presentation to Moody's

1

Hamilton County, Ohio

Presentation to

May 6, 2008

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Table of ContentsI.I. Introduction and ParticipantsIntroduction and Participants

II.II. OverviewOverview

III.III. Economic and Demographic ConditionsEconomic and Demographic Conditions

IV.IV. ManagementManagement

V.V. Financial Performance Financial Performance a)a) Near-Term Budget (2008-2009)Near-Term Budget (2008-2009)b)b) 2008 Budget – Current Estimate2008 Budget – Current Estimatec)c) Mid-Term Budget (2010-2012)Mid-Term Budget (2010-2012)d)d) General Fund ReserveGeneral Fund Reservee)e) Stadium DeficitStadium Deficitf)f) Banks Capital FundingBanks Capital Fundingg)g) Job and Family Service (JFS) ReportJob and Family Service (JFS) Report

VI.VI. Economic DevelopmentEconomic Development

VII.VII. Debt Management and Capital ProgramDebt Management and Capital Program

VIII.VIII. SummarySummary

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I. Introduction and Participants

4

Participants

Todd Portune President, Board of County Commissioners

Patrick Thompson County Administrator

Christian Sigman Assistant County Administrator

Eric Stuckey Assistant County Administrator

Karen McFarland Debt Manager

James HarperChief Assistant County Prosecutor

Ted Ricci Financial Advisor (Public Financial Management, Inc.)John Fischer Bond Counsel (Peck, Shaffer & Williams LLP)

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II. Overview

6

Overview Hamilton County remains the hub of a strong, growing

and economically diverse region. The County has identified and will continue to identify

solutions. Budget and Revenue/Expense Management Intergovernmental Initiatives Strategic Management Stadium Fund Management JFS Report Economic Development

The County is committed to strong financial management.

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III. Economic & Demographic Conditions

8

Summary

Hamilton County remains the center of a strong and growing economic region.

Income levels in the County are among the strongest in the region, the state, and the nation.

Population trends show the County and region maintaining population stability with future growth projected.

Employment trends in the County reflect better performance than the state due to significant diversification and non-manufacturing jobs.

Hamilton County is the home of 5 of the top 25 employers in the state and remains the home of 6 Fortune 500 companies and 10 Fortune 1000 companies.

9

Accessibility: Midwest & East Coast

Source: Board of County Commissioners – Request for Master Developer

• More than half of the nation’s population, manufacturers and purchasing power are located within 600 miles of Greater Cincinnati.

• The metropolitan area is a growing center for international business with over 1,000 firms engaged in international trade – ranking Greater Cincinnati 21st in total exports.

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Accessibility: Local

• Regionally Hamilton County is the hub of a growing tri-state area.

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Per Capita Income in Hamilton County is above both the State of Ohio and the U.S.

Income Levels

Hamilton County State of Ohio Hamilton County

% of Ohio United States Hamilton County

% of U.S.Median Household Income $44,652 $44,532 100.27% $48,451 92.16%Per Capita Income 27,213 23,543 115.59% 25,267 107.70%Median Home Value 147,700 135,200 109.25% 185,200 79.75%

2006 Income & Housing Statistics

Source: U.S. Census Bureau (2006 American Community Survey)

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Per Capita Income

Per Capita Income

20,00022,00024,00026,00028,00030,000

2002 2003 2004 2005 2006Year

Inco

me

($)

United States State of Ohio Hamilton County

Source: U.S. Census Bureau (2006 American Community Survey)

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Income Levels

Source: ******

• Personal Income levels in Hamilton County remain among the strongest in the region and the state.

14

Income Levels

Source: ******

• Hamilton County has maintained strong growth in personal income levels (approximately 2X neighboring counties).

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PopulationUrban County Comparison (2007)

Census COUNTY 2000 2001 2002 2003 2004 2005 2006 2007 Numeric Percent

Cuyahoga County 1,393,978 1,382,123 1,370,582 1,357,706 1,344,330 1,327,494 1,309,262 1,295,958 (98,020) (7.03%) Franklin County 1,068,978 1,082,686 1,087,882 1,093,073 1,096,810 1,101,432 1,109,067 1,118,107 49,129 4.60%

Hamilton County 845,303 849,507 848,546 847,765 847,040 847,204 847,368 842,369 (2,934) (0.35%) Lucas County 455,054 454,489 453,468 452,306 449,464 446,970 444,230 441,910 (13,144) (2.89%)

Montgomery County 559,062 555,109 552,550 550,719 548,197 545,082 541,320 538,104 (20,958) (3.75%)

Census Estimates Change 2000 - 20072007 Population Estimate for Ohio Urban Counties

Source: U.S. Census Bureau

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PopulationConsolidated Metropolitan Statistical Area (CMSA)

Census COUNTY 2000 2001 2002 2003 2004 2005 2006 2007 Numeric Percent Numeric Percent Per Year Per Year

Bracken County 8,279 8,365 8,457 8,448 8,674 8,630 8,577 8,574 (3) (0.03%) 295 3.56% 42 0.60%Boone County 85,991 90,245 93,356 96,695 100,910 105,585 109,180 112,459 3,279 3.00% 26,468 30.78% 3,781 5.10%Brown County 42,285 42,776 43,223 43,531 43,651 43,715 43,775 43,956 181 0.41% 1,671 3.95% 239 0.70%Butler County 332,807 336,629 339,071 341,909 345,119 348,655 353,386 357,888 4,502 1.27% 25,081 7.54% 3,583 1.30%

Campbell County 88,616 88,631 88,348 87,701 87,121 87,041 86,798 86,858 60 0.07% (1,758) (1.98%) (251) (0.30%)Clermont County 177,977 179,900 182,096 184,159 186,910 188,955 191,410 193,490 2,080 1.09% 15,513 8.72% 2,216 1.50%Dearborn County 46,109 46,779 47,161 47,770 48,333 48,658 49,199 49,759 560 1.14% 3,650 7.92% 521 1.30%Franklin County 22,151 22,279 22,431 22,630 22,772 22,952 23,059 23,234 175 0.76% 1,083 4.89% 155 0.80%Gallatin County 7,870 7,986 7,836 7,994 7,983 8,046 8,031 8,035 4 0.05% 165 2.10% 24 0.30%Grant County 22,384 23,112 23,530 23,909 24,236 24,452 24,788 25,161 373 1.50% 2,777 12.41% 397 2.10%

Hamilton County 845,303 849,507 848,546 847,765 847,040 847,204 847,368 842,369 (4,999) (0.59%) (2,934) (0.35%) (419) (0.10%)Kenton County 151,464 151,985 151,755 152,431 152,955 153,521 155,115 156,675 1,560 1.01% 5,211 3.44% 744 0.60%Ohio County 5,623 5,668 5,743 5,754 5,811 5,852 5,836 5,772 (64) (1.10%) 149 2.65% 21 0.40%

