Headlee rollback limits the millage rate to the annual rate of inflation. Recovery from the recent recession and decline in property tax revenue will be slow because of the Proposal A and Headlee property tax amendments.

� Over the past few years, Livingston County has aggressively and successfully reduced the cost of providing services to our residents and preserving Livingston County’s future financial capacity. This has been accomplished with reductions in personnel costs through attrition, departmental restructuring, and redesigning personnel wage and benefit packages with a focus on reducing high legacy costs. Departments do a commendable job monitoring expenses to stay within budget, utilizing County purchasing services, complying with the purchasing policy, and competitively bid supplies and services. However, in 2014 the County did have some large one-time expenditures, which required the use of fund balance. These expenditures include building improvements to the animal shelter and jail intake areas, equipment for the sheriff department road patrol, and software and implementation costs for the work order and inventory modules for the County’s new integrated financial system. The combination of these efforts resulted in the use of $281,262 to the General Fund’s fund balance in 2014.

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Management’s Discussion and Analysis (Continued)

5

Using this Annual Report

This annual report consists of a series of financial statements. The statement of net position and the statement of activities provide information about the activities of the County as a whole and present a longer-term view of the County’s finances. This longer-term view uses the accrual basis of accounting so that it can measure the cost of providing services during the current year and whether taxpayers have funded the full cost of providing government services. The activities are divided between governmental and business-type. Governmental activities include the General Fund, special revenue funds, debt service fund, capital projects fund, and internal service funds. Business-type activities include the Building and Safety Fund, Airport Fund, Delinquent Tax Revolving Fund, Livingston Essential Transportation Service Fund, and the Septage Receiving Station Fund.

The fund financial statements present a short-term view; they tell us how taxpayers’ resources were spent during the year, as well as how much is available for future spending. Fund financial statements also report the County’s operations in more detail than the government-wide financial statements by providing information about the County’s most significant funds. The fiduciary fund statements provide financial information about activities for which the County acts solely as a trustee or agent for the benefit of those outside of the government.

The County as a Whole

The following table shows a condensed format of the net position (in thousands of dollars) for the fiscal years ended December 31, 2014 and 2013:

Governmental Activities Business-type Activities Total

2014 2013 2014 2013 2014 2013(As restated)

AssetsCurrent assets 88,487$ 71,665$ 51,511$ 50,762$ 139,998$ 122,427$ Capital assets 63,571 62,855 36,848 37,155 100,419 100,010

Total assets 152,058 134,520 88,359 87,917 240,417 222,437

Deferred Outflows of Resources -Deferred charge on refunding - - 88 94 88 94

LiabilitiesCurrent liabilities 10,003 9,282 4,269 4,578 14,272 13,860 Long-term liabilities 23,552 11,173 2,416 2,455 25,968 13,628

Total liabilities 33,555 20,455 6,685 7,033 40,240 27,488

Deferred Inflows of Resources -Property taxes levied for the following year 2,662 2,599 - - 2,662 2,599

Net PositionNet investment in capital assets 52,025 51,800 34,394 34,458 86,419 86,258 Restricted 24,210 11,151 5,545 4,097 29,755 15,248 Unrestricted 39,606 48,515 41,823 42,423 81,429 90,938

Total net position 115,841$ 111,466$ 81,762$ 80,978$ 197,603$ 192,444$



6

The County’s combined net position for both governmental and business-type activities totals $197.6 million for fiscal year 2014 as compared to $192.4 million for fiscal year 2013. This is an increase of $5.2 million or 2.7 percent from 2013 to 2014. The increase in the total net position is attributed mainly to an increase in assets relating to the bond proceeds received for the construction of the new jail. Net position is further segregated between the restricted and unrestricted net position. The restricted net position is comprised of assets that are restricted for a specific purpose/use and invested in capital assets. Unrestricted net position is that net position that can be used to finance day-to-day operations.

The following table shows the changes in net position during the years ended December 31, 2014 and 2013 (in thousands of dollars):

Governmental Activities Business-type Activities Total

2014 2013 2014 2013 2014 2013

RevenueProgram revenue:

Charges for services 19,696$ 20,091$ 10,321$ 8,094$ 30,017$ 28,185$ Operating grants and contributions 12,596 9,746 1,874 2,104 14,470 11,850 Capital grants and contributions 158 218 668 747 826 965

General revenue:Property taxes 28,540 27,775 - - 28,540 27,775 State alcohol and convention tax 1,743 1,488 - - 1,743 1,488 State-shared revenue 2,298 2,463 - - 2,298 2,463 Unrestricted investment income 232 172 108 127 340 299 Transfers and other revenue 3,326 1,110 (2,987) (894) 339 216

Total revenue 68,589 63,063 9,984 10,178 78,573 73,241

Program ExpensesGeneral government 6,591 8,859 - - 6,591 8,859 Public safety 35,321 33,468 - - 35,321 33,468 Health and welfare 18,309 16,029 - - 18,309 16,029 Community and economic

development 3,562 2,917 - - 3,562 2,917 Interest on long-term debt 431 342 - - 431 342 Building and safety - - 1,832 1,473 1,832 1,473 Airport - - 1,748 1,634 1,748 1,634 Livingston Essential Transportation

Services - - 3,006 2,904 3,006 2,904 Septage receiving station - - 1,232 1,084 1,232 1,084 Delinquent tax revolving funds - - 1,382 347 1,382 347

Total program expenses 64,214 61,615 9,200 7,442 73,414 69,057

Change in Net Position 4,375$ 1,448$ 784$ 2,736$ 5,159$ 4,184$

C-3



7

Governmental Activities

Governmental activities are those activities (such as public safety, health and human services, and general governmental services) provided to the constituents of the County and supported by financing from property taxes and state-shared revenue, and charges for service.

The County expenses increased from 2013 to 2014. The cost of providing services for governmental activities was $64.2 million for fiscal year 2014, which includes the General Fund, special revenue fund, and internal service fund departments. This is a 4.2 percent increase, or $2.6 million more than the cost of providing services in 2013. The increase in the cost of providing services can be attributed mainly to the continued implementation of the new Enterprise Resource Planning system, wage and associated benefit increases resulting from a cost of living increase provided to all employee groups. Tiered salaries, additional funding, and restructuring of benefit packages have reduced long-term legacy costs.

The County’s total revenue generated from governmental activities increased by 8.8 percent, or $5.5 million, from 2013 to 2014. This is a result of the increase in operating grants and contributions, property taxes, state alcohol and convention tax, and transfers in for additional payments for pension.

Business-type Activities

Business-type activities are those activities that are financed primarily by charges for services or user fees. The County’s business-type activities consist of the Airport, Building and Safety Department, Livingston Essential Transportation, Septage Receiving Station, and Tax Delinquent Revolving Funds, the types of operations most similar to private businesses. A comparative analysis between fiscal years 2013 and 2014 shows that the cost of providing services for all business-type activities overall resulted in an increase of 23.6 percent. There were increases in costs to all business-type activities resulting from the increasing demand for services. The largest increase, however, was in the Delinquent Tax Revolving Funds activity, which increased significantly (more than $1.03 million) from 2013.

The Funds

Our analysis of the County’s major funds begins on page 15, following the government-wide financial statements. The fund financial statements provide detailed information about the most significant funds, not the County as a whole. This includes the General Fund, EMS Fund, and the Jail Expansion Construction Fund. The other nonmajor governmental funds are consolidated and reported under the column with that heading. The County board creates funds to help manage money for specific purposes, as well as to show accountability for certain activities, such as special property tax millages, 911 surcharge, and restricted revenue from grants or fees.



8

The General Fund finances the majority of the County’s governmental services and pays for services of the elected officials’ offices. The General Fund is the major operational expenditure and revenue fund of the County and accounts for the financial resources that are not recorded in other funds. Ordinary operations of the County such as public safety, county administration, county clerk, treasurer, register of deeds, drain commission, and other activities financed from taxes and general revenue are reflected in this fund. The most significant are those pertaining to public safety and include the sheriff departments, prosecuting attorney, and the court system. The General Fund incurred expenditures of $38.1 million in 2014, and an additional $3.3 million was transferred to other funds to subsidize operations. This was a 4.7 percent increase from providing services in 2013. General Fund revenue including transfers in from other funds was $629,369 more in 2014 mainly attributed to property tax revenue. Livingston County came back into the state-shared revenue formula in 2013. The County used fund balance in the General Fund for one-time expenses of just over $281,000 in 2014.

The EMS Fund provides emergency medical response and is financed by a special tax levy (24.3 percent of total revenue), charges for services (70.3 percent of total revenue), and other sources (less than 5.4 percent of total revenue). The cost of providing this service for 2014 was $8.7 million. Fund balance in the EMS Fund decreased by $88,781 from 2013. The EMS fund balance will be used in future years to meet the continual increase in demand for services and improved service response time.

The Jail Expansion Construction Fund was set up to record the construction and furnishing of a new addition to the Livingston County Jail. The new jail will add 157 additional beds to the existing jail. Capital outlay for the construction of the new expansion in 2014 was approximately $1.5 million. The total cost of the jail expansion and renovation is estimated at $16.4 million. The construction of the new addition is expected to be completed in late 2015.

Budgetary Highlights

Over the course of the year, the County board amended the budget to take into account events during the year. The following provides specific details regarding the amendments:

� Projected revenue and expenditures were adjusted to reflect actual receipts and/or spending.

� Recognition of increases/decreases in grant revenue

� Board authorization of one-time payments including additional payments to accelerate funding of long-term pension obligations, purchase of additional modules for the County Enterprise Resource Planning (ERP) System, and building improvements to the County animal shelter and jail intake area.

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9

During the year, special revenue funds and enterprise funds budgets were amended as follows:

� Amendments for capital purchases

� Projected revenue and expenditures were adjusted to reflect actual receipts and/or spending.

� Recognition of increases/decreases in grant revenue

Capital Asset and Debt Administration

At the end of 2014, the County had $100.0 million invested in a broad array of capital assets, including buildings, land, emergency response equipment, vehicles, etc. These assets are necessary to carry out the day-to-day operations of the County.

The County continues to sustain its excellent bond ratings with Moody’s AAA rating, thereby managing interest payments and reducing costs for infrastructure improvements. This rating is an accomplishment and maintained by those entities with transparency, sound financial management, and healthy General Fund reserves. Additionally, the County is well within its legal debt limit of 10 percent of the state equalized valuation, utilizing less than 1.00 percent of that capacity. The majority of outstanding debt is for our component units: the drainage districts, the Department of Public Works, and the Road Commission. The County has pledged its full faith and credit to maintain low costs for these units.

Economic Factors and Next Year’s Budgets and Rates

Michigan’s economy continues to show signs of recovery; however, we must continue to proceed with conservative optimism and monitor closely how the national and world economy impacts Michigan residents. Challenges such as healthcare costs, state legislative changes, and unfunded mandates hinder our abilities to provide services. A major challenge is the expected slow recovery of property tax and investment revenues.

The loss in tax revenue that began in fiscal year 2008 and continued through fiscal year 2013 changed the way the County does business. Major structural changes were made and will continue to be looked at to ensure sustainability of our operations into the future. Economic indicators also reflect that the economy in Livingston County is improving. Foreclosures have declined substantially from the high of 1,309 properties foreclosed on in 2010 to 261 properties in 2014. Permits for construction have also notably increased in our building, health, and drain departments. The most significant increase in 2014 was the building permits at 2,935 permits, which exceeds our high of 2,194 permits issued in 2006. The County treasurer is reporting an increase of 76 percent in the number of parcels going to tax sale. It is important to note that 70 percent of the parcels going to tax sale this year were from a single property owner. Livingston County has the highest median incomes at $72,359 annually among the 83 counties in Michigan. The unemployment rate is one of the lowest in Michigan.



10

The County has plans for several major projects in 2015 including the continued expansion and renovation to the Livingston County Jail. The board authorized the issuance of approximately $14 million in Limited Tax General Obligation Capital Improvement bonds to fund the project.

The County continues to focus on meeting and collaborating with other local municipalities to find new partnership opportunities to share services. A few great examples of successful collaboration include contracting with the City of Brighton to share the building official, countywide broadband fiber network sharing, contracting with the City of Howell to provide custodial and preventative maintenance services, one countywide central 911 dispatch center, and the countywide use of OSSI public safety software which has all fire, emergency, and police agencies within the County utilizing the same records management system.

The County board continues to act tenaciously to monitor costs of providing quality services to Livingston County residents. However, with over 25 percent of the workforce eligible to retire within seven years, the County has begun to lift some of the requirements on the hiring freeze. The policy has been revised so that only those vacant positions, reclassifications, or reorganizations that were not included in the budget will have to go through the vacancy review process. Sharing of responsibilities/personnel by departments continues to be encouraged. The County offered the first wage increase in five years to its employees. Also, several major changes to reduce benefit costs over the past five years should be noted. The changes include the following:

� Pension

o A hybrid pension plan offering both a defined benefit and a defined contribution plan is now offered to all newly hired nonunion and court employees.

o Employees remaining in a defined benefit plan contribute 5 percent of pension eligible wages.

o Additional payments were made for the fourth consecutive year to reduce the unfunded liability of the employee groups in the defined benefit plan. Total additional payment made in 2014 was $2 million.

� Active healthcare

o The base healthcare plan offered to all employee groups has been reduced to a PP04 plan which offers 80/20 coverage.

o All full-time employees are responsible for 10 percent of the PP04 plan premium. Nonunion employees hired after June 31, 2009 pay 20 percent of the plan premium.

o As of September 1, 2014, all new full-time union employees are responsible for 20 percent of the plan premium.

o Effective January 1, 2010, all 30-34-hour nonunion employees are responsible for 25 percent of the premium.

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11

� Retiree healthcare

o Retiree healthcare defined benefit plans are now closed for all employee groups.

o Nonunion employees not eligible to retire were converted from a defined benefit plan to a Retiree Health Savings Plan and received a lump-sum deposit into a RHCS based on their years of service.

o In 2012, 2013, and 2014, sheriff union groups were offered a cash incentive to switch from a defined benefit plan to a defined contribution plan, of which 43 percent in these groups elected to switch.

o Effective June 30, 2012, all new full-time sheriff deputies and lieutenants will be enrolled in a defined contribution plan equal to 4 percent of base wages annually.

o The above revisions effectively closed the retiree healthcare defined benefit plan and reduced the unfunded liability for retiree healthcare from $21.5 million to $10.3 million based on the December 31, 2013 actuarial report.

The County closely monitors reserve balances, revenue, and expenditures. Historically, we have utilized a five-year financial forecasting model for early detection of bad revenue/expenditure policies and potential deficits. The last two years we have had our resources focused on the implementation of the ERP system. It is our plan to resume utilizing the five-year model in the upcoming budget year. It is projected that Livingston County’s tax revenue will show another increase of 2-3 percent in 2015. As previously stated, recovery will be slow because Proposal A limits the increase of taxable value to the rate of inflation, or 5 percent, whichever is lowest, and the Headlee rollback limits the millage rate to the annual rate of inflation. However, Livingston County must continue to proceed with caution when making decisions to ensure its history of sound financial performance.

Contacting the Administration

This financial report is intended to provide our citizens, taxpayers, customers, and investors with a general overview of the County’s finances and to show the County’s accountability for the money it receives. If you have questions about this report or need additional information, we welcome you to contact the County administrator’s office at (517) 546-3669.


Statement of Net PositionDecember 31, 2014

Primary Government

Governmental

Activities

Business-type

Activities Total Component Units

AssetsCash and investments (Note 3) $ 67,164,169 $ 35,662,670 $ 102,826,839 $ 10,147,936Receivables:

Taxes 3,765,771 11,297,378 15,063,149 -Accounts 3,212,355 73,352 3,285,707 -Accrued interest 50,800 15,708 66,508 3,549,010Due from other governmental units 4,992,210 588,691 5,580,901 713,122Delinquent taxes interest and fees - Net of allowance - 3,862,520 3,862,520 -Special assessment receivable - - - 2,895,378Leases - - - 42,760,440

Advances to component units (Note 5) - 44,839 44,839 -Internal balances 129,927 (129,927) - -Inventories 37,508 68,818 106,326 1,214,996Prepaid costs and other assets 882,772 1,612 884,384 317Restricted assets - Cash and investments - - - 334,568Net pension asset (Note 10) 7,921,387 - 7,921,387 -Net OPEB asset (Note 12) 330,249 24,532 354,781 15,307Capital assets (Note 4):

Assets not subject to depreciation 12,056,368 12,811,719 24,868,087 27,495,338Assets subject to depreciation 51,514,692 24,037,572 75,552,264 148,745,427

Total assets 152,058,208 88,359,484 240,417,692 237,871,839

Deferred Outflows of Resources -Deferred charge on refunding of debt - 87,568 87,568 537,846

LiabilitiesAccounts payable 2,902,955 495,817 3,398,772 674,481Due to other governmental units 187,486 741,545 929,031 181,008Advances from primary government (Note 5) - - - 44,839Deposits - 708,522 708,522 -Accrued and other liabilities 2,346,008 356,000 2,702,008 1,324,819Unearned revenue 911,876 5,417 917,293 -Net OPEB obligation (Note 13) - - - 2,045,096Long-term obligations (Note 6):

Due within one year 3,653,972 1,803,499 5,457,471 5,336,377Due in more than one year 23,552,308 2,415,517 25,967,825 41,523,154Other noncurrent liability - 159,003 159,003 -

Total liabilities 33,554,605 6,685,320 40,239,925 51,129,774

Deferred Inflows of Resources State revenue - - - 750,000Property taxes levied for the following year 2,662,091 - 2,662,091 -

Total deferred inflows of resources 2,662,091 - 2,662,091 750,000

Net PositionNet investment in capital assets 52,025,459 34,394,291 86,419,750 143,999,020Restricted for:

Health and welfare expense 3,001,710 - 3,001,710 -Public safety expense 6,852,427 - 6,852,427 -Community and economic development expense 1,470,908 - 1,470,908 -Unspent bond proceeds - Jail Expansion 12,670,727 - 12,670,727 -Restricted for debt service 213,977 - 213,977 -Building and safety programs - 5,544,899 5,544,899 -Foundation nonexpendable - - - 274,462County roads - - - 6,545,336Capital projects - - - 123,723

Unrestricted 39,606,304 41,822,542 81,428,846 35,587,370

Total net position $ 115,841,512 $ 81,761,732 $ 197,603,244 $ 186,529,911

The Notes to Financial Statements are anIntegral Part of this Statement. 12

C-6


Program Revenue

ExpensesCharges for

Services

Operating Grantsand

Contributions

Capital Grantsand

ContributionsFunctions/Programs

Primary government: Governmental activities:

General government $ 6,590,860 $ 259,058 $ - $ -Public safety 35,320,783 9,653,235 5,831,119 158,206Health and welfare 18,309,291 8,425,873 5,668,774 -Community and economic development 3,561,866 1,358,226 1,096,064 -Interest on long-term debt 431,202 - - -

Total governmental activities 64,214,002 19,696,392 12,595,957 158,206

Business-type activities:Airport Fund 1,748,817 1,295,187 - 361,504Delinquent Tax Revolving Fund 1,381,813 3,622,593 - -Septage receiving station 1,232,034 1,804,423 - -Livingston Essential Transportation

Service 3,005,946 325,415 1,874,024 306,053Building and Safety Fund 1,831,828 3,273,374 - -

Total business-type activities 9,200,438 10,320,992 1,874,024 667,557

Total primary government $ 73,414,440 $ 30,017,384 $ 14,469,981 $ 825,763

Component units:Drain Commission $ 3,182,544 $ 2,249,163 $ 967,149 $ -Department of Public Works 3,683,916 3,291,090 68,196 -Road Commission 19,380,903 - - 26,280,901Livingston County Foundation - 14,435 - -

Total component units $ 26,247,363 $ 5,554,688 $ 1,035,345 $ 26,280,901

General revenue:Property taxes State alcohol and convention tax State-shared revenue Unrestricted investment earnings Miscellaneous Gain on sale of fixed assets

Total general revenue

Transfers

Change in Net Position

Net Position - Beginning of year (as restated) (Note 2)