Pendleton County 14,390 14,613 14,726 14,851 14,851 14,931 15,029 15,058 29 0.19% 668 4.64% 95 0.80%Warren County 158,383 167,406 174,398 181,425 188,374 194,911 199,577 204,390 4,813 2.41% 46,007 29.05% 6,572 4.80%CMSA Total 2,009,632 2,035,881 2,050,677 2,066,972 2,084,740 2,103,108 2,121,128 2,133,678 12,550 0.59% 124,046 6.17% 17,721 1.00%

Population Percent Change 2000 - 2007 - CMSA CountiesCensus Estimates Change 2006 - 2007 Change 2000 - 2007 Yearly Change


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PopulationHamilton vs. Cincinnati (1970 – 2007)

*2007 Jurisdiction estimate has not been released, 2006 estimate has been substituted

Total 1970 Total 2007 Numeric Percent Numeric Percent City of Cincinnati 452,524 332,252 -120,272 (26.58%) -3,251 (0.70%) Hamilton County

(Excluding Cincinnati)925,944 842,369 -83,575 (9.03%) -2,259 (0.20%)

CMSA Total 1,692,590 2,133,678 441,088 26.06% 11,921 0.70%

1970 - 2007 Population By Political JurisdictionCincinnati Consolidated Metropolitan Statistical Area (CMSA)

Change1970-2007 Change Per Year


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Population Distribution***Description Here***

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Percent Population Change

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UnemploymentHamilton County, State of Ohio & U.S.

2002 – 2007 Comparison

Unemployment Statistics

3.0

4.0

5.0

6.0

7.0

2002 2003 2004 2005 2006 2007

Year

Une

mpl

oym

ent (

%)

United States State of Ohio Hamilton County

• County employment trends reflect better performance than the state due to job diversification.

Source: U.S. Department of Labor (Bureau of Labor Statistics)

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EmploymentHamilton County:

Labor Force 2000 2001 2002 2003 2004 2005 2006 2007Labor Force 428,786 425,551 423,897 423,304 420,551 418,779 423,493 428,446

Employed 413,069 408,621 401,144 400,314 397,210 395,907 402,184 406,819Unemployed 15,717 16,930 22,753 22,990 23,341 22,872 21,309 21,627

Unemployment rate 3.7 4.0 5.4 5.4 5.6 5.5 5.0 5.0

Source: U.S. Department of Labor (Bureau of Labor Statistics)

• Employment trends for the County have stabilized.

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Total EmploymentCincinnati-Middletown, OH-KY-IN Counties (MSA)

Source: Hamilton County Regional Planning Commission, BEA, Regional Economic Information System

0.2%

0.3%

0.3%

0.4%

0.6%

0.7%

1.4%

1.8%

3.1%

6.2%

6.9%

7.0%

7.5%

14.7%

49.1%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Ohio, IN

Gallitin, KY

Bracken, KY

Pendelton, KY

Franklin, IN

Grant, KY

Brown, OH

Dearborn, IN

Campbell, KY

Kenton, KY

Clermont, OH

Boone, KY

Warren, OH

Butler, OH

Hamilton, OH

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Employment

Source: Hamilton County Regional Planning Commission, BEA, Regional Economic Information System

Hamilton County Earnings: Percent Share by Sector (2006)

0.4%0.9%

1.4%1.8%1.9%2.2%2.2%2.5%2.5%2.8%

4.4%5.2%5.3%

6.1%6.3%

7.0%9.8%

10.5%12.2%

14.6%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

UtilitiesEducational services

Arts, entertainment, and recreationReal estate and rental and leasing

State governmentTransportation and warehousnigAccomodation and food services

InformationOther services, except public administration

Federal, civilianRetail trade

ConstructionAdministrative and waste services

Local governmentFinance and insurnace

Wholesale tradeManagement of companies and enterprises

Professional and technical servicesHealth care and social assistance

Manufacturing

• The counties employment is reflective of strong job diversification.

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EmploymentNation vs. Cincinnati (1975 – 2006):

Employment Growth Since 1975Nation vs. Greater Cincinnati

0.91

1.11.21.31.41.51.61.71.81.9

1975 1980 1985 1990 1995 2000 2005

National Local

National

Local

Source: Ohio Department of Development (Office of Strategic Research) & Cincinnati USA Regional Chamber of Commerce (gccc.com)

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Ohio’s Top EmployersRank Company Ohio Employment

Estimate Headcount Headquarters

Location Sector

1 Wal-Mart Stores * 52,000 Bentonville, AR Retail General Merchandise2 Cleveland Clinic Health System 37,354 Cleveland, OH Health3 Kroger Co * 36,500 Cincinnati, OH Retail Food Stores4 Ohio State University * 24,400 Columbus, OH Education and Health5 Catholic Healthcare Partners2 23,000 Cincinnati, OH Health6 University Hospitals Health System 21,800 Cleveland, OH Health7 Wright-Patterson Air Force Base3 18,260 Dayton, OH Government Air Force base8 Bob Evans Farms, Inc * 17,500 Columbus, OH Hospitality Restaurants9 JP Morgan Chase & Co 17,100 New York, NY Finance Bank

10 Meijer, Inc * 16,300 Grand Rapids, MI Retail General Merchandise11 United Parcel Service, Inc * 15,130 Atlanta, GA Transportation Air Delivery12 Sears Holding Corp (Sears & Kmart) * 15,000 Hoffman Estates, IL Retail Department Stores12 Target Corp * 15,000 Minneapolis, MN Retail Department Stores14 OhioHealth * 14,500 Columbus, OH Health15 National City Corp 14,250 Cleveland, OH Finance Bank16 Nationwide Mutual Insurance Co 14,135 Columbus, OH Finance Insurance17 General Electric Co 14,000 Fairfield, CT Manufacture Aerospace / Electrical Eqpt.17 Honda Motor Co, Ltd 14,000 Tokyo, Japan Manufacture Motor Vehicles17 Procter & Gamble Co 14,000 Cincinnati, OH Manufacture Soaps & Consumer Goods20 Health Alliance * 13,300 Cincinnati, OH Health21 Home Depot, Inc * 13,000 Atlanta, GA Retail Home Improvement22 General Motors Corp 12,300 Detroit, MI Manufacture Motor Vehicles23 Macy's, Inc * 12,000 Cincinnati, OH Retail Department Stores23 Premier Health Partners, Inc * 12,000 Dayton, OH Health25 Giant Eagle, Inc 11,590 Pittsburgh, PA Retail Food Stores

( * ) INCLUDES PART-TIME EMPLOYEES( 2 ) FTE EMPLOYMENT COUNTS FOR SIX OHIO HEALTH SYSTEMS( 3 ) CIVILIAN AND MILITARY

Source: Office of Strategic Research (Ohio Department of Development)

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Hamilton County: Major Employers in Metropolitan Area

Rank Company Employee Estimate Headcount

Sector

1 University of Cincinnati* 15,400 Education2 Kroger Co.* 15,093 HQ - Retail3 Health Alliance of Greater Cincinnati* 13,745 Healthcare4 The Procter & Gamble Company* 12,256 HQ - Consumer Products5 TriHealth Inc.* 8,912 Healthcare6 Cincinnati Children's Hospital* 8,874 Healthcare7 Fifth Third Bank* 8,834 Financial Institution8 ABX Air Inc. 8,500 Air Cargo, Maintenance9 Wal-Mart Stores 7,122 Discount Retailer10 GE Aviation* 7,100 Aerospace (R&D and Mfg)11 Mercy Health Partners* 6,743 Healthcare12 Hamilton County* 6,179 Local Government13 Archiocese of Cincinnati* 6,150 Religious14 Cincinnati Public Schools* 6,135 Public School System15 City of Cincinnati* 6,000 Municipal Government

*Located in Hamilton County

Source: Greater Cincinnati Chamber of Commerce

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Fortune 500 & 1000: Headquarters in Metropolitan Area• 400 Fortune 500 Companies have presence in the Metropolitan

Area

Fortune 500 Corporations (Metropolitan Area)Company

Procter & Gamble*The Kroger Company*Macy's, Inc.*Fifth Third Bancorp*Chiquita Brands Intl.* Western & Southern Financial* Ashland, Inc.Omnicare, Inc.AK Steel Holding

*Headquartered in Hamilton County

Fortune 1000 Corporations (Metropolitan Area)Company

Procter & Gamble*The Kroger Company*Macy's, Inc.*Fifth Third Bancorp*Chiquita Brands Intl.*Western & Southern Financial*Ashland, Inc.Omnicare, Inc.AK Steel Holding American Financial Group*Cincinnati Financial Cintas*Convergys*E.W. Scripps*General Cable

*Headquartered in Hamilton County

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IV. Management

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Summary

The County has a long history of prudent yet proactive management.

The County is aware of its near-term and strategic challenges and is acting on a multifaceted program of strategic and financial initiative designed to address systemic weaknesses and build on historic strengths.

30 Source: Office of the Budget and Strategic Initiatives

Vision & Mission

Vision: To serve the residents of Hamilton County by providing the

best and most responsive county government in America.

Mission: To reach out to Hamilton County residents to provide efficient

service of the highest quality, encourage resident participation in service development and to deliver county services equitably.

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County Organization

Source: Office of the Budget and Strategic Initiatives

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County Organization – Board of County Commissioners

* Liaison Role to Elected Officials which are identified in green


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Budget and Revenue/Expense Management: Planned approach to rebuilding County General Fund Reserve

Developing consensus budget policies among elected officials

Requiring taxes and fees appropriate for the scope of services provided

Implementation of Performance-Based Budgeting

Spending caps on select commodities

Expedite collection of delinquent taxes

Review and sale of County assets

Enhanced periodic budget monitoring

Intergovernmental Initiatives: Continue shared services efforts with the City of Cincinnati and other

local governments

Local/Regional Governmental Equalization Initiatives

Pursuit of fiscal relief initiatives with the State of Ohio

2008-2012 Management Initiatives

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Strategic Management: Executive dash board tied to County Administrator performance

Infrastructure strategic analysis

Management work plan – monthly performance evaluation

In January 2008, the Commissioners empanelled the Cabinet of Economic Advisors (CEA) to develop strategies to grow revenues associated with the sales tax, property tax and investment earnings.

Early focus of efforts concern retail sales analysis in the county and developing a tax market basket for comparative jurisdictions.

Targeting poverty and unemployment Convening a summit on poverty with the City of Cincinnati and other agencies

Implementing worker Readiness Programs and small business contracting

Stadium Fund Management: Develop plan to address pending stadium fund deficit

Exploration of revenue enhancement for Stadium Fund (naming rights, etc)

2008-2012 Management Initiatives Cont.

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JFS Report: Completion of the Job and Family Services Audits

Complete reforms at Hamilton County Job and Family Services Dept.

Economic Development: Integrated County & City near-term implementation of The Banks development

project

Replicate unrestricted County Economic Development Fund

Restructuring of Cincinnati-Hamilton County Port Authority

Pressing for more cost efficient alternatives to the MSD Global Consent Decree

Reinstating linked deposit program for home and small business improvement

County, City, Local government is collaborating to develop land banks for conversion of distressed real estate to productive use.

County transportation improvement district- joint intergovernmental transportation initiatives

2008-2012 Management Initiatives Cont.

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Management Qualifications & Experience Board of County Commissioners

President of the Board in office since January 2001. Term expires January 2009.

8 years experience Cincinnati city council.

Commissioner DeWine in office since January 2005. Term expires January 2009.


Commissioner Pepper in office since January 2007. Term expires January 2011.


County Administrator Patrick Thompson took office in January 2006

Twenty five years local government experience

18 years experience as a county administrator

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Management Qualifications & Experience Cont. Senior Management

Christian Sigman – Assistant County Administrator for Budget/Finance & Public Safety/Judicial since March 2006

Eric Stuckey – Assistant County Administrator for Economic Development/Administration since August 2000

Jeff Aluotto – Assistant County Administrator for Public Works and Environmental/Infrastructure

Moira Weir – Assistant County Administrator for Jobs and Family Services and Social Services

Karen McFarland – County Debt Manager since 1993

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City & County Relationship

City/County Initiatives:

Banks Development

Regional Emergency Operations Center

CLEAR Wireless Data Service for law Enforcement

Regional GIS System

Shared Services Initiative

MSD (Metropolitan Sewer District) Global Consent Decree

SORTA (Southwest Ohio Regional Transit Authority)

Convention Center renovation and expansion

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V. Financial Performance

40

Summary

The County continues to proactively manage its annual budgets and conduct multi-year budget projections.

The County has flexibility in an identified range of options to bring the General Fund Reserve to a 15% balance by 2010 and assure balanced near-term budgets in 2008 and 2009, and to address future budgetary performance.

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Historic Revenue & Expense TrendsGeneral Fund Revenue vs. Inflation

• County fiscal and strategic management initiatives are focused towards addressing recent revenue growth trends below inflation.(1.96%) (2.81%)

General Fund Revenue vs. Inflation. The chart above compares actual recurring revenue to the level anticipated if they had increased with inflation. Historic trends compared to inflation do not include non-recurring revenue.

42

Historic Revenue & Expense TrendsGeneral Fund Expenditures vs. Inflation

• The County has been very proactive in controlling expenditure growth relative to both inflation and revenues.