Net Position - End of year


Statement of ActivitiesYear Ended December 31, 2014

Net (Expense) Revenue and Changes in Net PositionPrimary Government

GovernmentalActivities

Business-typeActivities Total

ComponentUnits

$ (6,331,802) $ - $ (6,331,802) $ -(19,678,223) - (19,678,223) -

(4,214,644) - (4,214,644) -(1,107,576) - (1,107,576) -

(431,202) - (431,202) -

(31,763,447) - (31,763,447) -

- (92,126) (92,126) -- 2,240,780 2,240,780 -- 572,389 572,389 -

- (500,454) (500,454) -- 1,441,546 1,441,546 -

- 3,662,135 3,662,135 -

(31,763,447) 3,662,135 (28,101,312) -

- - - 33,768- - - (324,630)- - - 6,899,998- - - 14,435

- - - 6,623,571

28,540,324 - 28,540,324 -1,743,444 - 1,743,444 -2,297,584 - 2,297,584 -

231,865 107,913 339,778 (4,751)320,165 18,773 338,938 529,852

- - - 138,239

33,133,382 126,686 33,260,068 663,340

3,005,034 (3,005,034) - -

4,374,969 783,787 5,158,756 7,286,911

111,466,543 80,977,945 192,444,488 179,243,000

$ 115,841,512 $ 81,761,732 $ 197,603,244 $ 186,529,911

14

C-7


Governmental FundsBalance Sheet

December 31, 2014

General Fund EMS Fund Jail ExpansionNonmajor

Funds TotalAssets

Cash and investments (Note 3) $ 23,797,599 $ 1,910,942 $ 12,972,462 $ 21,075,965 $ 59,756,968Receivables:

Taxes 1,103,681 2,280,241 - 381,849 3,765,771Accounts 145,370 988,168 - 2,004,159 3,137,697Accrued interest receivable 33,147 10 9,925 7,718 50,800Due from other governmental units 3,043,454 - - 1,933,370 4,976,824

Advances to other funds (Note 5) 166,231 - - 11,635 177,866Prepaid costs and other assets 327,662 132,351 - 18,079 478,092

Total assets $ 28,617,144 $ 5,311,712 $ 12,982,387 $ 25,432,775 $ 72,344,018

LiabilitiesAccounts payable $ 774,825 $ 75,490 $ 292,490 $ 1,225,235 $ 2,368,040Due to other governmental units 6,495 - - 144,446 150,941Advances from other funds (Note 5) - - - 36,304 36,304Accrued and other liabilities 791,365 183,149 19,170 249,391 1,243,075Unearned revenue - - - 911,876 911,876

Total liabilities 1,572,685 258,639 311,660 2,567,252 4,710,236

Deferred Inflows of Resources Unavailable revenue 2,541,473 520,101 - 681,308 3,742,882Property taxes levied for the following

year - 2,280,242 - 381,849 2,662,091

Total deferred inflows ofresources 2,541,473 2,800,343 - 1,063,157 6,404,973

Fund Balances (Note 8)Nonspendable 493,893 132,351 - 16,187 642,431Restricted - - 12,670,727 11,539,022 24,209,749Committed 2,324,375 596,080 - 2,034,021 4,954,476Assigned 15,000,000 1,524,299 - 8,333,167 24,857,466Unassigned 6,684,718 - - (120,031) 6,564,687

Total fund balances 24,502,986 2,252,730 12,670,727 21,802,366 61,228,809

Total liabilities, deferredinflows of resources,and fund balances $ 28,617,144 $ 5,311,712 $ 12,982,387 $ 25,432,775 $ 72,344,018



Governmental FundsReconciliation of the Balance Sheet to the

Statement of Net Position December 31, 2014

Fund Balance Reported in Governmental Funds $ 61,228,809

Amounts reported for governmental activities in the statementof net position are different because:

Capital assets used in governmental activities are not financialresources and are not reported in the funds 61,761,703

Net pension asset is not included as an asset of the funds 7,921,387

Net OPEB asset is not included as an asset of the funds 311,594

Grants and other receivables that are collected after year end,such that they are not available to pay bills outstanding as ofyear end, are not recognized in the funds 2,880,357

Property tax receivables that are collected after year end, suchthat they are not available to pay bills outstanding as of yearend, are not recognized in the funds 862,525

Bonds payable, capital lease obligations, and landfill postclosureliabilities are not due and payable in the current period and arenot reported in the funds (24,343,500)

Unamortized bond premiums are not reported in the funds (496,328)

Accrued interest is not due and payable in the current period andis not reported in the funds (127,213)

Employee compensated absences are payable over a long periodof years and do not represent a claim on current financialresources; therefore, they are not reported as fund liabilities (2,233,410)

Net self-insurance liabilities are not reported in the funds (459,567)

Internal service funds are included as part of governmentalactivities 8,535,155

Net Position of Governmental Activities $ 115,841,512


C-8


Governmental FundsStatement of Revenue, Expenditures, and Changes in Fund Balances

Year Ended December 31, 2014

General Fund EMS Fund Jail Expansion

NonmajorGovernmental

Funds

TotalGovernmental

Funds

RevenueTaxes $ 26,001,750 $ 2,239,538 $ - $ 375,175 $ 28,616,463Licenses and permits 444,402 - - 170,221 614,623Federal sources 42,210 - - 5,243,174 5,285,384State sources 5,184,564 - - 3,376,094 8,560,658Charges for services 5,871,487 6,475,879 - 6,194,438 18,541,804Fines and forfeitures 317,959 - - - 317,959Interest and rent 171,958 3,707 12,882 45,566 234,113Rental income 201,822 347,503 - 10,200 559,525Other 828,660 138,607 - 267,699 1,234,966

Total revenue 39,064,812 9,205,234 12,882 15,682,567 63,965,495

ExpendituresCurrent:

General government 8,822,463 - - 232,423 9,054,886Court systems 9,561,209 - - 5,493,235 15,054,444Public safety 15,190,060 - 156,754 5,113,026 20,459,840Health and welfare 1,636,980 8,684,753 - 6,934,528 17,256,261Economic development 2,913,040 - - 434,933 3,347,973

Capital outlay - - 1,493,579 280,209 1,773,788Debt service:

Principal - - - 1,400,000 1,400,000Interest on long-term debt - - - 387,277 387,277

Total expenditures 38,123,752 8,684,753 1,650,333 20,275,631 68,734,469

Excess of Revenue Over (Under)Expenditures 941,060 520,481 (1,637,451) (4,593,064) (4,768,974)

Other Financing Sources (Uses) Face value of debt issue (Note 6) - - 14,200,000 - 14,200,000Proceeds from sale of capital assets - - 392,178 - 392,178Operating transfers in (Note 5) 2,077,449 - - 5,193,833 7,271,282Operating transfers out (Note 5) (3,299,771) (609,262) (284,000) (73,215) (4,266,248)

Total other financing(uses) sources (1,222,322) (609,262) 14,308,178 5,120,618 17,597,212

Net Change in Fund Balances (281,262) (88,781) 12,670,727 527,554 12,828,238

Fund Balances - Beginning of year (asrestated) (Note 2) 24,784,248 2,341,511 - 21,274,812 48,400,571

Fund Balances - End of year $ 24,502,986 $ 2,252,730 $ 12,670,727 $ 21,802,366 $ 61,228,809



Governmental FundsReconciliation of the Statement of Revenue, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities


Net Change in Fund Balances - Total Governmental Funds $ 12,828,238

Amounts reported for governmental activities in the statementof activities are different because:

Governmental funds report capital outlays as expenditures;however, in the statement of activities, these costs are allocatedover their estimated useful lives as depreciation:

Capital outlay 3,111,461Depreciation expense (2,481,696)

Revenues are recorded in the statement of activities when earned;they are not reported in the funds until collected or collectiblewithin 60 days of year end 1,596,444

Decrease in net self-insurance liability is recorded as a decrease ofexpense on the statement of activities 163,435

Bond proceeds provide financial resources to governmental funds,but issuing debt increases long-term liabilities in the statementof net position (14,581,285)

Repayment of bond principal is an expenditure in thegovernmental funds, but not in the statement of activities(where it reduces long-term debt) 1,574,500

Bond premiums are amortized as a component of interest expensein the statement of activities 6,481

Change in accrued interest payable and other (61,302)

Increase in net pension asset is recorded in the statement ofactivities 2,133,974

Decrease in net OPEB asset is recorded in the statement ofactivities (375,571)

Decrease in accumulated employee sick and vacation pay isrecorded when earned in the statement of activities (35,002)

Internal service funds are included as part of governmentalactivities 495,292

Change in Net Position of Governmental Activities $ 4,374,969


C-9


Enterprise Funds

Major Funds

Airport FundDelinquent TaxRevolving Fund

Septage ReceivingStation

AssetsCurrent assets:

Cash and investments (Note 3) $ 530,901 $ 27,706,876 $ 1,527,955Receivables:

Taxes - Net of allowance - 11,297,378 -Accounts 52,650 - -Accrued interest receivable - 14,272 -Due from other governmental units 40,152 119,478 -Delinquent taxes interest and fees - Net of allowance - 3,862,520 -

Inventories 65,369 - -Prepaid costs and other assets - - -

Total current assets 689,072 43,000,524 1,527,955

Noncurrent assets:Advances to component units (Note 5) - 44,839 -Advances to other funds (Note 5) - 2,399,744 -Net OPEB asset (Note 12) 1,431 - -Capital assets - Net (Note 4) 32,084,333 - 2,899,405

Total noncurrent assets 32,085,764 2,444,583 2,899,405

Total assets 32,774,836 45,445,107 4,427,360

Deferred Outflows of Resources - Deferred charge on refunding of debt - - 87,568

LiabilitiesCurrent liabilities:

Accounts payable 284,310 7,283 126,467Due to other governmental units - 471,871 -Deposits - 708,522 -Accrued and other liabilities 109,898 658 10,458Unearned revenue - - -Current portion of long-term debt (Note 6) - 1,650,000 153,499

Total current liabilities 394,208 2,838,334 290,424

Noncurrent liabilities:Advances from other funds (Note 5) 2,107,017 - 422,654Other noncurrent liability 159,003 - -Long-term debt - Net of current portion (Note 6) - - 2,415,517

Total noncurrent liabilities 2,266,020 - 2,838,171

Total liabilities 2,660,228 2,838,334 3,128,595

Net PositionNet investment in capital assets 32,084,333 - 523,474Restricted for building and safety programs - - -Unrestricted (deficit) (1,969,725) 42,606,773 862,859

Total net position $ 30,114,608 $ 42,606,773 $ 1,386,333


Proprietary FundsStatement of Net Position

December 31, 2014

Enterprise FundsGovernmental

Activities

Nonmajor FundsLivingstonEssential

TransportationService

Building andSafety Fund

Total EnterpriseFunds

Internal ServiceFund

$ 221,048 $ 5,675,890 $ 35,662,670 $ 6,936,588

- - 11,297,378 -20,702 - 73,352 74,658

- 1,436 15,708 -429,061 - 588,691 15,386

- - 3,862,520 -3,449 - 68,818 37,5081,612 - 1,612 404,680

675,872 5,677,326 51,570,749 7,468,820

- - 44,839 -- - 2,399,744 -

10,879 12,222 24,532 18,6551,865,553 - 36,849,291 1,809,357

1,876,432 12,222 39,318,406 1,828,012

2,552,304 5,689,548 90,889,155 9,296,832

- - 87,568 -

30,036 47,721 495,817 534,915269,674 - 741,545 -

- - 708,522 -143,475 91,511 356,000 215,127

- 5,417 5,417 -- - 1,803,499 -

443,185 144,649 4,110,800 750,042

- - 2,529,671 11,635- - 159,003 -- - 2,415,517 -

- - 5,104,191 11,635

443,185 144,649 9,214,991 761,677

1,865,553 - 34,473,360 1,809,357- 5,544,899 5,544,899 -

243,566 - 41,743,473 6,725,798

$ 2,109,119 $ 5,544,899 $ 81,761,732 $ 8,535,155

20

C-10


Enterprise Funds

Major Funds

Airport FundDelinquent TaxRevolving Fund

Septage ReceivingStation

Operating RevenueCharges for services $ 1,295,187 $ 574,021 $ 1,799,816Penalties and interest - 3,004,583 -Other revenue - 43,989 4,607

Total operating revenue 1,295,187 3,622,593 1,804,423

Operating ExpensesPersonnel 210,144 - -Operating 962,304 - -Other expenses - 1,369,402 983,143Depreciation 512,801 - 177,219

Total operating expenses 1,685,249 1,369,402 1,160,362

Operating (Loss) Income (390,062) 2,253,191 644,061

Nonoperating Revenue (Expenses)Interest earnings 134 101,221 49Interest expense (63,568) (12,411) (71,672)Gain (loss) on sale of fixed assets - - -Federal and state operating subsidies - - -Other nonoperating general revenue 18,773 - -

Total nonoperating revenue (expenses) (44,661) 88,810 (71,623)

(Loss) Income - Before contributions and transfers (434,723) 2,342,001 572,438

Capital Contributions - Capital grants 361,504 - -

Transfers Out (Note 5) - (3,005,034) -

Change in Net Position (73,219) (663,033) 572,438

Net Position - Beginning of year 30,187,827 43,269,806 813,895

Net Position - End of year $ 30,114,608 $ 42,606,773 $ 1,386,333


Proprietary FundsStatement of Revenue, Expenses, and Changes in Net Position


Enterprise FundsGovernmental

Activities

Nonmajor FundsLivingstonEssential

TransportationService

Building andSafety Fund

Total EnterpriseFunds

Internal ServiceFund

$ 325,415 $ 3,273,374 $ 7,267,813 $ 15,449,444- - 3,004,583 -- - 48,596 -

325,415 3,273,374 10,320,992 15,449,444

1,760,510 1,395,768 3,366,422 9,970,882730,359 388,378 2,081,041 4,111,850341,434 - 2,693,979 -173,643 - 863,663 897,067

3,005,946 1,784,146 9,005,105 14,979,799

(2,680,531) 1,489,228 1,315,887 469,645

- 6,509 107,913 -- - (147,651) -- (47,682) (47,682) 25,647

1,874,024 - 1,874,024 -- - 18,773 -

1,874,024 (41,173) 1,805,377 25,647

(806,507) 1,448,055 3,121,264 495,292

306,053 - 667,557 -

- - (3,005,034) -

(500,454) 1,448,055 783,787 495,292

2,609,573 4,096,844 80,977,945 8,039,863

$ 2,109,119 $ 5,544,899 $ 81,761,732 $ 8,535,155

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C-11


Enterprise Funds

Major Funds

Airport Fund

Delinquent Tax

Revolving Fund

Septage Receiving

Station

Cash Flows from Operating ActivitiesReceipts from customers $ 1,328,478 $ 18,395,027 $ 1,804,423Receipts from interfund services and reimbursements - - -Payments to suppliers (888,881) (1,191,038) (977,033)Payments to employees (218,730) - -Settlement of delinquent taxes - (11,399,487) -

Net cash provided by (used in) operating activities 220,867 5,804,502 827,390

Cash Flows from Noncapital Financing ActivitiesFederal and state operating subsidies - - -Repayments of loans made to other funds - 76,355 -Transfers to other funds - (3,005,034) -Repayments of loans from other funds (88,534) - (16,681)

Net cash (used in) provided by noncapital financing activities (88,534) (2,928,679) (16,681)

Cash Flows from Capital and Related Financing ActivitiesIssuance of bonds and related premiums - 7,000,000 -Receipt of capital grants 376,285 - -Easement proceeds 18,773 - -Proceeds from sales of capital assets - - -Purchase of capital assets (515,780) - (39,422)

Principal and interest paid on capital debt (63,568) (7,763,127) (200,686)

Net cash (used in) provided by capital and relatedfinancing activities (184,290) (763,127) (240,108)

Cash Flows from Investing ActivitiesInterest received on investments 134 94,509 173Purchase of investment securities - - -Net proceeds and purchases of investment securities - (966,203) 654,917

Net cash provided by (used in)investing activities 134 (871,694) 655,090

Net (Decrease) Increase in Cash and Cash Equivalents (51,823) 1,241,002 1,225,691

Cash and Cash Equivalents - Beginning of year 582,724 123,848 302,264

Cash and Cash Equivalents - End of year $ 530,901 $ 1,364,850 $ 1,527,955

Statement of Net Position Classification of Cash and Cash EquivalentsCash and investments $ 530,901 $ 27,706,876 $ 1,527,955Less amounts classified as investments - (26,342,026) -

Total cash and cash equivalents $ 530,901 $ 1,364,850 $ 1,527,955

Reconciliation of Operating (Loss) Income to Net Cash from Operating ActivitiesOperating (loss) income $ (390,062) $ 2,253,191 $ 644,061Adjustments to reconcile operating (loss) income to net cash from operating activities:

Depreciation and amortization 512,801 - 177,219Changes in assets and liabilities:

Receivables 33,291 3,394,766 -Inventories (18,104) - -Prepaid and other assets 2,749 - -Accounts payable 91,527 178,364 6,110Accrued and other liabilities (11,335) (21,819) -

Net cash provided by (used in) operating activities $ 220,867 $ 5,804,502 $ 827,390


Proprietary FundsStatement of Cash Flows


Enterprise Funds

Governmental

Activities

Nonmajor Funds

Livingston Essential

Transportation Service

Building and Safety

Fund Total Enterprise Funds

Proprietary Internal

Service Fund

$ 410,763 $ 3,274,624 $ 25,213,315 $ 345,137- - - 15,068,570

(808,550) (350,345) (4,215,847) (4,344,766)(1,722,094) (1,395,200) (3,336,024) (9,976,741)

- - (11,399,487) -

(2,119,881) 1,529,079 6,261,957 1,092,200

1,874,024 - 1,874,024 -- - 76,355 -- - (3,005,034) -- - (105,215) (19,292)

1,874,024 - (1,159,870) (19,292)

- - 7,000,000 -306,053 - 682,338 -

- - 18,773 -- - - 25,645

(2,000) (47,682) (604,884) (983,779)- - (8,027,381) (12,714)

304,053 (47,682) (931,154) (970,848)

- 5,158 99,974 -- (3,880,300) (3,880,300) -- - (311,286) -

- (3,875,142) (4,091,612) -

58,196 (2,393,745) 79,321 102,060

162,852 3,477,635 4,649,323 6,834,528

$ 221,048 $ 1,083,890 $ 4,728,644 $ 6,936,588

$ 221,048 $ 5,675,890 $ 35,662,670 $ 6,936,588- (4,592,000) (30,934,026) -

$ 221,048 $ 1,083,890 $ 4,728,644 $ 6,936,588

$ (2,680,531) $ 1,489,228 $ 1,315,887 $ 469,645

173,643 - 863,663 897,067

85,348 1,250 3,514,655 (35,737)3,928 - (14,176) (37,508)8,928 10,589 22,266 (178,138)

260,927 38,033 574,961 6,22627,876 (10,021) (15,299) (29,355)

$ (2,119,881) $ 1,529,079 $ 6,261,957 $ 1,092,200

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Fiduciary FundsStatement of Fiduciary Net Position

December 31, 2014

OtherEmployee

Benefits TrustFund Agency Funds

AssetsCash and cash equivalents (Note 3) $ 333,426 $ 4,027,064Investments (Note 3):

Mutual funds 7,256 -U.S. government securities 5,362,681 -Equities 12,406,468 -

Accrued interest and other receivables - 39,627

Total assets 18,109,831 $ 4,066,691

LiabilitiesDue to other governmental units - $ 1,407,649Other liabilities - 2,659,042

Total liabilities - $ 4,066,691

Net Position Held in Trust for Pension and Other EmployeeBenefits $ 18,109,831



Fiduciary FundsStatement of Changes in Fiduciary Net Position - Other Employee

Benefits Trust FundYear Ended December 31, 2014

OtherEmployee

Benefits TrustFund

AdditionsInvestment income:

Interest and dividends $ 199,093Net increase in fair value of investments 855,340Investment-related expenses (120,629)

Net investment income 933,804

Contributions - Payment of current premiums 1,012,606

Total additions 1,946,410

Deductions - Benefit payments 1,012,606

Net Increase in Net Position Held in Trust 933,804

Net Position Held in Trust for Other Employee Benefits - Beginning of year 17,176,027

Net Position Held in Trust for Other Employee Benefits - End of year $ 18,109,831


C-13



Component UnitsStatement of Net Position

December 31, 2014

DrainCommission

Department ofPublic Works

RoadCommission

LivingstonCounty

Foundation Total

AssetsCash and investments (Note 3) $ 3,725,769 $ 982,946 $ 5,258,909 $ 180,312 $ 10,147,936Receivables:

Interest and other receivables 170,347 182,802 3,195,861 - 3,549,010Due from other governmental units - 113,122 600,000 - 713,122Special assessments receivable 2,895,378 - - - 2,895,378Leases receivable from local units 11,230,440 31,530,000 - - 42,760,440

Inventories - - 1,214,996 - 1,214,996Prepaid expenses and other assets 317 - - - 317Restricted assets - Cash and investments - 60,106 - 274,462 334,568Net OPEB asset (Note 12) 14,478 829 - - 15,307Capital assets (Note 4) 3,322,652 43,407,038 129,511,075 - 176,240,765

Total assets 21,359,381 76,276,843 139,780,841 454,774 237,871,839

Deferred Outflows of Resources - Deferredcharges on refunding of debt (Note 6) - 537,846 - - 537,846

LiabilitiesAccounts payable 64,388 419,221 190,872 - 674,481Due to other governmental units 39,220 60,064 81,724 - 181,008Advance to primary government (Note 5) - 44,839 - - 44,839Other current liabilities 880,897 244,583 199,339 - 1,324,819Net OPEB obligation (Note 13) - - 2,045,096 - 2,045,096Long-term debt (Note 6):

Due within one year 2,305,000 2,455,297 576,080 - 5,336,377Due in more than one year 10,660,440 29,792,101 1,070,613 - 41,523,154

Total liabilities 13,949,945 33,016,105 4,163,724 - 51,129,774

Deferred Inflows of Resources -State revenue - - 750,000 - 750,000

Net PositionNet investment in capital assets 3,322,652 12,354,587 128,321,781 - 143,999,020Restricted:

Foundation nonexpendable - - - 274,462 274,462County roads - - 6,545,336 - 6,545,336Capital projects - 123,723 - - 123,723

Unrestricted 4,086,784 31,320,274 - 180,312 35,587,370

Total net position $ 7,409,436 $ 43,798,584 $ 134,867,117 $ 454,774 $ 186,529,911


C-14


Program Revenue

ExpensesCharges for

Services

OperatingGrants and

Contributions

Capital Grantsand

ContributionsFunctions/Programs

Drain Commission $ 3,182,544 $ 2,249,163 $ 967,149 $ -Department of Public Works 3,683,916 3,291,090 68,196 -Road Commission 19,380,903 - - 26,280,901Livingston County Foundation - 14,435 - -

Total component units $ 26,247,363 $ 5,554,688 $ 1,035,345 $ 26,280,901

General revenue:Unrestricted investment earnings Miscellaneous Gain (loss) on sale of fixed assets

Total general revenue

Transfers

Change in Net Position

Net Position - Beginning of year (as restated) (Note 2)

Net Position - End of year


Component UnitsStatement of Activities


Net (Expense) Revenue and Changes in Net Position

DrainCommission

Department ofPublic Works

RoadCommission

LivingstonCounty

Foundation Total

$ 33,768 $ - $ - $ - $ 33,768- (324,630) - - (324,630)- - 6,899,998 - 6,899,998- - - 14,435 14,435

33,768 (324,630) 6,899,998 14,435 6,623,571

2,555 123 6,112 (13,541) (4,751)- 140,000 389,852 - 529,852

(27,160) - 165,399 - 138,239

(24,605) 140,123 561,363 (13,541) 663,340

87,463 (87,463) - - -

96,626 (271,970) 7,461,361 894 7,286,911

7,312,810 44,070,554 127,405,756 453,880 179,243,000

$ 7,409,436 $ 43,798,584 $ 134,867,117 $ 454,774 $ 186,529,911

29

C-15


Notes to Financial StatementsDecember 31, 2014

Note 1 - Summary of Significant Accounting Policies

The following is a summary of the significant accounting policies used by LivingstonCounty, Michigan (the "County"):

Reporting Entity

The County was organized in 1836 and operates under an elected Board ofCommissioners consisting of nine members. The County provides services to itsresidents in the areas of public safety, including law enforcement and administration ofjustice, economic development, general government, and human services.