(1.54%) (2.81%)

General Fund Revenue vs. Inflation. The chart above compares actual recurring expenditures to the level anticipated if they had increased with inflation. Historic trends compared to inflation do not include non-recurring expenses.

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Historic Fund Balance

2004 2005 2006 2007 2008Beginning Balance 44,343 29,618 31,083 18,824 18,816

Revenue by SourceSales Tax 63,503 64,095 64,048 66,381 67,600Service Fees 52,177 58,213 51,930 47,736 54,561Property Taxes 37,685 37,713 43,228 42,762 41,229Intergovernmental 23,563 20,810 22,118 20,297 30,785Local Gov't Funds 24,925 24,961 24,987 24,727 24,981Interest 15,015 15,840 20,109 20,890 18,532Fines & Forfeitures 8,725 9,598 9,536 10,497 10,713All Other Revenues 11,520 15,944 12,146 12,708 15,447

TOTAL 237,112 247,174 248,102 245,998 263,849

Expenditures by FunctionJudicial 96,041 96,643 95,401 96,538 99,172Public Safety 82,238 83,838 93,490 98,961 94,187General Government 54,517 48,058 61,592 55,287 64,045Debt Service 13,926 8,055 7,384 9,074 8,964Social Services 2,998 3,054 3,115 2,733 2,535Public Works 2,417 2,302 2,307 2,083 1,924Economic Development 767 1,213 1,384 979 738

TOTAL 252,904 243,163 264,672 265,656 271,565

Adjustments/Equity Transfers 1,067 (2,546) 4,311 19,650 1,500

Ending Balance 29,618 31,083 18,824 18,816 12,600

General Fund Balance: Revenue/Expenditure Breakdown

44

Annual Operating Budget - General Fund Budget Variance(2006 - 2012)

-16.6M -19.7M -7.7M

-12.1M -14.4M

-17.5M -20.3M

220

240

260

280

300

320

340

2006 Actual 2007 Estimate 2008 Budget 2009 Estimate 2010 Estimate 2011 Estimate 2012 Estimate

Mill

ions

($)

Expenditures Revenues

Revenues & Expenditures 2006-2012

County 5 Year Plan (Current Projection)

45

5 Year Plan: Revenue & Expense Forecast2008 2009 2010 2011 2012

Beginning Balance 18,816 12,600 154 (14,288) (31,767)

Revenue by SourceSales Tax 67,600 68,614 69,643 70,688 71,748Service Fees 54,561 56,200 57,431 58,690 59,979Property Taxes 41,229 39,934 39,934 39,934 41,132Intergovernmental 30,785 31,032 32,913 31,729 33,087Local Gov't Funds 24,981 25,304 25,676 26,053 26,437Interest 18,532 16,339 16,745 17,162 17,589Fines & Forfeitures 10,713 10,879 11,048 11,219 11,393All Other Revenues 15,447 15,962 16,399 16,610 17,020

TOTAL 263,849 264,263 269,789 272,086 278,386

Expenditures by FunctionJudicial 99,172 102,523 105,087 107,714 110,407Public Safety 94,187 99,455 100,576 103,785 107,100General Government 64,045 60,560 64,715 64,202 67,444Debt Service 8,964 8,863 8,755 8,638 8,356Social Services 2,535 2,580 2,644 2,710 2,778Public Works 1,924 1,639 1,680 1,722 1,765Economic Development 738 757 776 795 815

TOTAL 271,565 276,376 284,231 289,565 298,664

Adjustments/Equity Transfers 1,500 (333) - - -

Ending Balance 12,600 154 (14,288) (31,767) (52,046)

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a) Near-Term Budgets 2008-2009

47

Strategic Approachto Structurally Balanced Operations

IntergovernmentalInitiatives

EconomicDevelopment

ManagementInitiatives

FiscalManagement

Local/Regional CostLocal/Regional Costof Service Initiativesof Service Initiatives

City/County SharedCity/County SharedServices InitiativesServices Initiatives

State ReliefState Relief

CEACEA

Performance-BasedPerformance-BasedBudgetingBudgeting

Spending CapsSpending Caps

Restructure Port AuthorityRestructure Port Authority

BanksBanks

Industrial DevelopmentIndustrial Development

Job Creation/RetentionJob Creation/Retention

Retail Development*Retail Development*

Commercial Development*Commercial Development*

StadiumBudget JFS

*Non-city*Non-city

Expenditure ReductionsExpenditure Reductions

Revenue EnhancementsRevenue Enhancements

Reserve Replenishment Reserve Replenishment

and Maintenanceand Maintenance

JFS Report CompletionJFS Report Completion

Riverfront Stadium Deficit Riverfront Stadium Deficit

ManagementManagement

48

General Fund Revenues: 2008

General Fund Revenues (2008)

49

General Fund Expenses: 2008

General Fund Expenses (2008)

50

Expenditures & Revenues (2008) The 2008 Budget is structurally balanced with ongoing revenue

exceeding ongoing expenditures.

Expenditure Reductions• 111 General Fund positions eliminated

• No Pay Raises

• Departments assessed a 5% vacancy assumption

• Employee Health Insurance Plan Reform: a $3 million savings

• Capital Maintenance & Equipment*

• Select Commodity Spending Caps

• Outside agency funding eliminated / greatly reduced

• Programs eliminated

* During 2008, the County is undergoing a comprehensive inventory and analysis of spending requirements for three key infrastructures: facilities, equipment and information technology.

Includes one time expenditures totaling ($10M): Additional pay period ($5.6M), Presidential election costs (08 - $2M), employee separation costs ($1.4M), Workers’ Compensation Cost ($650,000), and JFS audit response ($350,000).

51

Health 654 FTEs

11%

Other 315 FTE's

5%

General Government

524 FTEs8%

J udicial 1,672 FTEs

27%

SocialServices1,637 FTEs

27%

Public Safety 1,372 22%

General Government

+49.9

Judicial -50.7

Public Safety

-4.0Social Services

-28.0

Health -90.3

Other

-39.2

-100

-75

-50

-25

0

25

50

2004 2005 2006 2007 2008

Employment2008 Employee Positions:Net Change in Positions since 2004

2004 2005 2006 2007 2008Total Position 6,339 6,329 6,306 6,244 6,177Annual Change - (10) (33) (95) (162)


52

-1,0002,0003,0004,0005,0006,0007,000

Other 354.74 356.11 353.44 329.99 315.50 Health 745.01 710.55 666.03 648.66 654.67 Social Services 1,665.65 1,665.90 1,660.65 1,680.65 1,637.65 Public Safety 1,376.11 1,382.36 1,394.65 1,402.36 1372.15Judicial 1,723.31 1,739.95 1,751.26 1,686.15 1,672.62 General Government 474.33 474.20 480.27 496.52 524.21

2004 2005 2006 2007 2008

EmploymentAll FTE’s by Function Trends:

6,339.2 6,329.1 6,306.3 6,244.3 6,176.8


53

EmploymentAll General Fund FTE’s

2,939.2

3,050.0 3,085.4 3,064.5 3,061.7

2,200

2,400

2,600

2,800

3,000

3,200

2004 2005 2006 2007 2008


54

Expenditures & Revenues (2008) continued

Outside Agency Funding Reductions • Ohio State Extension Service ($260,000 decrease)

• Miami Conservancy District ($80,000 decrease)

• Emergency Management Commission ($255,000 decrease)

• Regional Planning Commission ($28,000 decrease)

• Partnership for Greater Cincinnati ($100,000 decrease)

• Hamilton County Development Company ($9,000 decrease)

Program Eliminations/Suspensions• Employee Tuition Assistance Programs

• Home Improvement Loan Program

• Commuter Reverse Commute Program

55


Revenue Initiatives: No broad-based tax increase• Aging real property tax liens will be sold in 2008 ($325,000)

• Municipalities will be charged for jail costs for municipal code violations ($250,000)

• The county will sell excess property ($250,000)

• Inmate reception fee will be implemented ($150,000)

• Dog Warden boarding fees increased to reduce general fund subsidy ($45,000)

56

Expenditures & Revenues (2009)

Expenditures - $8.3 million increase (3.1% growth – 2008)

Major Expenditure Assumptions (Current):• 2.5% inflation on goods and services

• 3.5% Sheriff Uniform Staff salary increases (union)

• 5% Communication Center General Fund subsidy increase

• 2.5% salary increases for non-represented employees

• 7% cap on employee health insurance increase

• Level funding for capital maintenance and capital equipment

• Level funding for information technology investments

• No extraordinary costs associated with election operations

• 2.0% Sheriff Vacancy Rate ( reduced from 5% in 2008)

57


Revenues - $1.5 million decrease (0.6% decrease – 2008)

Major Revenue Assumptions (Current):• Property tax: no growth with mid-term assessment increase offset by

residential property value decreases

• 1.5% growth in sales tax

• Consistent investment earnings performance

• No change in Public Defender state reimbursement ratio

• Level Local Government Fund revenues from the state

• Housing Market fees reflect return to 2007 levels

Preliminary Budget Estimate shows negative $12.1 million Budget Gap.

58

Short-Term Balancing Options (2009)

Expenditures• Limit Raises - up to $2.5 million1

• Additional employee health insurance benefits changes1

• Local/Regional Governmental Cost Sharing Initiatives

• Transfer Storm Water Maintenance out of General Fund - $1.2 million1

• Revise Township Patrol Agreements - $500,000-$4.0 million (2009), total $12.0-13.0 million1

Revenues• Increase Real Estate Transfer Tax - $4.0 million2

• Increase Dog License Fee - $250,0001

• Add Cigarette/Alcohol taxes – $5.0 million1

• Other Fees - $500,000• Jail Reception Fee1

• Contractor Registration Fee1

• Auto License Plate Reader Program1

• Other1

1 - BOCC Approval Only

2 - Subject to Voter Referendum

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b) 2008 Budget – Current Estimate

60

2008 Budget – Current Year-End Projection

Monthly Budget Monitoring

First Quarter Preliminary Budget Projections Revenue Reductions

Housing Related Fees

Investment Earnings

Sales Taxes

Revenue Increases Juvenile Court

Remedial Actions Hiring Freeze (04/30/08)

Immediate fee increases

Letter to department heads

Commodity spending review

Expense Increases Personnel Vacancies

Final Coroner Settlement Payment

61

c) Mid-Term Budgets (2010-2012)

62

Expenditures (2010-2012)

Expenditures Growth: 2.64% annually from 2009

Major Assumptions (Current):• 2.5% inflation on goods and services

• 3.5% Sheriff Uniform Staff salary increases (union)

• 5% Communication Center General Fund subsidy increase

• 2.5% salary increases for non-represented employees

• Level funding for capital maintenance and capital equipment *

• Level funding for information technology investments *

* During 2008, the County is undergoing a comprehensive inventory and analysis of spending requirements for three key infrastructures: facilities, equipment and information technology.

63

Revenues (2010-2012)

Revenue Growth: 1.7% annually from 2009

Major Assumptions (Current):• 1.5% annual sales tax growth

• 0.0% property tax growth 2010-2011, 3.0% 2012

• 1.5% annual state Local Government Fund growth

• No change in Public Defender state reimbursement ratio

64

Balancing Options (2010-2012) Expenditures

Local/Regional Governmental Cost Sharing Initiatives Transfer Storm Water Maintenance out of General Fund - $1.2 million Revise Township Patrol Agreements - $8.0-12.0 million Zoning Crime Lab Public Defender Other

Revenues Increase Real Estate Transfer Tax - $4.0 million*Add Cigarette/Alcohol taxes Other fees

Potential Impacts of Management Initiatives Managed Competition CEA Task Force Banks Development State Relief Initiatives Delinquent Tax Collection

*Subject to Voter Referendum

Restructured Cincinnati-Hamilton County Port Authority

Performance-Based Budgeting Commodities Spending Caps

65

d) General Fund Reserve

66

County General Fund Reserve Policy

67

Strategic Reserve Improvement Plan

Issuance of Coroner's Judgment Debt ($8 million)

Internal loan pending sale of the Drake Hospital*

Target Drake Hospital sale to General Fund Reserve (2010)

Adhere to reserve policy approved in 2007

Maintain structurally balanced budgets

Sale of County assets (Sale/Development of County fairgrounds, other)

*Requires Statutory Change

68

Strategic Reserve Improvement Plan cont.

The County owns the Drake Hospital that is valued at approximately $50 million.

During 2006, the County entered into a lease with the Health Alliance of Greater Cincinnati that provides 30 year lease payments of approximately $1 million in an annual inflationary increase.

Lease also includes purchase option beginning 1/1/2010

Lease agreement includes incentives to purchase in 2010. Purchase price (2010) is approximately $28,500,000

The lease revenue is not included in the general fund budget, but directed to carrying costs at the 15 acre Kahn’s site.

69

Strategic Reserve Improvement Plan cont. The County has identified a number of actions to:

1) balance the near-term budgets (2008 & 2009) 2) structurally balance long-term budgets (2010-2012)3) replenish the general fund reserve.

In totality, general fund budgets will be structurally balanced and the general fund reserves will be at 15% by the end of 2010.