The accompanying financial statements present the County and its component units,entities for which the County is considered to be financially accountable. Althoughblended component units are legal separate entities, in substance, they are part of theCounty's operations. Each discretely presented component unit is reported in aseparate column in the government-wide financial statements to emphasize that it islegally separate from the County (see discussion below for description).

Blended Component Units - The Building Authority is governed by a five-memberboard that is appointed by the County Board of Commissioners. Although legallyseparate from the County, the Building Authority is reported as part of the primarygovernment because its sole purpose is to finance and construct the County’s publicbuildings.

Discretely Presented Component Units - The following component units arepresented discretely from the County:

Drain Commission Boards - Each of the drainage districts established pursuant to theDrain Code of 1956 are separate legal entities, with the power to contract, to sue andbe sued, to hold, manage, and dispose of real and personal property, etc. The drainageboard or drain commissioner, on behalf of the drainage district, may issue debt and levyspecial assessments authorized by the drain code without the prior approval of theCounty Board of Commissioners. The full faith and credit of the County may be givenfor the debt of the drainage district.

Department of Public Works - Pursuant to Michigan Compiled Law 123.732, theCounty has entered into a program of water supply and sanitary sewer facilityconstruction. The Department of Public Works is under the general control of theCounty Board of Commissioners and under the immediate control of the Board ofPublic Works, which includes the County Drain Commissioner. The Board of PublicWorks is considered an agency of the County. The Board of Public Works manageswater supply and sanitary sewer system construction projects that are bonded by theCounty. Bonds issued are authorized by an ordinance or a resolution approved by theBoard of Public Works and adopted by the County Board of Commissioners.

30



Note 1 - Summary of Significant Accounting Policies (Continued)

Road Commission - The County Road Commission, which is established pursuant tothe County Road Law (MCL 224.1), is governed by the appointed three-member Boardof County Road Commissioners. The Road Commission may not issue debt or levy a taxwithout the approval of the County Board of Commissioners.

Livingston County Foundation - The Livingston County Foundation (the“Foundation”), established as a 501(c)(3) not-for-profit entity, is governed by a seven-member board with two members being personnel of Livingston County, one memberappointed by those two County personnel, one member being a current member of theLivingston County Board of Commissioners, and the remaining three members beingappointed by the Livingston County Board of Commissioners. The Foundation is to beused for the enhancements of the Lutz County Park and for the development andmaintenance of the Fillmore Estate, the Owen J. Lutz and Florence B. Lutz ConferenceCenter, and for any other designation by the contributor.

Accounting and Reporting Principles

The County follows accounting principles generally accepted in the United States ofAmerica (GAAP) as applicable to governmental units. Accounting and financial reportingpronouncements are promulgated by the Governmental Accounting Standards Board.

Report Presentation

Governmental accounting principles require that financial reports include two differentperspectives - the government-wide perspective and the fund-based perspective. Thegovernment-wide financial statements (i.e., the statement of net position and thestatement of activities) report information on all of the nonfiduciary activities of theprimary government and its component units. The government-wide financialstatements are presented on the economic resources measurement focus and the fullaccrual basis of accounting. Property taxes are recognized as revenues in the year forwhich they are levied. Grants and similar items are recognized as revenue as soon as alleligibility requirements imposed by the provider have been met. The statements alsopresent a schedule reconciling these amounts to the modified accrual-basedpresentation found in the fund-based statements.

The statement of activities demonstrates the degree to which the direct expenses of agiven function or segment are offset by program revenues. Direct expenses are thosethat are clearly identifiable with a specific function or segment. Program revenuesinclude: (1) charges to customers or applicants for goods, services, or privilegesprovided; (2) operating grants and contributions; and (3) capital grants and contributions,including special assessments. Taxes and other items not properly included amongprogram revenues are reported instead as general revenue.

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For the most part, the effect of interfund activity has been removed from thesestatements. Exceptions to this general rule are charges between the County's enterprisefunctions and various other functions of the County. Eliminations of these chargeswould distort the direct costs and program revenues reported for the various functionsconcerned.

Separate financial statements are provided for governmental funds, proprietary funds,and fiduciary funds, even though the latter are excluded from the government-widefinancial statements. Major individual governmental funds and major individual enterprisefunds are reported as separate columns in the fund financial statements.

Basis of Accounting

The governmental funds use the current financial resources measurement focus and themodified accrual basis of accounting. This basis of accounting is intended to betterdemonstrate accountability for how the government has spent its resources.

Expenditures are reported when the goods are received or the services are rendered.Capital outlays are reported as expenditures (rather than as capital assets) because theyreduce the ability to spend resources in the future; conversely, employee benefit coststhat will be funded in the future (such as pension and retiree healthcare related costs, orsick and vacation pay) are not counted until they come due for payment. In addition,debt service expenditures, claims, and judgments are recorded only when payment isdue.

Revenues are not recognized until they are collected, or collected soon enough after theend of the year that they are available to pay for obligations outstanding at the end of theyear. For this purpose, the County considers amounts collected within 60 days of yearend to be available for recognition. The following major revenue sources meet theavailability criterion: state-shared revenue, district court fines, and interest associatedwith the current fiscal period. Conversely, special assessments and federal grantreimbursements will be collected after the period of availability; receivables have beenrecorded for these, along with a "deferred inflow."

Proprietary funds and fiduciary funds use the economic resources measurement focusand the full accrual basis of accounting. Revenue is recorded when earned and expensesare recorded when a liability is incurred, regardless of the timing of related cash flows.

All governmental funds and agency funds utilize the modified accrual basis of accounting.The component units record day-to-day activity using the modified accrual basis ofaccounting but report on the full accrual basis of accounting. The enterprise funds utilizethe full accrual basis of accounting.

32




Fund Accounting

The County accounts for its various activities in several different funds, in order todemonstrate accountability for how we have spent certain resources; separate fundsallow us to show the particular expenditures for which specific revenues were used. Thevarious funds are aggregated into three broad fund types:

Governmental funds include all activities that provide general governmental servicesthat are not business-type activities. This includes the General Fund, special revenuefunds, debt service funds, capital project funds, and permanent funds. The Countyreports the following funds as “major” governmental funds:

� General Fund - The General Fund is the County’s primary operating fund. Itaccounts for all financial resources of the general government, except thoserequired to be accounted for in another fund.

� EMS Special Revenue Fund - The EMS Special Revenue Fund accounts for all ofthe activities of the County’s EMS department.

� Jail Expansion Fund - The majority of financing for this project comes from theissuance of $14.2 million Capital Improvement Bonds in 2014. This major project isfor expanding the County Jail in Livingston County.

Additionally, the County reports the following "nonmajor" governmental funds:

� Special Revenue Funds - Special revenue funds account for the revenue andexpenditures related to health services, job training services, childcare services,family counseling, friend of the court, the small cities community development blockgrant, the community development block grant OLHSA, survey andremonumentation, drug law enforcement activities, prosecutor’s drug enforcement,criminal and OUIL forfeitures, law funds, community corrections, social welfare,soldiers’ and sailors’ relief, veterans' trust fund, register of deeds, federal equitablesharing activities, 911 services, homestead property exemption fund, correctionofficers' training, and federal and state grant funds.

� Debt Service Funds - Debt service funds account for the debt retirement activityof the governmental activities of the County for the debt service sinking fund, theBuilding Authority Mental Health Fund, Jail Debt Expansion Fund, and EMS DebtFund.

� Capital Projects Funds - Capital projects funds account for the development ofcapital facilities and equipment other than those financed by the operation of aproprietary fund. These projects include other capital improvements of the County,jail renovations, EMS Construction Fund, and the West Complex construction.

33

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� Permanent Funds - Permanent funds account for the maintenance and care of thecemetery.

Proprietary funds include enterprise funds, (which provide goods or services to usersin exchange for charges or fees) and internal service funds (which provide goods orservices to other funds of the County). The County reports the following funds as“major” enterprise funds:

� Airport Fund - The Airport Fund accounts for the operations of the rural airportlocated in the County. The primary revenue source is charges for services and grantmonies for the airport expansion.

� Delinquent Tax Revolving Fund - The Delinquent Tax Revolving Fund accountsfor the purchase of delinquent tax rolls from the County’s local units. Interest andpenalties received within the collection of these receivables are the Delinquent TaxRevolving Fund’s primary source of revenue.

� Septage Receiving Station - This fund is used to account for the operations ofthe septage receiving station. The primary source of revenue is a per-gallon chargefor service on waste that local communities dispose of through the receiving station.

Additionally, the County reports "nonmajor" enterprise funds to account for building andsafety and Livingston Essential Transportation Services revenue collected from users andexpenses related to operations.

Internal Service Funds - The County’s internal service funds are used to allocatebuilding services, information technology, car pool, and benefit services to the variousfunds on a full accrual basis, so that the full costs are recognized and allocated to thevarious funds in the year that the costs are incurred.

Fiduciary funds include amounts held in a fiduciary capacity for others. These amountswill not be used to operate our government's programs. Activities that are reported asfiduciary include:

� Trust Funds - The Other Employee Benefits Trust Fund accounts for the activitiesof the Postemployment Healthcare Trust Fund, which accumulates resources forhealthcare benefit payments for qualified employees.

� Agency Funds - Agency funds are used to account for assets held by the County asan agent for individuals, organizations, other governments, or other funds. Agencyfunds are custodial in nature (assets equal liabilities) and do not involve themeasurement of results of operations.

34




During the course of operations, the government has activity between funds for variouspurposes. Any residual balances outstanding at year end are reported as due from/toother funds and advances to/from other funds. While these balances are reported infund financial statements, certain eliminations are made in the preparation of thegovernment-wide financial statements. Balances between the funds included ingovernmental activities (i.e., the governmental and internal service funds) are eliminatedso that only the net amount is included as internal balances in the governmental activitiescolumn. Similarly, balances between the funds included in business-type activities (i.e.,the enterprise funds) are eliminated so that only the net amount is included as internalbalances in the business-type activities column.

Furthermore, certain activity occurs during the year involving transfers of resourcesbetween funds. In fund financial statements, these amounts are reported at grossamounts as transfers in/out. While reported in fund financial statements, certaineliminations are made in the preparation of the government-wide financial statements.Transfers between the funds included in governmental activities are eliminated so thatonly the net amount is included as transfers in the governmental activities column.Similarly, balances between the funds included in business-type activities are eliminatedso that only the net amount is included as transfers in the business-type activitiescolumn.

Specific Balances and Transactions

Cash, Cash Equivalents, and Investments - Cash and cash equivalents include cashon hand, demand deposits, and short-term investments with a maturity of three monthsor less when acquired. Investments are stated at fair value.

Receivables - All trade and property tax receivables are shown as net of allowance foruncollectible amounts. The EMS Fund accounts receivable balance includes $2,510,094as an allowance for doubtful accounts.

Inventories and Prepaid Items - Inventories are valued at cost, on a first-in, first-outbasis. Inventories of governmental funds are recorded as expenditures when consumedrather than when purchased. Certain payments to vendors reflect costs applicable tofuture fiscal years and are recorded as prepaid items in both government-wide and fundfinancial statements.

Capital Assets - Capital assets, which include property, buildings, furniture, vehicles,machinery, and equipment, are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets aredefined by the County as assets with an initial individual cost of more than $25,000 andan estimated useful life in excess of one year. Such assets are recorded at historical costor estimated historical cost if purchased or constructed. Donated capital assets arerecorded at estimated fair market value at the date of donation.

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Buildings, furniture, vehicles, machinery, and equipment are depreciated using thestraight-line method over the following useful lives:

Capital Asset Class Lives

Buildings 33 to 50 yearsImprovements other than buildings 20 to 40 yearsEquipment and furniture 3 to 10 yearsMachinery and equipment 5 to 20 yearsVehicles 3 to 10 yearsDrainage flow rights 99 years

Long-term Obligations - In the government-wide financial statements and theproprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities,business-type activities, or proprietary fund-type statement of net position. Bondpremiums and discounts are deferred and amortized over the life of the bonds using theeffective interest method. Bonds payable are reported net of the applicable bondpremium or discount. Bond deferred charges are amortized over the term of the relateddebt. Issuance costs are reported as an expense. In the fund financial statements,governmental fund types recognize bond premiums and discounts, as well as bondissuance costs, during the current period. The face amount of debt issued is reported asother financing sources. Premiums received on debt issuances are reported as otherfinancing sources while discounts are reported as other financing uses. Issuance costs arereported as expenditures. The debt service funds are generally used to liquidategovernmental long-term debt.

Deferred Outflows/Inflows of Resources - In addition to assets, the statement of netposition will sometimes report a separate section for deferred outflows of resources.This separate financial statement element, deferred outflows of resources, represents aconsumption of net position that applies to a future period and so will not be recognizedas an outflow of resources (expense/expenditure) until then. The government has oneitem that qualifies for reporting in this category. It is the deferred charge on refundingreported in the government-wide statement of net position. A deferred charge onrefunding results from the difference in the carrying value of refunded debt and itsreacquisition price. This amount is deferred and amortized over the shorter of the life ofthe refunded or refunding debt.

36




In addition to liabilities, the statement of net position will sometimes report a separatesection for deferred inflows of resources. This separate financial statement element,deferred inflows of resources, represents an acquisition of net position that applies to afuture period and so will not be recognized as an inflow of resources (revenue) until thattime. The government has two items that qualify for reporting in this category. Thedeferred inflows of resources related to unavailable revenue is reported only in thegovernmental funds balance sheet. The governmental funds report unavailable revenuesfrom three sources: grants, special assessments, and other miscellaneous sources. Theseamounts are deferred and recognized as an inflow of resources in the period that theamounts become available. The government also has property taxes recorded as areceivable before the period when the resources are required to be used. Theseproperty taxes are shown as deferred inflows of resources on both the governmentalfunds balance sheet as well as the statement of net position. Those property taxes willbe recognized as revenue next year, as those amounts were levied for the subsequentyear's budgeted operations.

Net Position Flow Assumption - Sometimes the government will fund outlays for aparticular purpose from both restricted (e.g., restricted bond or grant proceeds) andunrestricted resources. In order to calculate the amounts to report as restricted netposition and unrestricted net position in the government-wide and proprietary fundfinancial statements, a flow assumption must be made about the order in which theresources are considered to be applied. It is the government’s policy to considerrestricted net position to have been depleted before unrestricted net position is applied.

Fund Balance Flow Assumption - Sometimes the government will fund outlays for aparticular purpose from both restricted and unrestricted resources (the total ofcommitted, assigned, and unassigned fund balance). In order to calculate the amounts toreport as restricted, committed, assigned, and unassigned fund balance in thegovernmental fund financial statements, a flow assumption must be made about theorder in which the resources are considered to be applied. It is the government’s policyto consider restricted fund balance to have been depleted before using any of thecomponents of unrestricted fund balance. Furthermore, when the components ofunrestricted fund balance can be used for the same purpose, committed fund balance isdepleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

Fund Balance Policies - Fund balance of governmental funds is reported in variouscategories based on the nature of any limitations requiring the use of resources forspecific purposes. The government itself can establish limitations on the use of resourcesthrough either a commitment (committed fund balance) or an assignment (assigned fundbalance).

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The committed fund balance classification includes amounts that can be used only forthe specific purposes determined by a formal action of the government’s highest level ofdecision-making authority. The County Board of Commissioners is the highest level ofdecision-making authority for the government that can, by adoption of an ordinanceprior to the end of the fiscal year, commit fund balance. Once adopted, the limitationimposed by the ordinance remains in place until a similar action is taken (the adoption ofanother ordinance) to remove or revise the limitation.

Amounts in the assigned fund balance classification are intended to be used by thegovernment for specific purposes but do not meet the criteria to be classified ascommitted. The County Board of Commissioners may assign fund balance as it doeswhen appropriating fund balance to cover a gap between estimated revenue andappropriations in the subsequent year’s appropriated budget. Unlike commitments,assignments generally only exist temporarily. In other words, an additional action doesnot normally have to be taken for the removal of an assignment. Conversely, asdiscussed above, an additional action is essential to either remove or revise acommitment.

Property Tax Revenue - Property taxes are levied and become a lien on each July 1and December 1 on the taxable valuation of property as of the preceding December 31.Taxes are considered delinquent on March 1 of the following year, at which timepenalties and interest are assessed.

The 2013 taxable valuation of the County totaled $7.57 billion, on which ad valoremtaxes levied on December 1, 2013 consisted of 0.3000 mills for EMS operating purposesand 0.0500 mills for assistance to indigent veterans as authorized by PA 214 of 1899.On July 1, 2014, the general operating millage for the 2014 fiscal year, or 3.3897 mills,was levied on the 2014 taxable valuation of $7.72 billion for general operating purposes.The ad valorem taxes raised were approximately $25.8 million for general operations,$2.2 million for ambulance operations, and $376,000 for veterans. These amounts arerecorded in their respective funds as tax revenue. The amount recorded as revenue isnet of amounts distributed to local DDAs and TIFAs.

Pension and Other Postemployment Benefit Costs - The County offers bothpension and retiree healthcare benefits to retirees. The County receives an actuarialvaluation to compute the annual required contribution (ARC) necessary to fund theobligation over the remaining amortization period. In the governmental funds, pensionand OPEB costs are recognized as contributions are made. For the government-widestatements and proprietary funds, the County reports the full accrual cost equal to thecurrent year required contribution, adjusted for interest and “adjustment to the ARC”on the beginning of year underpaid amount, if any.

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Compensated Absences (Vacation and Sick Leave) - The County allows employeesto accumulate earned but unused sick and vacation pay benefits. The government-wideand proprietary statements accrue all vacation and personal pay as it is earned. Sick payis accrued according to management estimates of individuals who are eligible for benefitsupon termination or retirement. An expenditure for these amounts is reported ingovernmental funds as it comes due for payment (when the time is taken off oremployees terminate). Compensated absences attributable to the governmentalactivities will be liquidated by the fund from which the employee's salary and wage wasearned.

Proprietary Funds Operating Classification - Proprietary funds distinguish operatingrevenues and expenses from nonoperating items. Operating revenues and expensesgenerally result from providing services and producing and delivering goods inconnection with a proprietary fund’s principal ongoing operations. The principaloperating revenues relate to charges to customers for sales and services. Operatingexpenses for enterprise funds and internal service funds include the cost of sales andservices, administrative expenses, and depreciation on capital assets. All revenues andexpenses not meeting this definition are reported as nonoperating revenues andexpenses.

Use of Estimates - The preparation of financial statements in conformity withaccounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenue and expenses during theperiod. Actual results could differ from those estimates.

Note 2 - Change in Reporting Entity

In the current year, the County became aware of the fact that the County does nothave fiduciary responsibilities for two trusts: the Lutz County Park Trust and theFillmore Estate County Park Trust. Per the original trust agreements, Livingston CountyFoundation, a component unit of the County, has fiduciary responsibilities for bothparks. Conversely to this fact, the County has been recording the activity of the LutzCounty Park and the Fillmore Estate County Park as two special revenue funds sincetheir inception in 2005 to 2013. The Lutz County Park Fund and the Fillmore EstateCounty Park Fund were previously recorded as nonmajor special revenue funds in thefinancial statements.

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C-20



Note 2 - Change in Reporting Entity (Continued)

After this discovery, the County determined to relinquish responsibility for the trusts toLivingston County Foundation at the beginning of 2014 fiscal year and restate prior yearfund balances and net position for the 2014 financial statements. In the current yearfinancial statements, the Lutz County Park Fund and Fillmore Estate County Park Fundare no longer included in the County’s governmental statements. Instead, the activity ofthe trusts are accounted for in the Livingston County Foundation component unit.

As a result of the change in reporting entity, the following beginning balance for fundbalance and net position have been restated as indicated:

TotalGovernmentalFunds - Fund

Balance

GovernmentalActivities -

Net Position

ComponentUnits - Net

Position

Fund Balance/Net Position -December 31, 2013 - As previouslyreported $ 48,528,295 $ 111,594,267 $ 179,115,276

Adjustment for Lutz County ParkFund (88,215) (88,215) 88,215

Adjustment for Fillmore EstateCounty Park Fund (39,509) (39,509) 39,509

Fund Balance/Net Position -December 31, 2013 - As restated $ 48,400,571 $ 111,466,543 $ 179,243,000

Note 3 - Deposits and Investments

Michigan Compiled Laws Section 129.91 (Public Act 20 of 1943, as amended) authorizeslocal governmental units to make deposits and invest in the accounts of federally insuredbanks, credit unions, and savings and loan associations that have offices in Michigan. Thelocal unit is allowed to invest in bonds, securities, and other direct obligations of theUnited States or any agency or instrumentality of the United States; repurchaseagreements; bankers’ acceptances of United States banks; commercial paper ratedwithin the two highest classifications, which matures not more than 270 days after thedate of purchase; obligations of the State of Michigan or its political subdivisions, whichare rated as investment grade; and mutual funds composed of investment vehicles thatare legal for direct investment by local units of government in Michigan.

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Note 3 - Deposits and Investments (Continued)

The Other Employee Benefit Trust Fund retiree healthcare fund is also authorized byMichigan Public Act 314 of 1965, as amended, to invest in certain reverse repurchaseagreements, stocks, diversified investment companies, annuity investment contracts, realestate leased to public entities, mortgages, real estate, debt or equity of certain smallbusinesses, certain state and local government obligations, and certain other specifiedinvestment vehicles.

The County has designated seven banks for the deposit of its funds and those funds heldby the County on behalf of its component units. The investment policy adopted by theboard in accordance with Public Act 196 of 1997 has authorized investment as allowedunder state statutory authority as listed above.

Cash and investments held by the County are subject to several types of risk, which areexamined in more detail below:

Custodial Credit Risk of Bank Deposits - Custodial credit risk is the risk that in theevent of a bank failure, the County’s deposits may not be returned to it. The County’sinvestment policy requires that it shall diversify its investments by security type andinstitution. No more than 60 percent of the total investment portfolio will be invested ina single security type or with a single financial institution. At year end, the County hadbank deposits of $94,095,047, of which $2,500,000 was covered by federal depositoryinsurance and of which $91,595,047 was uninsured and uncollateralized. The Countybelieves that due to the dollar amounts of cash deposits and the limits of FDICinsurance, it is impractical to insure all deposits. As a result, the County evaluates eachfinancial institution with which it deposits funds and assesses the level of risk of eachinstitution; only those institutions with an acceptable estimated risk level are used asdepositories.

Interest Rate Risk - Interest rate risk is the risk that the value of investments willdecrease as a result of a rise in interest rates. The County’s investment policy does notrestrict investment maturities, other than commercial paper, which can only bepurchased with a 270-day maturity. At year end, the average maturities of investmentsare as follows:

Government-wide

Type of Investment Fair ValueLess Than

1 Year 1-5 Years 5-10 Years

Federal Home Loan Mortgage Corp $ 4,986,800 $ - $ 4,986,800 $ -Federal Home Loan Bank 6,805,371 1,990,140 4,815,231 -Federal National Mortgage Association 2,496,475 - 2,496,475 -Fowlerville Downtown Development Board 150,000 - 150,000 -Commercial paper 1,995,042 1,995,042 - -

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C-21




Fiduciary Funds

Type of Investment Fair Value 1-5 Years

Other Employee Benefits Trust FundFederal Home Loan Bank $ 2,272,477 $ 2,272,477Federal Farm Credit Bank 1,630,128 1,630,128Federal National Mortgage Association 340,012 340,012Federal Home Loan Mortgage Corp 1,120,064 1,120,064

Credit Risk - State law limits investments in commercial paper to the top two ratingsissued by nationally recognized statistical rating organizations. The County has noinvestment policy that would further limit its investment choices. As of year end, thecredit quality ratings of debt securities (other than the U.S. government) are as follows:

Government-wide

Investment Fair Value RatingRating

Organization

Federal Home Loan Mortgage Corp $ 4,986,800 Aaa Moody'sFederal Home Loan Bank 6,805,371 Aaa Moody'sFederal National Mortgage Association 2,496,475 Aaa Moody'sFowlerville Downtown Development Bond 150,000 NR N/ACommercial paper 1,995,042 P-1 Moody's

The following investments are not under the County’s investment policy as they are maintainedwithin fiduciary funds and are subject to different state regulations:

Fiduciary Funds

Investment Fair Value RatingRating

Organization

Other Employee Benefits Trust FundEquities $12,406,468 NR N/AFederal Home Loan Mortgage Corp 1,120,064 Aaa Moody'sFederal Farm Credit Bank 1,630,128 Aaa Moody'sFederal Home Loan Bank 2,272,477 Aaa Moody'sFederal National Mortgage Association 340,012 Aaa Moody's

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Concentration of Credit Risk - The County’s investment policy requires that it shalldiversify its investment by security type and institution by allowing no more than 60percent of the total investment portfolio to be invested in a single investment type orwith a single financial institution. The following shows issuers, other than the U.S.government, holding 5 percent or more of the County’s total investments:

Government-wide

Investment Fair Value

Federal Home Loan Bank $ 6,805,371Federal Home Loan Mortgage Corp 4,986,800

The following investments are not under the County's investment policy as they aremaintained within the fiduciary funds and are subject to different state regulations:

Fiduciary Funds

Investment Fair Value

Other Employee Benefits Trust FundFederal Farm Credit Bank $ 1,630,128Federal Home Loan Mortgage Corp 1,120,064Federal Home Loan Bank 2,272,477

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C-22



Note 4 - Capital Assets

Capital asset activity of the County's governmental activities, business-type activities, andcomponent units was as follows:

Balance January 1, 2014 Reclassifications Additions

Disposals andReclassifications

Balance December 31,

2014


Capital assets not being depreciated:Land $ 10,380,655 $ - $ - $ - $ 10,380,655Construction in progress 1,757,791 (1,757,791) 1,675,713 - 1,675,713

Subtotal 12,138,446 (1,757,791) 1,675,713 - 12,056,368

Capital assets being depreciated:Buildings 66,286,425 21,958 554,073 - 66,862,456Equipment and furniture 25,345,284 1,735,833 909,418 - 27,990,535Vehicles 5,009,938 - 952,718 (326,984) 5,635,672Improvements other than building 2,162,631 - 3,320 - 2,165,951

Subtotal 98,804,278 1,757,791 2,419,529 (326,984) 102,654,614

Accumulated depreciation:Buildings 20,491,421 - 1,410,193 - 21,901,614Equipment and furniture 21,874,719 - 1,283,557 - 23,158,276Vehicles 3,730,649 - 669,855 (326,984) 4,073,520Improvements other than building 1,991,354 - 15,158 - 2,006,512

Subtotal 48,088,143 - 3,378,763 (326,984) 51,139,922

Net capital assets being depreciated 50,716,135 1,757,791 (959,234) - 51,514,692

Net capital assets $ 62,854,581 $ - $ 716,479 $ - $ 63,571,060

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Note 4 - Capital Assets (Continued)

Balance January 1, 2014 Reclassifications Additions



2014


Capital assets not being depreciated:Land $ 12,516,959 $ - $ - $ - $ 12,516,959Construction in progress 35,835 (11,013) 269,938 - 294,760

Subtotal 12,552,794 (11,013) 269,938 - 12,811,719

Capital assets being depreciated:Buildings 7,078,455 - - - 7,078,455Improvements other than buildings 21,203,602 11,013 188,742 - 21,403,357Vehicles 1,645,980 - - - 1,645,980Machinery and equipment 1,901,937 - 146,204 (47,682) 2,000,459

Subtotal 31,829,974 11,013 334,946 (47,682) 32,128,251

Accumulated depreciation:Buildings 1,889,447 - 163,651 - 2,053,098Improvements other than buildings 2,785,945 - 443,383 - 3,229,328Vehicles 1,370,818 - 99,951 - 1,470,769Machinery and equipment 1,180,806 - 156,678 - 1,337,484

Subtotal 7,227,016 - 863,663 - 8,090,679

Net capital assets being depreciated 24,602,958 11,013 (528,717) (47,682) 24,037,572

Net capital assets $ 37,155,752 $ - $ (258,779) $ (47,682) $ 36,849,291

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C-23




BalanceJanuary 1, 2014 Additions



2014

Component Units

Capital assets not being depreciated:Land $ 27,172,776 $ 33,496 $ - $ 27,206,272Construction in progress - 289,066 - 289,066

Subtotal 27,172,776 322,562 - 27,495,338

Capital assets being depreciated:Land improvements 159,393 - - 159,393Buildings and improvements 12,881,900 684,725 - 13,566,625Drains and septic systems 32,592,553 156,830 (123,457) 32,625,926Machinery, equipment, and vehicles 12,058,011 1,073,134 (539,467) 12,591,678Infrastructure - Roads and bridges 210,373,345 14,454,371 - 224,827,716Draining flow rights 16,477,420 - - 16,477,420Depletable assets 488,543 - - 488,543

Subtotal 285,031,165 16,369,060 (662,924) 300,737,301

Accumulated depreciation:Land improvements 133,072 - - 133,072Buildings and improvements 4,278,954 378,184 - 4,657,138Drains and septic systems 6,490,677 905,313 (96,297) 7,299,693Machinery, equipment, and vehicles 10,079,334 726,819 (530,778) 10,275,375Infrastructure - Roads and bridges 119,759,280 8,175,918 - 127,935,198Draining flow rights 1,405,974 166,439 - 1,572,413Depletable assets 118,985 - - 118,985

Subtotal 142,266,276 10,352,673 (627,075) 151,991,874

Net capital assets being depreciated 142,764,889 6,016,387 (35,849) 148,745,427

Net capital assets $ 169,937,665 $ 6,338,949 $ (35,849) $ 176,240,765

Depreciation expense was charged to programs of the primary government as follows:

Governmental activities:General government $ 687,818Public safety 750,318Health and welfare 909,578Community and economic development 3,961Public works 130,024Internal service funds 897,064

Total governmental activities $ 3,378,763

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Business-type activities:Airport $ 512,801Septage receiving station 177,219L.E.T.S. 173,643

Total business-type activities $ 863,663

Component unit activities:Drain Commission districts $ 366,875Department of Public Works 1,063,960Road Commission 8,921,838

Total component unit activities $ 10,352,673

During the fiscal years ended December 31, 2006 and 2005, Livingston County acceptedthe bequests of the Lutz and Fillmore Estates, totaling approximately $4.04 million. TheCounty reports these properties as capital assets and exercises control over the use ofthe properties, within the stipulations of the trust documents. The trust documentsexplicitly limit the uses of the properties to park or conference center purposes. Theproperties cannot be sold, split, or subdivided. If the County violates the specified usesfor these properties, the assets will revert back to the trusts.

Construction Commitments - The County has the following active constructionprojects at year end. At year end, the County's commitments with contractors are asfollows:

Spent to DateRemaining

Commitment

Tyler software project $ 490,100 $ 737,729LETS generator 2,000 70,730Airport fuel farm 292,518 205,992Jail expansion 1,509,688 13,540,312Jail Renovation 175,925 2,324,375Jail roof 16,109 675,232Lake Tyrone 322,562 1,477,438

Total $ 2,808,902 $ 19,031,808

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C-24



Note 5 - Interfund Receivables, Payables, Transfers, and Advances

Interfund balances represent routine and temporary cash flow assistance.

The composition of interfund balances is as follows:

Advances

Receivable Fund Payable Fund Amount

General Fund Nonmajor governmental funds $ 36,304Septage Receiving Station Fund 109,927Airport Fund 20,000

Total General Fund 166,231

Delinquent Tax Revolving Fund Airport Fund 2,087,017Septage Receiving Station Fund 312,727

Total Delinquent TaxRevolving Fund 2,399,744

Nonmajor governmental funds Internal Service Fund 11,635

Delinquent Tax RevolvingFund Department of Public Works 44,839

Total advances $ 2,577,610

Interfund Transfers

Transferred To Transferred From Amount

General Fund Nonmajor governmental funds $ 73,215Delinquent Tax Revolving Fund 2,004,234

Total General Fund 2,077,449

Nonmajor governmental funds General Fund 3,299,771EMS Fund 609,262Delinquent Tax Revolving Fund 1,000,800Jail Expansion Fund 284,000

Total nonmajorgovernmental funds 5,193,833

Total operating transfersout $ 7,271,282

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Note 5 - Interfund Receivables, Payables, Transfers, and Advances(Continued)

The transfer from the nonmajor governmental funds provides for operations of theGeneral Fund per Public Act 357 of 2004. The transfer from the Delinquent TaxRevolving Fund to the General Fund was to transfer monies in excess of the board-approved $6,000,000 cap placed on the Delinquent Tax Revolving Fund to the GeneralFund. Transfers from the General Fund to the nonmajor governmental funds provide foroperations of those funds, capital projects, and capital acquisitions. The transfers fromthe Delinquent Tax Revolving Fund to the nonmajor governmental funds provide fordebt payments and capital improvements. The transfer from the Jail Expansion Fund tothe Jail Debt Expansion Fund was to transfer monies to cover debt service payments.The transfer from the EMS Fund to the EMS Construction Fund was to transfer moniesto complete the EMS building project.

Note 6 - Long-term Debt

The County issues bonds to provide for the acquisition and construction of major capitalfacilities. General obligation bonds are direct obligations and pledge the full faith andcredit of the County. County contractual agreements and installment purchaseagreements are also general obligations of the government.

Long-term obligation activity can be summarized as follows:

Matures Interest RateBeginningBalance Additions

Reductions/Adjustments Ending Balance

Due WithinOne Year


General obligation bonds:2012 Capital Improvement bonds 2032 2.00%-3.00% $ 8,200,000 $ - $ (310,000) $ 7,890,000 $ 320,0002005 Mental health refunding

bonds 2024 4.00%-5.00% 1,760,000 - (130,000) 1,630,000 140,0002005 Building Authority - Mental

health refunding bonds 2014 4.25%-5.00% 960,000 - (960,000) - -Jail Expansion Bonds 2029 2.00%-3.00% - 14,200,000 - 14,200,000 750,000

Plus premiums on bonds payable 121,524 392,178 (17,374) 496,328 32,627

Total bonds payable 11,041,524 14,592,178 (1,417,374) 24,216,328 1,242,627

Notes payable - Informationtechnology - Cisco 12,714 - (12,714) - -

Other obligations:Drain at large assessments 157,500 - (14,000) 143,500 14,000Landfill postclosure liability 640,500 - (160,500) 480,000 80,000

Employee compensated absences 2,329,733 2,354,064 (2,317,345) 2,366,452 2,317,345

Total governmentalactivities $ 14,181,971 $ 16,946,242 $ (3,921,933) $ 27,206,280 $ 3,653,972



Due WithinOne Year


Regional waste (septage receivingstation) 2028 4.00% - 4.25% $ 2,575,000 $ - $ (120,000) $ 2,455,000 $ 145,000

Tax notes - 2013 2014 0.30% + LIBOR 2,400,000 - (2,400,000) - -Tax notes - 2014 2015 0.30% + LIBOR - 7,000,000 (5,350,000) 1,650,000 1,650,000

Plus premiums on bonds payable 122,515 - (8,499) 114,016 8,499

Total business-typeactivities $ 5,097,515 $ 7,000,000 $ (7,878,499) $ 4,219,016 $ 1,803,499

49

C-25



Note 6 - Long-term Debt (Continued)



Due WithinOne Year

Component Unit Debt

Drain Commission districts 2013-2026 1.66%-5.05% $ 15,086,440 $ 170,000 $ (2,291,000) $ 12,965,440 $ 2,305,000Department of Public Works 2013-2030 2.00%-6.15% 34,054,615 - (2,524,615) 31,530,000 2,395,000Road Commission 2013-2018 3.20%-8.08% 1,286,234 498,245 (137,786) 1,646,693 576,080Plus premiums on Department of

Public Works bonds payable 777,695 - (60,297) 717,398 60,297

Total component debt $ 51,204,984 $ 668,245 $ (5,013,698) $ 46,859,531 $ 5,336,377

Annual debt service requirements to maturity for the above governmental, business-type, and component unit bond and note obligations are as follows:

Governmental Activities Business-type Activities Component Unit Activities

Years EndingDecember 31 Principal Interest Total Principal Interest Total Principal Interest Total

2015 $ 1,210,000 $ 629,819 $ 1,839,819 $ 1,795,000 $ 61,300 $ 1,856,300 $ 5,276,080 $ 1,829,557 $ 7,105,6372016 1,250,000 602,394 1,852,394 145,000 58,400 203,400 4,806,954 1,606,829 6,413,7832017 1,290,000 574,344 1,864,344 155,000 55,400 210,400 4,280,266 1,452,027 5,732,2932018 1,335,000 543,330 1,878,330 155,000 52,300 207,300 4,267,261 1,274,282 5,541,5432019 1,385,000 509,031 1,894,031 160,000 49,150 209,150 5,006,572 1,093,786 6,100,358

2020-2024 7,635,000 1,963,171 9,598,171 875,000 187,125 1,062,125 15,290,000 2,965,336 18,255,3362025-2029 7,935,000 859,125 8,794,125 820,000 50,400 870,400 6,160,000 764,838 6,924,838

2029-2033 1,680,000 102,000 1,782,000 - - - 1,055,000 27,275 1,082,275

Total $ 23,720,000 $ 5,783,214 $ 29,503,214 $ 4,105,000 $ 514,075 $ 4,619,075 $ 46,142,133 $ 11,013,930 $ 57,156,063

Debt Issuance - During the year, the County issued Limited Tax General ObligationCapital Improvement Bonds (Jail Expansion Bonds) with a par amount of $14,200,000and an original issue premium of $392,178 with an interest range of 2.50 to 3.00percent. The proceeds of this bond were used to provide funds for the LivingstonCounty Jail Expansion Project. The net proceeds of the bond issuance were $14,342,000(after payment of $252,178 in underwriting fees, insurance and other issuance costs).

Bond Premiums - The long-term debt issuance of the 2014 Jail Expansion CapitalImprovement Bonds resulted in an unamortized bond premium of $392,178. Theunamortized bond premium will be amortized over the life of the respective bondsthrough the year 2028.

Landfill Postclosure Liability - In February 1988, the State of Michigan Department ofNatural Resources (MDNR) ordered the Livingston County landfill to close. Reasonsgiven for the order were that groundwater at the landfill had been contaminated, a dailycover of dirt was not applied to garbage collected each day, leachate had risen tounacceptable depths, and the license to operate the landfill had expired in 1986. TheLivingston County Board of Commissioners ordered the landfill to close on April 19,1988 so that a plan could be developed that would bring the site up to MDNRstandards. In December 1988, a decision was made by the Livingston County Board ofCommissioners to permanently close the landfill.