70

e) Stadium Deficit

71

Present & Projected Annual Stadium Fund Aggregate Deficit (2008-2012): $0

1% sales tax growth

Final State grant payment

Action Taken to Date: Restructuring of Cincinnati School District Pilot Payments –

September 2006 Restructured to provide cash flow relief with no payments from 2007-

2010; payments resume 2011

Sales Tax Revenue Bond Refunding – November 2006 $26.5 million present value savings – taken 2007-2012 to provide cash

flow relief

Deficits Post 2012 Sales Tax Growth

1% - deficit begins 2013 2% - deficit begins 2013 3% - deficit begins 2014

72

Present & Projected Annual Stadium Fund Cont. Potential Balancing Options

Add Cigarette/Liquor Tax*($5M annually)

Property Tax Rebate Reductions – No voter approval

Debt Restructuring – Facility Useful Life Limitations

Explore Naming rights and formation of entertainment district to optimize leveraging of stadium assets.

73

Hamilton County Sports Facilities Project Page 9Financing Plan (Values in 000)Sales Tax Funding - Post-Construction Period 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NET ANNUAL CAPITAL POSITIONPost-Construction Projects Net Revenues (Pgs. 40-42) (2,239) 1,654 (5,411) 0 0 0 0 0 0 0 0

Additional Reserve Fund (if not expended) 0 0 9,240 0 0 0 0 0 0 0 0

TOTAL (2,239) 1,654 3,829 0 0 0 0 0 0 0 0

SALES TAX FUNDBeginning Balance 12,829

Net Annual Capital Position -2,239 1,654 3,829 0 0 0 0 0 0 0 0

Net Annual Operating Position (Page 6)

1% sales tax growth 552 321 2,312 (1,077) (3,708) (4,917) (6,345) (18,526) (20,070) (21,669) (23,326)

2% sales tax growth 552 705 3,157 243 (1,900) (2,605) (3,515) (15,162) (16,158) (17,193) (18,269)

3% sales tax growth 552 1,087 4,008 1,586 (41) (205) (548) (11,601) (11,975) (12,359) (12,755)

5% sales tax growth 552 1,848 5,729 4,343 3,833 4,870 5,819 (3,847) (2,732) (1,520) (205)

Ending Balance (Cumulative)

1% sales tax growth 11,141 13,116 19,258 18,181 14,473 9,556 3,211 (15,315) (35,385) (57,054) (80,380)

2% sales tax growth 11,141 13,500 20,486 20,729 18,830 16,225 12,710 (2,453) (18,611) (35,803) (54,073)

3% sales tax growth 11,141 13,882 21,720 23,306 23,265 23,061 22,513 10,912 (1,063) (13,422) (26,177)

5% sales tax growth 11,141 14,643 24,202 28,545 32,378 37,248 43,067 39,220 36,488 34,969 34,764

Note: 2008 Net Annual Capital Position assumes anticipated $7.6 million State grant receipt.

Public Financial Management, Inc. October 16, 2007

Sales Tax Fund Summary 2008-2012

74

f) Banks Capital Funding

75

Phase I Construction Contractual Obligation

$20 million (2008-2009)

Plan of Finance

Restructure Current Parking Revenue Bonds

Incremental Parking Revenue Bonds

76

g) JFS Report

77

JFS Report Status

78

VI. Economic Development

79

Summary

The County continues to prioritize and pursue broad based multi-jurisdictional and public/private economic development initiatives.

The County’s economic development successes are evidenced by numerous large and small commercial, retail, industrial and housing projects both in the city and local areas of the county.

80

Residential Building Permits

Total Units: Number of Private Housing units Authorized by Building Permit

Total Valuation (000): Value of Private Housing Units Authorized by Building Permit

Source: Ohio Department of Development (Office of Strategic Research)

81

Housing Growth

Housing Unit Growth (1990 - 2006)

0100,000200,000300,000400,000500,000600,000700,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

Year

Hou

sing

Uni

ts Franklin LucasMontgomeryHamiltonCuyahoga


82 Source: Ohio Department of Development (Office of Strategic Research)

Offices

83

Economic Development***Description Here***

Source: 2006 County Report Card

84

The Banks Development The City of Cincinnati and Hamilton County working with the lead developer

team of Carter & Associates and The Dawson Company will construct The Banks, a mixed use development that extend downtown Cincinnati to the riverfront between Paul Brown Stadium and Great American Ball Park. The Banks development creates a destination where people will want to live, work and play.

The City of Cincinnati and Hamilton County are jointly leveraging $180 million in public infrastructure investment into more than $600 million and bringing more than 3,000 residents to the area while creating a new office, retail and entertainment center along the Cincinnati riverfront.

Once completed, The Banks will be Cincinnati's largest single, mixed-use development and be comprised of a dynamic blend of residential, office and retail components. The total project will be a 2.8 million square foot development on 18 acres along Cincinnati's downtown riverfront.

85

The Banks Development Cont. The mixed-use development will include up to 1 million square feet of office,

approximately 300,000 square feet of retail and the balance in a variety of residential products. The plan capitalizes on the new urbanism trend by providing a place for people to move back to the urban core to be near work, entertainment and cultural amenities.

The groundbreaking for the project took place on April 2, 2008 with Phase 1-A to be completed in early 2010.

The development will include a 40-acre $80 million riverfront park. This "front door" of the development will include playgrounds, walking/biking paths, gardens, green space, fountains/water activities, venues for community events (festivals, concert, etc.). Groundbreaking for the park is scheduled for September of 2008.

86

Office Development Queen City Square, Downtown Cincinnati

Total class A space: 825,000 SF25,000 SF of retail and 1,400 parking spaces

Keystone Park, I-71 and Dana Avenue Total Class A space: 460,000 SFA four story parking structure with space for full service restaurant and other convenience

retailers

Linden Pointe, S.R. 562 and Montgomery RoadTotal Class A space: 600,000 SF24,000 SF of retail establishments and walkable campus environment

Kenwood Towne Place, Galbraith Road in Scyamore Township with direct access to I-71Total Class A space: 270,000 SFNumerous Amenities (i.e. on-site restaurants, retail and covered parking, etc)

Redstone, Montgomery Road in Sycamore Township with direct access to I-71Total Class A space: 160,647 SFFree parking on site, including a covered parking garage

87

Housing Development Projects Parker Flats & One River Plaza Projects Cincinnati Center City Dev. Corp.

Purchased 100 vacant building and lots to be converted into homeownership opportunities

City West $151.8 million revitalization program, brought 1,022 newly constructed townhomes to

Cincinnati’s West End Park Place at Lytle River Center Great Traditions Vintage Club

Estate Homes $1.4 – 2.6 million average cost; Courtyard Homes $850,000 average cost; Clubhouse Homes $1 million average

Total new units 113 Fort Scott

404 New single family homes, 500 condo units Erickson Retirement Community

A $175 million retirement community with 1,200 living units planned

88

Commercial Development

Vacancy factor declined to 5.86% in 2006 10.3 million square feet of gross absorption due to new speculative

developments and expansion to larger facilities New industrial construction for the year totaled 5.1 million square Sharonville Convention Center

89

Commercial/Industrial Development Highlights

Ford Motor Company $240 million investment in Sharonville plant

Procter and Gamble Acquired Gillette Investing $51 million in it’s St. Bernard plant

Hamilton County Macy’s Inc. Fourth largest general merchandise retailer

Citigroup Construction of a new facility in Blue Ash, which will staff 1,000

employees General Electric

Air Force tanker project will potentially bring 200-300 new jobs in the county

90

Retail Development Red Bank Village

35 acre project with 230,000 square feet of retail and 75,00 square feet of office space Kenwood Towne Place

High-end retail, restaurants, and office space Kenwood Mall

The mall has had a number of façade improvements, which includes the opening of several new stores

Stone Creek Towne 65 acre development with 440,000 square feet of retail space (coupled with Kenwood,

expected to generate more than $100 million in new investment) Legacy Place

106 acre site with 550,000 square feet of new retail space Tri-county Mall

A 1.3 million square foot regional mall will be redeveloped with an estimated total investment of $220 million

Anderson Towne Center A proposed expansion to the Towne Center could see over $30 million of new

investment, which will include a new theater by American Screen Works

91

VII. Debt Management & Capital Program

92

Summary

Outstanding General Obligation un-voted debt:$106.3 million

New issues anticipated: $10.5 million

93

Current Outstanding Debt (As of 4/1/08)VOTED GENERAL OBLIGATION BONDS

UNVOTED GENERAL OBLIGATION BONDS

Date of Original Amount Interest Coupon Final Amount Issue Purpose of Issue Rate Maturity Bond Outstanding

10/30/01 Museum Center $19,545,000 3.25-4.00% J1-D1 12/09 $5,380,000

Date of Issue

Purpose

Original Amount of Issue

Interest Rate

Coupon Maturity

Final Bond

Amount Outstanding

03/26/97 Various Purpose Ser 1997 9,055,000 5.40-5.50 J1-D1 12/17 0* 07/01/97 Building Improv Ser 1997B 24,850,000 5.15-5.25 J1-D1 12/17 0* 03/01/98 Court House Imp. 16,045,000 4.90 J1-D1 12/18 750,000♣

07/15/98 Building Improv. 12,495,000 4.80-5.00 J1-D1 12/18 585,000♣

12/15/98 Parking Facility 10,090,000 4.25-5.00 J1-D1 12/24 985,000♣ 11/01/01 Various Purpose Refunding 12,165,000 4.00-5.00 J1-D1 12/21 6,315,000 09/01/04 Various Purpose Refunding 42,130,000 2.50-4.00 J1-D1 12/15 27,400,000 03/15/05 Refunding 2005 28,715,000 3.00-5.00 J1-D1 12/17 24,805,000 08/15/06 Emer. Mgmt. & Op. Ctr. 2006 725,000 4.00-5.00 J1-D1 12/25 700,000 11/01/06 Emergency Services 19,520,000 3.50-4.00 J1-D1 12/21 18,515,000 12/01/06 Various Purpose Refunding 25,465,000 4.00-4.15 J1-D1 12/24 25,260,000 04/15/07 Communication Center 1,025,000 3.75-4.00 J1-D1 12/16 940,000

TOTAL $202,280,000 $106,255,000 * Defeased with the proceeds of the G.O. Various Purpose Refunding Bonds issued on 3/15/05. ♣ A portion of these bonds were refunded with the proceeds of the 2007 Various Purpose Refunding Bonds issued 01/04/07 (the call date for the refunded portion of the 1998 Courthouse and Building Improvement Bonds is 12/1/07 and the call date for the refunded portion of the 1998 Parking Facilities Bonds is 12/1/08).

94

Current Outstanding Debt (As of 4/1/08)SEWER REVENUE BONDS 133.08

Date of Issue

Purpose


Interest

Rate

Coupon Maturity

Final Bond

Amount

Outstanding

04/15/93* Sewer System $171,790,000 5.30-5.45 J1-D1 12/09 $23,855,000 10/01/97 Sewer System 105,245,000 4.50-5.50 J1-D1 12/17 11,595,000 06/01/00 Sewer System 40,085,000 4.95-5.25 J1-D1 12/25 6,345,000 11/01/01 SS Refunding 76,000,000 3.20-5.25 J1-D1 12/26 32,505,000 07/09/03 Sewer System (Series A) 160,065,000 1.80-5.25 J1-D1 12/28 154,505,000 09/04/03 Sewer System (Series B) 55,510,000 5.00 J1-D1 12/13 51,670,000 09/01/04 SS Refunding (Series A) 46,385,000 2.15-5.00 J1-D1 12/17 41,875,000 03/01/05 Sewer System 86,960,000 2.65-5.00 J1-D1 12/25 86,525,000 11/01/05 Sewer System 83,600,000 3.13-5.00 J1-D1 12/25 79,975,000

11/01/06 Sewer System 83,045,000 4.00-5.00 J1-D1 12/31 81,335,000 12/01/07 Sewer System 72,385,000 3.50-4.50 J1-D1 12/32 72,385,000

TOTAL $981,070,000 $642,570,000

* Partially refunded by the Sewer System Series A and Series B Bonds (2003). Partially refunded by the Sewer System Series A Bonds (2004). Partially refunded by the Sewer System Series A Bonds (2005). 2004, 2005, 2010, 2011, 2014, and 2016 maturities were advance refunded. All maturities other than the 12/1/05 maturity have been advance refunded by the 2003 and 2004 Bonds. The 2008, 2009, 2012, 2013 and 2014 maturities and the 2017 term bond have been advance refunded by the 2004

and 2005 Bonds. Maturities beginning with 2013 through (and including) 2020 and the 2025 term bond have been advance refunded

by the 2004 and 2005 Bonds. Maturities beginning with 2014 through (and including) 2021 have been advance refunded by the 2005 Bonds.