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Note 6 - Long-term Debt (Continued)

On February 21, 1991, a grant in the amount of $466,604 was received from the Stateof Michigan to help fund clean-up and closure of the landfill. In 1999, a plan wasdeveloped at the insistence of the Michigan Department of Environmental Quality(MDEQ) to monitor methane concentrations in and around the landfill. This plan,entitled Methane Monitoring Plan, Livingston County Landfill, Howell Township,Michigan, was submitted in April 1999 and subsequently approved by the MDEQ. Theplan detailed a commitment to methane monitoring and potential remediation. In 2005,in response to detection of subsurface migration of methane, the Livingston CountyBoard of Public Works (BPW) initiated actions to ensure the safety of neighboringproperty owners. An active venting system was installed, as well as additional monitoringwells and methane detectors in neighboring homes. The current monitoring andmaintenance activities include, but are not limited to, groundwater sampling, leachatehauling, and methane monitoring. These costs are funded through operating transfersinto the Landfill Fund.

State and federal laws and regulations require Livingston County to perform certainmaintenance and monitoring functions at the site for 30 years after closure. Theestimated costs of these functions over this timeframe were established as a postclosurelandfill liability and reported in the government-wide financial statements.

Defeased Debt - In current and prior years, the County has defeased portions ofbonded debt by placing the proceeds of new bonds in escrow accounts to provide for allfuture debt service payments on the defeased portions of the old bonds. Accordingly,the escrow accounts’ assets and the liabilities for the defeased bonds are not included inthe basic financial statements. At December 31, 2014, $4,875,000 of bonds outstandingis considered defeased.

Note 7 - Revenue Pledged in Connection with Local Unit Debt

The County has pledged, as security for bonds issued by various local units within theCounty’s borders, the amounts collected for debt service payments from local unitcontributions. The bonds, issued by the County, are to provide funding for various drainand department of public works projects and are payable through 2030. The Countyhas committed to appropriate each year the total amount contributed by local units.Each local unit has pledged, as the primary security for the bonds, the annual debtservice requirements of its related debt, as an appropriation to the County. Totalprincipal and interest remaining on the debt at December 31, 2014 total $53,236,269,with annual requirements ranging from $6,294,833 to $535,250. The local unitcontributions from which the appropriations will be made have averaged approximately$7.4 million over the last five years. For the current year, the principal and interest paidon behalf of the local units and the total local unit contributions recognized by theCounty were $4,655,000 and $1,891,613, respectively.

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C-26



Note 8 - Fund Balance Constraints

The detail of the various components of fund balance is as follows:General

Fund EMS FundJail

ExpansionNonmajor

Funds TotalFund Balances

Nonspendable: Prepaid costs and other assets $ 327,662 $ 132,351 $ - $ 4,552 $ 464,565Long-term receivable 166,231 - - 11,635 177,866

Total 493,893 132,351 - 16,187 642,431

Restricted: Health and welfare - - - 3,001,710 3,001,710Public safety expense - - - 6,852,427 6,852,427Community and economic development - - - 1,470,908 1,470,908Debt service - - - 213,977 213,977Capital projects (unspent bond proceeds) - - 12,670,727 - 12,670,727

Total - - 12,670,727 11,539,022 24,209,749

Committed: EMS construction - 596,080 - 5,090 601,170Debt service 2,324,375 - - 2,013,296 4,337,671West Complex construction - - - 15,635 15,635

Total 2,324,375 596,080 - 2,034,021 4,954,476

Assigned: Future operating requirements 15,000,000 - - - 15,000,000Health and welfare - 1,524,299 - 982,070 2,506,369Capital replacement - - - 7,351,097 7,351,097

Total 15,000,000 1,524,299 - 8,333,167 24,857,466

Unassigned 6,684,718 - - (120,031) 6,564,687

Total fund balances $24,502,986 $ 2,252,730 $12,670,727 $21,802,366 $61,228,809

Note 9 - Risk Management

The County is exposed to various risks of loss related to property loss, torts, errors andomissions, and employee injuries (workers’ compensation), as well as medical benefitsprovided to employees. The County has purchased commercial insurance for workers’compensation and excess medical benefit claims and participates in the MichiganMunicipal Risk Management Authority risk pool for claims relating to general liability.Settled claims relating to the commercial insurance have not exceeded the amount ofinsurance coverage in any of the past three fiscal years.

The Michigan Municipal Risk Management Authority (the “Authority”) risk pool programoperates as a claims servicing pool for amounts up to member retention limits, andoperates as a common risk-sharing management program for losses in excess ofmember retention amounts. Although premiums are paid annually to the Authority thatthe Authority uses to pay claims up to the retention limits, the ultimate liability for thoseclaims remains with the County.

52



Note 9 - Risk Management (Continued)

At December 31, 2014, the County’s Member Retention Fund with the Authorityincludes approximately $471,000 for claims and claims adjustment expenses. Upontermination of the program, any amounts remaining on deposit after the Authority hassettled all claims incurred prior to termination will be returned to the County.

The County estimates the liability for claims that have been incurred through the end ofthe fiscal year, including claims that have been reported as well as those that have notyet been reported. Changes in the estimated liability for the past two fiscal years are asfollows:

2014 2013

Unpaid claims - Beginning of year $ 812,102 $ 735,523

Incurred claims 377,041 221,990Change in incurred but not reported estimate (43,636) 197,579Claim payments (215,327) (342,990)

Unpaid claims - End of year $ 930,180 $ 812,102

In addition to the claims paid, the County incurred an additional $1,203,066 forinsurance expense for the year ended December 31, 2014.

The County is self-insured for medical benefits provided to active employees andretirees. Claims are being paid out of the Benefits Internal Service Fund. The plan isadministered by Blue Cross/Blue Shield of Michigan. The County is self-insured underthe Blue Cross/Blue Shield of Michigan program up to $150,000 per contract. Once theindividual contract or aggregate stop-loss amount is reached, reinsurance provides theremaining benefits. The is no liability for unpaid claims at December 31, 2014.

Note 10 - Defined Benefit Pension Plan

Plan Description - The County participates in the Michigan Municipal Employees’Retirement System (MERS), an agent multiple-employer defined benefit pension planthat covers the majority of County employees. The system provides retirement,disability, and death benefits to plan members and their beneficiaries.

MERS issues a publicly available financial report that includes financial statements andrequired supplemental information for the system. That report may be obtained bywriting to MERS at 1134 Municipal Way, Lansing, Michigan 48917.

During 2003, through collective bargaining, two employee groups (ambulance servicesand 911) opted to institute a defined contribution plan administered by MERS. Existingemployees were given the choice to stay in the defined benefit plan or move to thedefined contribution plan. Effective in 2003, all new hires are automatically eligible forparticipation in the defined contribution plan.

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Note 10 - Defined Benefit Pension Plan (Continued)

During the year ended December 31, 2009, the County started a new hybrid pensionplan for nonunion employees hired after August 1, 2009 and court employees hired afterJanuary 1, 2011. Existing nonunion employees were given the option to remain in thedefined benefit plan or to move into the hybrid plan effective February 1, 2010. Thehybrid plan consists of a defined benefit component and a defined contributioncomponent. Under the defined benefit component, the multiplier is 1.25 percent andthere is a six-year vesting requirement. For existing employees who transferred into thehybrid plan, their prior years of eligible service were transferred from the definedbenefit plan to the hybrid plan. Under the defined contribution component, participantsare required to contribute at least 1 percent, but no more than 3 percent, of eligiblewages to the plan. The County will match dollar-for-dollar all participant contributionsof 2 percent or 3 percent. The County does not match any participant contributionsbelow 2 percent. Participants are 100 percent vested in the employer match uponparticipation in the plan. For all employee groups participating in the hybrid plan, theCounty contributed $214,582 during the year ended December 31, 2014.

Nonunion employees who did not opt out of the defined benefit plan began contributing5 percent of MERS eligible compensation to the costs of the plan on January 1, 2010.

During the plan year ended December 31, 2011, all bargaining units who participate inthe defined benefit plans contribute 5 percent of MERS eligible compensation to thecosts of the plan. All of these defined benefit programs are now closed to new hires. Inaddition, newly hired employees have a lower retirement benefit than longer-termemployees. For most bargaining units, newly hired employees have a multiplier of 1.25percent compared to 2.25 percent of final average compensation for the existingemployees of these bargaining units.

Annual Pension Costs - For the year ended December 31, 2014, the County’s annualpension cost was $3,224,192 for the plan. The required contribution to the plan was$3,358,166. The annual required contribution was determined as part of an actuarialvaluation at December 31, 2012 using the entry age actuarial funding method. Significantactuarial assumptions used include (a) an 8 percent investment rate of return, (b)projected salary increases of 4.5 percent per year, attributable to inflation, and (c)additional projected salary increases of 0 percent to 13 percent per year, attributable toseniority/merit. The actuarial value of assets was determined using techniques thatsmooth the effects of short-term volatility over a 10-year period. In an effort to increasethe funding level and reduce the County's unfunded pension liability, the County madean additional $2,000,000 contribution above the annual required contribution in 2014for a total contribution of $5,358,166.

The unfunded actuarial liability is being amortized as a level percentage of payroll on aclosed basis over a period of 26 years and 10 years for negative unfunded accruedliabilities.

54



Note 10 - Defined Benefit Pension Plan (Continued)

For the year ended December 31, 2014, the County’s annual pension cost and netpension asset are as follows:

Annual required contribution $ 3,358,166Interest on net pension asset (462,993)Adjustment to annual required contribution 329,019

Annual pension cost (APC) 3,224,192

Contributions made (5,358,166)

Increase in net pension asset (2,133,974)

Net pension asset - Beginning of year 5,787,413

Net pension asset - End of year $ 7,921,387

Schedule of Employer Contributions

Year EndedDecember 31

AnnualRequired

Contribution(ARC)

Percentage ofARC

ContributedAnnual Pension

Cost (APC)

Percentage ofAPC

ContributedNet Pension

Asset

2012 $ 2,849,419 %136 $ 2,762,681 %141 $ 4,673,3562013 3,120,022 132 3,055,966 135 5,787,4132014 3,358,166 160 3,224,192 166 7,921,387

Schedule of Funding Progress

ActuarialValuation

Date

ActuarialValue ofAssets

ActuarialAccrued

Liability (AAL)Unfunded

AAL (UAAL)FundedRatio

CoveredPayroll

UAAL as aPercentageof Covered

Payroll

12/31/2011 $ 75,914,394 $102,788,649 $ 26,874,255 %74 $ 22,632,843 %11912/31/2012 79,875,603 108,155,474 28,279,871 74 22,213,767 12712/31/2013 84,685,040 114,208,101 29,523,061 74 23,254,390 127

Note 11 - Defined Benefit Pension Plan - Road Commission

Plan Description - Livingston County Road Commission participates in the MunicipalEmployees' Retirement System of Michigan (MERS), an agent multiple-employer definedbenefit pension plan. The system provides the following provisions: normal retirement,deferred retirement, service retirement allowance, disability retirement allowance, andnonduty-connected death and postretirement adjustments to plan members and theirbeneficiaries.

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Note 11 - Defined Benefit Pension Plan - Road Commission (Continued)

Annual Pension Cost - During the fiscal year ended December 31, 2014, LivingstonCounty Road Commission's contributions totaling $398,726 were made in accordancewith contribution requirements determined by an actuarial valuation of the plan as ofDecember 31, 2012. The employer contribution rate has been determined based onthe entry age normal cost funding method. Under the entry age normal cost fundingmethod, the total employer contribution is comprised of the normal cost plus the levelannual percentage of payroll payment required to amortize the unfunded actuarialaccrued liability over 26 years.

Schedule of Employer Contributions

Year EndedDecember 31

Annual PensionCost (APC)

Percentage ofAPC

ContributedNet PensionObligation

2012 $ 397,350 %100 $ -2013 397,166 100 -2014 398,726 100 -

Schedule of Funding Progress

ActuarialValuation

Date


ActuarialAccrued

Liability (AAL)Unfunded

AAL (UAAL)FundedRatio

CoveredPayroll


Payroll

12/31/2012 $ 16,958,334 $ 18,735,384 $ 1,777,050 %91 $ 3,336,207 %5312/31/2013 17,420,587 19,839,195 2,418,608 88 3,568,710 6812/31/2014 17,803,008 21,075,225 3,272,217 85 3,645,812 90

For further information, refer to the Livingston County Road Commission's separatelyissued financial statements.

Note 12 - Other Postemployment Benefits

The County has elected to provide postemployment health benefits to eligibleparticipants and their beneficiaries. An employee is eligible to participate if the employeeis a permanent employee and provided eligibility under County policy or an applicablecollective bargaining agreement. The retiree healthcare plan provisions were created bythe Livingston County Board of Commissioners. The County maintains the followingtwo plans:

56



Note 12 - Other Postemployment Benefits (Continued)

Livingston County Retiree Health Care Plan

The Livingston County Retiree Health Care Plan (defined benefit) is for eligibleemployees including employees covered under the sheriff’s department collectivebargaining agreement, elected officials, and nonunion employees elected or hired on orbefore March 17, 2003 who have elected to remain in this program and who met theage and service requirements for a pension under the Municipal Employee RetirementSystem of Michigan (MERS) on or before February 28, 2010. Beginning on the effectivedate, the County shall provide healthcare benefits to each eligible retiree and his or herspouse or one beneficiary (depending on the employee group). Currently, the plan has199 members, including 49 employees in active service and 150 retired employees andtheir spouses or beneficiaries currently receiving benefits.

This is a single-employer defined benefit plan administered by the County. The benefitsare provided by County resolution and under collective bargaining agreements. Theplan does not issue a separate stand-alone financial statement. All administrative costs ofthe plan, except the annual trust account fees, are absorbed by Livingston County. Theannual trust account fees are paid by the Trust.

Funding Policy - The collective bargaining agreements require no contributions fromthe sheriff’s department retirees who select the base plan. Those who retired afterDecember 31, 2014 will be responsible for paying the same rate as the active bargainingunit members. For elected officials and non-union employees, the County and eligibleparticipants will share health insurance costs as follows:

Years of Service atRetirement County Share Retiree Share

Between 10 and 15 25% 75%Between 15 and 20 35% 65%Between 20 and 25 50% 50%Between 25 and 30 65% 35%More than 30 75% 25%

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Beginning January 1, 2009, nonunion members and their spouses or beneficiaries andbeginning January 1, 2015 those who retired from the sheriff's collective bargaining afterDecember 31, 2014 will no longer receive the prescription drug coverage portion of thehealthcare benefits after they reach age 65. These persons are required to switch toMedicare Part D for their prescription coverage.

Also beginning January 1, 2009, after age 65, an annual payment of $500 for single-person and $1,000 for two-person coverage (in addition to medical coverage) is payableas long as the retiree or spouse/beneficiary is alive. This flat dollar amount is fixed anddoes not increase with inflation. The amount is prorated according to the cost-sharingschedule noted above. Also, those who retired from the sheriff's collective bargainingunit after December 31, 2014 after age 65 will receive an annual payment of $300 forsingle-person coverage and $600 for two-person coverage.

The County has no obligation to make contributions in advance of when the healthcareexpenditures are incurred (in other words, this may be financed on a “pay-as-you-go”basis). However, the County has established a Postemployment Health Care Trust(the “Trust”) and annually contributes the actuarial determined annual requiredcontribution (ARC). The Postemployment Health Care Trust is reported in the financialstatements as a fiduciary fund type.

The County closed participation in the plan to all nonunion employees hired on or afterMarch 17, 2003. Then in 2009, the County amended the plan and changed the eligibilityrequirements for those still participating in the Retiree Health Care Plan. EffectiveFebruary 28, 2010, nonunion employees hired on or before March 27, 2003 who wereeligible to participate in the plan and who satisfied the age and service requirementswere given the opportunity to make a one-time irrevocable “opt-out” decision toparticipate in the Retiree Health Savings Plan. The nonunion participants who did notmeet the age and service requirements were automatically transferred into the RetireeHealth Savings Plan and received an employer contribution to the Retiree Health SavingsPlan based on years of service. Also effective February 28, 2010, the eligible nonunionemployees who chose to remain in the Retiree Health Care Plan no longer accrueservice or seniority toward their share of the cost of healthcare benefits. Currently,there are eight nonunion employees remaining in the plan.

In 2011, the sheriff lieutenants and deputies unions, and in 2012, the sergeants unionwere given the same opportunity to make a one-time irrevocable “opt-out” decision toparticipate in the Retiree Health Savings Plan. The plan was closed to new hires in allthree sheriff unions. New hires will be enrolled into the Retiree Health Savings Plan andreceive an employer contribution based on 4 percent of the employee’s base salary.The County's December 31, 2012 actuary valuation reflects the plan changes to thesheriff (lieutenants and deputies) unions as noted above.

58




Funding Progress - For the year ended December 31, 2014, the County has estimatedthe cost of providing retiree healthcare benefits through an actuarial valuation as ofDecember 31, 2012. The valuation computes an annual required contribution whichrepresents a level of funding that, if paid on an ongoing basis, is projected to covernormal cost each year and amortize any unfunded actuarial liabilities over 24 years. Thisvaluation’s computed contribution and actual funding are summarized as follows:

Annual OPEB cost - Annual required contribution $ 1,465,222Interest on the prior year's net OPEB asset (56,662)Less adjustment to the annual required contribution 43,394

Annual OPEB cost 1,451,954

Amounts contributed - Payments of current premiums 1,012,605

Decrease in net OPEB asset 439,349

OPEB asset - Beginning of year 809,437

OPEB asset - End of year $ 370,088

The net OPEB asset is reported in the following:

Primary government:Governmental activities $ 330,249Business-type activities 24,532

Total primary government 354,781

Component units 15,307

Total net OPEB asset $ 370,088

The County’s annual OPEB costs, the percentage of annual OPEB cost contributed tothe plan, and the net OPEB assets as of December 31, 2014, 2013, and 2012 were asfollows:

2014 2013 2012

Annual OPEB costs $ 1,451,954 $ 1,280,884 $ 1,236,652Percentage contributed %70 %63 %53Net OPEB asset $ 370,088 $ 809,437 $ 1,278,900

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The funding progress of the plan as of the most recent valuation date is as follows:

Valuation as of December 312012 2010 2008

Union Nonunion Total Total

Present value of future benefitpayments $ 22,874,445 $ 3,616,755 $ 25,117,936 $ 34,543,511

Actuarial value of assets $ 6,413,729 $ 5,473,020 $ 11,260,991 $ 8,420,707Actuarial accrued liability (AAL) $ 18,582,943 $ 3,587,734 $ 21,124,919 $ 27,403,425Unfunded AAL (UAAL) $ 12,169,214 $ (1,885,286) $ 9,863,928 $ 18,982,718Funded ratio 35% 152% 53% 31%Annual covered payroll $ 3,827,319 $ 389,679 $ 3,419,799 $ 9,646,911Ratio of UAAL to covered

payroll 318% -484% 153% 197%

Actuarial Methods and Assumptions - Actuarial valuations of an ongoing plan involveestimates of the value of reported amounts and assumptions about the probability ofoccurrence of events far into the future. Examples include assumptions about futureemployment, mortality, and the healthcare cost trend. Amounts determined regardingthe funded status of the plan and the annual required contributions of the employer aresubject to continual revision as actual results are compared with past expectations andnew estimates are made about the future. The funding of the plan began during 2003and the available multi-year trend information is disclosed in the table above.

Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as understood by the employer and the plan members) and include the typesof benefits provided at the time of each valuation and the historical pattern of sharing ofbenefit costs between the employer and plan members to that point. The actuarialmethods and assumptions used include techniques that are designed to reduce theeffects of short-term volatility in actuarial accrued liabilities and the actuarial value ofassets, consistent with the long-term perspective of the calculations.

In the December 31, 2012 actuarial valuation, the entry age normal level percent of payactuarial cost method was used. The actuarial assumptions included a 7.0 percentinvestment rate of return (net of administrative expenses) for all groups, which is ablended rate of the expected long-term investment returns on plan assets, and an annualhealthcare cost trend rate of 9.00 percent initially, reduced by 0.5 percent decrementsto an ultimate rate of 4.5 percent after 10 years. The rate includes a 4.5 percent inflationassumption. The actuarial value of assets was determined using techniques that spreadthe effects of short-term volatility in the market value of investments over a seven-yearperiod. The UAAL is being amortized as a level dollar amount over 12 years based on aclosed group for nonunion participants and as a level dollar amount over 24 years on aclosed group for all other groups at December 31, 2012.

60




Livingston County Retiree Health Savings Plan - The Livingston County RetireeHealth Savings Plan (defined contribution) is for eligible employees hired after March 17,2003 but prior to November 1, 2009 and/or participants of the Retiree Health Care Planwho made a voluntary irrevocable “opt-out” of the Retiree Health Care Plan andelected participation in this new program. In consideration for such a nonrevocabledecision to opt-out of the Retiree Health Care Plan, the County made an employercontribution in an amount equal to the maximum amounts as described below for eachof the eligible years of County service the employee has served. The opt-out windowbegan in November 2003 and ended in January 2004. The plan was administered underICMA prior to December 2009. Effective December 2009, MERS became the planadministrator. Union court employees are allowed to participate in the plan effectiveJanuary 1, 2009.

In 2011, all sheriff bargaining units ratified three-year contracts. These employees weregiven a one-time option of remaining in the defined benefit retiree healthcare plan oraccepting a payment either into a healthcare savings plan or as a direct payment oftaxable income. In addition, the employees who opted out of retiree healthcare had ahealthcare savings account established through MERS of Michigan into which quarterlypayments equaling 4 percent of their base salary will be deposited.

The employer contributions will be subject to the following maximum limitation in eachcalendar year of participation: for nonunion employees - first five years of service withthe County - up to $610 per year (prorated); beginning with the sixth year of servicewith the County until termination of participation - up to $1,831 per year (prorated).For union court employees - first five years of service with the County - up to $350 peryear (prorated); beginning with the sixth year of service with the County untiltermination - up to $1,000 per year (prorated). Adjustments may be made annuallyconsistent with the nonunion salary schedule adjustment. The employer contributionshall be distributed over a 12-month period. For sheriff (lieutenants and deputies) unionemployees, the employer contributes 4 percent of base salary quarterly.

During 2009, the County amended the Retiree Health Savings Plan and closedparticipation to all nonunion employees hired on or after November 1, 2009.

For all employee groups participating in the defined contribution retiree healthcaresavings plan, the County contributed $530,442 during the year ended December 31,2014.

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Note 13 - Other Postemployment Benefits - Road Commission

Plan Description - The Road Commission provides postretirement healthcare benefitsto all employees who retire from the Road Commission, in accordance with theagreement between the Board of County Road Commissioners and the AmericanFederation of State, County, and Municipal Employees Council #25 AFL-CIO Local#1071.

The Road Commission provides health insurance coverage for retirees on a "pay-as-you-go" basis. There is no obligation to make contributions in advance. For employees whoretired before September 30, 2008, the Road Commission bears the full cost of thehealth insurance premium. Employees who retire after September 30, 2008 and areover 65 years of age must bear the cost of insurance premiums for amounts in excess of$300. All retirees are responsible for 100 percent of the cost of insurance premiums forspousal coverage, if it is elected. The spouse may continue to have coverage throughthe Road Commission after the death of the retiree, but must bear the entire cost of theinsurance premium. Currently, there are 31 retirees.

The following table shows, for the current year, the components of the RoadCommission's annual OPEB cost, the amounts actually contributed, and the changes inthe Road Commission's net OPEB obligation:

2014 annual required contribution $ 360,417Interest on the prior year's net OPEB obligation 77,137Less adjustment to the annual required contribution (64,281)

Annual OPEB cost 373,273

Payments of current premiums (256,602)

Increase in net OPEB obligation 116,671

OPEB obligation - Beginning of year 1,928,425

OPEB obligation - End of year $ 2,045,096

62



Note 13 - Other Postemployment Benefits - Road Commission(Continued)

The Road Commission's annual OPEB cost, the percentage of annual OPEB costcontributed to the plan, and the net OPEB obligation as of December 31, 2014 and thetwo preceding years are as follows:

Fiscal Year EndedAnnual

OPEB Costs

Percentageof OPEB

CostsContributed

Net OPEBObligation

12/31/14 $ 373,273 68.70 $ 2,045,09612/31/13 421,109 58.92 1,928,42512/31/12 402,090 62.33 1,755,445

The funded status of the OPEB obligation per the three most recent actuarial valuationsis as follows:

ActuarialValuation Date


(a)

ActuarialAccruedLiability(AAL)

(b)

UnfundedAAL (UAAL)

(b-a)

Funded Ratio(Percent)

(a/b)

CoveredPayroll

(c)


Payroll

12/31/06 $ - $12,069,831 $12,069,831 - $ 3,376,715 357.412/31/09 - 7,049,418 7,049,418 - 3,705,079 190.312/31/12 - 6,538,689 6,538,689 - 3,336,207 196.0

For further information, refer to the Livingston County Road Commission's separatelyissued financial statements.

Note 14 - Subsequent Events

In May 2015, the County sold general obligation limited tax notes in the amount of$6,000,000. The initial interest rate on the variable rate notes was at the rate of the 30-day LIBOR plus 1.00 percent. The bonds will mature on October 1, 2016.

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Note 15 - Upcoming Accounting Pronouncements

In June 2012, the Government Accounting Standards Board (GASB) issued GASBStatement No. 68, Accounting and Financial Reporting for Pensions. Statement No. 68requires governments providing defined benefit pensions to recognize their unfundedpension benefit obligation as a liability for the first time, and to more comprehensivelyand comparably measure the annual costs of pension benefits. This net pension liabilitythat will be recorded on the government-wide, proprietary and discretely presentedcomponent units statements will be computed differently than the current unfundedactuarial accrued liability, using specific parameters set forth by the GASB. TheStatement also enhances accountability and transparency through revised notedisclosures and required supplemental information (RSI). The County is currentlyevaluating the impact this standard will have on the financial statements when adopted.The provisions of this Statement are effective for financial statements for the year endingDecember 31, 2015.

GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other ThanPension Plans, was issued in June 2015. This new accounting standard addressesreporting by Postemployment Benefit Plans other than pensions (OPEB) that administerdefined benefit OPEB benefits on behalf of governments. Along with the currentlyrequired statement of fiduciary net position and statement of changes in fiduciary netposition, OPEB plans will now be required to include in the financial statements moreextensive footnote disclosures and required supplemental information related to themeasurement of the OPEB liabilities for which assets have been accumulated. Theprovisions of this new standard are effective for financial statements for fiscal yearsbeginning after June 15, 2016.

In June 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions, which addresses reporting bygovernments that provide postemployment benefits other than pensions (OPEB) totheir employees and for governments that finance OPEB for employees of othergovernments. This OPEB standard will require the County to recognize on the face ofthe financial statements its net OPEB liability related to its participation in the LivingstonCounty Retiree Health Care Plan. The Statement also enhances accountability andtransparency through revised note disclosures and required supplemental information(RSI). The County is currently evaluating the impact this standard will have on thefinancial statements when adopted. The provisions of this statement are effective for theCounty’s financial statements for the year ending December 31, 2018.

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Note 15 - Upcoming Accounting Pronouncements (Continued)

In February 2015, the Governmental Accounting Standards Board issued GASBStatement No. 72, Fair Value Measurement and Application. The requirements of thisStatement will enhance comparability of financial statements among governments byrequiring measurement of certain assets and liabilities at fair value using a consistent andmore detailed definition of fair value and acceptable valuation techniques. ThisStatement also will enhance fair value application guidance and related disclosures inorder to provide information to financial statement users about the impact of fair valuemeasurements on a government’s financial position. GASB Statement No. 72 is requiredto be adopted for years beginning after June 15, 2015. The County is currentlyevaluating the impact this standard will have on the financial statements when adopted,during the County's 2016 fiscal year.

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Required Supplemental Information

66


Required Supplemental InformationBudgetary Comparison Schedule - General Fund


Original BudgetAmended

Budget ActualVariance with

Amended Budget

RevenueTaxes $ 25,851,523 $ 25,741,273 $ 26,001,750 $ 260,477Licenses and permits 405,100 405,100 444,402 39,302Federal grants 48,500 21,428 42,210 20,782State sources 4,773,864 4,771,364 5,184,564 413,200Charges for services 6,312,703 5,849,328 5,871,487 22,159Fines and forfeitures 427,500 424,500 317,959 (106,541)Interest and rent 102,500 215,250 171,958 (43,292)Rental income 2,880 167,380 201,822 34,442Other 1,563,001 2,401,528 2,531,635 130,107

Total revenue 39,487,571 39,997,151 40,767,787 770,636

Expenditures - CurrentGeneral government:

Board of Commissioners 486,874 509,394 506,541 2,853County administration 555,595 582,065 574,318 7,747Purchasing 197,386 204,112 186,023 18,089Internal/External audit 125,000 120,444 106,391 14,053Information technology 360,835 365,412 267,362 98,050Treasurer (70,027) 965,656 927,416 38,240Equalization 462,980 474,579 448,457 26,122Clerk 1,167,488 1,211,009 1,197,896 13,113Elections 141,121 128,121 98,638 29,483Buildings and grounds 17,208 17,208 17,208 -Attorney 200,000 200,000 203,438 (3,438)Human resources 516,799 597,461 597,281 180Register of Deeds 652,362 667,464 646,827 20,637Insurance and other functions 3,536,907 4,130,718 3,971,547 159,171

Total general government 8,350,528 10,173,643 9,749,343 424,300

Court systems 9,498,622 9,667,951 9,566,168 101,783Public safety - Sheriff and jail 14,111,017 15,238,378 15,197,127 41,251Health and welfare 1,826,653 2,037,004 2,006,743 30,261Economic development 3,485,623 3,701,666 3,677,109 24,557

Total expenditures 37,272,443 40,818,642 40,196,490 622,152

Excess of Revenue Over (Under) Expenditures 2,215,128 (821,491) 571,297 1,392,788

Other Financing Sources (Uses) Operating transfers in 394,220 2,467,370 2,447,212 (20,158)Operating transfers out (3,173,727) (3,283,966) (3,299,771) (15,805)

Total other financing uses (2,779,507) (816,596) (852,559) (35,963)

Net Change in Fund Balance (564,379) (1,638,087) (281,262) 1,356,825

Fund Balance - Beginning of year 24,784,248 24,784,248 24,784,248 -

Fund Balance - End of year $ 24,219,869 $ 23,146,161 $ 24,502,986 $ 1,356,825

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Required Supplemental InformationBudgetary Comparison Schedule - Major Special Revenue Funds

EMS FundYear Ended December 31, 2014

Original BudgetAmended

Budget Actual

Variance withAmended

Budget

RevenueTaxes $ 2,211,743 $ 2,211,743 $ 2,239,538 $ 27,795Charges for services 6,284,556 6,411,018 6,475,879 64,861Interest and rent - - 3,707 3,707Rental income 295,347 295,347 347,503 52,156Other - - 138,607 138,607

Total revenue 8,791,646 8,918,108 9,205,234 287,126

Expenditures - Current - Health andwelfare 7,911,317 8,324,683 8,399,532 (74,849)

Excess of Revenue Over Expenditures 880,329 593,425 805,702 212,277

Other Financing Uses - Operatingtransfers out (787,908) (787,908) (894,483) (106,575)

Net Change in Fund Balance 92,421 (194,483) (88,781) 105,702

Fund Balance - Beginning of year 2,341,511 2,341,511 2,341,511 -

Fund Balance - End of year $ 2,433,932 $ 2,147,028 $ 2,252,730 $ 105,702

68


Required Supplemental InformationPension System Schedule


The schedule of funding progress is as follows:



(a)

ActuarialAccrued

Liability (AAL)(b)

UnfundedAAL (UAAL)

(b-a)


(a/b)

CoveredPayroll

(c)

UAAL as aPercentage of

CoveredPayroll

12/31/11 $ 75,914,394 $102,788,649 $ 26,874,255 73.9 $ 22,632,843 118.712/31/12 79,875,603 108,155,474 28,279,871 73.9 22,213,767 127.312/31/13 84,685,040 114,208,101 29,523,061 74.1 23,254,390 127.0

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Required Supplemental InformationOPEB System Schedule


The schedule of funding progress is as follows:



(a)

ActuarialAccrued

Liability (AAL)(b)

UnfundedAAL (UAAL)

(b-a)


(a/b)

CoveredPayroll

(c)

UAAL as aPercentage of

CoveredPayroll

12/31/08 $ 8,420,707 $ 27,403,425 $ 18,982,718 30.7 $ 9,646,911 196.812/31/10 11,260,991 21,124,919 9,863,928 53.3 3,419,799 288.412/31/12 11,886,749 22,170,677 10,283,928 53.6 4,216,998 243.9

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Note to Required Supplemental Information December 31, 2014

Budgetary Information - Annual budgets are adopted for the General Fund and all specialrevenue funds in compliance with the State Budget Act. The budget is prepared in accordancewith accounting principles generally accepted in the United States of America, except thatreimbursements have been included as "other finance sources (uses)," rather than in the"revenue" and "expenditures" categories.

Any expenditures that exceed the budget must be approved by the County Board ofCommissioners through a budget amendment. The County Board of Commissioners approvesbudget amendments with the exception that the county administrator has the authority to makeinterdepartmental line-item transfers that are less than $25,000. Department directors, electedofficials, or their designee, are authorized to transfer budgeted funds, with a net change effect ofzero between certain available object codes within their department organization code. Allbudget transfer requests are monitored and posted by County administration.

During the year, the General Fund budget was amended for recognition of board actions for thefollowing:

� Projected revenue and/or expenditures were adjusted to reflect actual collection andexpenditure activity.

� Projected expenditures were adjusted for delayed or unanticipated expenses that arose.

� Recognize new grants and revisions to existing grant awards

� Renovations to the jail and improvements to the animal control building

� Additional payment to pension to reduce unfunded liabilities

� General Fund departments continue taking proactive measures to operate within or underthe approved budget and eliminate or reduce future ongoing costs.

The budget document presents information by fund, function, department, and line item. Thelegal level of budgetary control adopted by the Board of Commissioners is the department levelin the General Fund and the fund level for all other funds. All annual appropriations lapse at fiscalyear end. Encumbrance accounting utilized is the responsibility of each individual department.Encumbrances (purchase orders or service contracts) outstanding at year end are tracked;however, they do not constitute expenditures or liabilities because the goods or services havenot been received by year end. The commitments will be honored during the subsequent year.

The budget process begins in late spring when the Board of Commissioners conducts a “goal-setting workshop” to formulate the strategic goals, policies, and objectives for the upcomingyear. To encourage long-term planning, the County prepares a five-year financial model toproject the long-term impact of new or proposed policies and programs.

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Note to Required Supplemental Information (Continued)December 31, 2014

In early summer, the strategic goals, policies, and objectives established by the board are sharedand discussed with board subcommittees (including elected officials and department heads),public safety, health and human services, infrastructure and development, and generalgovernment. The elected officials and department heads make recommendations that maymodify the strategic goals, policies, and objectives and determine how these may impact theirdepartmental budgets.

Additionally, in early summer, the finance department prepares the projection for employeecosts, including salaries/wages and all fringe benefits, by department and/or fund. The financedepartment projects total expenditures per functional group (i.e., public safety, health andhuman services, infrastructure and development, and general government for the General Fund).

Departments are requested to submit budget requests within these limits. Budget requests aredue from the departments on July 30.

In October, County administration finance reviews and analyzes the department budget requestsand makes recommendations to present to the Board subcommittees. Board subcommitteemeetings are held with the departments to review requests and potentially make modifications.In the fall, the budget plan is compiled and the County Administrator distributes or makesavailable the recommended budget plan to the Board of Commissioners, elected officials, anddepartment heads.

During November, the finance subcommittee reviews the budget plan and makes arecommendation to the Board of Commissioners. Upon review and a subsequent publichearing, the Board of Commissioners authorizes the proposed budget plan by adoption of theGeneral Appropriations Resolution. The budget must be adopted by the Board ofCommissioners at its annual meeting.

A reconciliation of the budgetary comparison schedules to the fund-based statement of changesin fund balance is as follows:

Total RevenueTotal

Expenditures

Total OtherFinancing

Sources (Uses)

General FundAmounts per operating statement $ 39,064,812 $ 38,123,752 $ (1,222,322)Reimbursements from other funds budgeted as transfers - 369,763 369,763Reimbursements from other funds are budgeted as revenue

instead of net of expenditures 1,702,975 1,702,975 -

Amounts per budget statement $ 40,767,787 $ 40,196,490 $ (852,559)

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Note to Required Supplemental Information (Continued)December 31, 2014

Total RevenueTotal

Expenditures

OtherFinancingSources

EMS FundAmounts per operating statement $ 9,205,234 $ 8,684,753 $ 609,262Reimbursements from other funds budgeted as transfers - (285,221) 285,221

Amounts per budget statement $ 9,205,234 $ 8,399,532 $ 894,483

Excess of Expenditures Over Appropriations in Budgeted Funds - During the year, theCounty incurred expenditures that were in excess of the amounts budgeted as follows:

Budget Actual Variance

General Fund - General government - Attorney $ 200,000 $ 203,438 $ (3,438)General Fund - Operating transfers out 3,283,966 3,299,771 (15,805)EMS Fund - Health and welfare 8,324,683 8,399,532 (74,849)EMS Fund - Operating transfers out 787,908 894,483 (106,575)

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APPENDIX D

TOWNSHIP OF HARTLAND

GENERAL FINANCIAL, ECONOMIC & STATISTICAL INFORMATION LOCATION AND DESCRIPTION

The Township of Hartland (the “Township”) covers an area of approximately 36.4 square miles within

the County of Livingston. FISCAL YEAR

The Township’s fiscal year begins on April 1st and ends on March 31st.

POPULATION

The U.S. Census reported populations and the Southeast Michigan Council of Governments (“SEMCOG”)

December 2015 estimated population for the Township is as follows:

Township of % Hartland Change

2015 Estimate 14,734 0.48% 2010 U.S. Census 14,663 33.35 2000 U.S. Census 10,996 --

PROPERTY VALUATIONS

Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value.

On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting

the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as “Taxable Value.” Since 1995, taxable property has had two valuations—state equalized valuation (“SEV”) and Taxable Value. Property taxes are levied on Taxable Value. Generally, the Taxable Value of property is the lesser of: (a) the property’s Taxable Value in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions, or (b) the property’s current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property’s SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of

the current true cash value. The Taxable Value of new construction is equal to current SEV. The Taxable Value and SEV of existing property are also adjusted annually for additions and losses.

Responsibility for assessing taxable property rests with the local assessing officer of each township and city.

Any property owner may appeal the assessment to the local assessor, to the local board of review and ultimately to the Michigan Tax Tribunal.

In addition to limiting the annual increase in Taxable Value, the Michigan Constitution mandates a system of

equalization of assessments. Although the assessor for each local unit of government within a county is responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor.

Municipal assessments are then equalized to the 50% levels as determined by the County Department of Equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits.

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$0

$200

$400

$600

$800

2015 2014 2013 2012 2011

Mil

lion

s

History of Valuations

Taxable State

1.13% 12.93%0.73%

78.65%

0.21%6.35%

Agricultural Commercial Industrial

Residential Developmental Personal

Taxable Value by Class

Property that is exempt from property taxes (e.g., churches, government property, public schools) is not

included in the SEV or Taxable Value data in this Appendix F. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax abated property is based upon SEV but is not included in either the SEV or Taxable Value data in this Appendix F except as noted.

HISTORY OF VALUATIONS

A history of the property valuations in the Township is shown below:

Property Levy/ Total State Value as Valuation Taxable Percent Equalized Percent of 12/31 Year Value Change Value Change

2014 2015 $597,777,184 2.59% $707,114,700 7.13% 2013 2014 582,687,353 -0.20 660,034,700 2.95 2012 2013 583,879,619 1.06 641,114,800 2.96 2011 2012 577,771,684 -1.29 622,705,900 -0.19 2010 2011 585,341,292 -5.13 623,889,200 -7.53


Valuation Composition

A breakdown of the Township’s 2015 Taxable Value by class and use is as follows:


2015 Percent By Class: Taxable Value of Total

Real Property $559,825,084 93.65% Personal Property 37,952,100 6.35 TOTAL $597,777,184 100.00%

By Use: Agricultural $6,748,128 1.13% Commercial 77,268,077 12.93 Industrial 4,369,394 0.73 Residential 470,171,050 78.65 Developmental 1,268,435 0.21 Personal 37,952,100 6.35

TOTAL $597,777,184 100.00%

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MAJOR TAXPAYERS

The Township’s top ten taxpayers and their 2015 Taxable Values are as follows:

Taxable

Taxpayer Product/Service Value DTE Energy Utility $10,533,128 Oakbrooke Apartments Apartments 6,773,367 ITC Transmission Utility 6,201,100 Hartland Meadows Manufactured Housing 5,940,418 Meijer Realty Co Retail 5,188,230 Village Manor Retirement of Hartland Retirement Community 4,402,828 Wal-Mart Retail 3,505,400 Consumers Energy Utility 3,243,700 W & A - 1 Shops at Waldenwoods 3,096,768 Vector Pipeline LP Utility 3,082,200

TOTALS $51,967,139

Total 2015 Taxable Value $597,777,184 Total 10 Taxpayers as a % of 2015 Total Taxable Value 8.69%

Source: Hartland Township CONSTITUTIONAL ROLLBACK AND ASSESSMENT CAPS

Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in

a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be reduced through a Millage Reduction Fraction unless reversed by a vote of the electorate of the local taxing unit.