95

Current Outstanding Debt (As of 4/1/08)

OTHER REVENUE BONDS

SPECIAL ASSESSMENT BONDSDate of Original Amount Interest Coupon Final Amount Issue Purpose of Issue Rate Maturity Bond Outstanding

08/01/88 Sewer District 415,900 7.25 J1-D1 12/08 25,000 08/01/90 Sewer District 410,000 6.90 J1-D1 12/10 100,000 08/01/93 Sewer District 600,000 5.00-5.20 J1-D1 12/13 245,000 09/01/94 Sewer District 175,000 5.75 J1-D1 12/14 65,000 09/01/95 Sewer District 210,000 5.57 J1-D1 12/15 115,000 09/01/96 Sewer District 445,000 5.60-5.625 J1-D1 12/16 255,000 08/01/97 Sewer District 340,000 5.25-5.30 J1-D1 12/17 215,000 09/01/98 Sewer District 705,000 4.75 J1-D1 12/17 465,000 09/01/99 Sewer District 170,000 5.5 J1-D1 12/18 130,000 10/01/00 Sewer District 545,000 5.40-5.55 J1-D1 12/20 410,000 08/15/01 Sewer District 150,000 4.25-5.10 J1-D1 12/21 120,000 08/15/02 Sewer District 295,000 3.50-5.05 J1-D1 12/22 240,000 09/01/03 Sewer District 460,000 2.60-5.75 J1-D1 12/23 395,000 09/01/04 Sewer District 625,000 2.40-4.90 J1-D1 12/24 550,000 09/01/05 Sewer District 110,000 4.38-4.40 J1-D1 12/25 100,000 08/01/06 Sewer District 76,000 4.65-4.75 J1-D1 12/26 72,000 09/01/07 Sewer District $750,000 4.15-4.65 J1-D1 12/27 $750,000

TOTAL $6,481,900 $4,252,000


12/12/01 Parking System 24,500,000 Var. Monthly 12/26 21,785,000

$24,500,000 $21,785,000

96

Current Outstanding Debt (As of 4/1/08)SALES TAX BONDS

OHIO WATER DEVELOPMENT AUTHORITY*+

Date of Issue Purpose


Interest Rate

Coupon Maturity

Final Bond

Amount Outstanding

01/01/98 Football Project $ 71,610,000*+ 4.20-4.75 J1-D1 12/27 $19,675,000 05/15/98 Football Project 272,855,000*++ 4.20-5.50 J1-D1 12/27 -0- 11/01/00 Baseball Project 349,992,512+ 4.60-5.85 J1-D1 12/32 112,312,513 12/12/06 Refunding Bonds 452,270,000 4.00-5.00 J1-D1 12/32 449,725,000 TOTAL $1,146,727,512 $581,712,513


Various Sewer Imp. $41,830,000 2.00-7.149 D1 12/13 $801,711

*A portion of these bonds was refunded with a portion of the Series 2000B Bonds +A portion of these bonds was refunded with the sale of the County's $452,270,000 Sales Tax Refunding Bonds, Subordinate Series 2006A, dated December 12, 2006 (the 1998A Bonds to be called on 12/01/07 and the 1998B Bonds to be called on 06/01/08). ++These bonds have been defeased with the proceeds of the County's $452,270,000 Sales Tax Refunding Bonds, Subordinate Series 2006A, dated December 12, 2006 (the 2000B Bonds to be called on 12/01/2010).

* These contracts are not bonded debt obligations of the County under Chapter 133 of the Ohio Revised Code, and are therefore not considered to count against the debt limitations.

+ Amounts outstanding calculated as of December 31, 2006

97

Current Outstanding Debt (As of 4/1/08)OHIO PUBLIC WORKS COMMISSION*

Date of Original Amount Interest Coupon Final Amount

Issue Purpose of Issue Rate Maturity Bond Outstanding

03/20/91 Sewer Improvement $ 225,847 0.00 J1-D1 12/11 $ 23,168 07/01/94 Sewer Improvement 1,891,000 3.00 J1-D1 12/14 661,819 07/01/95 Sewer Improvement 1,500,000 3.00 J1-D1 06/18 567,758 07/01/96 Sewer Improvement 1,500,000 0.00 J1-D1 12/17 739,056 09/01/96 Sewer Improvement 903,275 0.00 J1-D1 12/17 426,820 07/11/97 Sewer Improvement 1,500,000 3.00 J1-D1 06/19 810,356 07/01/04 Sewer Improvement 453,634 3.00 J1-D1 07/24 401,561

$7,973,756 $3,630,538

* Amounts outstanding calculated as of December 31, 2006

98

Current Outstanding Debt (As of 4/1/08)WATER POLLUTION CONTROL LOAN FUND – LOANS*+

Date of Original

Amount of Interest Coupon Final Amount Issue Purpose Issue Rate Maturity Bond Outstanding

06/24/93 Sewer Improvement $ 999,843 4.80% J1-D1 06/14 $ 406,802 10/28/93 Sewer Improvement 3,727,126 3.54 J1-D1 06/14 844,052 10/27/94 Sewer Improvement 1,230,697 4.56 J1-D1 01/16 564,242 01/26/95 Sewer Improvement 496,265 4.56 J1-D1 12/16 222,377 07/27/95 Sewer Improvement 268,725 4.35 J1-D1 12/16 139,911 09/28/95 Sewer Improvement 639,534 4.18 J1-D1 06/15 115,164 09/28/95 Sewer Improvement 678,900 4.35 J1-D1 12/16 352,503 05/30/96 Sewer Improvement 4,763,510 4.04 J1-D1 12/17 2,689,992 10/31/96 Sewer Improvement 549,202 4.12 J1-D1 12/16 313,879 01/27/00 Sewer Improvement 4,223,034 4.66 J1-D1 12/20 3,354,599 07/31/03 Sewer Improvement 2,094,880* 3.50 J1-D1 12/25 1,726,832 07/31/03 Sewer Improvement 7,948,736* 3.50 J1-D1 12/26 7,005,875 03/25/04 Sewer Improvement 5,247,900* 3.41 J1-D1 12/24 4,262,926 12/16/04 Sewer Improvement 2,161,103 3.35 J1-D1 12/25 1,933,296

$32,868,352 $23,932,450

* These issues are construction loans from state agencies that have not yet been fully drawn on (and may not be fully drawn on). Principal and interest payments by MSD have already commenced. When the final amount of the construction loans is determined, adjustments will be made to reflect the final loan amount.

+ Amounts outstanding calculated as of December 31, 2006

99

Prospective DebtSpring 2008

$8.0M Coroner's judgment

Summer 2008

$1.7M Voice tone alerting Fire and EMS

$0.8M Communication Center HVAC system

100

VIII. Summary

101

Summary The County is the center of a strong economic region and continues

to prioritize prudent proactive and strategic management. The County recognizes the key factors and challenges facing it both

strategically and financially. The County has instituted a broad-based multi-phase program of

near-term and mid to long-term initiatives to address its challenges and build on its strengths.

The County has instituted significant budget adjustments in 2008 and is monitoring and proactively addressing projected budget performance.

The County is proactively addressing its 2009 budget under prudent assumptions and with a range of expenditure and revenue options.

The County has flexibility in an identified range of options to bring the General Fund Reserve to a 15% balance by 2010 and address future budgetary performance.

The County is currently implementing and identifying a range of management, strategic, governmental and economic development initiatives and developing additional initiatives to fundamentally improve the systemic programmatic, operational and financial performance of the County going forward.

Documents

presentation to Moody's