TAX RATES (Per $1,000 of Valuation)

The following table shows the total Township tax rates for the past five years.

Hartland 2015 2014 2013 2012 2011

Allocated 0.8003 0.8003 0.8003 0.8003 0.8003 Fire 1.8819 1.8819 1.8819 1.8819 1.8819 Road 1.5000 0.0000 0.0000 0.0000 0.0000 TOTAL 4.1822 2.6822 2.6822 2.6822 2.6822

Source: Livingston County Equalization Department and Hartland Township OTHER JURISDICTIONS’ TAX RATES - (Per $1,000 of Valuation) The following table provides the 2015 and 2014 tax rates for the municipal units of government that are located within the Township’s boundaries.

2015 2014 State Education Tax 6.0000 6.0000 Livingston County 3.7389 3.7397 Hartland Public Schools

Homestead 8.5500 8.2900 Non-Homestead 26.5500 26.2900

Livingston LESA 2.3334 2.3361 Source: Livingston County Equalization Department

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TAX RATE LIMITATION

The current millage rates are as follows:

2015 Millage Maximum Allowable Expiration

Purpose Authorized Millage after Rollback Date of Levy Operating 1.3000 0.8003 N/A Fire 1.8819 1.8819 2021 Road 1.5000 1.5000 2023

TAX LEVIES AND COLLECTIONS

The Township’s fiscal year begins April 1 and ends March 31. The Township’s property taxes are due

December 1 of each fiscal year and are payable without penalty or interest on or before the following February 28. All real property taxes remaining unpaid on March 1 of the year following the levy are turned over to the County Treasurer for collection. Livingston County annually pays from its Tax Revolving Fund delinquent taxes on real property to all taxing units in the County, including the Township’s, shortly after the date delinquent taxes are returned to the County Treasurer for collection.

A history of tax levies and collections for the Township is as follows:

Levy Operating Collections to Collections to Year Tax Levy March 1, Each Year June 30, Each Year 2015 $477,414* In Process of Collection N/A 2014 464,827 $441,775 95.04% $464,692 99.97% 2013 462,836 443,399 95.80 462,577 99.94 2012 459,049 439,729 95.79 458,950 99.98 2011 468,011 442,800 94.61 468,011 100.00

*Estimated. Source: Livingston County Treasurer’s Office and Hartland Township Treasurer

REVENUES FROM THE STATE OF MICHIGAN

The Township receives revenue sharing payments from the State of Michigan under the State Constitution and

the State Revenue Sharing Act of 1971, as amended. The revenue sharing payments are composed of two components – a constitutional distribution and a statutory distribution.

The constitutional distribution is mandated by the State Constitution and distributed on a per capita basis to

townships, cities and villages. The amount of the constitutionally mandated revenue sharing component distributed to the Township can vary depending on the population of the Township and the receipt of sales tax revenues by the State.

The statutory distribution is authorized by legislative action and distribution is subject to annual State

appropriation by the State Legislature. Statutory distributions may be reduced or delayed by Executive Order during any State fiscal year in which the Governor, with the approval of the State Legislature’s appropriations committees, determines that actual revenues will be less than the revenue estimates on which appropriations were based.

On June 26, 2012, Governor Snyder signed into law the budget for fiscal year 2013. Similar to fiscal year 2012,

the budget replaces the statutory distribution for cities, villages and townships with an incentive-based revenue sharing program known as the Economic Vitality Incentive Program (“EVIP”), that will be distributed to municipalities that comply with “best practices” such as sharing costs of services with other communities, reducing employee pension costs and requiring employees to pay at least 20% of the cost of their health insurance as their contracts expire. The fiscal year 2013 budget increases the total EVIP distribution to cities, villages and townships to $210,000,000 from $200,000,000 in FY 2012. The fiscal year 2013 budget does not alter the constitutional component, and includes an increased constitutional revenue sharing distribution to cities, villages and townships of approximately $711,100,000. Under the EVIP program, an eligible municipality such as the Township can receive (i) one-third of the money it is eligible for if it produces a citizen’s guide to its finances and a performance

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dashboard; (ii) another third if it develops plans to increase its existing level of cooperation, collaboration and consolidation, both internally and with neighboring jurisdictions; and (iii) a final third if it develops a compensation plan that, among other things, limits public employer health care contributions to no more than 80% and pension multipliers to no more than 1.5% to 3% depending on whether an employee is eligible for social security and whether retiree health care is offered, or that establishes the employer’s share as cost competitive with a state preferred provider organization health plan on a per-employee basis. The compensation plan must be completed by June 1, 2013 for the Township to receive all of the money that it is eligible for from the final component described in clause (iii) above. Any portion of the EVIP that the Township would be eligible to receive would be subject to certain benchmarks that the Township would need to meet, and there can be no assurance of what amount, if any, the Township would receive under the proposed EVIP program. The Township does not receive funding for EVIP.

Purchasers of the Bonds should be alerted to further modifications to revenue sharing payments to Michigan

local governmental units, to potential consequent impact on the Township’s general fund condition, and to the potential impact upon the market price or marketability of the Bonds resulting from changes in revenues received by the Township from the State.

The following table sets forth the annual revenue sharing payments and other moneys received by the Township for the State’s fiscal years ended September 30, 2011 through September 30, 2014 and the estimated payments for the State’s fiscal year ending September 30, 2015.

State of Michigan Fiscal Year Ended Revenue Sharing

September 30th Payments1 2015 $1,170,1272 2014 1,099,946 2013 1,074,741 2012 1,052,942 2011 989,240

1Amounts do not include state gas and weight tax distributions. 2Estimated. Source: Department of Treasury via website at www.michigan.gov/treasury

LABOR FORCE

The Township of Hartland has 25 employees, none of whom are represented by bargaining units.

RETIREMENT & DEFERRED COMPENSATION PLANS

The Township participates in the Municipal Employers Retirement System Defined Contribution Pension Plan Group No. 106476 for Michigan Township employees. The Township contributes $900 annually for full-time employees and all Township elected officials and trustees.

The Township’s contributions for the past four years and an estimate for the current fiscal year are shown below.

Fiscal Year Ended Employer

March, 31 Contributions 2016 $17,100* 2015 16,050 2014 16,200 2013 16,800 2012 16,200

*Estimated.

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The Township also participates in the ICMA 457 Deferred Compensation Plan with International City/County Management Association Retirement Corporation (ICMA-RA). The Township matches up to 6% of employee compensation in addition to any contribution made to the employees’ defined contribution plan.

The Township’s contributions for the past four years and an estimate for the current fiscal year are shown below.

Fiscal Year Ended Employer March, 31 Contributions

2016 $33,396* 2015 22,927 2014 22,183 2013 21,542 2012 15,262

*Estimated. Source: Audited Financial Statements and Township

OTHER POST-EMPLOYMENT BENEFITS

The Township does not provide Other Post-Employment Benefits.

DEBT HISTORY

The Township has no record of default on its obligations FUTURE FINANCING

The Township may issue between $2-3 million of bonds for road improvements within the next 12 months,

which would be paid from a dedicated road millage.

SHORT TERM BORROWING

The Township has no short-term borrowing outstanding.

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DEBT STATEMENT - (As of 03/02/16 – including Bonds described herein)

DIRECT DEBT:

Dated Final Principal Date Purpose Bond Type Maturity Outstanding

General Obligations: 11/01/11 Sewer LTGO 11/01/33 $5,610,000 07/01/15 Highway Road Improvement LTGO 04/01/24 1,650,000 $7,260,000

Special Assessment Bonds1: 07/01/01 Water LTGO 05/01/21 $2,850,000 09/05/07 Highway Road Improvement LTGO 04/01/17 140,000 04/30/09 Public Improvement LTGO 05/01/33 4,860,000 06/17/09 Highway Road Improvement LTGO 04/01/19 150,000 8,000,000

Share of County Issued Bond: 08/15/05 Sewer, Hartland Twp., Series 2005A LTGO 11/01/25 $4,900,000 08/15/05 Sewer, Hartland Twp., Series 2005B LTGO 11/01/30 6,675,000 09/28/95 Drainage, Hartland Twp., Series B1 LTGO 04/01/16 219,000 09/28/95 Drainage, Bches to Hartland1 LTGO 04/01/16 130,526 09/17/15 Drainage, Lake Tyrone, SRF1 LTGO 04/01/35 1,312,640

$13,237,166 TOTAL DIRECT DEBT $28,497,166

Less: Special Assessment Bonds (9,662,166) Less: Prior Bonds Refunded by Bonds (11,575,000) Plus: Refunding Bonds described herein 11,430,000

NET DIRECT DEBT $18,690,000

OVERLAPPING DEBT:

Percent Net Township's Share Municipality Debt Share 52.85% Hartland Schools $158,996,034 $84,029,404 7.41 Livingston County 24,284,500 1,799,481 8.43 Livingston ISD 3,080,000 259,644

TOTAL OVERLAPPING DEBT $86,088,529

NET DIRECT AND OVERLAPPING DEBT $104,778,529

1Special Assessment Bonds. Source: Municipal Advisory Council of Michigan

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DEBT RATIOS

Township's Estimated Population 14,734 2015 Taxable Value $597,777,184 2015 State Equalized Value (SEV) $707,114,700 2015 True Cash Value (TCV) $1,414,229,400

Per Capita 2015 Taxable Value $40,571.28 Per Capita 2015 State Equalized Value $47,992.04 Per Capita 2015 True Cash Value $95,984.08

Per Capita Net Direct Debt $1,268 Per Capita Net Direct and Overlapping Debt $7,111

Percent of Net Direct Debt of 2015 Taxable Value 3.1266% Percent of Net Direct and Overlapping Debt of 2015 Taxable Value 17.5280%

Percent of Net Direct Debt of 2015 SEV 2.6431% Percent of Net Direct and Overlapping Debt of 2015 SEV 14.8178%

Percent of Net Direct Debt of 2015 TCV 1.3216% Percent of Net Direct and Overlapping Debt of 2015 TCV 7.4089%

HOUSING

The Southeast Michigan Council of Governments reports the history of building permits for Hartland Township as follows:

New Units 2015 2014 2013 2012 2011

Single Family 24 21 24 7 2 Two Family 0 0 0 0 0 Attach Condo 0 0 0 0 0 Multi-Family 0 0 0 0 0 Total New 24 21 24 7 2 Less Demolished Units (3) (1) (2) 0 0

Net Total 21 20 22 7 2

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LARGEST EMPLOYERS

A representative list of largest employers in the Township of Hartland is as follows:

Approx. No. Employer Product or Service of Employees

Within the Township (50 + employees) Meijer Grocery Store 200 Beauchamp Lawn & Snow Service Snowplowing 100 Charyl Stockwell Academy Education 100 Dynamic Technology Inc Electrical Repair 100 Hartland Middle School Elementary School 100 Waldenwoods Resort Conference Resort 100 Burger King Chain Fast Food 50 Hartland Smilemakers Dentist 50 McDonald's Chain Fast Food 50 Taco Bell Chain Fast Food 50 Wendy's Chain Fast Food 50

Source: Manta Intelligence Company via www.manta.com, and individual employers

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APPENDIX E

TOWNSHIP OF HARTLAND GENERAL FUND BUDGET SUMMARY AND COMPARATIVE FINANCIAL STATEMENTS

Electronic copies of the Township’s audited financial statements are available upon request from: Public Financial Management, 305 East Eisenhower Parkway, Ann Arbor, MI, 48108, (734) 994-9700-Phone or the Department of Treasury via https://treas-secure.state.mi.us/LAFDocSearch/

As Amended 2015-16

Total Revenue $2,334,647

Total Expenditures $2,088,745

Excess of Expenditures (over) under Revenues $245,902

Fund Balance - April 1, $3,476,454

Projected Fund Balance - March 31, $3,722,356

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The following financial information has been compiled from information provided in the Township of Hartland’s audited Comprehensive Annual Financial Reports for the fiscal years ended March 31, 2015, 2014 and 2013.

Township of Hartland General Fund

Comparative Balance Sheet

For Fiscal Years Ended March 31, 2013 2014 2015

Assets: Cash and Cash Equivalents $2,636,473 $2,825,938 $3,146,768 Receivables

Taxes 25,433 24,647 30,163 State Shared Revenues 164,428 158,649 174,990 Accounts 149,376 48,727 56,454 Due From Other Funds 128 24,851 168,458 Prepaid Expenditures 17,988 17,838 22,387

Total Assets $2,993,826 $3,100,650 $3,599,220

Liabilities: Accounts Payable $59,928 $48,438 $29,942 Accrued Wages and Absences 34,595 43,983 42,158 Compliance Reserves 50,106 50,182 50,257 Deferred Revenues 470 Due to Other Funds 470 409

Total Liabilities $145,099 $143,073 $122,766

Fund Balance: Nonspendable - Prepaid Items $17,988 $17,838 $22,387 Committed:

Capital Improvement 1,082,618 974,400 1,321,051 Unassigned 1,748,121 $1,965,339 $2,133,016

Total Fund Balance $2,848,727 $2,957,577 $3,476,454

Total Liabilities and Fund Balance $2,993,826 $3,100,650 $3,599,220


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Hartland Township General Fund

Comparative Statement of Revenues, Expenditures and Changes in Fund Balance

For Fiscal Years Ended March 31, 2013 2014 2015

Revenue: Property Taxes $462,048 $463,861 $465,416 Intergovernmental - state 1,065,014 1,084,263 1,156,044 Fines and Forfeitures 42,455 2,338 568 Licenses and Permits 3,449 3,486 3,254 Rental Income 31,740 31,740 31,740 Franchise Fees 180,242 186,270 198,367 Charges for Services 386,433 369,028 364,789 Grant 1,350 25,000 5,913 Contributions 100,000 13,297 9,000 Interest 6,180 4,565 4,998 Miscellaneous 10,118 20,710 19,741 Change in Fair Value of Investments (415) 1,221

Total Revenue $2,289,029 $2,204,143 $2,261,051

Expenditures: Current:

General Government $1,526,886 $595,781 $1,253,006 Parks and Recreation 8,903 14,208 46,910 Police Protection/Public Safety 182,764 14,668 5,691 Public Works 234,977 877,049 330,733 Community Development 43,000 40,000 40,000

Capital Outlay: General Government 72,136 10,038 40,834 Parks and Recreation 852,707 538,549

Total Expenditures $2,921,373 $2,090,293 $1,717,174

Excess of Revenue Over (Under) Expenditures ($632,344) $113,850 $543,877

Other Financing Sources (Uses): Operating Transfers In $3,466 Operating Transfers Out (25,000) (5,000) (25,000)

Total Other Financing Sources (Uses): ($21,534) ($5,000) ($25,000)

Excess of Revenue & Other Sources Over (Under) Expenditures & Other Uses ($653,878) $108,850 $518,877

Fund Balance - Beginning April 1, $3,502,605 $2,848,727 $2,957,577

Fund Balance - Ending March 31, $2,848,727 $2,957,577 $3,476,454


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APPENDIX F –

FORM OF LEGAL OPINION


__________, 2016 COUNTY OF LIVINGSTON Howell, Michigan We have acted as bond counsel and have examined the law and such certified proceedings of the County of Livingston, Michigan (the “County”), and other documents as we deemed necessary to render this opinion in connection with the issuance by the County of its $12,200,000* aggregate principal amount Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) dated __________, 2016 (the "Refunding Bonds"). The Refunding Bonds are being issued under and pursuant to the Constitution and statutes of the State of Michigan and in particular Act No. 34, Public Acts of Michigan, 2001, as amended (the "Act"), for the purpose of refunding part of the outstanding Livingston Regional Sanitary Sewer Project (Series 2005 A (LTGO) Bonds – Hartland Township), dated August 15, 2005 maturing in the years 2016 through 2030 in the principal amount of $6,675,000 and the Livingston Regional Sanitary Sewer Project (Series 2005B (LTGO) Bonds – Hartland Township), dated August 15, 2005 maturing in the years 2019 through 2025 in the principal amount of $4,900,000 (together the "Refunded Bonds"). Said Refunded Bonds were issued in anticipation of the receipt of certain contractual payments (the “Payments”) pursuant to a Contract dated May 1, 2003 as amended by the First Amendment thereto dated May 1, 2005 between the Township of Hartland (the “Township”) and the County (together the “Contract”) to defray the cost of constructing a sewer system improvement project in the Township. In so acting, we have examined one executed and authenticated bond. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the Official Statement or any other offering material relating to the Refunding Bonds (except to the extent, if any, stated in the Official Statement), and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Based on such examination, we are of the opinion, as of the date hereof and under existing law: 1. The Bond Resolution has been duly adopted by the Board of Commissioners of the County. 2. The Contract is a valid and binding upon the parties thereto and the Refunding Bonds are valid and binding obligations of the County, payable as to both principal and interest solely from the Payments. In addition, the limited tax full faith and credit pledge of the County is also pledged for the payment of the Refunding Bonds and the interest thereon, and in the event of insufficiency of the payments under the Contract, the County is required to pay the amount of deficiency out of its general funds or, if necessary, to levy taxes for such purpose on all taxable property within its boundaries subject to constitutional and statutory tax limitations. *Subject to adjustment.

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COUNTY OF LIVINGSTON _____________, 2016 Page Two 3. Under existing statutes, regulations, rulings and court decisions as currently interpreted, the interest on the Refunding Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, it should be noted that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. This opinion is subject to the condition that the County comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Refunding Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Such requirements include filing certain returns with the United States Internal Revenue Service and rebating to the United States certain investment earnings unless certain conditions are met. Failure to comply with such requirements could cause the interest on the Refunding Bonds to be so included in gross income retroactive to the date of issuance of the Refunding Bonds. The County has covenanted to comply with all such requirements. We express no opinion regarding other federal tax consequences arising with respect to the Refunding Bonds and the interest thereon.

4. In addition, the Refunding Bonds and the interest thereon are exempt from taxation presently in effect in the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. 5. The Refunding Bonds have not been designated by the County as “qualified tax-exempt obligations” for purposes of Section 265 (b) (3) of the Code. The rights of holders of the Refunding Bonds may be affected by bankruptcy, reorganization, moratorium, receivership or other similar laws affecting the enforceability of creditors' rights now existing or hereafter enacted to the extent constitutionally applicable, and the enforcement of such rights may be subject to the exercise of judicial discretion in appropriate cases. AXE & ECKLUND, P.C. By __________________________ Las.os-liv68-hartland

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APPENDIX G –

FORM OF CONTINUING DISCLOSURE UNDERTAKING


FORM OF CONTINUING DISCLOSURE CERTIFICATE

COUNTY OF LIVINGSTON $__________

Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016

(Limited Tax General Obligation) This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the County of Livingston (the "County") in connection with the issuance of its $_________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) (the "Bonds"). This Disclosure Certificate is being executed and delivered pursuant to a resolution adopted by the Board of Commissioners of the County on ______, ____ (the "Resolution"). The County covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate.

(a) This Disclosure Certificate is being executed and delivered by the County for the benefit of the Bondholders and the Beneficial Owners and in order to assist the Participating Underwriters in complying with subsection (b)(5) of the Rule.

(b) In consideration of the purchase and acceptance of any and all of the Bonds by those who shall hold the same or shall own beneficial ownership interests therein from time to time, this Disclosure Certificate shall be deemed to be and shall constitute a contract between the County and the Bondholders and Beneficial Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the County shall be for the benefit of the Bondholders and Beneficial Owners of any and all of the Bonds.

SECTION 2. Definitions. The following capitalized terms shall have the following meanings in this Disclosure Certificate:

"Annual Report" shall mean any Annual Report provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

"Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).

"Dissemination Agent" shall mean the County, or any successor Dissemination Agent appointed in writing by the County and which has filed with the County a written acceptance of such designation.

“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB. As of the date of this Disclosure Certificate, the EMMA Internet Web site address is http://www.emma.msrb.org.

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"GAAP" shall mean generally accepted accounting principles, as such principles are prescribed, in part, by the Financial Accounting Standards Board and modified by the Government Accounting Standards Board and in effect from time to time.

"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.

"MSRB" shall mean the Municipal Securities Rulemaking Board. "Official Statement" shall mean the Official Statement for the Bonds dated ____________.

"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

"Rule" shall mean Rule 15c2-12 promulgated by the SEC pursuant to the 1934 Act, as the same may be amended from time to time, together with all interpretive guidances or other official interpretations or explanations thereof that are promulgated by the SEC.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Counsel" shall mean legal counsel expert in federal securities law.

"State" shall mean the State of Michigan.

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

SECTION 3. Provision of Annual Reports.

(a) Each year, the County shall provide, or shall cause the Dissemination Agent to provide, not later than nine months after the first day of the County's fiscal year, commencing with the County's Annual Report for the fiscal year ending December 31, 2015, to the MSRB an Annual Report for the preceding fiscal year which is consistent with the requirements of Section 4 of this Disclosure Certificate. Currently, the County’s fiscal year commences January 1. Not later than fifteen (15) business days prior to said date, the County shall provide the Annual Report to the Dissemination Agent (if other than the County). In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, however, that if the audited financial statements of the County are not available by the deadline for filing the Annual Report, they shall be provided when and if available, and unaudited financial statements in a format similar to the audited financial statements most recently prepared for the County shall be included in the Annual Report.

(b) If the County is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the County shall send a notice, in a timely manner, to the MSRB in substantially the form attached as Exhibit A.

(c) If the County's fiscal year changes, the County shall send written notice of such change to MSRB, in substantially the form attached as Exhibit B.

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(d) If the Dissemination Agent is other than the County, the Dissemination Agent shall file a report with the County certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided.

(f) In connection with providing the Annual Report, the Dissemination Agent (if other than the County) is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the Annual Report for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

SECTION 4. Content of Annual Reports. The County's Annual Report shall contain or incorporate by reference the following:

(a) The audited financial statements of the County for its fiscal year immediately preceding the due date of the Annual Report. (b) An update of the financial information and operating data relating to the County of the same nature as that contained in the following tables in the Official Statement: “Property Valuations,” “Major Taxpayers,” “Tax Rates,” “Tax Rate Limitation,” “Tax Levies and Collections,” “Revenues from the State of Michigan,” “Labor Force,” “Pension Fund,” “Other Post-Employment Benefits,” “Debt Statement,” “Outstanding Notes,” “Future Financing,” and “Legal Debt Margin,” . The County’s financial statements shall be audited and prepared in accordance with GAAP with such changes as may be required from time to time in accordance with State law. Any or all of the items listed above may be included by specific reference to other documents available to the public on the MSRB’s Internet Web site or filed with the SEC. The County shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.

(a) The County covenants to provide, or cause to be provided, notice of any of the following events with respect to the Bonds, if material, in a timely manner, but not to exceed 10 business days, and in accordance with the Rule:

(1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial

difficulties; (4) unscheduled draws on credit enhancements reflecting financial

difficulties; (5) substitution of credit or liquidity providers, or their failure to perform;

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(6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

(7) modifications to rights of security holders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the

securities, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated

person; (13) the consummation of a merger, consolidation, or acquisition involving an

obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

(14) appointment of a successor or additional trustee or the change of name of

a trustee, if material. (b) Whenever the County obtains knowledge of the occurrence of a Listed

Event, the County shall as soon as possible determine if such event would be material under applicable federal securities laws. The County covenants that its determination of materiality will be in conformance with federal securities laws.

(c) If the County determines that the occurrence of a Listed Event would be material under applicable federal securities laws, the County shall promptly cause a notice of such occurrence to be filed with the MSRB. In connection with providing a notice of the occurrence of a Listed Event described in subsection (a)(9), the County shall include in the notice explicit disclosure as to whether the Bonds have been escrowed to maturity or escrowed to call, as well as appropriate disclosure of the timing of maturity or call.

(d) In connection with providing a notice of the occurrence of a Listed Event, the Dissemination Agent (if other than the County), solely in its capacity as such, is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the notice for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

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(e) The County acknowledges that the "rating changes" referred to above in Section 5(a)(11) of this Disclosure Certificate may include, without limitation, any change in any rating on the Bonds or other indebtedness for which the County is liable.

(f) The County acknowledges that it is not required to provide a notice of a Listed Event with respect to credit enhancement when the credit enhancement is added after the primary offering of the Bonds, the County does not apply for or participate in obtaining such credit enhancement, and such credit enhancement is not described in the Official Statement.

SECTION 6. Mandatory Electronic Filing with EMMA: All filings with the MSRB under this Disclosure Certificate shall be made by electronically transmitting such filings through the EMMA Dataport at http://www.emma.msrb.org as provided by the amendments to the Rule adopted by the SEC in Securities Exchange Act Release No. 59062 on December 5, 2008.

SECTION 7. Termination of Reporting Obligation.

(a) The County's obligations under this Disclosure Certificate shall terminate upon the legal defeasance of the Resolution or the prior redemption or payment in full of all of the Bonds. If the County's obligation to pay the principal of and interest on the Bonds is assumed in full by some other entity, such entity shall be responsible for compliance with the Disclosure Certificate in the same manner as if it were the County, and the County shall have no further responsibility hereunder.

(b) This Disclosure Certificate, or any provision hereof, shall be null and void in the event that the County (i) receives an opinion of Securities Counsel, addressed to the County, to the effect that those portions of the Rule, which require such provisions of this Disclosure Certificate, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, amended or modified, or are otherwise deemed to be inapplicable to the Bonds, as shall be specified in such opinion, and (ii) delivers notice to such effect to the MSRB.

SECTION 8. Dissemination Agent. The County, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Disseminating Agent. The initial Dissemination Agent shall be the County. Except as otherwise provided in this Disclosure Certificate, the Dissemination Agent (if other than the County) shall not be responsible in any manner for the content of any notice or report prepared by the County pursuant to this Disclosure Certificate.

SECTION 9. Amendment; Waiver. (a) Notwithstanding any other provision of this Disclosure Certificate, this Disclosure Certificate may be amended, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(1) If the amendment relates to the provisions of Section 3(a), (b), (c), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;

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(2) This Disclosure Certificate, as so amended or taking into account such waiver, would, in the opinion of Securities Counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(3) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders.

(b) In the event of any amendment to, or waiver of a provision of, this Disclosure Certificate, the County shall describe such amendment or waiver in the next Annual Report, and shall include a narrative explanation of the reason for the amendment or waiver. In particular, if the amendment results in a change to the annual financial information required to be included in the Annual Report pursuant to Section 4 of this Disclosure Certificate, the first Annual Report that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. Further, if the annual financial information required to be provided in the Annual Report can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Report that does not include such information.

(c) If the amendment results in a change to the accounting principles to be followed in preparing financial statements as set forth in Section 4 of this Disclosure Certificate, the Annual Report for the year in which the change is made shall include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of such differences and the impact of the changes on the presentation of the financial information. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in accounting principles shall be sent by the County, or the Dissemination Agent (if other than the County) at the written direction of the County, to the MSRB.

SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the County shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 11. Failure to Comply. In the event of a failure of the County or the Dissemination Agent (if other than the County) to comply with any provision of this Disclosure Certificate, any Bondholder or Beneficial Owner may bring an action to obtain specific performance of the obligations of the County or the Dissemination Agent (if other than the County) under this Disclosure Certificate, but no person or entity shall be entitled to recover monetary damages under any circumstances, and any failure to comply with the obligations

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under this Disclosure Certificate shall not constitute a default with respect to the Bonds or under the Resolution.

SECTION 12. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate.

SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Dissemination Agent, the Participating Underwriters, the Bondholders and the Beneficial Owners, and shall create no rights in any other person or entity.

SECTION 14. Transmission of Information and Notices. Unless otherwise required by law or this Disclosure Certificate, and, in the sole determination of the County or the Dissemination Agent, as applicable, subject to technical and economic feasibility, the County or the Dissemination Agent, as applicable, shall employ such methods of information and notice transmission as shall be requested or recommended by the herein designated recipients of such information and notices.

SECTION 15. Additional Disclosure Obligations. The County acknowledges and understands that other State and federal laws, including, without limitation, the Securities Act of 1933, as amended, and Rule 10b-5 promulgated by the SEC pursuant to the 1934 Act, may apply to the County, and that under some circumstances, compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the County under such laws.

SECTION 16. Governing Law. This Disclosure Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Disclosure Certificate shall be instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to the extent this Disclosure Certificate addresses matters of federal securities laws, including the Rule, this Disclosure Certificate shall be construed and interpreted in accordance with such federal securities laws and official interpretations thereof.

COUNTY OF LIVINGSTON By: ________________ Its: ___________ Date: ____________

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EXHIBIT A

NOTICE TO THE MSRB

OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: County of Livingston, Michigan Name of Bond Issue: $________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) Date of Bonds: ________ NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Certificate with respect to the Bonds. The Issuer anticipates that the Annual Report will be filed by __________, ____. COUNTY OF LIVINGSTON By: Its: Dated: __________, ____

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EXHIBIT B

NOTICE TO THE MSRB

OF CHANGE IN ISSUER'S FISCAL YEAR Name of Issuer: County of Livingston, Michigan Name of Bond Issue: $________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) Date of Bonds: ________ NOTICE IS HEREBY GIVEN that the Issuer's fiscal year has changed. Previously, the Issuer's fiscal year ended on __________, ____. It now ends on __________, ____. COUNTY OF LIVINGSTON By: Its: Dated: __________, ____

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FORM OF CONTINUING DISCLOSURE CERTIFICATE

TOWNSHIP OF HARTLAND $__________

Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016

(Limited Tax General Obligation) This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the Township of Hartland, State of Michigan (the "Township") in connection with the issuance by the County of Livingston, (the “County”) of its $__________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) (the "Bonds"). This Disclosure Certificate is being executed and delivered pursuant to a resolution approved by the Township Board of the Township on ______ (the "Resolution"). The Township covenant and agree as follows:

SECTION 1. Purpose of the Disclosure Certificate.

(a) This Disclosure Certificate is being executed and delivered by the Township for the benefit of the Bondholders and the Beneficial Owners and in order to assist the Participating Underwriters in complying with subsection (b)(5) of the Rule.

(b) In consideration of the purchase and acceptance of any and all of the Bonds by those who shall hold the same or shall own beneficial ownership interests therein from time to time, this Disclosure Certificate shall be deemed to be and shall constitute a contract between the Township and the Bondholders and Beneficial Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the Township shall be for the benefit of the Bondholders and Beneficial Owners of any and all of the Bonds.

SECTION 2. Definitions. The following capitalized terms shall have the following meanings in this Disclosure Certificate:

"Annual Report" shall mean any Annual Report provided by the Township pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

"Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).

"Dissemination Agent" shall mean the Township, or any successor Dissemination Agent appointed in writing by the Township and which has filed with the Township a written acceptance of such designation.

“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB. As of the date of this Disclosure Certificate, the EMMA Internet Web site address is http://www.emma.msrb.org.

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"GAAP" shall mean generally accepted accounting principles, as such principles are prescribed, in part, by the Financial Accounting Standards Board and modified by the Government Accounting Standards Board and in effect from time to time.

"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.

"MSRB" shall mean the Municipal Securities Rulemaking Board.

"Official Statement" shall mean the Official Statement for the Bonds dated ____________.

"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

"Rule" shall mean Rule 15c2-12 promulgated by the SEC pursuant to the 1934 Act, as the same may be amended from time to time, together with all interpretive guidances or other official interpretations or explanations thereof that are promulgated by the SEC.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Counsel" shall mean legal counsel expert in federal securities law.

"State" shall mean the State of Michigan.

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

SECTION 3. Provision of Annual Reports.

(a) Each year, the Township shall provide, or shall cause the Dissemination Agent to provide, not later than nine months after the first day of the Township’ fiscal year, commencing with the Township’ Annual Report for the fiscal year ending June 30, 2016 for the Township of Hartland, to the MSRB an Annual Report for the preceding fiscal year which is consistent with the requirements of Section 4 of this Disclosure Certificate. Currently, the Township of Hartland’s fiscal year commences July 1. Not later than fifteen (15) business days prior to said date, the Township shall provide the Annual Report to the Dissemination Agent (if other than the Township). In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, however, that if the audited financial statements of the Township are not available by the deadline for filing the Annual Report, they shall be provided when and if available, and unaudited financial statements in a format similar to the audited financial statements most recently prepared for the Township shall be included in the Annual Report.

(b) If the Township are unable to provide to the MSRB an Annual Report by the date required in subsection (a), the Township shall send a notice, in a timely manner, to the MSRB in substantially the form attached as Exhibit A.

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(c) If either of the Township’ fiscal year changes, the Township shall send written notice of such change to MSRB, in substantially the form attached as Exhibit B.

(d) If the Dissemination Agent is other than the Township, the Dissemination Agent shall file a report with the Township certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided.

(f) In connection with providing the Annual Report, the Dissemination Agent (if other than the Township) is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the content of the Annual Report for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

SECTION 4. Content of Annual Reports. The Township’ Annual Report shall contain or incorporate by reference the following:

(a) The audited financial statements of the Township for their fiscal year immediately preceding the due date of the Annual Report. (b) An update of the financial information and operating data relating to the Township of the same nature as that contained in the following tables in the Official Statement: “Property Valuations,” “Tax Base Composition,” “Major Taxpayers,” “Tax Rates,” “Tax Rate Limitation,” “Tax Levies and Collections,” “Retirement and Deferred Compensation Plans,” “Revenues from the State of Michigan,” “Debt Statement,” “General Fund Budget”. The Township’ financial statements shall be audited and prepared in accordance with GAAP with such changes as may be required from time to time in accordance with State law. Any or all of the items listed above may be included by specific reference to other documents available to the public on the MSRB’s Internet Web site or filed with the SEC. The Township shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.

(a) The Township covenant to provide, or cause to be provided, notice of any of the following events with respect to the Bonds, if material, in a timely manner and in accordance with the Rule:

(1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial

difficulties; (4) unscheduled draws on credit enhancements reflecting financial

difficulties;

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(5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of

proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

(7) modifications to rights of security holders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the

securities, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated

person; (13) the consummation of a merger, consolidation, or acquisition involving an

obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

(14) appointment of a successor or additional trustee or the change of name of

a trustee, if material.

(b) Whenever the Township obtain knowledge of the occurrence of a Listed Event, the Township shall as soon as possible determine if such event would be material under applicable federal securities laws. The Township covenant that its determination of materiality will be in conformance with federal securities laws.

(c) If the Township determine that the occurrence of a Listed Event would be material under applicable federal securities laws, the Township shall promptly cause a notice of such occurrence to be filed with the MSRB. In connection with providing a notice of the occurrence of a Listed Event described in subsection (a)(9), the Township shall include in the notice explicit disclosure as to whether the Bonds have been escrowed to maturity or escrowed to call, as well as appropriate disclosure of the timing of maturity or call.

(d) In connection with providing a notice of the occurrence of a Listed Event, the Dissemination Agent (if other than the Township), solely in its capacity as such, is not obligated or responsible under this Disclosure Certificate to determine the sufficiency of the

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content of the notice for purposes of the Rule or any other state or federal securities law, rule, regulation or administrative order.

(e) The Township acknowledge that the "rating changes" referred to above in Section 5(a)(11) of this Disclosure Certificate may include, without limitation, any change in any rating on the Bonds or other indebtedness for which the Township are liable.

(f) The Township acknowledge that they is not required to provide a notice of a Listed Event with respect to credit enhancement when the credit enhancement is added after the primary offering of the Bonds, the Township do not apply for or participate in obtaining such credit enhancement, and such credit enhancement is not described in the Official Statement.

SECTION 6. Mandatory Electronic Filing with EMMA: All filings with the MSRB under this Disclosure Certificate shall be made by electronically transmitting such filings through the EMMA Dataport at http://www.emma.msrb.org as provided by the amendments to the Rule adopted by the SEC in Securities Exchange Act Release No. 59062 on December 5, 2008.

SECTION 7. Termination of Reporting Obligation.

(a) The Township’ obligations under this Disclosure Certificate shall terminate upon the legal defeasance of the Resolution or the prior redemption or payment in full of all of the Bonds. If the Township’ obligation to pay the principal of and interest on the Bonds is assumed in full by some other entity, such entity shall be responsible for compliance with the Disclosure Certificate in the same manner as if it were the Township, and the Township shall have no further responsibility hereunder.

(b) This Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Township (i) receive an opinion of Securities Counsel, addressed to the Township, to the effect that those portions of the Rule, which require such provisions of this Disclosure Certificate, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, amended or modified, or are otherwise deemed to be inapplicable to the Bonds, as shall be specified in such opinion, and (ii) delivers notice to such effect to the MSRB.

SECTION 8. Dissemination Agent. The Township, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Disseminating Agent. The initial Dissemination Agent shall be the Township. Except as otherwise provided in this Disclosure Certificate, the Dissemination Agent (if other than the Township) shall not be responsible in any manner for the content of any notice or report prepared by the Township pursuant to this Disclosure Certificate.

SECTION 9. Amendment; Waiver. (a) Notwithstanding any other provision of this Disclosure Certificate, this Disclosure Certificate may be amended, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

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(1) If the amendment relates to the provisions of Section 3(a), (b), (c), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;

(2) This Disclosure Certificate, as so amended or taking into account such waiver, would, in the opinion of Securities Counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(3) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders.

(b) In the event of any amendment to, or waiver of a provision of, this Disclosure Certificate, the Township shall describe such amendment or waiver in the next Annual Report, and shall include a narrative explanation of the reason for the amendment or waiver. In particular, if the amendment results in a change to the annual financial information required to be included in the Annual Report pursuant to Section 4 of this Disclosure Certificate, the first Annual Report that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. Further, if the annual financial information required to be provided in the Annual Report can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Report that does not include such information.

(c) If the amendment results in a change to the accounting principles to be followed in preparing financial statements as set forth in Section 4 of this Disclosure Certificate, the Annual Report for the year in which the change is made shall include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of such differences and the impact of the changes on the presentation of the financial information. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in accounting principles shall be sent by the Township, or the Dissemination Agent (if other than the Township) at the written direction of the Township, to the MSRB.

SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Township from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Township choose to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Township shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

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SECTION 11. Failure to Comply. In the event of a failure of the Township or the Dissemination Agent (if other than the Township) to comply with any provision of this Disclosure Certificate, any Bondholder or Beneficial Owner may bring an action to obtain specific performance of the obligations of the Township or the Dissemination Agent (if other than the Township) under this Disclosure Certificate, but no person or entity shall be entitled to recover monetary damages under any circumstances, and any failure to comply with the obligations under this Disclosure Certificate shall not constitute a default with respect to the Bonds or under the Resolution.

SECTION 12. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate.

SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Township, the Dissemination Agent, the Participating Underwriters, the Bondholders and the Beneficial Owners, and shall create no rights in any other person or entity.

SECTION 14. Transmission of Information and Notices. Unless otherwise required by law or this Disclosure Certificate, and, in the sole determination of the Township or the Dissemination Agent, as applicable, subject to technical and economic feasibility, the Township or the Dissemination Agent, as applicable, shall employ such methods of information and notice transmission as shall be requested or recommended by the herein designated recipients of such information and notices.

SECTION 15. Additional Disclosure Obligations. The Township acknowledge and understands that other State and federal laws, including, without limitation, the Securities Act of 1933, as amended, and Rule 10b-5 promulgated by the SEC pursuant to the 1934 Act, may apply to the Township, and that under some circumstances, compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the Township under such laws.

SECTION 16. Governing Law. This Disclosure Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Disclosure Certificate shall be instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to the extent this Disclosure Certificate addresses matters of federal securities laws, including the Rule, this Disclosure Certificate shall be construed and interpreted in accordance with such federal securities laws and official interpretations thereof.

TOWNSHIP OF HARTLAND By: _____________________ Date: ____________, 2016 Its: __________________

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EXHIBIT A

NOTICE TO THE MSRB

OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Township of Hartland

Livingston County, Michigan Name of Bond Issue: $________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) Date of Bonds: ________ NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Certificate with respect to the Bonds. The Issuer anticipates that the Annual Report will be filed by __________, ____. TOWNSHIP OF HARTLAND By: Its: Dated: __________, ____

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EXHIBIT B

NOTICE TO THE MSRB

OF CHANGE IN ISSUER'S FISCAL YEAR Name of Issuer: Township of Hartland

Livingston County, Michigan Name of Bond Issue: $________ Livingston County Regional Sanitary Sewer System Refunding Bonds (Hartland Township), Series 2016 (Limited Tax General Obligation) Date of Bonds: ________ NOTICE IS HEREBY GIVEN that the Issuer's fiscal year has changed. Previously, the Issuer's fiscal year ended on __________, ____. It now ends on __________, ____. TOWNSHIP OF HARTLAND By: Its: Dated: __________, ____

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Additional information relative to this Bond issue may be obtained from:

Public Financial Management, Inc.305 East Eisenhower Parkway, Suite 112

Ann Arbor, MI 48108Phone: (734) 994-9700

Documents

County of Livingston, State of Michiganand by lot within any maturity, on any date occurring on or after November 1, 2025, at par plus accrued interest to the date fixed for redemption